UAE- ME industry giants told go green to counter rising energy costs

1/30/2016 11:48:52 PM

(MENAFN- Khaleej Times)

Some of the Middle East's biggest industrial firms facing massive increases in energy costs in the wake of subsidy reforms are being advised to reduce their carbon footprint to make multi-million dollar savings.

The problem of rising energy spend has been highlighted by Saudi Arabian dairy firm Almarai which says that utility price increases combined with new crop-growing restrictions will increase its costs by SR500 million (Dh489 million) this year.

Immediately following its recent statement in response to the reduction of government subsidies the company's shares fell by eight per cent but PA Consulting Group says companies like Almarai can make huge savings through investment in low emission technologies.

SURVEY SAYS... A study among more than 500 marketing experts underlined why the significance of 'going green' is increasing and how it gives companies a competitive advantage:

. 70% saw an increase in the significance of sustainability for marketing efforts

. 60% believed going green increases trust in the brand

. 56% said green companies are seen as more innovative and future-oriented

. 50% saw green companies as positively differentiating them-selves from their competitors.

"The exploding cost of energy drives up the cost base of manufacturers significantly and the energy subsidies issue in this region has increased the burden" said Philip Rice energy and utilities expert at PA's regional headquarters in Abu Dhabi. "In the past 10 years the global manufacturing industry has been investing in optimising its carbon footprint and reduction targets of 50 per cent less emission and 35 per cent less energy consumption are common."

"Working with PA one of the world's largest aerospace and defence companies delivered massively reduced energy consumption cost identified reduction potentials of 200000 tonnes of carbon-dioxide emissions and optimised investment of more than ?450 million across 25 sites in several countries."

Investing in low-emission technologies and implementing new behaviours to reduce consumption is no longer a cost position only but can offer other major business opportunities. But only a few companies are aware of how to exploit this he added.

Rice says PA helps big industrial firms save millions of dollars by sending in teams of experts to develop a customised energy efficiency roadmap.

"Solar and photovoltaic systems combined heat and power plants wind power and heat recovery can all reduce carbon footprint significantly and cut costs by millions of dollars but there is no single solution" he points out.

"Companies need to understand that to succeed in going green many local factors have to be taken into account such as sunshine hours wind intensity and availability of subsidies. But a detailed analysis of each manufacturer's operations and local conditions will produce a customised energy roadmap that can make a massive difference in terms of cutting costs."

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