The Business Profile live edition

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Crossrail

Europe’s Mega Project

BP

Target Neutral

Starbucks

Ethically Sourced Coffee

Smart Highways & The Future of Transport

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Have a look inside Welcome to The Business Profile.

The current edition is filled with insight, comments, news of collaborations, reports and more.

What’s inside?

There is positive news for supply chain in Europe with reports suggesting that following the French election, volatility and risk within the EU has somewhat subsided.

More positive news for Europe comes in the shape of recent figures released by IHS Markits Manufacturing Purchasing Managers Index (PMI), which shows growth in the sector reaching a 6 year high!

Off-Highway research’s report into the global construction equipment sales has shown a positive growth curve in most regions with the industry now worth an estimated US$810 Billion globally.

In other news UK real estate brokers are hoping that the weakened economy following Brexit will provide a launchpad for overseas property investors, leading German equipment manufacturer Stihl are celebrating 50 years in their first export market Austria, and Starbucks have achieved 99% sustainable sourcing of coffee.

We hope you enjoy.

The Business Profile Team

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Procurement & Supply Chain

6 Technology

24

Sustainability

18

Business Briefs

Infastructure

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46

Procurement & Supply Chain

French election victory reduces supply chain risk in Europe C

IPS Risk Index, powered by Dun & Bradstreet - Second straight CRI improvement in 2017 • Western & Central Europe’s contribution to global supply chain risk has fallen to 29.94% in Q2 2017 from 30.14% last quarter • A reduction in risk in France was the biggest factor, with five other countries in the region also seeing reduced risk • This prompted an improvement in global supply chain risk to 81.27 compared to 81.90 last quarter Western and Central Europe’s contribution to global supply chain risk fell in Q2 2017 to 29.94%, compared with 30.14% in Q1, according to the

CIPS Risk Index, powered by Dun & Bradstreet.

The Index, produced for the Chartered Institute of Procurement & Supply (CIPS)

by Dun & Bradstreet economists, tracks the impact of economic and political developments on the stability of global supply chains.

The main driver of this fall in risk is France, following Emmanuel Macron’s victory in the French presidential elections. Macron’s victory brings greater clarity, following fears that Macron’s main opponent, Marine Le Pen, would withdraw France from international trade agreements and the EU, and immediately suspend France’s

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membership of Europe’s Schengen border-free zone.

The new EU trade deal with Japan is also good news for supply chain risk, with trade tariffs due to be removed for key sectors including automotive and agriculture. This new deal comes after the US withdrew from the Trans-Pacific Partnership, leaving room for the EU to fill the gap.

However, the outcome of elections in Italy and Austria are unclear, and if parties that are unsupportive of the EU and keen to leave the single market rise to power, this could lead to supply chain disruption if more countries leave the single market. Italy’s elections are due to be held in 2018, and the Eurosceptic Five Star party, which has previously promised to pull Italy out of the Euro, has been gaining support.

Positive developments in Western and Central Europe put downward pressure on global supply chain risk, but were also counteracted slightly by an increase in risk in the Middle East and North Africa. The increase is largely due to the severing of diplomatic and trade ties between Qatar and Saudi Arabia, Bahrain, Egypt and UAE. These events are having a significant impact on Qatar, limiting the flow of goods to and from the country and forcing it to re-route supply chains through Oman. As a result, the Middle East and North Africa contributed 6.91% to global supply chain risk in Q2 2017, up from 6.87% in Q1.

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European economies are performing well, and the EU is capitalising on new opportunities for trade deals

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Procurement & Supply Chain

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Overall, the global economy is undergoing a period of change

Additionally, large-scale protests took place in Romania following the government’s decision to amend the Penal Code of Romania to weaken anti-corruption laws. This led to a rise in Eastern Europe and Central Asia’s contribution to global supply chain risk to 7.58% in Q2 2017 from 7.55% the previous quarter.

Overall, global supply chain risk fell to 81.27 in Q2 2017 from 81.90 in Q1, though the underlying risk trend is on the rise.

John Glen, CIPS Economist and Director of the Centre for Customised Executive Development at The Cranfield School of Management said: “European economies are performing well, and the EU is capitalising on new opportunities for trade deals, as shown by the recent agreement with Japan.

This is good news for supply chains in the Eurozone, but the threat of populism to the European project remains in the background.

“Overall, the global economy is undergoing a period of change. Although there appears to have been little movement in supply chain risk since last quarter, we could be experiencing the calm before the storm. The re-shaping of global trade, with Brexit and various, long-standing trade agreements such as NAFTA being negotiated, could disrupt supply chain integrity in the future.”

Bodhi Ganguli, Lead Economist, Dun & Bradstreet:

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“Global supply chain risk continued to improve in Q2, driven by two main factors: A strengthening global economy with improved near-term forecasts and a decline in political risk over recent months, particularly in Europe.

“Nevertheless, potential changes to global trade agreements remain

a major risk to cross-border supply chains, as NAFTA renegotiations could start as early as late August, and Brexit negotiations start in earnest.

Q2 also saw a number of major cyber security incidents, with this becoming a serious and evolving threat and a more significant operational risk.”

About the CIPS Risk Index, powered by Dun & Bradstreet: First launched in April 2014, the CIPS Risk Index, powered by Dun & Bradstreet, is a composite indicator of pressures acting upon supply chains globally. The Index analyses the socio-economic, physical trade and business continuity factors contributing to supply chain risk across the world, weighting each score according to that country’s contribution to global exports.

The Index helps sourcing professionals understand the risks to which their supply chains are exposed, articulate questions and scenarios for key suppliers, inform assurance activities, check the readiness of contingency plans, support the negotiation of risk transfer in contracts, and establish factors which may impact the financial stability of tier one and sub-tier suppliers upstream.

Regular production of this Index will help procurement and supply professionals

communicate and justify risk-informed sourcing decisions and support effective Supplier Relationship Management.

About the Chartered Institute of Procurement & Supply: The Chartered Institute of Procurement & Supply (CIPS) is the leading international body representing purchasing and supply management professionals. It is the worldwide centre of excellence on purchasing and supply management issues. CIPS has a global community of 115,000 in 150 different countries, including senior business people, high-ranking civil servants and leading academics. The activities of purchasing and supply chain professionals have a major impact on the profitability and efficiency of all types of organisation and CIPS offers corporate solutions packages to improve business profitability.

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Procurement & Supply Chain

The Bosch Group – Recognising Suppliers

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he Bosch Group is a leading global supplier of technology and services. It employs roughly 390,000 associates worldwide (as of December 31, 2016). The company generated sales of 73.1 billion euros in 2016. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. As a leading IoT company, Bosch offers innovative solutions for smart homes, smart cities, connected mobility,

and connected manufacturing. It uses its expertise in sensor technology, software, and services, as well as its own IoT cloud, to offer its customers connected, cross-domain solutions from a single source. The Bosch Group’s strategic objective is to deliver innovations for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm.

In short, Bosch creates technology that is “Invented for life.” The Bosch Group

The Business Profile as “Workshop for Precision Mechanics and Electrical Engineering.” The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan over the long term and to undertake significant upfront investments in the safeguarding of its future. Ninety-two percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a charitable foundation. The majority of voting rights are held by Robert Bosch Industrietreuhand KG, an industrial trust.

The entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the Bosch family and by Robert Bosch GmbH.

comprises Robert Bosch GmbH and its roughly 440 subsidiaries and regional companies in some 60 countries. Including sales and service partners, Bosch’s global manufacturing and sales network covers nearly every country in the world. The basis for the company’s future growth is its innovative strength. At 120 locations across the globe, Bosch employs some 59,000 associates in research and development.

