CONSERVING RESOURCES, BOOSTING EFFICIENCY

We need a large number of resources at all our sites around the world to be able to engage in our core business of developing, manufacturing, and processing highly specialized non-ferrous metal products. These resources include metals such as aluminum, nickel, copper, and titanium, energy in the form of electricity, natural gas, and fuels, and water, consumables, and supplies. At the same time, our production process and the up- and downstream stages of the value chain – for example, being supplied with starting products or making deliveries to our customers around the world – cause direct and indirect greenhouse gas emissions, effluents, and waste. This has an impact on the climate and the environment, and results in costs for our company.

CONSERVING RESOURCES, BOOSTING EFFICIENCY

For us, acting responsibly is about giving some thought to the environmental impact of our processes, continuously improving them, and managing them in such a way that they place a minimal burden on the environment. Even minor optimizations can result in major savings potential and can minimize the costs we incur as a company. Our aspirations of environmentally friendly and resource-conserving corporate governance are defined in our integrated management handbook and in our memorandum of understanding regarding environmentalpolicy. The guidelines serve as the framework for our environmental activities. We seek to minimize our energy consumption, emissions, effluents and waste, and the consumables and supplies we use, and to use sustainable manufacturing processes and materials. We use resources sparingly. Waste is recycled wherever possible.

Developing the appropriate processes is the responsibility of the individual companies within OTTO FUCHS. They each set themselves location-specific goals and define concrete measures. Our plants focus on making more efficient use of energy and optimizing their energy usage. This is all founded on systematic energy management. In the area of resource management, we focus in particular on optimizing the charge weights, reusing auxiliary materials, and generally minimizing our consumption levels. In this way, we not only contribute to establishing resourceconserving processes – we also reduce our operating and production costs.

PROJECTS AND MEASURES

OPTIMIZING ENERGY USAGE
As a metalworking company, OTTO FUCHS has high energy requirements because of its production portfolio. The processes within our value chain are complex and, with areas like casting, forging, extruding, and heat treatment, also very energy-intensive. In fiscal year 2017, OTTO FUCHS’s total energy needs came to 822,879 megawatt-hours. The primary energy sources include natural gas (2017: 449,878 MWh) and electricity (2017: 293,289 MWh). Even minor process changes can result in savings in terms of the resources used and can reduce our costs, too. As such, using energy efficiently is a question of environmental and economic responsibility.

Developments at our main site in Meinerzhagen serve as a good example here. The plant set itself specific energy targets for the next three years as part of the company’s operating goals. The focus here is on three strategic goals: improving energy efficiency, significantly reducing the specific energy consumption levels of both electricity and natural gas, and increasing the degree of detail when measuring energy consumption levels. For each of these strategic goals, OTTO FUCHS in Meinerzhagen has defined concrete subgoals for the site’s various divisions and departments and has stipulated operating measures. These first and foremost include installing new equipment and systems or optimizing the energy usage of existing ones, replacing hall lighting, and boosting heat recovery.

Our Meinerzhagen site has been implementing various measures to increase energy efficiency for a number of years. In 2015 and 2016, our energy consumption was reduced in particular by our optimizing the supply of forging press water, a new furnace concept in zone B4 (large forging shop), and the commissioning of a combined heat and power system (CHP). A further reduction was achieved in 2017 among other things by optimizing our control arm presses, extrusion presses, and tool furnaces.

However, we do not focus solely on technical improvements in order to achieve our strategic energy goals. It is also important to us that we cultivate a sense of responsibility among our employees. Our aim is to encourage all the employees to use energy and resources sustainably and to actively apply themselves to the process of continuously improving our operating processes. OTTO FUCHS pays bonuses to its employees for their suggestions if selected. The 10 Golden Environmental Rules pocket card published in September 2017 summarizes our guiding principles regarding responsible joint conduct.

With this and other measures, the Meinerzhagen site is actively playing its part in improving energy efficiency and further optimizing our energy requirements. Electricity consumption at the Meinerzhagen site fell in the reporting period from 184,128 megawatt-hours in 2015 to 158,856 megawatt-hours in 2017. The energy consumption of OTTO FUCHS has increased overall since 2015 (822,879 MWh in 2017 compared with 714,004 MWh in 2015). OTTO FUCHS’s electricity consumption fell from 301,628 megawatt-hours to 278,129 megawatthours between 2015 and 2016, then increased again by a moderate amount in 2017.

Natural gas consumption increased from 379,423 megawatt-hours in 2015 to 449,878 megawatt-hours in 2017. This development is primarily attributable to an increase in sales and volumes, additional production facilities, and a general increase in the proportion of titanium and nickel products, which require higher forging temperatures, thus making them more energy-intensive to manufacture. An increase in finished parts, especially at our Meinerzhagen and Dülken sites, has also contributed to the overall development in energy consumption.

We are making a conscious effort to increasingly use natural gas at our plants, this being a low-emissions energy source. This is exemplified by the decision to commission a combined heat and power system at the Meinerzhagen site and the replacement of furnaces run on electricity by furnaces powered with natural gas. The resultant increase in natural gas consumption corresponds with a positive development in our greenhouse gas emissions thanks to the high utilization ratios and a good carbon footprint.

