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Interview

with Laurent Francisci, Managing Director, Degrémont Technologies Australia

12.04.2011 / Energyboardroom

With over 70 years experience in major infrastructure projects for water processing and treatment, Degrémont is a well-established and reputable global name. What do you believe have been the main factors contributing to the longevity of Degrémont’s success?

Within SUEZ ENVIRONNEMENT, Degrémont is the world water treatment specialist and designs, builds, equips and operates water treatment plants. By the nature of its activity, the company if a key player in sustainable development and today stands as a major innovator in sustainable water management.

Indeed, 2009 marked Degrémont’s 70th anniversary which was a good occasion to step back and assess the most important keys to our success. Three main ones stick out: having the courage to innovate; honoring our customers’ needs; and continuously improving our performance by drawing on the lessons of past experience. These three factors have indelibly aided our international trajectory.

Something that I always find impressive is that between 1948 and 1956, Degrémont was already delivering large water treatment schemes for cities such as Cairo, Jakarta, and Lima. This pioneering spirit is part of the corporate culture based on a strategic vision of innovation.

Finally, there is the human factor. With 4,400 people in Degrémont’s global organization we recently underwent an exercise to identify the principles that we all strongly commit to. The values that came out of it were: be ambitious for Degrémont; commit with courage; creating trust through respect and integrity; and making progress while helping others to progress. These values we embrace have been and will remain key to our success.

Locally Degrémont is involved in the design and construction of a large scale desalinization plant outside of Melbourne which will supply nearly 1/3 of the city’s water. What does this say about the trajectory of Australia for the group at-large?

It is clearly a huge project and its impact is certainly in line with these of the landmark international projects mentioned earlier. The size and scope of the project are challenging which called upon a great deal of innovation both in setting up the bid and in developing the winning solution for design and build, construction but also operation for a period of 30 years.

The plant will be completely integrated into its environment and will preserve the natural setting by creating an ecological space and reducing the environmental impact, through rooftop gardens, ambitious planting programs for the site, and protection of fauna. Moreover, the energy needed for producing and delivering the drinking water will be 100% renewable, generated primarily by a new wind farm in the State of Victoria.

The scale and complexity of the project confirms Degrémont’s leading position in the field of seawater desalination by reverse osmosis and sustainable solution provider.

It also required strong partnerships to launch the delivery and get things moving to the stage where we are today. We are presently in the execution phase and are focused on the challenges that come with meeting scheduled completion time.

This project and the more recent Adelaide O&M contract reinforce the group’s presence in Australia. The region is considered as a high level development zone for the group. In 2009, Asia, Oceania, Middle-East represented 25% of Degrémont’s sales.

How would you rate the climate for public-private-partnerships (PPPs) here in Australia given their necessity to underpin much of Degrémont’s scope of work?

It is indeed a popular model for many Australian states, in line with previous major international successes with such schemes. The key success factors for the PPP model in Australia are a stable legal framework and a proven contractual base. Most Australian states have numerous experiences in setting up and executing PPPs. Victoria alone has worked on 20 projects of this type since 2000. Victoria really is one of the most sophisticated states in terms of PPP contracts. It has a well known, demonstrated and robust model. The state also undertakes a thorough analysis to confirm the advantages of using a PPP in each instance, using a public sector comparator to check if it would be better for the state to undertake the work itself. It is an overall assessment of all criteria including the technical aspects. When they did the comparison they found they were saving roughly 14% by opting for a PPP with the consortium’s proposal.

Through such experiences, Clients have developed good ratings with agencies, which in turn is great ground for setting up new projects under this model.

While Degrémont has been in Australia for over two decades, Degrémont Technologies is only beginning to establish itself now. With a strong name behind it but a competitive market ahead, what is your plan of attack for growing Degrémont Technologies in Australia?

As you know, Degrémont is the Business Line of SUEZ ENVIRONNEMENT dedicated to designing, building, maintaining, and equipping water treatment plants worldwide. The flagship of Degrémont is therefore an extremely strong base for development. In many cases, clients in Australia rely on our capacity to provide solutions for large and complex water treatment plants. We are less known for our other range of solutions like equipment or skids products. There lies the challenge for Degrémont Technologies Australia over the coming year: provide equipment solutions matching the needs of municipalities, public entities, and industrial customers of all types. Good points to start with will be the several significant coal seam gas (CSG) bids that are coming to the market this year. No doubt the oil & gas and mining industry will be very keen to see modular solutions deployed by Technology providers in remote locations where operations are located. There is quite tough competition for each project but we’re up to the challenge!

You identified the “courage to innovate” as a key to Degrémont’s success. Has the newly emerging and rapidly booming CSG industry triggered any new innovations for Degrémont? What are the competitive advantages that this courage has produced over time which make Degrémont particularly suited for water treatment in the CSG arena?

The basic challenges are more or less similar across projects in a way: industrial clients seek water treatment solutions to manage their activities impact on the environment. There is no “one size fits all” but Degrémont provides solutions or combination of solutions to address virtually any water treatment challenge in accordance with regulations and specific Customers constraints.

A common need to several industries is to deal with dissolved solids, which often calls upon membranes or ion exchange separation techniques. There is often consideration of organic contamination that requires disinfection solutions in the process line. Recycling and dealing with the sludge (Drying Techniques or other valorization scheme) are obviously fully relevant to close the loop.

