People, Planet, Profits & Projects

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Categories: China

NOTE: This post is not an endorsement of any political candidate!  If anything, it is an endorsement of project management and project managers.

 “I will build a great wall, and nobody builds walls better than me, believe me, and I’ll build them very inexpensively.  I will build a great, great wall on our southern border and I will make Mexico pay for that wall, mark my words.”

- Donald Trump, candidate for President of the United States

 

This post is indeed about walls.  But instead of border walls, it’s about sea walls.  Why sea walls?  Well, they’re an instrumental part of several huge, huge, great projects (to paraphrase Mr. Trump) which will engage many of our peer project managers, whatever their politics.

An article in The Edge, from the April 2016 issue of PM Network, says, “a growing number of organizations are now launching projects to generate power from the ocean.  Many of these projects are based in the UK, but they are also going to take place elsewhere, particularly in North America and in China. 

Projections (see chart, imagined from data in the article), take the investment from $25M in 2013 to over $10B in 2020.

 That’s quite a ‘wave’ of investment, and spells lots of opportunities for project managers.  Key to this demand is the predictability of the tides, as contrasted to the uncertainty and variation in solar and wind power – forcing them to rely on effective storage of power (another area of research and project management!). 

Here’s an example: In Swansea, Wales, there is a $1.5B tidal lagoon project which is set to generate power for 150,000 homes for over a century.  This project includes the creation of large (great, great!) sea walls.

Here’s another one: in China, there is a $30B proposed tidal wall, using special curved blades to help limit damage to sea life, which will be built by a consortium of eight Dutch companies.  In China, this is illustrative of the gigantic increase in renewable energy spending.  China is leading the way here with $110B invested in 2015 alone, and the US in second place at $56B.

Here is an excellent video (just 3 minutes) showing the technology behind the tidal project to be built off the coast of China.

Of course, China has some history building great, Great Walls…

In any case - these green-by-definition projects present great opportunities for project managers who have learned about the importance of sustainability in projects, and in project, program, and portfolio management.

Posted by Richard Maltzman on: April 18, 2016 10:03 PM | Permalink | Comments (0)

Risk = Threat + Opportunity

Categories: China

One of the toughest things to convey to those who study the PMBOK® Guide is the focus that PMI has on risk – a bifurcated focus that says “risk is not just a bad thing… it’s good and bad… we call the good risk opportunity and the bad risk threat”.  Well, those aren’t the exact words, but it’s the thinking behind this idea of a split-personality of risk.

Since this blog is focused on the “planet”, we decided to tackle the issue of regulations in China with respect to pollution, and how this may affect decisions made at the portfolio level of your organization.

We start with an astounding fact, courtesy of a very recent story in China Daily.

In brief, it says,

“Chronic air pollution and unclear regulations are the major obstacles for most of the United States-based companies operating in China, a survey said on Wednesday.

Of the 477 companies that participated in the annual business climate survey conducted by the American Chamber of Commerce in China, 53 percent said that they experienced difficulties in hiring senior executives to work in China because of the country's chronic air pollution.

This is the first time that air pollution has been cited as a reason by most of the companies that have participated in the survey's 17-year history.”

And of course, it’s not just an inability to hire senior executives that is of concern to China.  Disturbingly, air quality in the country’s cities is so bad, that a very active twitter feed, @BeijingAir, tracks air quality in China’s capital city on a daily basis.  A similar Twitter feed does the same for Shanghai - @CGShanghaiair (example below):

China is doing something about this.  In this story from Reuters, we see that in 2014:

“(China passed) amendments to an environmental protection law imposing tougher penalties on polluters in the most sweeping revisions to the law in 25 years amid mounting public anger over pollution.

The much-anticipated amendments follow a two-year debate among scholars, the government and state-owned enterprises over changes to the environmental protection law.

The amendments enshrine environmental protection as the overriding priority of the government, but fall short of calls by non-governmental organisations to allow all such groups to file lawsuits against polluters.

The amendments were passed by the Standing Committee of the National People's Congress, China's largely rubberstamp parliament, and take effect on Jan. 1, 2015.

They include provisions to help the government impose rules on powerful industrial interests. In contrast, the environmental legal code in the past was focused on growth, said legal experts."

 From BusinessInsider, we find:

“The much-anticipated amendments signal the close of a two-year debate among scholars, the government and state-owned enterprises over changes to the environmental protection law, and come in response to public anger over widespread pollution that has choked the country.”

