Monday, 6 October 2008

Financial crisis tests industry's green priorities

By Joshua Chaffin in Brussels
Published: October 6 2008 03:00

The slowing economy and financial crisis are testing Europe's goal of becoming a world leader in greenhouse gas reduction.
Industry has seized on the slowdown to lobby for delayed or watered down regulations, arguing that directives set out by the European Commission earlier this year would force them to cut jobs or relocate factories abroad.
Some politicians also acknowledge that the financial crisis could hinder efforts to forge international agreements on reducing emissions.
"This crisis changes priorities," Frank-Walter Steinmeier, the German foreign minister, last week told a conference on transatlantic climate and energy cooperation in Berlin. "One cannot rule out that interest in protecting the climate will change because of such a crisis."
Tomorrow the European Parliament's environmental committee is set to vote on a range of measures at the heart of the EU's commitment to reduce greenhouse gas emissions by 20 per cent by 2020.
Among the proposals are plans to expand emissions trading, accelerate the development of carbon capture and storage and a measure that would ban the construction of new power plants that emit more than 350 grams of carbon dioxide per kilowatt hour - essentially ruling out coal-fired plants.
The results of the vote, dubbed "Super Tuesday," will form the basis for negotiations with the EU's 27 member states. With members of Parliament facing re-election in the spring, it is seen as a last chance for Europe to pass meaningful climate legislation before an international summit to renegotiate the Kyoto treaty next year.
"It is very important that the EU is ambitious because the EU will have to be a leader if we want to have an international deal that means something," said Delia Villagrasa, the EU climate project co-ordinator at the World Wildlife Fund.
However, the economic environment has deteriorated since the Commission first spelled out its climate change proposals in January. Just last week, France confirmed that it had fallen into recession and Spain reported that unemployment had surged past 11 per cent while governments were forced to bail out banks amid a growing financial crisis.
"You have to keep in mind that only with a good economy can you afford all this," Heimo Schuch, chief operating office of Wienerberger, the world's largest manufacturer of clay bricks, said.
Mr Schuch is focused on one of the most contentious proposals, which would adjust Europe's emissions trading scheme so that companies would have to buy emissions allowances at auction beginning in 2013. Until now, they have received them free.
If adopted, that measure would drive up housing prices across Europe, says Mr Schuch, while giving an unfair advantage to other building materials, such as aluminium, which have been exempted from the auction.
Alistair Steel, executive director of Euro Chlor, which represents about 40 European chlorine manufacturers, raised similar concerns.
Electricity accounts for about half the cost of chlorine production. Mr Steel argued that chemical companies would be forced to invest in new plants elsewhere - a dynamic known as "carbon leakage" -- if they were forced to absorb emissions costs passed on by power companies.
As such, he is asking that his member companies receive some emissions allowances to offset those costs.
"All these statements that have been made by Europe up until now have been from the environmental view," Mr Steel said. "Now the bill is coming due."
But environmental groups dismiss such claims. "The problem is that we've had a lot of scare-mongering from the traditional industries, which are always against change," said Sanjeev Kumar, the World Wildlife Fund's emissions trading scheme coordinator.
Mr Kumar argued that some of the industries that have complained the loudest - such as cement and paper - make products that cannot be easily exported, and so would not readily leave Europe.
More broadly, environmentalists warn that putting off investments now will only increase costs in future.
Additional reporting Chris Bryant in Berlin
Copyright The Financial Times Limited 2008