The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942)

Suppliers are key to The Bosch Group’s continued success!!

The Bosch Group has recognized 44 suppliers from 11 countries with the Bosch Global Supplier Award. This marks the fifteenth time the supplier of technology and services has honored outstanding performance in the manufacture and supply of products or services – notably in the areas of quality, costs, innovation, and logistics. Bosch presented the coveted awards before an audience of some 100 representatives of the supply industry.

The theme of this year’s award ceremony was “Partners in success.” Dr. Volkmar Denner, the chairman of the Bosch board of management, emphasized the special role of the increasingly interlinked cooperation between Bosch and its suppliers: “In the connected world, partnerships are becoming more and more important.

Hierarchical value chains are turning into 11

Procurement & Supply Chain value-added networks. With our open platform technologies, we are in an ideal position to seize the opportunities offered by digitalization in our partner networks; for example, exchanging Industry 4.0 data using the Production Performance Management Protocol.”

Transformation affects entire value chains “Our goal is to achieve supply chain excellence, which requires maintaining the highest quality standards. In the future, we must react even more quickly and flexibly to the demands of the market and of our customers. This will work only when all partners are intelligently connected with one another, working closely together with the aid of automated processes,” said Prof. Dr. Stefan Asenkerschbaumer, the deputy chairman of the Bosch board of management and in charge of purchasing and logistics. In preparation for the impending shift, Bosch continues to invest heavily in new technologies and markets, to drive innovative purchasing and

logistics strategies forward, and to train its associates for this new world.

Suppliers’ software expertise increasingly important As an innovation leader, Bosch is shaping and actively driving transformation on the internet of things. “By 2020, all Bosch’s new electronic products will be connected. This means that our demand for software will also be constantly on the rise. By 2023, we expect to triple our software purchasing volume to over three billion euros,” Denner said. The Bosch CEO is convinced that the company’s suppliers will also find it increasingly important to develop their organizational structures for the internet of things, a move that will primarily involve expanding their software-related expertise. Denner believes that companies’ sharing of ideas and knowledge is a key success factor: “We have to work together to further expand our existing business in connected products and Industry 4.0. Indeed, this is the only way to stay competitive over the long term.”

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A tradition of international partnerships Bosch has been working with many of its partners for decades. In fact, for three of the award winners, this is the eighth time they have been so honoured. More than half the awardees are headquartered outside Germany, and just about one-third of those are located in Asia. Dr. Karl Nowak, the president of the Bosch corporate sector for purchasing and logistics, said, “Bosch’s success is based in no small part on competitiveness, innovative strength, and agility – qualities we can achieve only with fruitful international partnerships.” Bosch conferred awards in a total of six categories: innovation, raw materials and components, electronics and electromechanics,

mechanics, resale goods, and purchasing of indirect materials.

Suppliers play a key role in innovation Bosch’s suppliers have long been more than mere deliverers of parts and components: they are also partners in development and innovation who help Bosch stay competitive. Currently, the Bosch Group’s purchasing and logistics volume amounts to some 60 percent of its total sales. Most of the purchases are of electronic and mechanical components, but Bosch also buys resale goods, software, services, capital goods, and operating equipment.

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Procurement & Supply Chain

Businesses flouting Modern Slavery legislation

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ne in three businesses are flouting Modern Slavery legislation – and getting away with it according to a CIPS survey • Over a third of businesses covered by the Modern Slavery Act flout requirements – with no consequences • 10% of UK businesses report having found modern slavery in their supply chains • The profession does not think that the Modern Slavery Act goes far enough and calls for greater legislation A third (34%) of organisations required by law to complete a statement in compliance with the Modern Slavery Act have failed to do so, according to a new survey from the Chartered Institute of Procurement & Supply. The survey of 1,288 supply chain professionals found that 37% of supply chains managers subject to the Act’s remit admitted to not even having read the Government guidance on Modern Slavery.

The Modern Slavery Act requires all businesses that operate within the UK and with a turnover of more than £36m to produce a yearly statement outlining the actions they have taken to combat slavery in their supply chains. Currently, there are no punitive consequences for non-compliance. Even more alarming are the figures relating to foreign businesses

who conduct business in the UK and are therefore also required to complete a statement: 60% have failed to do so.

Again there are no consequences for noncompliance.

The CIPS survey revealed that a tenth* of UK supply chain managers admitted having found evidence of modern slavery in their supply chains since the Act, compared with 6% who had found it before the Act was introduced This news coincides with recent figures from the National Crime Agency which revealed that there were far more modern slavery victims in the UK than previously thought, with 300 live modern slavery police operations currently in progress in the UK alone.

The lack of engagement with the modern slavery statement has resulted in a large proportion of businesses having few or no policies in place to tackle the issue.

Only 45% of organisations have provided any training to their staff to help them spot modern slavery, while just 42% have mapped their supply chains to better understand their risks. As a result, only 6% of supply chain managers under the Act’s remit are absolutely certain there is no slavery in their supply chain.

There are no legal consequences for

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a business which does not complete a statement, and the survey reveals that the industry does acknowledge that further legislative pressure is needed to goad them into action. Less than half of supply chain managers who are under the Act’s remit think it goes far enough, with more than half calling for fines for businesses who fail to comply with the Act. More than two-thirds of those surveyed called for the Act to be extended to organisations with a turnover of less than £36 million.

However, the increased attention placed on modern slavery does seem to have raised awareness among supply chain professionals about how to deal with this scourge. In 2015,52% of UK supply chain managers said they would not know what to do if they found modern slavery in their supply chains, compared to just 17% today.** Cath Hill, CIPS Director, said: “The results of our survey are shocking.

Legislation that was designed to be world

leading has fallen at the first hurdle: compliance. Whilst awareness of modern slavery is becoming more widespread, we need to ensure that outrage turns into action. We can only ensure that people are protected from this appalling crime if there is a consequence for not doing so. At the moment, the Modern Slavery Act has great intent and some of its ambitions are being met. However, those working in the procurement and supply chain profession have told us that without stricter policies and harsher punishments for those who are not compliant with the Act, little will change.

“The Modern Slavery Act has set us on the right path but there is still a long way to go before we can say that we are actively eliminating modern slavery from supply chains.”

CIPS produces publications, such as the Tackling Modern Slavery in Supply Chains Guide, which are available free to anyone interested in eradicating slavery from their supply chains.

The Impact of the Modern Slavery Act UK Supply Managers who:

Before the Act

After the Act

Said they would not know what to do if they found modern slavery in their supply chains

52%

17%

Have mapped their suppliers to understand the potential risks and exposure to modern slavery

33%

45%

Ensured all workers in the UK in their supply chain receive the minimum wage and apply robust immigration checks

41%

40%

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Procurement & Supply Chain

Starbucks celebrates 99% ethically sourced coffee

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n 9 September 2017, participating Starbucks store teams in Britain, France, the Netherlands, Switzerland, Austria, Greece, Cyprus and South Africa celebrated the group’s position in 99% ethical sourcing, by writing 99 on customers’ cups.

Starbucks is the largest coffee retailer to have 99% of its coffee supply chain verified as ethically sourced, working in partnership with Conservation International.

CAFE Practices programme The cornerstone of Starbucks sourcing practices is its CAFE (Coffee and Farmer Equity) Practices programme, which was developed over 15 years ago, with Conservation International. The practices form a set of growing and buying guidelines that help farmers supplying Starbucks to produce coffee in a sustainable and fair way, and has already affected over one million farmers and workers across four continents.

