Chemical Leasing - SWITCH-Med

Chemical Leasing in Egypt- A Tool for Circular
Economy
Ali Abo Sena
ENCPC Director
Circular Economy Webinar. 13th ,November, 2014
www.encpc.org
Content
• Chemical Leasing (ChL) Approach
• Chemical Leasing (ChL) Definition of Chemical
Leasing
• Introduction of Chemical Leasing in Egypt
• Scope of Chemical Leasing (ChL) in Egypt
• Case Studies
• Lessons Learnt
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The ChL Approach
Chemical Leasing is a service oriented business model to enhance
efficient use of chemicals
What is it:
producers of
chemicals
Players:
Objectives:
users of
chemicals
equipment
supplier
Environment:
added value
air pollution
≈
water
pollution
UNIDO,
NCPCs
Economy:
Emission reduction
waste load
recycling
companies
Costs
producers of
chemicals
Costs
others
Costs
Users
Chemical Leasing suggests new forms of payments for chemicals that
direct the economic interests of all
partners towards process
optimisation and reduction of chemicals consumption.
Principle:
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Payments on the Benefits of ChL
“leasing”
Chemical producer
provides chemicals to
(no sales)
the user
payment not for the chemical itself, but for the benefits of the chemical
(e.g. not for tons of solvents used, but for number of pieces cleaned!)
amount of produced chemicals will decline as chemicals
volume turns from a factor for earnings (“the more you sell
the more you earn“) to a cost driver (“less is more“)
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Chemical Leasing Business Models
Bundle Motivations
Traditional business models:
Chemical leasing models:
Contradictory motivations
Bundled motivations
supplier
Delivery of goods
"the more the
better"
consumer
supplier
Delivery of services consumer
material
Life cycle costs
(costs, volume)
(material, work,
waste management)
"less is more" "less is more"
"less is more"
Willingness and culture of corporation is required
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Definition Chemical Leasing -I
Chemical Leasing is a service-oriented business model
that shifts the focus from increasing sales volume of
chemicals towards a value-added approach. The producer
mainly sells the functions performed by the chemical and
functional units[1] are the main basis for payment.
Within Chemical Leasing business models the
responsibility of the producer and service provider is
extended and may include the management of the entire
life cycle.
[1] Functions performed by a chemical might include:
number of pieces cleaned; amount of area coated , etc..
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Definition Chemical Leasing - II
Chemical Leasing strives a win-win situation. It aims at
increasing the efficient use of chemicals while reducing the
risks of chemicals and protecting human health. It improves
the economic and environmental performance of
participating companies and enhances their access to new
markets.
Key elements of successful Chemical Leasing business
models are proper benefit sharing, high quality standards
and mutual trust between participating companies.
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Chemical Leasing Phases in Egypt
Phase I:
–
–
–
–
Introduction of ChL model concept
Selection of target sectors /processes
Development of methodology and tools for implementation
First pilot cases
Phase II: Replication and Testing in other sectors
Phase III:
– ChL service based market demand
– Promotion/raising awareness
– ChL helpdesk for industry
– Regional and international share of experiences /promotion
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Sectors/ Processes for ChL in Egypt
Industrial Sector
Process (s)
Engineering Sector (e.g. domestic 
electrical
equipment,
automotive
industry )