Green issues move up the balance sheet

By Fiona Harvey, Environment Correspondent
Published: October 6 2008 03:00

Ryanair shareholders attending the company's general meeting in Dublin in September were bemused by a sight not often associated with such gatherings, when a bare-chested young man wearing an oxygen mask approached the podium where Michael O'Leary, the chief executive, was speaking.
The protestor, with "Exposing O'Leary's Lies" written across his chest, accused the airline chief of denying the damage his fleet was causing to the climate. His protest underlined the pressure aviation companies are under from the green movement.
All air travel accounts for only a few per cent of total greenhouse gas emissions, but its projected expansion means it will become a much bigger source of emissions within 20 years.
Flying also produces much more carbon dioxide than some other forms of transport.
The rising number of short-haul flights to destinations that could be served by railways, which produce less carbon per passenger, has been a complaint of environmentalists.
Campaigners say airlines have had unfair tax breaks on fuel that have skewed the economics of travel. Will corporate aviation be the next target for protests?
Joshua Blackburn, head of the ethical communications agency Provokateur, says it is unlikely that protestors will home in on corporate jets and business travel soon, as they are targeting the industry as a whole rather than niches.
But he warns that corporate travellers must become more aware of their impact, especially those using company or business hire jets.
"Using corporate jets puts you at the front of the queue as far as your carbon footprint is concerned. There isn't much else that would make your footprint bigger."
He predicts that such trips will become "socially unacceptable" and that environmental groups will target companies that claim to be "green" but continue using "this form of corporate indulgence".
The corporate aviation sector is becoming increasingly aware of the threat to its reputation of failing to deal with climate change.
Mr O'Leary called his lone protestor an "eco-looney", but other parts of the industry have taken a more conciliatory approach, seeking to reduce the impact of their flights.
For instance, Boeing has worked with seven airlines in the past year - including British Airways, Air France KLM, Continental Airlines, Delta Air Lines and El Al - on a "performance improvement package" of fuelefficiency technologies that save 1,300 tonnes of carbon dioxide per aircraft per year.
There is an economic advantage, too. Per Noren, vicepresident of environmental strategy at Boeing's commercial aviation services division, says: "Operational efficiencies become environmental efficiencies and the aviation community can contribute to a cleaner future."
But voluntary measures are only part of the picture. Regulation is also increasing, in Europe at least.
Airlines will be covered by the European Union's emissions trading scheme from 2012. They will be allocated a fixed quota of carbon emissions, and must buy carbon permits from other groups if they need to emit more.
This will impose large costs. Robert Casamento, a director in the power and utilities team at Ernst & Young, says: "Airlines incur very high carbon abatement costs compared with other industrial sectors.
"In addition, many expected technological improvements, such as fuel- efficient engine designs and lighter-weight components, will not be in place in time to achieve significant emission reductions before 2022."
A report last year by Ernst & Young predicted that the cost to the European aviation industry of purchasing the emissions allowances needed for traffic growth could exceed €45bn in the period from 2012 to 2022.
Mr Casamento says this could have the effect of "jeopardising the long-term viability of many airlines and increasing the need for further consolidation. Some European airlines are already beginning to develop carbon-hedging programs."
The costs will translate directly into higher ticket prices for all travellers.
One aspect of the regulations that is still unclear is the treatment of private and corporate jets. One proposal would exempt such flights from the scheme, provided "carbon offsets" are bought to cover the emissions.
Offset schemes allow travellers to cancel out the effect of their emissions by buying carbon credits, which fund carboncutting schemes, such as wind turbines or solar panels, usually in developing countries. They are already used by many corporate travellers and several charter and fractional schemes.
A separate proposal would exempt companies making fewer than 245 flights in four months.
But if corporate and private jets are included, it would "impose a serious administrative burden", says Mark Bissett, partner at Stephenson Harwood, a law firm.
Companies would pay a financial penalty in having to buy emissions permits, but more costly would be ensuring compliance with the scheme through monitoring emissions and having them independently verified.
At least, however, companies could deflect the wrath of environmentalists by pointing to their compliance with the emissions trading scheme.
Copyright The Financial Times Limited 2008