Having said that, innovation is a continuous process, which often materializes with some products, such as Degrémont’s 500+ patented applications. We work both internally on R&D and externally through partnerships to continually strengthen our technical leadership. In many other instances, innovation is more simply proven in the capacity to put together different components in order to reach the optimal solution for your client multiple constraints.

We find this to be a consistent theme regarding innovation, particularly in the CSG industry. Unlike offshore energy exploration, CSG production creates a much closer interaction between community and industry. Innovation therefore is all about managing new dynamics in stakeholder relations.

This is an interesting, but not necessarily new, theme and Australia has in fact participated to pioneering this type of multi-stakeholder engagement in my view. There is much more communication and access to news and industry developments, whereby raising public concern about impact of large and small infrastructure schemes. Regulations are becoming more stringent in order to protect public health and preserve the environment. All of this is healthy and puts a new spotlight on the role of public entities and regulators to ensure that proper homework and due diligence are done before projects are tendered. It also means that stakeholder relations are strongly emphasized.

In Degrémont we consider our role as one of community partner. Making sure that projects are not only community-oriented in their result but also in their execution on a day-to-day basis is a must. Making sure the global picture is well understood as well and the project is managed with transparency.

To us, CSG is therefore not fundamentally different from other projects in that respect. Degrémont provides advanced solutions to treat industrial wastewater complying with the most stringent regulation and therefore helps protect the environment.

Australia has been very much affected by the footprint of climate change recently. Politically, a carbon tax has been debated by government. Environmentally, both Queensland and Victoria saw massive flooding from harsh storms earlier this year. What types of new infrastructure, technologies, or solutions do you believe will be required in a world that has to increasingly cope with climate change?

The answer again is not necessarily in the development of one specific technology but more so in the balanced approach to respond to community needs. Such approach very often involves a number of technologies. Management of surface waters, Fresh water treatment, desalination plants and re-use, energy consumption reduction are for instance all part of the solutions portfolio for large cities drinking water problems. I believe the same type of reasoning applies to the energy world.

Climate change drives the water treatment market. There is a need for state-of-the-art solutions such as the wastewater treatment plant we designed, built and now operated in As Samra, Jordan. Such new facilities maximize water recycling and minimize the energy consumption. At As Samra, 95% of the energy needed for the treatment is produced by the plant itself. 100% of the treated wastewater is recycled.

Do you have to be driven by sustainability and a “green” person to fit in with the Degrémont culture?

We see sustainability as a global human concern. At the end of the day, a less polluted environment means healthier people and therefore, our treatment solutions help protecting public health and safety. Everyone today is concerned about minimizing the footprint of water treatment plants, managing the impact on the environment, and putting recycling and reusing solutions on the table. Degrémont develops a large range of solutions for these concerns. Sustainability is a driver for innovation and one of the focus of our R&D programs and partnerships.

What do you think needs to be done to raise more awareness about access to clean water in some places in the world? How can water treatment and water security become as concerning in the public eye as energy security?

As mentioned, I think that there is now a strong concern among the public for any infrastructure that is developed, whether for oil and gas, mining, or the water solutions developed for producing these resources and for municipalities. I believe that there is a strong understanding that solutions need to be developed to protect the environment and to improve the quality of peoples’ lives and businesses. With increasing city sizes and needs for resources, this concern is likely to keep naturally growing.

What types of partnerships would you like to forge and which stakeholders would you like to engage with to create further inroads in the CSG industry?

There are plenty of partnerships to be formed.

We were recently awarded Adelaide’s contract alongside SUEZ ENVIRONNEMENT. It is a great success and a strong demonstration of our Group’s capacity to offer the expertise for resolving the State water issues in the frame of a fully transparent alliance partnership.

Equipment and technology providers like Degrémont need to partner with serious construction players who enable us to develop projects sometimes in a very challenging context, considering the distance of resources from cities.
I mentioned before the continuous quest of innovation. You also have to develop the proper partnerships with external technology/equipment players because at any given moment you do not always have all components of the whole solution that you want to provide. Partnerships – from community to client, through construction – are everywhere.

Does Degrémont still retain an element of French corporate culture in its foreign areas of operation? What are the commonalities between Degrémont’s French roots and the local Australian culture?

We spoke earlier about Degrémont’s 70 year internationalization process. A natural byproduct of this internationalization is adaptability, which became part of the Degrémont DNA a very long time ago. We have a strong capacity to adapt in a very different context, far away from our home base, and grow our expertise alongside the appropriate partners. It contributes to the diversity of partnerships that we form for the solutions that we engineer.

Something that struck me when first coming to Australia were the big workshops involving many stakeholders, continuously repeated until there was comfort that everyone had placed their input on the table; it appeared as a very long consultation process from a “latin world” prospective before a decision was made, but the strength of the resulting decision and the team commitment in deploying it was impressive. This is a typical case in which you get to open your mind, take in a variety of cultures, enhance your business behavior, and foster a better value of engineering to reach a solution.

What can we expect from Degrémont Technologies over the next 5-7 years as this new division grows alongside the many opportunities in the resources and energy industry?

You will keep seeing Degrémont Businesses on all fronts in Australia. We intend to provide solutions in water treatment for our clients – municipalities, mining and oil & gas companies as well as other industries. Our solutions will either be of a large, complex nature like we have done in the past but Degrémont Technologies Australia will also deploy equipment or skid products types of solutions for the same Australian clients.

What would be your final message to our readers?

Our corporate motto, “Committed together to water, source of life.” is a strong guideline for our business strategy. Our objective is to provide solutions to support people’s quality of life and businesses.

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