Creating New Markets
Changing social needs mean major new business opportunities. Is your company well positioned for these markets?Wood is a highly versatile material that provides furniture, paper, and an estimated 10,000 other products that sustain and enrich our lives. But with global wood demand and global population continuing to grow, there is concern that we are overtaxing the Earth's forest resources. Can we meet these expanding needs without courting ecological disaster?
I believe we can, because wood is a renewable resource. But achieving this aspiration will require continued progress in our forestry and manufacturing approaches.
Almost all wood and paper products are biodegradable and potentially recyclable. They require less energy to produce than products made from metals, petrochemical-based plastics, or cement. And it's possible to provide all the wood products people need and still maintain the forest cover vital as a source of clean water, watershed protection, habitat for plants and animals, even a means of sequestering carbon from the atmosphere.
Should we be alarmed given that deforestation is occurring in many parts of the planet - and occurring at a disturbing pace? Yes, if nothing is done to reverse this trend. Yes, but not without hope if we apply sustainable forestry practices now available to improve the way we manage our "working" forests.
Half the world's annual wood harvest of 3.5 billion cubic meters is being consumed for fuelwood, and, where this is the case, reforestation is rare. But today's sustainable forestry practices can grow trees in repeated rotations without depleting the soil. Depending on the region, modern forestry can grow from three to 10 times the volume of wood per acre as an unmanaged forest - and much more quickly. This provides society the opportunity to have wood products on a sustainable basis without placing demands on the world's most ecologically significant natural forests - or those that people wish to preserve for scenic, recreational or other purposes.
In an article in the December, 1997, issue of Environment magazine, forestry and environmental experts Roger Sedjo and Daniel Botkin estimate that 20% to 40% of the world's forests would be required to meet present demand via unmanaged, naturally regenerating forests. However, only 2% to 4% would be required if all the timber came from high-yield, managed forests.
But how do we get from here to there? Obviously, we in the forest products industry have a challenge to educate and encourage all forest owners, not just ourselves, to manage their forests in a sustainable manner. Another challenge is to encourage all nations to adopt laws and regulations toward this same end.
We at Weyerhaeuser are committed to playing an important role in this future success story. We were among the first in our industry to advocate the growing of trees as a crop - meaning replanting harvested areas. We began America's Tree Farm System(r), which now consists of 66,000 private forest owners growing trees on a sustainable basis. We pioneered high-yield forestry by using genetically improved seedlings, adding nutrients to the soil and thinning forests for increased growth.
Furthermore, we and other responsible forest companies don't just manage our forests to produce healthy trees. We manage them for soil conservation, air and water quality, wildlife and fish habitat, and cultural, historic and aesthetic values.
But sustainability goes beyond our forestry practices. It extends to our manufacturing sites operations, where we strive to achieve minimum-impact manufacturing. At Weyerhaeuser, this includes:
We have a lot of learning to do as a company, as an industry, and as a society before the forest products industry is truly sustainable. But at Weyerhaeuser, we believe wood will be as important and beneficial to the world's economy in the future as it has been in the past.
In the October, 1998, Atlantic Monthly, William McDonough and Michael Braungart argue that "The model for the Next Industrial Revolution may well have been right in front of us the whole time: A tree." We agree.
Since Werner von Siemens discovered the dynamo-electric principle in 1866 and invented the dynamo, the ever-increasing use of electricity has contributed enormously to an improved standard of living. Electrical energy - a critical driving force behind modern technical advance and prosperity - accounts for a larger and larger share of the total energy consumed.
As the demand for electric power has grown, however, so has its impact on the environment. Over the past 25 years, environmental concerns have continually shaped the industry and its technology. The demand for electricity is rising rapidly, especially in emerging markets. Deregulation of the utility industry is attracting new power producers and intensifying competition. The result is that today's power plant operators face unprecedented challenges, including ever-higher demand for their product and increased competition and price sensitivity. Simultaneously, initiatives to protect the environment and conserve natural resources are challenging both energy companies and their suppliers to develop more efficient, cleaner technologies that can meet the needs of everyone.
Power generation technology today runs the gamut from solar to combined cycle to fuel cells. And the company Werner von Siemens built is active in all of them. In fact, providing the widest possible range of power generating technologies is part of Siemens' strategy to balance ecological and economic considerations. By bringing to bear comprehensive systems engineering expertise and the experience gained working with our customers over many years, we can offer solutions matched to specific environmental requirements and widely varying economic and competitive conditions.
