National Halmstad

Managed services agreement helps Swedish manufacturer reduce energy consumption

Sound-damping, sealing, insulating and protecting - now with reduced energy costs and increased sustainability

National Halmstad supplies industry with specialized polymer products (made from a combination of plastic and rubber). All products are made to order and are available in all sizes, from the smallest packing components up to the huge seals around ship's hatches.

 

Around 2015, the company discovered that energy consumption had been steadily increasing without a parallel increase in production.

 

"We started by doing an energy survey. It was an eye opener for the management team", says Daniel Cervin, Head of Environment and Sustainability - National Halmstad.

It turned out that the main energy inefficiency lay in our buildings and estate, not – contrary to our expectation - in our production systems. 
Daniel Cervin, Head of Environment and Sustainability - National Halmstad

At the very moment that National Halmstad was grappling with the issue - how to solve it, when it could be done, and its likelihood of success – Siemens proposed a complete solution for energy efficiency transformation. Siemens was a long-standing technology supplier to National Halmstad. The proposed solution was a turnkey operational contract. During the contract period, both uptime and energy savings are guaranteed, all embraced into a fixed monthly cost, with no capital required. This structure is known as a managed service agreement - a unique solution developed by Siemens together with Siemens Financial Services.

Without the Siemens managed service agreement, we would never have made the investment, or benefited from the energy savings.
Claes Rössel, Chief Financial Officer - National Halmstad

Turnkey contract, packaged and tailored for a cost-neutral solution

The Siemens team conducted an analysis which scrutinized 35 ‘zones’ that the energy survey had identified. Then they came up with concrete proposals on how to wrap in a series of different initiatives and how that would play out across a five-year managed service agreement.

 

Since all energy efficiency investments - with different write-down periods - are combined into a single agreement and the cost is distributed over time, the investment becomes cost-neutral – the energy savings pay for the upgrade. National Halmstad saves money through lower energy costs and reduced maintenance costs. In addition, expensive capital investments that affect liquidity are avoided. Thanks to the managed service agreement, for example, the company did not have to invest in a new gas boiler - the analysis showed that the existing pair of boilers had ample capacity.

The concept of a managed service agreement was completely new to us and we were a little skeptical at first. But when we thought it through, we quickly realized that it was the best solution to implement all the measures we wanted at the same time, and also keep it cost-neutral.
Claes Rössel, Chief Financial Officer - National Halmstad

Digitized properties

In addition to the project being managed by Siemens, Claes Rössel sees another positive effect: "Our buildings technology systems have been digitized. 32 technical systems are now connected and are controlled remotely by Siemens. Should problems arise, National Halmstad does not need to call in property technicians or find out what type of technicians are needed."

 Siemens guarantees that systems are operational at all times and ensures that any problems are rectified.
Claes Rössel, Chief Financial Officer - National Halmstad

Claes Rössel, National Halmstad, Henrik Holmgren, Siemens Financial Services, Daniel Cervin, National Halmstad and Karl-Henrik Rognefjord from Siemens are satisfied with both the structure and the outcome of the managed service agreement and turnkey contract.

Five-year agreement

The agreement runs for five years. During the contract period, Siemens manages, optimizes and responds to alerts and alarms from the connected systems. Every year, a construction meeting is held to make sure that goals are being met, and even exceeded. Siemens is also tasked with presenting improvement proposals, based on the insights gained during the operational and maintenance analysis.

"Siemens has helped us achieve our goal, to reduce energy consumption in relation to sales. We have also cut our water consumption and driven down our climate footprint", concludes Claes Rössel. "Without the Siemens managed service agreement, we would never have made the investment, or received the energy savings."

Technology specifics

Some of the measures that reduced energy consumption and reduced maintenance costs:

  • Digitization and connectivity of 32 buildings technology systems.
  • Switch to modern LED lighting.
  • Recovery of heat from compressed air.
  • Modernization of property automation.
  • Optimization of ventilation.
  • Replacement of fans.
  • Modernization of control and regulation technology.
  • Connection of meters to Siemens Navigator for follow-up, efficiency improvements and remote monitoring via Siemens Service Center.
  • Revision of National Halmstad's investment plan which meant that they did not have to invest in a new completely gas boiler.

This is how much energy consumption has decreased:

  • Heat, 868 MWh / year = - 26%
  • Electricity, 363 MWh / year = - 7.5%
  • Water, expected consumption 5,500 m3 / year = - 61%

Finance specifics - Managed service agreement

Siemens, in collaboration with its own finance company Siemens Financial Services, guarantees the uptime and capability of the agreed service areas, at a fixed monthly cost. These embrace sub-components such as fire protection, security, energy efficiency or ventilation, but also apply to the turnkey contract for the entire property. During the contract period, service, maintenance and insurance are included, also covering fire and lightning strike. The customer is guaranteed a fixed monthly cost, a supplier contact manager and unitary invoicing, while avoiding large capital investments that affect liquidity.

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