CAFE Practices set out guidelines that mean any coffee purchased by Starbucks must meet the following standards: • Economic – a transparent supply chain where coffee suppliers must be able to provide evidence of payments to coffee farmers • Social Responsibility – Ensure safe and

fair working and living conditions for workers and ensure access to medical facilities and children have access to education • Quality - All Arabica coffee must meet Starbucks quality standards • Environment Leadership – Help preserve and protect the farming land and water bodies

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Reaching 100% Bambi Semroc, senior strategic advisor, Center for Environmental Leadership in Business at Conservation International, said, “Conservation International has been working with Starbucks for over 15 years towards its commitment to sustainable coffee sourcing. Together, we have ensured – from coffee tree to cup – that 99% of Starbucks coffee is ethically sourced. We’re honoured to celebrate alongside Starbucks and look forward to working together in reaching 100%.”

Kelly Goodejohn, Starbucks director ethical sourcing, added, “The group

has invested more than $100 million in supporting coffee communities and our comprehensive sourcing strategy means we can improve the resilience of our supply chain and ensure the long-term supply of high-quality coffees, as well as building stronger, enduring farming communities for generations to come. It’s fantastic to celebrate our verified 99% ethically sourced coffee with customers around the world but it is the last 1% that means so much, since we have the opportunity to scale our sustainable coffee model to coffee farming communities in new regions as we strive to reach our 100% goal.”

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Sustainability

BP Target Neutral expands carbon offset portfolio

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P advances its commitment in support of a lower carbon future: the project portfolio has the total capacity to reduce up to 2.5 million tonnes of CO2 equivalent per year and improve the livelihoods of more than 2 million people BP Target Neutral, BP’s voluntary carbon offsetting programme, is

celebrating its 11th year with an announcement that it has expanded the portfolio of carbon offsetting projects for 2017.

New projects in India, Peru, China and Mexico have been added to the portfolio, which includes activities as diverse as forest conservation, energy efficiency, renewable power and biogas.

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BP Target Neutral only buys carbon credits that meet ICROA’s (International Carbon Reduction & Offset Alliance) best practice standards. Credits are used to offset carbon emissions as part of a “reduce - replace - neutralise” approach to carbon reduction. This supports the development of low carbon and carbon neutral products and services across

BP’s businesses.

The new carbon offset projects have been overseen by an independent project selection forum using the UN’s sustainable development goals as a framework for assessment. The projects selected are expected to reduce carbon dioxide equivalent emissions by more than 2.5 million tonnes per year and improve the livelihoods of more than 2 million people though better access to energy, health, education, and employment opportunities as well as protecting more than 40,000 hectares of globally significant habitat.

Andrea Abrahams, global director, BP Target Neutral, said: “BP is committed to a lower carbon transition. Our carbon project selection process ensures the integrity of carbon reduction projects and their contribution to the UN’s sustainable development goals.

“Increasing numbers of businesses are implementing carbon management strategies which allow them to target top-line growth, business efficiency and brand enhancement with measurable and material impacts. BP is proud to provide our customers and their businesses with opportunities to not only offset their carbon emissions but also help to bring people out of poverty.”

In India, the Bagepalli Coolie Sangha Project involves installing 18,000 biogas plants and cookstoves in low income homes and over the past six years has avoided 137,452 tonnes of CO2e (equivalent) emissions. Biogas generated

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Sustainability in biodigesters replaces the burning of wood and kerosene in traditional stoves and secures a significant reduction in greenhouse gases and harmful indoor air pollution.

In Peru, the Qori Q’oncha Cookstoves Project is helping households to obtain improved cookstoves that have an enclosed combustion chamber which burns more efficiently and evacuates smoke from the home through a chimney.

Burning more efficiently and using less firewood, each new stove reduces on average 3.3 tCO2e per year. By January 2017, 106,000 improved cookstoves have been installed benefitting over 450,000 people from rural communities living in poverty.

In China, the Sichuan Rural PoorHousehold Biogas Project also supports the installation of biogas units and smoke-free cookstoves in low-income households. The project aims to provide one million low income households with clean, convenient and free biogas for cooking, heating and lighting and the programme has the potential to save up to 20 million tCO2e within its 28-year lifetime.

In Mexico, the Distribution on ONIL Cookstoves Project is working to provide high-efficiency plancha-style cookstoves to families in rural Mexico. As well as improving indoor air quality, the stoves use much less firewood than traditional open fires. Traditional three-stone fires in Mexico use around 5 tonnes of firewood each year per household and gathering it is time-consuming and heavy work.

High-efficiency plancha-style cookstoves reduce the time needed to collect firewood and protects bio-diversity.

The project is aiming to install 35,000 cookstoves per year by 2019.

About BP Target Neutral BP Target Neutral is administered by BP as a not-for-profit scheme - BP covers BP Target Neutral’s operating costs. BP Target Neutral’s work is governed by an independent advisory and assurance panel of prominent environmental and industry experts. The panel ensures that all policies and activities conform to best practice in carbon management, and where possible will seek to set new standards for that best practice.

About carbon credits Carbon credits are tradable certificates that represent one tonne of carbon dioxide equivalent (tCO2e) either removed or prevented from entering the atmosphere. A carbon credit grants the holder the right to claim for that specific environmental benefit. Approved registries give each carbon credit a unique identification number to make sure it doesn’t get double-counted.

Credits can be traded in compliance or voluntary markets. Since GHG reduction projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners and around the world. BP Target Neutral only buy carbon credits from ICROA approved standards.

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The Business Profile

Mars pledges $1 billion to fight climate change T

he $35 billion food giant behind brands like M&Ms, and Twix has launched its “Sustainability in a Generation” plan, aiming to reduce the carbon footprint of its business and supply chain by more than 60% by 2050.

“We’ve been increasingly worried about overall progress on the big issues, whether that’s climate change or solving poverty,” Barry Parkin, Mars’ chief sustainability officer, told Business Insider.

“There are obviously commitments the world is leaning into but, frankly, we don’t think we’re getting there fast enough collectively. We’re trying to go all in here.”

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Sustainability

The huge investment commitment comes ahead of a UN General Assembly and Climate Week in New York later this month, and the timing is meant to spur other companies around the world to make similar environmental commitments.

CEO Grant Reid said in a statement released Wednesday that “the engine of global business — its supply chain — is broken and requires transformational, cross-industry collaboration to fix it.”

Parkin said the consequences of inaction were “the planet warming” and “more extreme weather events,” which could cause “significant challenges and hardships in specific places around the world, whether that’s oceans rising or crops not growing successfully.”

“We’re a food business, which is based on agriculture, so we care a lot about the farmers who supply us around the world,” he said. “It’s towards 1 million farmers around the world who produce raw materials for us.

“Climate science says many of those are going to be challenged as the world gets warmer. We care about this both on a societal level but also on a business level.”

He added: “It’s time for companies to accelerate their game and work together, and work together with governments and civil society. This is a world issue, and it requires all actors to work together.”

Mars, which had close to $35 billion in sales last year, was one of the companies that signed a letter in May urging President Donald Trump not to withdraw from the Paris climate agreement. Parkin

said Mars’ investment wasn’t motivated by Trump.

“We’re not interested in the politics here — this is about policy,” he said. “We believe in the scientific view of climate science and the need for collective action.”

But he added, “We’re clearly disappointed that the US administration has chosen to withdraw from the Paris agreement.”

Mars said it would meet the environmental commitments set out in the Paris agreement as part of its sustainability plan.