Regardless of the primary energy source, our power generating technologies are designed to maximize efficiency and, as a result, environmental compatibility. A good example of a clean, efficient, and advanced power generation technology currently being delivered around the world is the gas turbine combined cycle system. This concept, which takes the waste heat generated from the first cycle (gas turbine) then uses it to make steam to power a second steam cycle, can reach efficiency levels of 58% - one of the highest efficiency ratings of any fossil-fuel power plant design.
Siemens is also the world's largest manufacturer of solar photovoltaic (PV) cells. These cells harness power directly from the sun, produce no emissions, and only require sunlight to operate. We are also developing fuel cells, working to commercialize this exceptionally clean and efficient technology. Because fuel cells can power everything from cars and submarines to homes and businesses, fuel cells are a key emerging technology which can reach efficiency levels of 60%, yet emits nothing but pure water vapor.
Of course, many factors contribute to any power plant's overall efficiency. State-of-the-art instrumentation and process control systems along with integrated communications capabilities and production automation can greatly enhance operations and ensure the safe, economical, and environmentally responsible operation of an electric power generating plant.
As a cornerstone of today's society,
the ongoing development of renewable, clean, and efficient power generation methods is central to our company's mission. And if progress to date is any indication, the future of our global energy supply looks very bright indeed.
Life can exist without heat, power, and light - but is impossible without water. Water is essential to our life and our future. But that future will be one of shared water resources - and it will either be a gratifying success or a nightmare of conflict.
Anyone familiar with the history of the American West knows of the mayhem likely to be caused by disputed water rights. Mark Twain, captured it well when he said, "Whiskey is for drinking, water is for fighting over."
This must not be the case in the 21st century. Rather, we must recognize the critical need and properly manage the shared opportunity.
As the world's leading producer of fluid handling machinery for the supply and transport of fresh water, and for treating and recycling wastewater, ITT Industries has been active in promoting more efficient use and re-use of this most precious of Earth's resources. In this context, we know that good business and responsible citizenship are mutually supportive. We are shareholders not only in our businesses, but in our global water future as well; and we hold ourselves accountable in equal measure for both.
Since 1900 there has been a six-fold increase in world water use. As a result, there is now no access to safe drinking water for one-fifth of the world's population. Irrigation has increased 60% since 1960, with serious consequences. The Aral Sea, at one time the fourth largest inland body of water in the world, is a case in point: 30 years of surface water takeoff for irrigation has depleted it to less than half its original size. Some 95% of the world's cities still dump raw sewage into their waters and half of the Earth's population do not have adequate water sanitation. More than five million humans die each year from causes related to unsanitary water.
If the world is to prosper, we must meet the water needs of all. This means providing safe drinking water as well as supplying agriculture and industry.
We recommend certain enabling processes to drive major improvement. The first is creating water markets, because water represents economic capital and such capital must be managed. A water market is a means for placing a proper value on this essential resource and for providing the economic incentives to move water from applications of lower value (and often misuse) to areas of higher value, with benefit to both.
A second means is the concept of water productivity. We are all quite comfortable with the concept of land productivity, which has driven improvements in crop yields: the "Green Revolution" has been a land-productivity success story. Similar approaches are needed to support water productivity. We must look to increase the yield per unit of water used, and water must be managed for maximum yield. It makes so much sense, yet is so little considered.
Creating water markets combined with optimizing water productivity will have benefits as significant as the Green Revolution. But it must first gain public acceptance.
We must accept responsibility as corporate representatives and as citizens to popularize such breakthrough thinking. And at ITT Industries, we do. As world leaders in the fluid products business, we focus not only on products and manufacturing, but also on environmental sciences and water diplomacy and raising global knowledge of these subjects.
ITT Industries is a charter sponsor of the Stockholm Water Foundation, a globally recognized center for studies related to the world's effective use of water. We are also founding partners of the International Water Academy, based at the University of Oslo - a leader in global water diplomacy. And we have taken a leadership role in efforts to showcase technology that improves energy efficiency in motor-driven pumping systems.
The 20th century confirmed the importance of clean water. The 21st century must provide the will and the means to make its availability a reality for the entire world. To do so, we must merely take certain sensible, prosaic steps in order to change significantly for the better the world in which we live.