Metallurgical
Industries
(e.g. 
Galvanization)
Textile


Beverage Industry




Tanning Industry


Pretreatment Processes (Degreasing, Pickling, Phosphate,
Fluxing, Passvation)
Electrostatic Coating
Liquid Painting (solvent based or water based)
Foaming Agent and Flame Retarding Process
Cleaning metal parts with solvent
Degreasing, Pickling , Fluxing, Zinc Galvanization
Services or cross-cutting processes in 
industrial sectors (e.g. Food, Textile,
Pharmaceutical, Furniture , hotels and 
hospitals ) -
Densification of equipment of places & Cleaning of metal parts
with solvent
Water purification & Boilers water treatment and maintenance
Pretreatment (Bleaching, Mercerization)
Finishing (Dyeing and Printing)
Washing of bottles
Carbon Dioxide separation
Labeling with adhesive materials
Lubrication of conveyor belts
Soaking , De-hairing, Liming and De-liming
Pickling and Tanning, Dying Processes
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Case Studies for Chemical Leasing in Egypt
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1- Chemical Leasing on Cleaning with
Hydrocarbon Solvent
Supplier :
Dr Badawi Chemical Work
User:
GM Egypt
Industrial process: Cleaning of equipment with solvent
Chemicals:
Hydrocarbon Solvent
Hydrocarbon Solvent Management
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Summary of Results
Item
Before Chemical Leasing Item
Under Chemical Leasing
Consumption of Hydrocarbon
Solvent
1.5-2.0 L per vehicle (almost 30 tons of
solvent was used per year at the
beginning of project)
0.85- 1.0 Per Vehicle (total
consumption based on number
of produced cars)
5 % of total generated waste
20-25 % of total solvent waste
generated (Based on data
colleted from monitoring
14-18 L.E Per Vehicle (Based on prices
of raw material
9-10 L.E per Vehicle ( almost
reduction of 40 of total cost of
cleaning per car)
0 % is recycled ( all collected
quantities go for illegal dumping)
100 % of all collected waste
(Percentage of value of recycled
solvent to the delivered solvent
= 10 %) (cost of recycling is 1
L.E per liter and )
1L per barrel
Zero per barrel
100 ppm (Meets the Egyptian
environmental Law limit in workplace )
40 ppm
Collected Solvent Waste
Reduction of Cleaning Cost per
Vehicle
Recycling rate
Cost of disposal
Volatile Organic Compounds (VOCs)
Emissions, measured as Toluene
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2- Chemical Leasing on Electrostatic Powder
Coating
Chemicals Supplier
AKZO NOBEL For Powder Coatings S.A.E
Chemicals User :
ABB ARAB
Implementing Agency:
UNIDO- ENCPC
Industrial Process:
Electrostatic Powder Coating
Chemicals:
Coating Powder
Electrostatic Powder Coating Process at ABB ARAB
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Summary of Results
Item
Before Chemical Leasing Item
Under Chemical Leasing
Powder Coating
Chemical
Consumption per m2
0.2 kg per m2 of coated articles
0.1 6 kg per m2 of coated paints
Cost price per m2 of
coated articles
(LE/m2
3.80 L.E per m2
3.2 L.E per m2
fine powder waste %
12 %
% 4-5% (Goes for recycling to
achieve Zero waste)
Energy consumption
(Pressure of powder
coating gun and
powder pressure ) &
Maintenance Cost
It was estimated that gun pressure used for
powder coating was 2.0 bar & Line maintenance
was two times per month
It was estimated that gun pressure
was reduced by 30 %
&
Line maintenance reduced from two
times per month to one time per
month which contributes for reduction
of process cost.
Capacity of Powder
Capacity of powder coating was 22 000 m2 in 2006
Capacity of powder coating reached
44 000 m2 in 2008 (20% increase
due to chemical leasing)
Coating Per year
100 % (No rejects)
First Pass Yield (FPY
98%
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3- Chemical Leasing on Integrated Process
Management of Washing Machine Painting
• Akzo Nobel (Leading Supplier):
is part of the international group of AKZO
NOBEL Company and leading Company in the powder coating which covers around
60% of the Egyptian powder coating Market. Joint-Venture with an Egyptian Company.
Its main End user sectors in Egypt are domestic appliances, electric equipment and airconditioners.
• Chemetall Company (Sub-contract Supplier & copartner):
Chemetall
is a global company committed to specialty chemistry. The Group's activities focus on
products and processes for the chemical treatment of metal surfaces and plastics, as
well as selected fields of fine chemistry, e.g. lithium and cesium compounds. The
company is represented in Egypt by its authorized agent company (Obegi Chemicals
Egypt) which has sole distributorship understandings with other international companies
• User: Delta Electrical Appliance- Olympic Group:
DEA is the largest and
leading Egyptian company in the field of electrical equipment manufacturing. It is part of
Olympic Group, one of the leading Egyptian companies. The DEA Company is mainly
producing electrical appliances, (refrigerators, and washing machines).
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Scope of Processes
Surface
Treatment
Electro-deposition
Coating
Electro-static
Powder Coating
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Unit for Payment Per Washing
Machine
Model (s)
Total Surface Area
(m2)
SD (Small Design )
Model Aquatech (Ideal
Zanussi)
3.7
BD (Big Design) Model
Aquatech (Ideal
Zanussi)
3.6
5 Kg Elite
4.2
7 Kg Elite
4.64
Reinforce or
Refrigerator Support
0.1
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Summary of Results
Item
Before Chemical Leasing Item
Total computation of chemical per
From current high consumption
Perspective Under Chemical Leasing
Reduction by 15- 20 %
unit ( washing machine)
Cost per Washing Machine
From current high cost
Reduction of 15-20 % under
chemical Leasing
Re-work percentage
9%
0%
Environmental Conditions:
Fine powder waste
Sludge waste and wastewater
Dust & heat stress at workplace
Health and Safety Measures /
The amount of sludge wastes from
phospating process is (0.021 per
unit) (about 6 tons in 2008) which
go for the nearby dumpsite and
wastewater of 30 m3 per day and
fie powder waste is 10 % which
goes for recycling
Eliminate sludge waste by using
environmentally friendly pretreatment process (e.g non-cyanide
technologies) and re-use of
wastewater, recycling of waste
No full compliance with REACH or
Comply with the requirements of
REACH and ROHs for DEA
Equipments
Ensure compliance with REACH &
ROHS requirements and Free TIGC
powder coating
RoHs
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Lessons learned I
 ChL Concept sells easily but implementation takes
time.
 Intensive involvement of NCPCs as independent
institutions is necessary to ensure
implementation, mediation and monitoring.
proper
 Trust and willingness for cooperation of the partners
is essential.
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Lessons Learned II
Chemical Leasing enhances the impact of Resource
Efficiency and Cleaner Production.
Resource Efficiency and Cleaner Production 
efficient use of resources (water, energy, raw materials) to
allow cost reduction and productivity increase.
Chemical Leasing
increases environmental and
economic benefits and continuous improvement through
the active involvement of additional stakeholders of the
production / supply chain resulting also in mutual
performance control.
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Conclusion
•
Chemical leasing concept as CP+ tool is an effective tool for sustainable
chemicals management and circular economy
•
Chemical Leasing has economical, environmental , quality and organizational
benefits
•
Chemical Leasing is a continuous learning process
•
Role of CPCs is important for introduction and implementation of ChL but
needs further support and collaboration from other concerned players to upscale and ensure its sustainability
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Egypt National Cleaner Production Center
26 A Sherif St,Dowen,Cairo, Egypt
Tel: +2 02 23925984
Fax: +2 02 23916154
E-mail: abosena@ yahoo.com,
[email protected]
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