French polish on deal after long wrangle

By Peggy Hollinger in Paris
Published: October 6 2008 03:00

Pierre Gadonneix believes one should "live every day as if you are eternal. Otherwise life becomes impossible".
But there must have been days when the chairman of EDF felt himself a powerless mortal amid the endless wrangling over the French electricity group's bid for British Energy, the UK's nuclear operator.
Now British Energy has finally recommended a sweetened €15.7bn ($21.6bn) offer, Mr Gadonneix can allow himself a small smile of satisfaction.
"I believe that in the 10 years to come, the UK will have the biggest number of nuclear reactors under development in Europe," he told the Financial Times. "British Energy is a great opportunity for EDF."
The French electricity group, 85 per cent state-owned, is the acknowledged world leader in operating nuclear power stations. Its 58 reactors generate almost 80 per cent of France's electricity, more than any other country except Lithuania.
But, until now, EDF has failed to take its nuclear expertise abroad in a big way. Though it has stakes in leading conventional utilities in Italy and Germany, most of its profits come from its French nuclear operations.
The acquisition of British Energy, operator of eight British reactors, will change that. Now, more than half of its sales are international, giving it a big head start in the one European market outside France that will build new reactors.
But the deal is sparking controversy. UK consumers mutter that they will be squeezed to subsidise French power bills, already among Europe's lowest due to government imposed tariffs. Across the Channel, Mr Gadonneix fends off allegations that French taxpayers will pay for their British cousins at the expense of investment at home.
"I have the same question from both sides," said Mr Gadonneix. "It proves we have no intention of using one to subside the other."
Mr Gadonneix argues that the deal is a unique opportunity to bring even more competition into one of Europe's most open energy markets. "Our development in the UK reinforces security of supply and brings competition through new capacity. This should lower prices in the long term."
But some believe EDF could control up to 27 per cent of UK production and that is before it builds the four 1600MW EPR reactors it plans in the UK. Partly to ease such concerns and help cut the acquisition cost, EDF is talking to Centrica of the UK about selling a 25 per cent stake.
Mr Gadonneix insists that EDF could keep the stake - or sell to whoever it wants. "We are in discussions with Centrica, but they are not the only one interested. Everyone is."
The British Energy deal is a welcome coup for Mr Gadonneix, who has watched European rivals muscle up through mergers and acquisitions. It answers critics who have accused him of hesitating while the sector consolidates. Mr Gadonneix argues he has, instead, been careful only to target promising nuclear markets. Nonetheless, he must still prove that his ambition to make EDF a world leader in the nuclear renaissance will not be stymied in his second international market of choice, the US.
EDF's plan for four EPRs in the US was thrown into doubt by a bid for American partner Constellation Energy from billionaire Warren Buffett. Now EDF is weighing whether to make a counter offer, in partnership with KKR, at a time of record investment requirements.
Mr Gadonneix is sanguine, despite the credit crunch. "We will still have room for manoeuvre," he says. "We are probably the company with easiest access to credit."
A decision will come in the "next few weeks," he says. Nonetheless he adds: "I do not exclude disposals."
EDF will be forced to accept changes in its home market, making international success even more imperative. The merger of rival Suez with Gaz de France has created a formidable competitor, now a favourite to build France's second new generation nuclear reactor that would break EDF's exclusive hold on nuclear power in France.
Mr Gadonneix will fight any such decision, but he does admit: "EDF will lose market share in France. That is certain."
As the 65-year-old EDF boss' mandate is due to end in 2009, he seems determined to resolve remaining questions over the group's international expansion. EDF hopes to hear in the coming days whether it has been chosen to build reactors in South Africa, another of the world's promising nuclear markets.
Though he may argue it is pointless to count the days, the governmentappointed EDF boss knows the clock is ticking. "One day I will leave," he says. "Even if I think I am eternal, there are those who think that it is not true."
Copyright The Financial Times Limited 2008

Hundreds of deaths from ozone predicted

By Louise Gray, Environment Correspondent
Last Updated: 2:01pm BST 05/10/2008

Hundreds more people could die because of increasing levels of ozone at street level, according to scientists.

