Energy Efficiency: The Gift that Keeps on Giving

Sustainability not only feels good, it pays off, as a growing number of drug companies are learning.

By Bill Swichtenberg, Senior Editor

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Staying ahead of constant changes in energy availability and costs challenges all manufacturers in any industry. Drug manufacturing, not usually thought of as an energy-intensive industry, is no exception. Operations such as HVAC can be extremely wasteful if they aren’t approached properly (Pharmaceutical Manufacturing, February 2006, p. 50 and May 2006, p. 40).

Today, more pharmaceutical manufacturers are taking basic steps and applying new technologies in long-term strategies designed to see them through supply disruptions and rate hikes. In the process, they are meeting public demands for environmental performance.


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Even though there is no official national mandate, they are also reducing greenhouse gas emissions to minimize their contribution to global warming. An added benefit is that they are adding millions of dollars to their bottom lines.

Spurred by local and state grants for energy efficiency, some companies are embracing cutting-edge technologies in their quest for “sustainability,” in which continued economic prosperity is balanced by protection of the environment.

This year, Baxter International Inc., Roche Holdings, Novo Nordisk and Genzyme Corp. were among Innovest’s “Global 100” list of the most sustainable corporations in the world.

“We are committed to sustainability,” says Jack Kace, Roche’s vice president of environmental and safety affairs. “The high cost associated with energy use and its impact on the global environment make energy management important. It’s what Roche needs to be doing.”

Merck & Co., Inc. also is committed to protecting the environment. Robert Colucci, director of global energy and asset management, sees it as a responsibility to the company’s shareholders, employees and community.

Raising the Bar

Since the mid-1990s, Baxter has been tracking and openly reporting detailed information regarding energy use, energy costs and associated greenhouse gas emissions from all of its facilities. But in 1997, the company also set a number of ambitious long-term environmental, health and safety goals, including reducing energy use and greenhouse gas emissions by 30% (per unit of production activity) by 2005.

Baxter’s efforts fell just three percentage points short of the mark, since some quality assurance validation testing and automation projects had boosted energy requirements. But since then, the company has raised its expectations. “We want to be a global leader in reducing greenhouse gases, since this will make us more competitive,” says Ron Meissen, senior director of sustainability.

Last year, Baxter improved its overall energy efficiency by nearly 6%, avoiding $7.8 million in costs during a year when utility costs increased dramatically around the world, says Larry Funke, director of energy engineering.

Roche achieved its 2008 goal: 10% reductions in energy and greenhouse gas emissions, three years ahead of schedule. Now, it plans to reduce these emissions by another 10% in three years. The company indexes its savings based on number of employees.

Top-Down Commitment is Critical

In order to run an efficient energy program, goals must not only be set by top management but embraced at the various sites. Merck’s Global Energy Team has adopted a goal of cutting energy usage by 25% by 2008 (compared to 2004), as well as a 15% water usage. “These are aggressive goals. Without grassroots participation at the shop-floor level, they can’t be reached,” says Colucci.

At Baxter, each plant has a goal of reducing energy use by 3% per year. According to Funke, plants facilitate their own projects. Each plant has a Quality Working Team that looks for savings in the consumption of air, water and electricity, and then shares best practices with the rest of the organization.

Projects are identified, analyzed and implemented at the facility level, while goal setting and reporting supports these efforts and ensures progress at the corporate level. Manufacturing professionals at the facilities know best where energy can be saved.

To achieve these goals, companies can turn to state funding. New Jersey, so far, has the most aggressive goals in place for reducing greenhouse gas emissions, with Governor Jon Corzine committed to reducing them by 20% over the next 13 years, and 80% by 2050. California also has set stringent reduction goals.

As a result, funding is available to help facilities based in New Jersey improve their energy efficiency. Both Merck and Roche availed themselves of this funding. At Merck’s Rahway/Linden, N.J. plant, for example, the company leveraged support from the New Jersey Clean Energy Program to build the company’s first large-scale solar energy system.

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