Bridging the gap between ecology and economics: Heubach India

Geneva, 8 September 2004 - Did you know that ecology and economics can go hand in hand through sustained efforts to incorporate environmental thinking into mainstream processes? Heubach India is doing just that, and making a profit.

Pigments, like the colors they reflect, are everywhere: ink in magazines, the plastic covers of mobile phones, anti-corrosive paints on cars, etc. The factories producing such pigments are typically large consumers of chemically based raw materials and hence create vast amounts of highly toxic discharges.

Heubach India has set its goal to come as close to zero emissions as possible without compromising its leading position as a producer of high-quality pigments for the global market. Backed up by the results to prove it, their philosophy is one that assertively states that ecology and economics can go hand in hand, even for an upstream/primary producer. As a direct result of their effort to incorporate environmental thinking into their mainstream processes, Heubach has become one of the world’s top pigment suppliers, both in terms of quality and quantity.

Investment costs for pollution controls are usually seen as heavy burdens in a competitive market, enticing industries to move to countries where compliance is less restrictive and expensive. This movement creates tensions including:

• A greater concentration of polluting industries and the resulting natural resource depletion and contamination in one area;
• The prospect of local companies trying to outperform their global competitors by cutting environmental corners on their home grounds;
• The struggle to combine economic growth without the traditional dirty phases of catch-up.

However, companies like Heubach set examples that resolve such tensions. As Heubach’s German Chairman Rainer Heubach has stated: “By incorporating environmental practices at the very first planning stages, we have managed to save the costs of cleaning up our act afterwards.” Cost-effective implementation, however, is the difficult part. Rainer Heubach continues: “Harnessing the Indian labor cost advantage vis-à-vis developed countries has made implementing environmental practices at such an early stage possible.”

Eco-design I: Waste = food

In nature, matter continuously circulates and thus ecosystems generate no waste. Traditionally, the industrial process is linear, i.e. from input to output and waste. But as technical director, Dr. Marx, observes: “in essence, every emission is a material loss and hence also a financial loss.” In the line of eco-design, Heubach has undertaken many efforts to reduce such losses by converting waste into food/feedstock. It created an “industrial plant ecology” where the waste from one unit is circulated as feedstock for the next.

Heubach’s efforts are illustrated in three concrete cases:

• The conversion of waste from Huebach’s green pigment plant into a sellable by-product, aluminium hydroxide, used in antacid formulations in the pharmaceutical industry, rather than neutralizing it with lime and sending it to landfill.
• Stripping the effluent from the blue pigment plant of its ammonia content through a chemical process to create a residual by-product that is also an essential raw material used at the aluminium hydroxide plant.
• Offsetting emissions: Heubach calculated its CO2 emissions and put into place a program to plant 50,000 heterogeneous plants to offset their emissions. 25,000 plants have already been planted on the factory’s premises.

Eco-design II: Doing more with less

A second principle of sustainable business is “doing more with less”. Traditionally industries have concentrated on increasing productivity by investing in labor and machines, leaving the gains that can be made by increasing resource productivity often ignored. In fact, “doing more with less” can be expanded into “doing more with nothing”. Take for example:

• The intelligent laying of pipes to increase proximity to sources and to make the best use of gravity, thereby eliminating the need for electricity-consuming pumps.
• The construction of a natural gas-fired power plant to generate its own electricity.
• The use of electricity co-generation through a heat exchanger where waste heat from the engines is used to create the steam and hot water necessary for the production of pigments, thereby reducing boiler costs to a minimum.
• Waste reduction achieved by inciting suppliers to change the packaging (polyethylene bags, HDPE bags, and paper or plastic containers) used to deliver raw materials. As a result, the quantity of waste generated through packaging materials has been reduced to a negligible amount.
  

Heubach is a prime example of a company that is actively engaged in limiting its environmental impact while achieving outstanding financial results. Turnover has doubled every three years since its inception in 1994, despite almost 25% of investments flowing into ecological projects. In fact, profits have risen partly due to these environmental investments. This can be traced back to measures that have increased efficiency and reduced consumption through resource productivity.

In an era where foreign direct investment has been the biggest driver of development, and has often left environmental devastation in its wake in developing countries, examples like that of Heubach are few in number. However, there is a growing awareness that companies can only achieve long-term business success if they recognize that the economy is an “open subsystem of the earth’s ecosystem, which is finite, non growing and materially closed” (Herman Daly, The Case of the Global Economy, Sierra Book Club, 1996). It is in this scenario that ecologically oriented companies will outperform their competitors. Heubach profits from its values, precisely because it values its profits. As a private firm, it shows that environmental projects can be profitable, and sometimes even imperative in cutthroat competition.

Case study produced in cooperation with Philip Reuchlin, freelance journalist from the London School of Economics, currently based in Mumbai, India. Contact: p.a.reuchlin-alumni@lse.ac.uk -- Tel: 0091 -2223890364/ 9819488218

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Author WBCSD/Philip Reuchlin Publication Date 8 Sep 2004 Document Type Case studies Issue/Topic Business Role/CSR Region Asia Country India Source WBCSD		688 kb   194 kb