A study by the Royal Society found ground levels of ozone, the pollutant caused when sunlight hits a mixture of gases in the air, has risen by six per cent per decade since the 1980s.
Although the ozone layer protects the planet at a higher level, at ground level it is damaging to human health.
Children, the elderly and asthmatics are particularly vulnerable to the pollutant which affects the lungs, nose and eyes and is worse on warm stagnant days. The situation could be compounded by global warming, experts fear.
In 2003 some 1,582 UK deaths were attributed to ozone.
But the study projected that with more emissions in the future and climate change this will rise by 51 per cent resulting in 2,391 deaths in 2020.
If no limit is put on the level at which ozone can affect health, then the increase in ozone results in a 15 per cent rise in deaths from 11,272 to12,930 in the same period. An increase in ozone levels is also bad for crops, affecting yield and nutrition levels.
In the EU in 2000 an estimated £5.2 billion was lost due to the impact on arable crops. Again this is projected to get worse as ozone levels rise in the next few years, especially for staple crops such as wheat and rice, threatening food security.
Professor David Fowler, Chairman of the Royal Society's ground level ozone working group, said something must be done to reduce ozone levels in the coming years.
Ozone concentrations increase in hot, sunny, stagnant weather conditions, so will get worse as the climate warms up. The situation is exacerbated by emissions including vehicle exhaust fumes, the smoke from forest fires and emissions from international shipping.
However, it cannot be controlled by one country alone, but must be tackled on a global basis, Prof Fowler said.
"Ozone is a global traveller and one of the most pervasive of air pollutants. Weather systems and jet streams transport ozone, and the pollutants that lead to its formation, often far from their point of origin. Here in the UK, for example, we receive most of our ozone from outside of Europe," said Professor Fowler.
"Until we have a globally coordinated approach that addresses the international nature of the problem, national and even regional level controls are unlikely to deliver the kind of reductions that are necessary to protect human health and the environment."
The report highlights that climate change and ozone levels are inextricably linked.
While hotter weather make it harder to reduce levels of ground level ozone, an increased level of ozone reduces the ability of plants to remove carbon dioxide from the atmosphere, thereby contributing to climate change.
Furthermore, increased levels of ozone will exacerbate climate change because it is the third most important greenhouse gas contributing to global warming.
"Ozone has become a global pollutant, with direct effects on human health, crop production, ecosystems and climate, yet control strategies are country or region based," Professor Fowler went on.
"A coordinated global strategy bringing ozone into international frameworks for controlling air pollutants and greenhouse gases is required.
"The reduction of methane emissions would for example contribute both to the reduction of climate change and ozone pollution, and all of the associated ecological and human health effects."

New charges on shipping could help climate

Juliette Jowit
The Guardian,
Monday October 6 2008

Billions of dollars could be raised to help the poorest countries cope with and tackle climate change under proposals to be floated in London this week for new charges on international shipping.
Opponents fear the charges - in the form of a fuel tax or selling permits to pollute - will raise the cost of food imports, especially for small island states that depend on trade to feed their populations.
However, a report for the environmental campaign group WWF estimates that price increases would average less than 1% and that up to $45bn (£25bn) could be generated a year, most of which would be spent on developing countries.
The sum raised, which partly depends on the future price of carbon, would greatly surpass the funds currently available for adaptation to climate change and the transfer of clean technology to developing countries. However it is still less than what the UN has said will be needed, including $67bn (£37.7bn) a year for adaptation alone.
"There's a chance for a double dividend: tackling a major source of greenhouse gases and putting money into the pot for vital climate assistance to those who need it most," said Peter Lockley, WWF's head of transport.
Although shipping is the least polluting form of transport per tonne, it generates nearly 850m tonnes of carbon dioxide annually. The UK produces 587m tonnes in total, and is also one of the top 10 shipping nations. The shipping and aviation industries are excluded from international agreements to reduce emissions because they operate across borders, but the UN has urged the industries to introduce their own schemes.
The UN's International Maritime Organisation, meeting in London this week, will hear two proposals: carbon trading under which permits to pollute would be auctioned and traded, and a fixed levy on fuel.