And the law has teeth, as indicated from this article from The Japan Times:

"A Chinese court has fined six domestic companies a record $26 million for discharging tens of thousands of tons of waste chemicals into rivers, state media said.

The firms in Taizhou, in the eastern province of Jiangsu, were sued by a local environment protection organization and were found to have dumped 25,000 tons of waste hydrochloric acid into two rivers, the official Xinhua News Agency reported.

A court in the city ordered the companies to pay 160 million yuan ($26 million) in fines earlier this year, the highest ever penalty in Chinese environmental public interest litigation. A higher court upheld the punishment Tuesday, Xinhua said.

In August, 14 people involved in the case were sentenced by another court to prison terms of two to five years for causing environmental pollution, it added."

So we had a threat (devastating pollution effects) a risk response (the new regulations)… where is the opportunity?

Well, here, opportunity is in the form of helping with the risk response (amongst other things).  For example, in this article from Reuters, note how some enterprises have adjusted their project and program portfolios:

"Firms from Bill Gates-backed start-up EcoMotors Inc to Faurecia SA, a parts supplier controlled by French giant Peugeot SA, are jostling to help automakers meet new diesel emission rules taking effect in January, despite concerns the standards may not be strictly enforced.

"Generally speaking, we will benefit from higher emission standards in China as they will further spur our business growth," said Liu Xiaoxing, China vice president of Cummins Inc, a U.S. diesel engine maker that partners with Faurecia and counts China as its biggest and fastest-growing market.

Mathias Miedreich, Asia president of Faurecia's emission control technologies unit FECT, whose clients include makers of both diesel and gasoline-propelled vehicles, said annual sales stood to grow 40 percent faster than the broader auto industry's growth rate over the remainder of the decade.

The company forecasts FECT's China revenue will double to 2 billion euros ($2.72 billion) by 2020. FECT recently invested several million euros in a plant in Beijing to expand capacity for NS4-compliant exhaust systems.

"China represents the highest growth market ... We believe our products will give us significant advantage," Miedreich said.

Other players are also boosting investment. EcoMotors struck a deal in March with a unit of state-owned China FAW Group Corp [SASACJ.UL], one of China's biggest producers of commercial vehicles, to jointly build a $200 million engine plant in China.

EcoMotors President Amit Soman said many Chinese automakers were looking to skip straight to the latest technology in fuel efficiency rather than "just do small changes in conventional engines".

German automotive supplier Eberspaecher Group is also getting in on the act, setting up a joint venture in December with Shaanxi Automobile Group Co Ltd to make exhaust systems for the China market."

This article from Thomas talks further about the opportunities:

"This commitment by the government to exert some air pollution control measures has created an opportunity for U.S. companies in the industry to gain a slice of the Chinese pollution-control market. 

And that's just what some U.S.-based manufacturers are doing, though there are obstacles.

One U.S. company that has established a beach-head in China is Fuel Tech, a giant in air pollution control systems. Fuel Tech entered the Chinese market a little more than a decade ago and opened its first full office in Beijing in 2007, said company CEO and Chairman Doug Bailey. The Beijing Fuel Tech branch has 35 employees and subcontracts all the equipment the U.S.-based headquarters of Fuel Tech would sell. The company's employees are predominantly engineering-based.

"We're fully staffed by local Chinese citizens, and I think that does help us with local businesses looking for services like we offer," Bailey said."

And it’s not just the news media that has sensed this threat-opportunity pairing. The well-respected Conference Board will host a webinar on this topic on April 27th

Check out a teaser video here in which you can see the very mixture of threat and opportunity which we cover in our post.

And here's a link to the upcoming event - should you want to ... er... take advantage of the opportunity...

https://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2928&subtopicid=260

 

Blogger's note: This is one of many new posts that will feature the Program and Portfolio level - and sometimes the Enterprise level - of the intersection of sustainability, and long-term thinking - with projects.  If you have ideas about this, suggestions of topics, issues that concern you, let us know.  We want to make this as meaningful to you as possible.  Thanks!

 


Posted by Richard Maltzman on: April 13, 2015 01:42 AM | Permalink | Comments (0)
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"Marta was watching the football game with me when she said, 'You know, most of these sports are based on the idea of one group protecting its territory from invasion by another group.' 'Yeah,' I said, trying not to laugh. Girls are funny."

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