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11:26 a.m., Feb. 26, 2010----J. Erik Fyrwald, chairman, president and CEO of Nalco Co. and a University of Delaware alumnus, emphasized the role his company plays in global water dynamics during his presentation, “Nalco: Model of Profitable Growth in Green Technology -- Growth in China and India,” on Friday, Feb. 19, at UD's Goodstay Center in Wilmington. He also explained how Nalco interacts with customers and described the company's key growth strategies.
The talk was part of the Senior Executive Speaker Series sponsored by UD's Alfred Lerner College of Business and Economics.
“There is a real and significant shortage of clean water in much of the world today,” began Fyrwald, “and the problem is getting worse because the demand for water is growing at two times the rate of the growth of the population. In fact, over one billion people in the world don't have enough clean water for their needs and about five million children die each year due to lack of available, clean water.”
Citing industry as a key player with the ability to impact global water dynamics, Fyrwald explained Nalco's purpose, which is to work with a variety of industrial customers -- including manufacturing facilities, universities, hospitals, and other large buildings -- that use water to either cool or heat as part of their operating processes, and help them to reduce consumption and improve productivity while boosting the bottom line.
“Our sole focus is to help customers operate their water systems better,” he said, “by using Nalco's approximately 7,000 service technicians worldwide, automation technology, specialty equipment, and chemistry as a package, resulting in lowering water use by roughly 25 percent and increasing energy efficiency by about 15 percent.”
To drive home the positive impact Nalco's services can have, Fyrwald shared a few examples of how the company interacts with customers.
Recently, Nalco audited water use at the Dow Chemical Company's largest production site in Freeport, Texas. Cooperative efforts between the two companies resulted in annual water savings of one billion gallons of fresh water -- enough to supply nearly 40,000 people in the U.S. for one year. At the Dow Freeport facility, this savings also translates to a $4 million per year reduction in maintenance costs, reduced energy cost, reduced water use and reduced greenhouse gas emissions.
Fyrwald also noted the global impact Nalco has in working with companies in countries such as China, India and Russia.
“About three years ago, the Chinese population became more vocal about environmental issues,” he explained. “The government started to listen and companies started to listen, causing a shift in attention from GDP growth to 'green' GDP growth -- growing a company and working toward environmental sustainability.”
Nalco has since created partnerships with various Chinese facilities, resulting in the development of new standards created by Chinese companies in their home base.
Touching next on Nalco's aggressive growth strategy -- including increasing research in the United States, China, and India; automating service capabilities and moving to an outsourcing model; and putting global leaders into place -- Fyrwald highlighted the company's number one strategy as investing in what they call “BRIC plus” countries.
“We need to invest heavily in countries like Brazil, Russia, India and China (BRIC), plus other areas with water issues,” said Fyrwald. “These emerging global geographies are where we want to put into place the technical capability, service capability, manufacturing support and supply chain capability to fully service those markets in a way that we go from small players to leading the market and helping our customers drive much more efficient use of their water systems.”
Fyrwald capped his lecture, which was the final lecture of the UD Lerner College of Business and Economics' Senior Executive Speaker Series, by taking questions from the audience.
Executive Master of Business Administration (EMBA) students' questions ran the gamut from how to deal with government regulations abroad and how to find leaders of satellite locations to other challenges of globalization and how to protect Nalco's intellectual property.
“It's a question we talk about a lot,” responded Fyrwald to the intellectual property inquiry. “In China and India we have to assume we cannot protect our intellectual property. Whatever we have at our customer site, someone will take it and reverse engineer it.”
Fyrwald went on to discuss specific ways Nalco protects its intellectual property, such as continually advancing chemistry and equipment, divvying up product assembly to various sites, offering the best service capability in the industry and training employees and offering competitive benefits to retain them.
“We need to always keep ahead as offering full solution capabilities,” Fyrwald said. “We have to keep getting better and better. That's really the only way to do it.”
After Fyrwald concluded his remarks, Conrado (Bobby) Gempesaw, dean of UD's Lerner College of Business and Economics, and Ajay Manrai, professor of marketing and faculty director of Graduate and Executive Programs, presented Fyrwald with a memorial plaque.
Fyrwald attended the University of Delaware, where he received a bachelor of science degree in chemical engineering in 1981. He also completed the Advanced Management Program at Harvard Business School. Before joining Nalco, Fyrwald held a 27-year career at DuPont. From 2003 to 20008, he served as group vice president of the agriculture and nutrition division of DuPont. From 2000 until 2003 he was vice president and general manager of DuPont's nutrition and health business.
Fyrwald joined Nalco as chairman, president and chief executive officer in February 2008. When he was first approached by an executive search firm about the new leadership opportunity, though, he wasn't quite ready to end his career at DuPont.
“At the time I was running the agriculture and nutrition division,” he recalled, “which was an $8 billion business -- bigger than Nalco. I liked being part of DuPont's biggest division. It was fast-growing, high margin -- a great place to be.”
But after hearing the Nalco story and doing his homework about the business, Fyrwald was convinced it was the right move.
“It was a compelling opportunity to take a company focused on something that really matters,” he said. “They were good at it, but not nearly as good as they could be. I thought about that versus running a very important division of a very big company -- I had done the latter for 27 years and wanted to see what I could do with a company focused in a critical area, and how I could create value compared to what I had done.
“So far we've done okay,” he concluded. “Last year, Warren Buffet became our largest shareholder, so we've got one good vote of confidence.”
In addition to serving as chairman of Nalco's board of directors, Fyrwald serves as a director of Eli Lilly and Company, the Society of Chemical Industry and the American Chemistry Council and is a trustee of the Field Museum of Chicago.
Nalco has more than 11,500 employees who operate in 130 countries supported by a comprehensive network of manufacturing facilities, sales offices and research centers to serve a broad range of end markets. The company holds the title as the world's leading water treatment and process improvement company, and enables customers to reduce energy, water and other natural resource consumption; enhance air quality; minimize environmental releases; and improve productivity and end products all while increasing the bottom line. In 2008, Nalco achieved sales of over $4.2 billion.
The Senior Executive Speaker Series, sponsored by UD's Alfred Lerner College of Business and Economics, brings senior executives to campus in order to provide EMBA students, alumni, faculty and friends of the college with an opportunity to engage in live interactions with leaders at the level of CEO, president and chairperson of the board.
Article by Kathryn Marrone