Mars’ $1 billion sustainability drive will include investments in: • Renewable energy: Mars’ US and UK operations are already powered by huge wind farms built over the past decade, but it plans to have wind-powered operations in 11 countries around the world, including Russia, China, Australia, and India, by next year.

• Food sourcing: The company, which also makes pet food under brands including Whiskas and Pedigree, will invest in sustainable sourcing for ingredients like fish.

• Cross-industry action groups: Mars has set up groups like CocoaAction, an industry coalition aimed at making cocoa growing more sustainable, and Livelihoods Fund for Family Farming, which invests in smallholder farming across the world.

• Farmers: “A huge amount of it will go upstream in working with farmers and helping farmers transform the

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way they grow crops to be both more environmentally sound, but also in ways that dramatically increase the income of farmers,” Parkin says.

“This is not just a little bit better,” Parkin said. “The science says we need to reduce our carbon footprint by two-thirds, and we’re going to do that. You have to completely change the way you operate your business, and you have to completely

change how you source your products.”

He added: “The billion is a good start and a very clear investment, but we fundamentally have to make the business more sustainable. Everything we invest over the next few years has to be in pursuit of becoming a truly sustainable business.

“We care about our business being successful over the next 100 years.”

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Transport and Technology

The Future of Transport: Smart Highways, Driverless Cars and Transportation Tubes

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s technological innovation like artificial intelligence becomes part of everyday life, it is reaching sectors that will make its presence even more pervasive, like transport and related infrastructure.

Driverless cars, autonomously lit highways and bridges that regulate the flow of traffic

promise to improve safety and efficiency, such as reducing commuting times between home and office.

The benefits of these technological developments are not lost on governments.

With roads and other infrastructure fitted with sensors that provide data in real time, for example, trucks loaded

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as a laboratory by Daan Roosegaarde, a designer who developed a coating that lights up at night after absorbing the sun’s rays during the day. The coating has been applied in thin lines along the edges of the highway, its illumination helping guide drivers. It eliminates the need to have traditional lamps that consume electricity and cost money. On cloudy days, a solar panel provides the power needed to light it up.

The United States is also promoting the idea of “smart highways”. The Department of Energy launched a project called the SunShot Initiative, which offers funding to viable projects. One of them is called Brighter Days, which received $5 million to build a 100-meter-long stretch of solar panel-lined bicycle path to provide electricity to nearby housing in Florida.

with merchandise can arrive at their destination in a shorter periods of time by avoiding traffic snarls and other obstacles.

This improvement in logistics results in merchandise spending less time in the warehouse.

From “Smart Highways”…

Another development is the lighting of highways at night without the use of electricity. In Oss, the Netherlands, a stretch of Highway N329 is being used

…to Underground Highways Underground highways to reduce congestion and quicken the pace of travel is one vision being pursued by serial entrepreneur Elon Musk, founder of Tesla Motors, the electric car maker. His idea is to have cars loaded on wagons that run along a monorail underground at 200 kilometres per hour. He would have the first tunnel built in Los Angeles, starting at the airport.

Trains of the Future Changes are coming not only to roads and rail but also to the cars and trains that use them. Once again, Musk is leading the charge. He is overseeing the construction of the Hyperloop, which is essentially a tube powered by the sun that will send levitated 27

Technology

The Business Profile objects inside it at 1,200 kilometres per hour at low pressures. It is still in the experimental phase - called Hyperloop One - in the Nevada desert near Las Vegas. But the first such system is expected to come into service in Dubai in 2020, linking Abu Dhabi in 12 minutes.

Public transport inside cities could also face a transformation with skyTran, which is designed to be a high-speed, low-cost, elevated transport system.

Using magnetic levitation technology, it would shuttle two-person pods along an elevated track. It is already in the experimental phase in Tel Aviv.

The Car of the Future The future of the car is in artificial intelligence. Tesla has developed software to put its cars on autopilot. Audi, BMW, Daimler and General Motors are also working on similar projects.

The EU has demanded that all new cars sold after March 31, 2018, must come equipped with eCall, a distress communications system that makes an emergency call when the vehicle gets into an accident. The next step is the installation of a sensor to gather information on traffic, road work and other topics of interest to the driver.

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Technology

New DHL Resilience360 Analytics module to provide businesses with foresight on supply chains risks

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t its third annual Risk & Resilience Conference today, DHL launched a tool that streamlines and consolidates data from existing modules to provide further insights through DHL Resilience360, the Group’s innovative, cloud-based risk management platform and early warning system. Resilience360 Analytics is unique in combining years of systemically collected supply chain data with some of the most comprehensive risk databases available on the market. It combines DHL’s Risk Exposure Index, a weighted index across more than 30 risk categories, with customer supply chain

and business impact data to provide predictions of potential future obstacles.

The analyzed and consolidated data is visualized in a succinct manner and helps businesses have an increasingly clear view into their supply chains.

“As global businesses are growing rapidly while supply chains are becoming more complex, it is crucial for our customers to detect future obstacles along the supply chain and take early actions to mitigate business risks,” says Tobias Larsson, Head of Resilience360, DHL Customer Solutions & Innovation.

During Hurricane Harvey, about 33

The Business Profile percent of US chemical production was disrupted and many chemical suppliers had to give force majeure notices.

Resilience360 Analytics showed that the expected shortages of basic industrial building blocks such as ethylene, chlorine or butadiene are likely to have an impact on the Automotive, Life Science & Healthcare and Electronics industries.

A manufacturing company in one of these sectors, for example, might have a supplier of chemicals that ships items by rail from the Port of Houston. Armed with the knowledge that the port and the railway were likely to be closed for a certain period of time, the customer could be the first to pre-order additional supplies to cover that period. With the information from Resilience360, DHL is able to visualize their customer’s end-to-end supply chain, making it possible to specifically say whether production lines may be impacted and revert to contingency plans, if needed.

The new module immediately provides insights to companies, helping them to gain profound understanding of risks affecting their supply chain. These insights include: • Benchmarking dashboards to compare own risk profiles with those of industry peers and to receive early-warnings on incidents.

• Sector-specific analysis based on unique risk profiles of various geographically mapped supplier production locations.

• Risk bottlenecks in supply chains by analyzing registered incidents that have had impact on nodes and receiving user feedback on relevant events.

• Supply chain pain points by combining historic as well as forward-looking risk information with supplier data (trade volumes, business impact scores, value at risk, single sourcing etc.).

The new module for instance shows that automotive and aerospace industries are 16.6 percent and 4 percent below the average risk profile, meaning that these industries are the most risk averse, while chemicals and technology have a substantially higher risk profile with figures at 8 percent and 10 percent above the average respectively.

“Utilizing the new analytical tool and methods now gives us the basis to develop regression and predictive models, further enhancing our solutions in the area of risk mitigation. Together with the Deutsche Post DHL Data Science teams, we are currently looking into alternative re-routing suggestions as well as shipment delay predictions, to forecast the likelihood and the potential duration of shipment disruptions for risk events along transportation hubs using millions of historic DHL shipment data sets,” says Rick Tillenburg, Senior Customer Operations Analyst at Resilience360.

From natural disasters to cyber-attacks and a quickly changing regulatory environment, organizations need to be prepared in order to take quick action when the inevitable occurs. The new R360 Analytics application complements DHL’s Resilience360 platform in order to map out specific industries and the subsequent impacts to other industries likely to run short of supply in the event of a disruption.

