In their drive for productivity improvement, managers at the St. Marys Cement Inc. plant in Bowmanville, Ont., have put their operation on a strict energy diet, and in the process shaved $1-million off annual operating costs.
The Toronto-based company, one of North America's leading cement makers, has seen its sales fall sharply since the recession, and cost control has become ever more urgent.
"If you reduce your energy costs, you become more competitive in terms of your industry and, these days, that's tough," Fabio Garcia, manager of plant operations, said in an interview.
The company did not make major capital investments to achieve its improvements, but focused on operational changes – adding fans to redistribute heat, changing schedules to perform electricity-intensive operations during off-peak hours, and instilling in its workers a conservation ethic that produced a series of small savings.
For a cement company, the drive for energy efficiency may seem like a no-brainer: Energy represents 35 per cent of St. Marys operating costs at its Bowmanville plant. But in an age of high oil prices and rising power costs, corporate executives across the business spectrum are being urged to get a better handle on their energy usage.
The Canadian Council of Chief Executives – which represents the 150 largest firms in the country – has issued a call for governments, industry and consumers to redouble their efforts to conserve energy in order to reduce overall costs and cut the emissions that result from fossil-fuel consumption.
The council, led by former deputy prime minister John Manley, reiterated its call for a carbon tax, which would make fuels more expensive and encourage conservation.
"We must use existing and future energy supplies as efficiently as possible, embracing the maxim that the cheapest form of energy is the unit that is not used," the council says in a report to be released Monday.
"Better conservation practices will help to insulate Canadians from volatile energy prices, reduce costs for public institutions such as schools and hospitals, and improve the international competitiveness of Canadian companies."
But it adds that businesses, in particular the industrial sector, can benefit from greater energy efficiency.
"For many of these companies, energy costs are one of their largest line items and energy savings translate immediately to the bottom line," the council says, adding the productivity-enhancing investments in efficiency are part of a "relentless race to stay competitive in increasingly globalized markets."
Linamar Corp. chief executive Linda Hasenfratz has focused on continued improvements in energy efficiency as one critical way to stay ahead in the hypercompetitive North American car parts market.
"We've been trying to reduce our energy use for a number of years – both from an environmental perspective and to save money," Ms. Hasenfratz said in an interview.
At one of its main plants, Linamar undertook a full audit of energy usage and implemented changes that cut energy bills as a percentage of sales by 18 per cent over one year, through automated shutoffs of machines, retrofitted lighting and other low-cost operational changes.
The focus on energy efficiency in an integral part of the company's efforts to improve productivity, Ms. Hasenfratz said. "Productivity means the elimination of waste or reduction of waste and that goes right across your organization."