Failure to fight ozone pollution 'puts lives in danger'

The Times
October 6, 2008
Lewis Smith, Environment Reporter

Human health and food production are being damaged because too little is being done to control worldwide ozone levels, a report by the Royal Society says.
Ozone forms a protective layer that helps to block ultraviolet radiation high in the atmosphere, but at ground level it is a significant pollutant and a contributor to global warming.
Regulations to control the gas have been introduced by Britain and other industrialised nations but it is still present in quantities well above safe levels, largely because it is carried by air currents from other parts of the world. Levels close to the ground have risen 6 per cent each decade since the 1980s, the Royal Society says in its report, which calls for concerted international action.
Ozone is formed by the reaction between sunlight and chemicals - some naturally occurring and others from pollutants - in the air. Sources of ozone-promoting pollutants include vehicle exhaust fumes and shipping.

Children and the elderly are especially vulnerable to adverse reactions to ozone, which affects the eyes, lungs and nose. An estimated 1,582 people died in 2003 because of the effects of ozone. Deaths are conservatively forecast to rise by 51 per cent to 2,391 by 2020 because of pollution and climate change.
European Union nations, the United States and Japan have all managed to reduce the frequency of peak levels of ozone pollution but have failed to eradicate them.
Peaks occur during hot, sunny and stagnant conditions and can be particularly dangerous when they exceed 100 parts per billion (ppb). Background levels, which are 35-40 ppb in Britain, are worrying scientists because of their effects on human health and crop yields.
David Fowler, chairman of the Royal Society's ground level ozone working group, said: “Weather systems and jet streams transport ozone, and the pollutants that lead to its formation, often far from their point of origin. Here in the UK, for example, we receive most of our ozone from outside of Europe.
“Until we have a globally co-ordinated approach that addresses the international nature of the problem, national and even regional level controls are unlikely to deliver the kind of reductions that are necessary to protect human health and the environment.”
Significant reductions in crop yields because of ozone have been observed in Europe and North America, with £5 billion being knocked off the value of arable crops in Europe in 2000 alone. The nutritional values of wheat, rice and soya bean are all known to be reduced by the chemical.
The Royal Society report, published today, estimates that crop losses will increase over the next 30 years.
In regions including South Asia the losses to crops such as wheat and rice are forecast to be so serious that they may cause food shortages.
Climate change, the report says, will exacerbate the problem by increasing the quantities of ozone produced at ground level. It is also a greenhouse gas so will help to intensify climate change.
Professor Fowler added: “Ozone has become a global pollutant, with direct effects on human health, crop production, ecosystems and climate, yet control strategies are country or region based.
“A co-ordinated global strategy bringing ozone into international frameworks for controlling air pollutants and greenhouse gases is required. The reduction of methane emissions would, for example, contribute both to the reduction of climate change and ozone pollution, and all of the associated ecological and human health effects.”

Unilever comes out against worldwide rush to biofuels

Tim Webb
The Guardian,
Monday October 6 2008

Unilever, the food and consumer goods group, has thrown its weight behind moves to scrap mandatory biofuel targets and subsidies. It is backing recommendations being made today to Commonwealth finance ministers at their annual meeting in St Lucia to improve food security and prevent famine.
Unilever is concerned that subsidies for biofuels are driving up food prices and the cost of its products. The group is a member of the Commonwealth Business Council (CBC), which is presenting the recommendations to the ministers. The CBC is chaired by Paul Skinner, chairman of the mining group Rio Tinto; other members include the Indian steel magnate Lakshmi Mittal and John Studzinski of the private equity firm Blackstone.
If ministers adopt the recommendations, the CBC hopes that they will lobby their counterparts for curbs on biofuels at the International Monetary Fund and World Bank summits in Washington later in the week.
Mohan Kaul, director general of the CBC, said: "This would be the first major world signal to stop the current rush to produce energy from biofuels that has impacted on food, security and prices."
It is also the first time that a major conglomerate such as Unilever has voiced its opposition.
Most environmentalists and non-governmental organisations are already opposed to biofuels, which use oil mostly produced from food crops, which is then blended with petrol or diesel. By reducing the consumption of fossil fuels, biofuels are supposed to reduce greenhouse gas emissions, but many types are so inefficient that they result in higher emissions. For example, biofuels from sugar cane in Brazil have 10% of the carbon footprint of traditional fuel, while maize-based fuels in the US have at least 80% to 90%. Biofuels are also accelerating the destruction of rainforests to clear the extra arable land needed. Environmentalists estimate that deforestation is responsible for one-quarter of the world's emissions.
The large-scale diversion of food crops into biofuel production has contributed to record food prices. According to the International Food Policy Research Institute, the forecast increase in biofuel production will result in maize prices increasing by more than two-thirds in future.
In the UK, from April this year, petrol stations must supply more biofuels at the pumps. By 2010, 5% of all petrol and diesel must be made from biofuels. However, this summer the government announced that it was considering reducing the targets because of concerns that biofuels are doing more harm than good.
But India, a member of the Commonwealth, announced plans last month to increase its own target, so that by 2017, a fifth of its road fuel must be produced from biofuels. The US, which is the world's largest biofuel producer, shows no sign of reviewing its policy. It is estimated to use more than a third of its domestic maize crop to produce bioethanol.