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Technology

KPMG CIO Survey Global Political and Economic Uncertainty Create a New Breed of Digital Innovators, CIO Survey Finds

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espite two-thirds (64 percent) of organizations adapting their technology strategy because of unprecedented global political and economic uncertainty, 89 percent are maintaining or ramping up investment in innovation, including in digital labour. More than half (52 percent) are investing in more nimble technology platforms to help their organization innovate and adapt.

This is according to the 2017 Harvey Nash/ KPMG CIO Survey, the world’s largest survey of IT leadership. While economic uncertainty is making business planning difficult for many organizations, it is clear digital strategies have infiltrated businesses across the globe at an entirely new level. The proportion of organizations surveyed that have enterprisewide digital strategies increased 52 percent in just two years, and those organizations with a Chief Digital Officer have increased 39 percent over last year. To help deliver these complex digital strategies, organizations also report a huge demand for Enterprise Architects - the fastest growing technology skill this year, up 26 percent compared to 2016.

Cyber security vulnerability is at an all-time high, with a third of IT leaders (32 percent) reporting their organization had been subject to a major cyber-attack in the past 24 months – a 45 percent increase from 2013. Only one in five

(21 percent) say they are “very well” prepared to respond to these attacks, down from 29 percent in 2014. Despite very visible headlinegrabbing attacks such as the recent WannaCry ransomware attack, the biggest jump in threats comes from insider attacks, increasing from 40 percent to 47 percent over last year.

“Making a success of technology has always been challenging, and this year’s Survey says that it has just got harder still,” said Albert Ellis, CEO, Harvey Nash Group. “Layered on top of astonishing advances in technology is a political and economic landscape that is dynamic and changing fast, sometimes in surprising ways. However, what is very clear is that many technology executives are turning this uncertainty into opportunity, driving their organization to become more nimble and digital. CIOs are becoming increasingly influential as CEOs and boards turn to them for help in navigating through the complexity, and the threat and opportunity, which a digital world presents.”

“Organizations have moved on from a world of strategizing and talking about digital, to one in which they are actually making it happen, and we are now seeing widespread and active implementation,” said Lisa Heneghan, KPMG’s Global Head of Technology, Management Consulting. “The businesses we see as Digital

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Leaders are taking a pragmatic approach, applying technology and automation across their business, including in back office functions, to create a platform for broader transformation”.

Now in its 19th year, the Harvey Nash/ KPMG CIO Survey is the largest IT leadership survey in the world. Additional findings from the survey include: Digital leadership has changed • Almost one in five CIOs (18 percent) report their organizations have ‘very effective’ digital strategies.

• CIOs at these digitally-enabled organizations are almost twice as likely to be leading innovation across the business (41 percent versus 23 percent), and are investing at four times the rate of non-leaders in cognitive automation (25 percent versus 7 percent). ) • Overall, the survey found almost twothirds (61 percent) of CIOs from larger organizations are already investing or planning to invest in digital labour.

CIOs love their jobs, and are more likely to be involved at the Board level • CIOs who are “very fulfilled” in their role is at a three-year high - rising from 33 percent in 2015 to 39 percent this year.

• For the first time in a decade, more than seven in ten CIOs (71 percent) believe the CIO role is becoming more strategic.

• 92 percent of CIOs joined a Board meeting in the past 12 months.

• However, the CIO life span is just five years or less (59 percent), although many want to stay longer.

Female CIOs receive salary boost • In a striking development, female CIOs are far more likely to have received a salary increase than male CIOs in the past year (42 percent and 32 percent, respectively), but still, the number of women in IT leadership remains extraordinarily low at 9 percent, the same as last year.

Big data/analytics remains the most indemand skill • While the fastest growing demand for a technology skill this year was enterprise architecture, big data/analytics remained the most in-demand skill at 42 percent, up 8 percent over last year.

Complex IT projects – increase risk of failure monumentally • Two thirds (61 percent) of CIOs say IT projects are more complex than they were five years ago, and weak ownership (46 percent), an overly optimistic approach (40 percent), and unclear objectives (40 percent) are the main reasons IT projects fail.

• Over a quarter (27 percent) of CIOs say that a lack of project talent is the cause of project failure, but project management skills are absent from the CIOs top list of technology skills needed in 2017, dropping a staggering 19 percent in one year.

About the Survey The 2017 Harvey Nash/KPMG CIO Survey is the largest IT leadership survey in the world in terms of number of respondents. The survey of 4,498 CIOs and technology leaders was conducted between December 19, 2016 and April 3, 2017, across 86 countries.

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Technology

Get to know Ericsson CTO Erik Ekudden E rik Ekudden has been Ericsson Group CTO and Head of Technology & Architecture since July 1.

The year was 1993, and GSM – the Global System for Mobile Communications – was starting to gain traction. That was also the year that Erik Ekudden started as an engineer with Ericsson Research, working on signal processing and speech coding.

“From a technology point of view, it was a great time to start,” Ekudden says. “We were finalizing GSM, I was working with research and I’d already started working with some of our leading customers. It was a period when we went from local technologies with local standards and systems to truly global technologies with global standards and systems.”

Ekudden continued to stay close to the technology, holding senior technical positions within Research and Development. During that time his team created the speech coding and speech and multimedia functionality that are now used in today’s smartphones worldwide.

Also during his career, he has worked to create global mobile systems for 3G and 4G in close collaboration with customers.

Shortly after the millennium, Ekudden headed up a new research area in service layer technologies, spanning management, data and media. This team also conducted some of the first work on virtual and augmented reality for mobile systems.

For the past seven years, Ekudden was Head of Technology Strategy for the Ericsson Group and CTO Americas. It was there, in the heart of Silicon Valley, that Ekudden gained some of his most valuable insight for his new role.

“Silicon Valley is quite a unique place, where business and technology come together, perhaps in a stronger way than in other places around the world,” Ekudden says. “That’s not to say it doesn’t exist elsewhere – the Nordics is one example. But you really notice the strength of the relationship between the two in Silicon Valley – there is a very natural connection between technology and business.”

“One of the key learnings from my time there is that it is extremely important for Ericsson to be a strong player in the technology and innovation ecosystem and for us to drive strong partnerships on the technology side.

Also, speed is really critical: speed in terms of decision making, in terms of execution and implementation and in the change in the technology landscape.”

This mentality of rapid change is something Ekudden is committed to maintaining at Ericsson.

“The telecommunications industry is used to being the disruptor and implementing change at speed. Now we are entering a new phase where we are building systems that affect not only consumers with their phones, but we are building systems with 5G that will affect enterprises and society at large,” he says.

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35

Business Briefs

Orbotech Announces Multi-Million-Dollar Deal With Unimicron Orbotech to supply Unimicron with Industry 4.0-compliant DI, AOI and AOS PCB Production Solutions for new state-of-the-art facility.

O

rbotech Ltd., (NASDAQ: ORBK) a leading global supplier of yieldenhancing and process-enabling solutions for the manufacture of electronics products, today announced a multi-milliondollar agreement with Unimicron Germany GmbH (formerly RUWEL International) for the purchase of Orbotech’s direct imaging (DI), automated optical inspection (AOI) and automated optical shaping (AOS) PCB production solutions. Unimicron Germany is in the process of rebuilding its inner layer fab as a fully automated Industry 4.0, state-of-the-art facility, and upgrading its Outerlayer and Solder Mask capacity and capabilities.

Unimicron Germany GmbH specializes in high-end, high-reliability manufacturing for automotive electronics, renewable energy and industrial markets. The site is expected to be fully functional in the first half of 2018.