We create trailblazing products and rely on resource-saving processes.

CERTIFIED MANAGEMENT SYSTEMS
The majority of our sites are certified in accordance with the international standards ISO 14001 and ISO 50001, and are subjected to regular internal and external audits. To increasingly incorporate environmental aspects into our processes and exploit synergies as part of an integrated management system, we are working on further systemizing and more closely coordinating the areas of occupational safety, environmental protection, and energy management. We are also working toward standardizing the management systems and standards we usearound the world.

Effluent Volume in m3

DEVELOPMENTS IN GREENHOUSE GAS EMISSIONS

We record our greenhouse gas emissions (GHG emissions) all along the value chain as part of our accounting activities. We make a distinction between two types of emissions: Scope 1 refers to direct emissions from sources at OTTO FUCHS sites, including our own manufacturing facilities, for example. Scope 2 encompasses indirect energy-based GHG emissions. These are caused by the generation of the purchased or acquired electricity or heating and cooling energy needed by our sites.

Overall, more than 50 percent of our GHG emissions come from the electricity we purchase. These emissions developed very much in line with our energy consumption in recent years. The figures also indicate that changes in the mix of energy sources have an effect on our emissions. Taking Meinerzhagen as an example, operation of the combined heat and power system there results in greater consumption of natural gas and reduced electricity consumption. This has a positive impact on emissions, with emissions in 2016 increasing much more moderately than the energy volume used in comparison to the
previous year.

CLIMATE-FRIENDLY THANKS TO COGENERATION
In view of increasing energy costs and company and statutory requirements regarding greenhouse gas emission reductions, it is essential that the efficiency of technical facilities be boosted further and that energy be used carefully. Energy which is environmentally friendly and which comes from decentralized sources is therefore becoming more and more important when it comes to our sites’ energy supplies. In Meinerzhagen, for example, we operate an extensive industrial heating network which supplies the production processes – such as the heat treatment facility’s water baths – with heat of up to 145 degrees Celsius during preheating, then provides room heating of up to 90 degrees Celsius. To cover the resultant electricity and thermal energy needs as efficiently as possible, the plant put a gas-powered combined heat and power system (CHP) into operation in October 2015. A gas engine generates electrical energy and the waste heat generated in the process is used within the company processes. The electrical energy generated during an hour of operation is enough to cover the entire annual energy needs of the average four-person household. The CHP system has been running at full load since 2016 and now covers more than 20 percent of the Meinerzhagen site’s electrical energy needs. In 2017, 23,246 megawatt-hours of energy taken from net electricity generation of 34,712 megawatt-hours were used to heat water. This gives the facility a net utilization ratio of more than 69.7 percent and also reduces our carbon emissions. We reduced our carbon emissions by 13,100 tons in this way in the reporting period. There are opportunities to use efficient energy concepts in particular when new production facilities or plants are built. Taking into account the positive development at our main site, we therefore included a combined heat and power system in our plans for our new plant on Meinerzhagen’s Grünewald industrial estate from the outset.

Total water withdrawal by source

Greenhouse gas emissions in relation to sales

Direct and indirect greenhouse emissions. The Scope 1 emissions comprise sulfur hexafluoride (SF6) in addition to the energy sources.

SOUTH AFRICA AS AN EXAMPLE: MAKING TARGETED USE OF COLLECTED RAINWATER

Responsible water management and using water sparingly as a resource are key environmental goals for OTTO FUCHS. We run our sites and manufacturing processes using fresh water sourced both from public networks and our own wells. In particular in regions where sustainable water supplies and distribution are already a challenge, we specifically look for ways in which to reduce our fresh water requirements. Our plant in East London, South Africa, is a good example here. Ongoing industrialization, strong economic growth, and the population’s rising standard of living continue to increase the country’s water consumption by an estimated 1.2 percent per annum. The situation is further exacerbated by a lack of rainfall and by dry spells. Our plant in East London needs water primarily for cooling purposes and to cool the parts produced in the heat treatment process. To reduce the consumption of mains water, Foxtec-Ikhwezi began to install rainwater collection tanks back in 2014, with the water initially only being used for cooling. More tanks have been installed since then and the plant now has eleven interconnected collection tanks with total capacity of 110,000 liters. The rainwater runs along the building’s gutters and straight into the tanks. It is then purified by two mechanical filters and disinfected using UV light before it is used. The plant primarily uses the water treated in this way in its production processes. The water is only used elsewhere at the site, for example in the kitchens and washrooms, if the municipal supply is interrupted. The treatment and use of rainwater make a big difference to the site’s water footprint: before the tanks were installed, the average consumption of water sourced from the public network was two liters per part produced. It has since fallen to 0.6 liters. Overall, Foxtec-Ikhwezi has managed to more than halve its annual water consumption from 7,477 cubic meters in 2015 to 2,730 cubic meters in 2017.