Another inconvenient truth

By Peter Brabeck-Letmathe
Published: October 5, 2008

At last, many of the world's political leaders have begun to realize that diverting land and food crops to produce biofuels leads to higher food prices. But an equally important consequence of this policy folly is being largely ignored in the public and political debate: Producing biofuels will further deplete the world's already overtaxed water supply.

This is emblematic of a larger and increasingly dangerous disregard for the world's most valuable, irreplaceable and finite natural resource: fresh water.

Seventy percent of all water withdrawal is already used in agriculture, and while all such activity requires water, growing enough soy or corn to create biofuels is especially water-intensive. For example, to produce just one gallon of diesel fuel up to 9,000 gallons of water are required. Up to 4,000 gallons are needed to produce enough corn for the same amount of ethanol. By way of contrast, producing enough food to meet the caloric needs of one person for one day in, for example, Tunisia or Egypt requires about 666 gallons of water, and twice as much in California (caloric needs and intakes vary widely from region to region due to dietary customs).
If all of the biofuel targets and timelines set by governments across the world are met, we can expect water withdrawals for agriculture to increase by up to one-third. Making a dent in the world's energy problems with biofuels will require much more water than the world can afford to give up. There simply isn't enough; water tables are falling throughout the world. While there are substitutes for oil, there are none for water.
The world is facing a water crisis and, consequently, a food crisis that in terms of severity and potential impact far supersedes the current food crisis or the exhaustion of fossil fuels. Either it never occurred to biofuel advocates to ask about the amount of water needed for biofuel production, or they simply chose to ignore this particular inconvenient truth.

According to a report by the International Water Management Institute, by 2025, about one third of the world's population, perhaps as many as 3 billion people, will face water shortages. From an agricultural standpoint, we may be looking at losses equivalent to the entire grain crops of India and the United States by then. According to some estimates, even without biofuels, we will very likely reach the upper limit of available fresh water for worldwide consumption, more than 2.9 billion cubic miles, by 2050. A growing reliance on biofuels would exacerbate an already difficult challenge.
There was a remarkable lack of careful planning in the drive to convert food to fuel. In Europe and the United States, a developer trying to open a shopping center is subjected to an extensive environmental impact assessment. But when politicians decided to promote biofuels, the decisions were not preceded with a comparably thorough analysis of environmental sustainability.
Regardless of how it happened, policy makers neglected the dwindling supply of a resource essential to life in order to replace fossil fuels and fight global warming. This was not a sensible trade-off. There is no question that we have to reduce our consumption of fossil fuels. But biofuels derived from food crops planted exclusively for that use are clearly the wrong solution. While there are substitutes for oil, there aren't any for water.
This scandal is instructive because it was caused, in part, by the general attitude toward water in both the developed and developing world. Water is still treated as a limitless resource in too many communities, and one reason is that it is has no price. States heavily subsidize water usage so that it is sometimes even free for both farmers and consumers. Because it is not assigned a value in the marketplace, there is no incentive for using it efficiently. If water were not free or heavily subsidized, would biofuels still be produced? I doubt it!
The water problem can be solved. It requires much more careful stewardship of water supplies by local and national governments. I, for one, also believe reasonable pricing policies would help by encouraging the use and development of water efficient crops and smart irrigation systems. But even those who disagree with that prescription should be deeply disturbed by the lack of attention paid to water by those who rushed headlong to biofuels as the answer to the world's energy problems. As the international community grapples with how to fight global warming and build a sustainable future, it must stop ignoring a priority that is even more pressing.
Failure to address the water problem will result in food scarcity. Water scarcity is no longer an environmental issue. It is a national and international security issue that can not be ignored.
Peter Brabeck-Letmathe is the chairman and former chief executive of Nestlé.