Among the Orbotech solutions Unimicron

Germany has ordered are the latest members of the Nuvogo™ family for direct imaging; Orbotech Diamond™ 8 for high throughput solder mask direct imaging; Fusion™ 22 AOI with 2D metrology in process quality control (IPQC); Precise™ 800 AOS system for 3D shaping of any layer HDI and complex multi-layer boards; and Orbotech Smart Factory for Industry 4.0-compliant, integrated PCB production.

“Following the fire which devastated our facility last year, we have a unique opportunity to rebuild and improve on our past successes,” said Mr. Gerard van Dierendonck, CEO of Unimicron Germany. “We are committed to making the facility more environmentally and energy friendly, as well as ensuring the highest level of flexibility with the lowest total cost of ownership. We selected Orbotech’s solutions because they enable us to achieve our goals and are the best fit for

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our customers’ present and anticipated production and technology needs.”

“We are delighted to be able to provide a wide range of PCB production solutions as part of Unimicron Germany’s rebuilding project and to further deepen our relationship,” stated Mr. Sharon Cohen, President of Orbotech West. “Our Industry 4.0-compliant solutions meet Unimicron’s specific advanced technology and reliability needs and enable and ensures traceability, which is critical for automotive and other high-reliability PCB applications. In addition, our comprehensive customer service offering, with our one-stop monitoring center, is designed to provide proactive, preventative measures which can troubleshoot any potential issues, such as downtime, before they even occur.”

“Orbotech’s solutions are a perfect fit for our strategy moving forward and our aim of building the most modern inner layer factory possible,” said Mr. Rico Schlüter, CTO of Unimicron Germany. “As the European PCB industry continues to make significant changes, we are determined to invest in stateof-the-art equipment that will grow with us.”

About Unimicron Germany GmbH Unimicron Germany (formerly known as RUWEL International GmbH) is part of the Unimicron Technology Corporation, and is one of the most important producers of circuit boards in Europe. Unimicron Germany has production capacity in both Europe and Asia managed by one team of highly dedicated professionals based in Germany. Unimicron Germany’s maxim is to be a technology trendsetter with

innovations to set the pace for technical progress. The company aims to help clients to optimize their PCB designs, provide rapid prototyping and sample production and place particular focus on producing small to medium volumes of highly complex PCBs. By continuously transferring process know-how and technology within the High Reliability Business Unit (HRBU), high volume clients are served equally well, while getting great value from the lower cost base in Asia.

About Orbotech Ltd Orbotech Ltd. is a leading global supplier of yield-enhancing and process-enabling solutions for the manufacture of electronics products. Orbotech provides cutting-edge solutions for use in the manufacture of printed circuit boards (PCBs), flat panel displays (FPDs), and semiconductor devices (SDs), designed to enable the production of innovative, next-generation electronic products and improve the cost effectiveness of existing and future electronics production processes.

Orbotech’s core business lies in enabling electronic device manufacturers to inspect and understand PCBs and FPDs and to verify their quality (‘reading’); pattern the desired electronic circuitry on the relevant substrate and perform three dimensional shaping of metalized circuits on multiple surfaces (‘writing’); and utilize advanced vacuum deposition and etching processes in SD and semiconductor manufacturing (‘connecting’). Orbotech refers to this ‘reading’, ‘writing’ and ‘connecting’ as enabling the ‘Language of Electronics’.

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Business Briefs

50 years of STIHL Austria: A blueprint for success

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A

ndreas Stihl developed his first chainsaw in 1926. Only four years later the young entrepreneur ventured abroad with his products: Austria was the first market outside Germany for STIHL’s gasoline-powered two-man chainsaws.

Eventually, in 1967, STIHL Ges.m.bH. was founded and was thus the first ever wholly owned sales subsidiary. The 50-year success story has now been extensively celebrated in Salzburg on September 15 under the motto “Mission Future”.

In retrospect, the founding of the company’s own sales subsidiary was a landmark decision with lasting consequences for the future strategy of today’s world market leader. “It became clear that we could operate far more effectively with our own subsidiary”, said Dr. Nikolas Stihl, grandson of the company’s founder and now chairman of the STIHL advisory and supervisory boards, in his speech. The new path taken in Austria was from that point onwards a kind of blueprint for success. The result: In 2017, STIHL distributes its products through 37 marketing and sales subsidiaries, some 120 importers and more than 45,000 appointed dealers in over 160 countries.

In Austria alone, STIHL has more than 320 appointed dealers. “We supply the most suitable power tool for every requirement and every application, be it a chainsaw or robotic mower. The many years of success with customers must be appropriately celebrated”, said Alexander Hembach, general manager of STIHL Austria, at the gala evening which took place with a large

number of staff and servicing dealers in Hangar-7 in Salzburg. “A company is more than a manufacturer of products or a provider of services. It is primarily characterized by a strong bond between people who work together every day”, emphasized Hembach and expressed his sincere thanks to all those involved.

Business at STIHL Austria has grown continuously over the past fives decades.

“We are the undisputed market leader in chainsaws, bruhscutters and many other product categories”, said Nikolas Stihl.

Together with Norbert Pick, STIHL executive board member responsible for marketing and sales, and Alexander Hembach, he was pleased about the large attendance at the gala evening and took the opportunity to look not only at the past, but also the future.

For example, apart from expansion of the product line of cordless electric power tools, further new products in the core business of gasoline chainsaws are in the pipeline, and STIHL is currently working intensively on new developments such as digitalization and connected products.

“The catchword digitalization is not new to STIHL. In our worldwide manufacturing network, a large number of ‘Industrie 4.0’ components and systems as well as collaborative robots have long been established”, explained Norbert Pick during an interview on the stage. A new field, which the company is currently opening up, is the development of smart connected products.

“We see digitalization as an opportunity to offer our end users even better service and added value when they use our products.”

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Business Briefs

GPI teams with Heineken France for sustainable logistics

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eineken has partnered with Graphic Packaging International (GPI) and Jung Logistique (JL), to launch a sustainable logistics solution in France.

JL is GPI’s strategic logistics provider and will work with the folding carton manufacturer and Heineken France to fully utilise a new Jung Lauwin-Planque (Northern France) distribution centre with the aim of eradicating wasted transport space between production sites and distribution centre.

JL will provide a common night shuttle service to transport beer from Heineken Mons-en-Baroeul to the distribution facility (the primary use of the hub) and return with cartons from key supplier, GPI Masnieres, stored in the same location.

Romain Pertin, group supply chain manager, GPI, said: “We’re pleased to be able to support Heineken and our logistics partner, Jung Logistique, in improving supply chain performance and optimising transport costs between sites.

The partnership could reduce carbon

emissions by 48%, which makes complete environmental and economic sense for all three businesses.”

Utilising the 41,000m2 Lauwin-Planque hub to facilitate the emission-reducing logistics solution will also support a reduction in logistics costs as well as associated challenges such as late deliveries caused by traffic jams and driver shortages in high season.

Pertin continued: “At GPI, we’re very proud of the steps we’re taking to shrink our carbon footprint as part of this exciting venture. I hope that it serves as a great business case to inspire many more sustainable logistics solutions between partners across the supply chain.”

GPI is one of the world’s largest producers of folding cartons holding a leading market position in coatedunbleached kraft and coated-recycled board. The company said it is committed providing resource efficient and sustainable products and services to its global customer base.

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Dell Technologies Announces Multi-Year Agreement with GE Dell Inc. named primary IT infrastructure supplier for GE

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ell Technologies announces that GE, the world’s largest digital industrial company, has signed a multi-year commitment to use Dell Inc. infrastructure and end-user computing solutions to support GE’s ongoing digital transformation efforts.

Under the agreement, Dell Inc. becomes the primary IT infrastructure supplier for GE. The deal is one of the largest non-government contracts in Dell Technologies, Dell or EMC history.

GE will use Dell EMC servers, storage, backup and related professional services, enabling the company to enhance the reliability and efficiency of its IT infrastructure with automated and flash-optimized solutions. In addition, GE will use Dell client solutions and peripherals to drive workforce transformation and an improved end-user experience for GE employees worldwide.

Today’s agreement builds on a history of collaboration between the two organizations.

GE has previously worked with Virtustream, Pivotal and VMware, all Dell Technologies

companies, to support development of its Predix industrial IoT platform. In addition, GE Digital is a Dell IoT Solutions Partner, and the companies have worked together on a variety of Industrial IoT and OEM initiatives.

“Dell Technologies is uniquely positioned to provide customers like GE with the essential building blocks to transform their IT and realize the digital future,” said Michael Dell, chairman and CEO, Dell Technologies. “We are excited to deepen our relationship with GE to enable them to better serve customers and to continue our mutual exploration of what’s possible for the industrial internet.”

“GE’s collaboration with Dell Technologies has helped us drive the transformation of GE into a digital industrial company,” said Chris Drumgoole, vice president and chief technology officer, digital technology at GE. “The investment we are making today will continue to push us forward and improve the end-user experience for our employees around the globe.”

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Business Briefs

Increase to global unit sales of construction equipment

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lobal construction equipment sales are expected to increase by 16% this year, according to updated forecasts from specialist consultant Off-Highway Research.

Worldwide sales are expected to exceed 810,000 units, with a value of more than US$80 billion.

Most major regional equipment markets are expected to see growth this year, but the key driver will be China. Crawler excavator sales

have more than doubled in the first half of 2017, compared to the same period last year. Among other impacts, this is likely to mean that for the first time more excavators than wheeled loaders will be sold in China in 2017, a market which was once dominated by the latter type of equipment. “The sudden recovery in market demand is attributed to the large number of new projects that have been given approval to proceed

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since 2015, when the government decided to strengthen the economy by increasing infrastructure investment,” said Off-Highway Research.

The market previously peaked in 2011 on the back of the Government’s stimulus spending programme. However, this boom was followed by a crushing decline in sales which saw market demand fall to a quarter of its peak size at the bottom of the cycle in 2015 and 2016.

India Elsewhere in the world, the Indian market remains strong, with 10% sales growth forecast for this year, continuing the momentum of the 36% surge seen in 2016. This will see the market surpass the previous record high of 54,065 machine sales seen in 2011.

Off-Highway Research expects continued growth in the market, although this will inevitably moderate in 2019 due to the general election. However, growth is expected to resume thereafter, with sales likely to exceed 73,000 units in 2021.

“Almost all types of equipment will witness growth, though the market will continue to be dominated by the six most popular products: backhoe loaders, crawler excavators, mobile cranes, mobile compressors, compaction equipment and wheeled loaders. Together these will account for 93 per cent of the market in 2021,” said Off-Highway Research.

Europe In Europe, sales of construction equipment are expected to grow by 2% this year to almost 145,000 units. This moderate rise follows an 11% surge in 2016, which was driven by booming demand from the German residential

construction sector.

Most countries in Europe will see increased equipment sales in 2017, including the major markets of France, Italy and the UK. However, the German market is expected to see a sharp correction, having hit record levels in 2016. This slide in Europe’s biggest equipment market will offset many of the gains seen elsewhere.

The North American market is expected to climb 8% to over 170,000 units. This would take it back to levels seen in 2014 and 2015, before market growth was disrupted by last year’s presidential election.

Similarly, in Japan, a 4% increase in equipment sales is expected, following a slump in demand last year. The correction of 2016 was preceded by three years of unusually high sales in response to the government’s stimulus policies – Abenomics – and the demand for equipment needed for reconstruction work following the 2011 earthquake and tsunami.

Over the longer term, Off-Highway Research expects global construction equipment sales to rise to close to 900,000 units by 2021, with a value of more than US$90 billion in today’s terms.

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Business Briefs

Europe’s manufacturing growth hits 6-year high

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igns that the bloc’s economy is enjoying a stable and broad-based recovery, alongside inflationary pressures, will be welcomed by European Central Bank (ECB) policymakers.

IHS Markit’s Manufacturing Purchasing Managers’ Index (PMI) for the euro zone rose to 57 in July, up from April’s 56.7 and its highest level since April 2011. The figure matched a preliminary reading.

An index measuring output, which feeds into a composite PMI due next week, also climbed further above the 50 mark that separates growth from contraction. It reached 58.3, its highest in more than six years, up from April’s 57.9.

“The euro zone upturn is developing deeper roots as factories enjoy a spring growth spurt,” said Mr Chris Williamson, chief business economist at IHS Markit.

“Demand for goods is growing at the steepest rate in six years, encouraging manufacturers to step up production and take on extra staff at a rate not... seen in the twodecade history of the PMI survey.”

The euro zone upturn is developing deeper roots as factories enjoy a spring growth spurt.

MR CHRIS WILLIAMSON, chief business economist at IHS Markit.

A new-orders sub-index nudged up to 57.8 from 57.7, its highest since March 2011. The upturn came even though companies raised prices last month, albeit not as sharply as they

did in April.

Germany, Europe’s largest economy, led the charge, but IHS Markit said solid upturns were recorded in other countries as well. France lagged behind but is still enjoying its best quarter in six years.

As the bloc’s economic performance improves, the ECB is likely to signal a move away from its ultra-easy monetary policy by September, economists in a Reuters poll forecast last month.

But consumer prices rose just 1.4 per cent from a year ago last month, compared with 1.9 per cent in April. That was weaker than the 1.5 per cent expected in a Reuters poll and below the ECB’s 2 per cent target.

The reading caused euro zone government bond yields to fall briefly on Wednesday, as it was well below the ECB’s target ahead of a meeting of policymakers next week.

It supports the widespread view - one put forward by ECB president Mario Draghi on Monday - that the central bank should keep its current ultra-loose monetary policy stance in place.

Even though risks to euro zone growth have declined, Mr Draghi said he was convinced that an extraordinary amount of monetary policy support was still necessary.

High-grade euro zone bond yields have dropped in recent days on below-forecast inflation numbers from Germany and Spain.

The Business Profile

45

Business Briefs

Weakened pound fuels property market?

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ricks and mortar cited as sound longterm investment choice for wealth preservation as UK brokers prepare to capitalise at Cityscape Global UK real estate brokers are preparing to take advantage of a surge of interest in British property at Cityscape Global this year, with Brexit providing greatly reduced prices for US dollar pegged investors from the UAE, Saudi Arabia, Oman and Bahrain.

Niccolo Barattieri, CEO of Northacre, a UKbased real estate developer, said: “Further to the European referendum and the subsequent slump in the Sterling currency, residential property in Britain is currently providing up to 30% discount over the last three years for USD-pegged investors.

“As a consequence there has been a surge of interest and activity from dollar-backed investors, particularly from the GCC and Asia.”

While the weak British pound has had a negative impact on many people residing in the UK, investors from countries with currencies tied to the US dollar, including the UAE, Saudi Arabia and Bahrain, have shown healthy signs of interest driven by lower costs and market savvy intelligence.

Andy Phillips, Commercial Director for Knight Knox said: “This is a particularly good time for foreign investors to enter the UK

buy-to-let market as the current depreciation of the pound means that UK property is essentially being sold at a steep discount.

“Approximately 30% of our current business involves Middle Eastern buyers which is a good indicator of the health of the UK property market and its appeal to foreign investors.”