Edwards' green focus pays off

By Bob Sherwood
Published: October 6 2008 03:00

The drive for green energy sources is helping a West Sussex-based manufacturer to expand in spite of a weakening in its traditional semiconductor business.
Edwards, a global vacuum technology company, is seeking to exploit growing demand for solar panels and biofuels as new markets open up for its industrial products.
The Crawley-based company, founded in 1919, makes vacuum pumps that are used in the manufacturing of products such as semiconductors and flat panel displays as well as other chemical, pharmaceutical and metallurgical processes.
The company is the largest vacuum supplier to the semiconductor industry but Nigel Hunton, chief executive, says its products are in greater demand from a growing range of industries.
He says: "New markets are opening up for us all the time, such as biofuels and solar. We are starting to see some of the technology that is in flat-panel TVs coming into thin-film solar panels.
"Last year, we did virtually nothing in solar, and this year we will do $80m (£54m) [of business] and next year we will do more than $100m."
Edwards has increased its turnover to $1bn and is on track to raise it again this year, even though the semiconductor market is down by about 30 per cent. It predicts "strong growth" over the next three years, driven by emerging markets and new products coming through its development programme.
Mr Hunton says the company has become more entrepreneurial in the past year since it was bought by CCMP Capital Advisors, the private equity group, last summer from The Linde Group. It means Edwards, previously part of industrial gases group BOC, which was acquired by Linde, has been able to re-establish itself as an independent company.
He adds: "Edwards was a hidden part of BOC and not high on their agenda. But it's completely different now. It is reborn in a way. BOC was always about gases but now we have a board that is really interested, passionate and engaged."
The company is able to be more fleet of foot under the new ownership, he insists, and has disposed of its non-core chemical, parts cleaning and bearing businesses, generating $100m in the process.
It has also invested about £20m on manufacturing equipment in its south-east sites of Shoreham, Burgess Hill, Newhaven and Eastbourne in the past two years and is moving its headquarters into new offices in Crawley. It employs about 1,000 people in the region.
"Shoreham is now one of the most advanced machining facilities in the UK," says Mr Hunton, stressing that manufacturing in the UK is crucial to the company, even though it now employs 3,600 staff in more than 20 countries, with manufacturing facilities in Korea, Japan, China and the Czech Republic.
The UK bases are instrumental in designing and manufacturing the company's most innovative products, with about 50 per cent of its turnover manufactured in the UK.
Shoreham will, for example, play a role in the manufacture of the world's biggest dry mechanical vacuum pumping system, recently ordered by Ching Qing Steel Group in China. Worth about £4.3m, it is Edwards' biggest-ever order.
And by sharing data between its development sites in the UK and Korea on a daily basis, the company can take advantage of time differences and achieve "24-hour-a-day development".
Among the advantages of the new ownership, says Mr Hunton, are the excellent financing arrangements, including favourable credit agreements and a flexible loan structure, as well as ensuring the business is not over-leveraged.
"But they are performance-driven," he adds. "And so I think the company is more performance driven than before."
And the new owners appear prepared to take a long-term view, with no talk of an exit strategy yet.
"We did a three-year strategic plan review in July. It's very much about investing for the long term ," concludes Mr Hunton. "Though an IPO is clearly one exit option in the future at some point."
Copyright The Financial Times Limited 2008