More than a year on from the UK’s decision to leave the European Union, political uncertainty and a weakened Sterling have been key factors in the decision making process for global investors, driving demand for a more stable investment choice.

Barattieri added: “Whilst the knee-jerk shocks of 2016 in the UK seem to have mostly settled, investors remain cautious of economic and political risk. As such, buyers are looking ever more for wealth preservation and asset diversification, and residential property looks set to become even more of a key lynchpin through 2017 and 2018.”

Reinforcing the message that property is a smart long-term investment choice, Phillips said: “In such turbulent times, no one can truly make accurate long term predictions.

However, as always in times of trouble, bricks and mortar make a sound investment.

Property provides a sense of permanence which cannot be match by many other investments.”

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47

Infastructure

Europe’s largest construction project

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T

he Crossrail project is the biggest construction project in Europe and is one of the largest single infrastructure investments ever undertaken in the UK. 75 per cent of the project has now been delivered, and the project is being delivered on time and on budget.

Over two-thirds of the permanent track on the line has now been laid, and nearly all of the platform structures, which will give stepfree access to the 200m long trains at all of the 10 new stations, have also been built.

Over the course of the next year, the railway and new stations will continue to take shape as the tunnels are furnished with over 15,000km of cable which will deliver power, lighting and communications systems through the tunnels. Over 4km of full height platform edge screens will be fitted at stations. This will help with the circulation of air and to maintain temperature levels along with huge vent fans that will be installed at 18 locations across the route.

Since the construction of the new railway began in 2009, over 15,000 men and women have worked on the project and over 100 million working hours have been completed. Over 600 apprentices have also been recruited on the Crossrail project.

Fitting out the railway Crossrail is now focussed on the complex task of fitting out the new tunnels and stations with the necessary infrastructure and railway systems to enable TfL-run services to commence through central London and Docklands in December 2018.

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Infastructure

This includes the installation of track, tunnel ventilation, high voltage power, traction power, signalling, communications and overhead line equipment.

Crossrail’s 26 mile tunnelling marathon complete Crossrail is the first complete new underground line in more than 30 years.

Crossrail tunnelling began in the summer of 2012 and ended at Farringdon with the break through of tunnelling machine Victoria. Eight 1,000 tonne tunnelling machines have bored 26 miles or 42 km of new 6.2m diameter rail tunnels under London.

A marathon of new Crossrail tunnels have been constructed beneath the busy streets of London by huge tunnel boring machines.

Ten new stations in central and southeast london New stations at Paddington, Bond Street,

Tottenham Court Road, Farringdon, Liverpool Street, Whitechapel, Canary Wharf, Custom House, Woolwich and Abbey Wood are being built.

Each of the ten new stations will have its own, distinct character, conceived by different architects, which reflect the environment and heritage of the local area. However, at platform level, common design components such as seating, signage and full-height platform screen doors will create a consistent and familiar feel to the rest of the TfL network.

Upgrades to the existing rail network Around three quarters of the route will run above ground on the existing rail network in outer London, Berkshire and Essex.

On these sections of the route, Network Rail is delivering a ÂŁ2.3bn investment as part of the Crossrail programme to add capacity, improve reliability, upgrade stations and electrify sections of the Great Western Main Line.

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51

Infastructure

Trans Adriatic Pipeline (TAP) – Natural Gas from Asia to Europe

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AP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The approximately 878 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the TurkishGreek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

TAP’s routing can facilitate gas supply to several South Eastern European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others. TAP’s landfall in Italy provides multiple opportunities for further

transport of Caspian natural gas to some of the largest European markets such as Germany, France, the UK, Switzerland and Austria.

TAP will promote economic development and job creation along the pipeline route; it will also be a major source of foreign direct investment. With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow in 2020.

TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

The Trans Adriatic Pipeline (TAP) is now more than 50% completed, nearly 16 months after construction began. This includes all engineering, procurement and construction scope. As of early-September 2017: • TAP remains on its journey to deliver world-class health and safety performance across Greece, Albania and Italy. To date, our teams have collectively worked over 16 million manhours and driven approximately 43 million kilometres without a major incident.

• TAP’s contractors have cleared approx.

70% of the project route in Greece and

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Albania (539km out of 765km). Also, over 45% of welded steel pipes are already in the ground (backfilled).

• Approximately 95% of the total 55,000 pipes to be used for the construction of the pipeline have been received in Greece, Albania and Italy. The last shipment of offshore line pipes has been offloaded in Brindisi, Italy, between 3 and 6 September 2017.

• More than 5,500 people have been working for the project across TAP’s host countries - over 85% of which have been staff employed locally.

• TAP has implemented a wide range of social and environmental investment (SEI) programmes in the communities along its route. Substantial projects are due to be rolled out in the upcoming months. In total, TAP will invest over €55 million in SEI in

Greece, Albania and Italy.

TAP Managing Director Luca Schieppati said: “We are pleased that TAP continues to progress on time and on budget. We therefore remain on track to deliver the first Shah Deniz II gas in 2020, bringing a much-needed new source of energy into the European energy network.”

“I want to underline that our project is built with the utmost care for the environment. Our teams are working very carefully along our route to ensure that the land on which construction has been completed is returned to the owners or users in its original condition or better. We are also collaborating with local authorities and local stakeholders to ensure that the benefits of our project are tangible across all those communities crossed by the pipeline.” Schieppati added.

53

Event

ADIPEC 2017 O

rganisers of the annual Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), hosted

by ADNOC, have confirmed the event’s technical conference, already the world’s largest for oil and gas professionals, will see a significant increase in scope for 2017 to include the downstream industry for the first time, as well as more sessions for specialised areas including offshore and marine exploration and production.

With around 900 speakers scheduled for more than 200 sessions, the conference will bring together the industry’s most respected experts, global leaders and top decision makers, with around 10,000 delegates attending over the course of the event’s four days.

The expanded technical programme will encompass all layers of the industry, including upstream and midstream sessions organised by the Society of Petroleum Engineers (SPE), while dmg

events, Global Energy, will oversee a new programme of downstream sessions.

Organisers say the change reflects the accelerating search for efficiency and integration in a challenging market.

“The key to growth for oil and gas companies will be to find new ideas, and to share information in the pursuit of best practice,” said Ali Al Rawahi, Reservoir Manager - Studies (BUH/SE Asset), at the Abu Dhabi Company for Onshore Petroleum Operations Ltd. (ADCO), and ADIPEC 2017 Technical Conference Chairman.

“ADIPEC is clearly established as the leading platform for knowledge exchange in oil and gas. What the conference offers has never been more important than it is today. Resource owners are getting better prices for their product, but nobody can rely on further rises to ensure their business. The focus will continue to be on improving efficiency and reducing

The Business Profile

cost, which can only be achieved through sharing experience between companies and across borders.”

The expansion to include the downstream sector reflects one of the emerging industry trends in oil and gas, as upstream and midstream companies are increasingly looking towards integration, collaboration and diversification across refining and petrochemicals, processing, and endproduct sales to boost overall profitability.

The ADIPEC Technical Conference programme received 3,060 abstract submissions for presentations at this

year’s edition, a 10 per cent increase from last year, and for the second consecutive year setting a record for the number of submitted abstracts in the oil and gas industry.

Technical abstracts came from 622 organisations located in 70 countries.

Underlining ADIPEC’s expanding international reach, 59 per cent of submissions were from outside the Middle East. The ADIPEC 2017 technical committee, comprised of 164 industry leading experts, selected 809 high-quality abstracts.

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