Chemical Leasing within the SAFECHEM Business Model

Düsseldorf, Germany – Sept. 16, 2005 -- SAFECHEM Europe GmbH, a subsidiary of The Dow Chemical Company (Dow), was established in 1992 with the objective of developing solutions for the safe handling of chemicals used in the metal parts cleaning process and of adequately controlling the product-specific risks. This led to the development of innovative closed-loop systems and novel solutions for the safe handling and virtually risk-free use of solvents. The continuous enhancement of the SAFECHEM business model is thereby an on-going challenge.

Changing market conditions, heightened environmental awareness and new regulations have required a different approach to surface cleaning. As a result, there’s been an increased demand for services that provide comprehensive risk management. The role of the chemicals supplier is thereby changing to one of a solutions provider.

The classic SAFECHEM model – which has been in place since 1992 – does not only consist of selling and marketing solvents, but also includes the provision of service elements for their safe use and disposal. The sales price for the solvent sold includes the delivery of fresh solvent as well as the collection of used solvent for recycling in the SAFE-TAINER™ system which consists of special safety containers. In addition, services for an extended solvent use, process safety and quality assurance are offered. The revenue generated from these services thus increasingly becomes a decisive factor for the economic success. This qualifies the classic SAFECHEM model as a ‚Chemical Product Services’ business model. Such models are characterized by the fact that the revenue does not exclusively result from the quantity of chemicals sold, but is increasingly based on the services provided, thus achieving greater sustainability. Today, over 4,500 customers in Europe benefit from this classic SAFECHEM model.

In an enhanced SAFECHEM model - as it is for the first time tested in the Austrian Chemical Leasing Pilot Project – the very close, enhanced cooperation between the machine manufacturer and the chemicals supplier leads to an additional optimization of the cleaning process. Key factors are thereby the know-how-pooling between the involved partners and an invoicing process which is based on the provided cleaning services. The revenue is therefore solely service-based and solvent consumption becomes thus a cost rather than a revenue factor for the chemicals supplier. As a direct consequence, greater optimization of consumption, e.g. through increased efficiency during the use of the solvent, is achieved.

Model calculations show that in cleaning plants which already feature low emissions, solvent consumption could be further reduced by 40 to 80 percent through additional services and enhanced know-how-sharing. SAFECHEM is optimistic that these expectations will be met in the Austrian pilot project.

A Paradigm Shift

The change from solely selling chemical products to a ‚Chemical Product Services’ business model is a clear paradigm shift which is only feasible through the joint engagement of political and business stakeholders. Within the framework of the Austrian Chemical Leasing pilot this prerequisite has been met in an ideal way: The Austrian Ministry of Environment as strong supporter, Automobiltechnik BLAU as progress-oriented customer and PERO AG and SAFECHEM jointly, as innovative solution providers.

Dow, as chemicals producer, is committed to the principles of sustainable development and considers the participation of its subsidiary SAFECHEM in the Austrian pilot as another milestone in its efforts to promote innovative business models world-wide. The development of the innovative SAFECHEM business model and the fact that, as a result of this model, Dow has become a leading supplier in the European solvent based surface cleaning market, is a prime example of the successful implementation of such sustainable concepts. Dow is convinced that the Austrian Chemical Leasing project is a very important step in further developing sustainable business models. The successful cooperation between the business and political sectors will continue to play a major role in the future.

Inauguration of the Chemical Leasing Pilot – Sept. 16, 2005
The chemical leasing pilot was inaugurated on Sep. 16, in Weiz, Austria, in presence of the Austrian minister of Environmnet, Mr. Josef Pröll, further delegates of the Austrian ministry of environment, and representatives of Pero, BLAU, SAFECHEM and Dow. The presence of the minister demonstrates the high importance the Austrian government gives to the development and implementation of Chemical Leasing systems.

About PERO AG
PERO, a medium-sized company based in Königsbrunn, Germany, has been developing and manufacturing high quality cleaning plants for metal parts for over 50 years.
144 employees are producing PERO cleaning plants, in which items from tiniest of horological components, car parts, to huge turbine parts for aircrafts are cleaned. Highest cleaning standards requested by the customers are accomplished through procedural treatment.

With the new foundation of PERO Innovative Services GmbH as an independent company, PERO enters a new field of business: Chemical Leasing. The business model does not just compass the utilization of chemicals, but also the leasing of the entire treatment process which includes in addition to the chemicals, the cleaning plant, the reprocessing plant, service and process reliability.

For further information on PERO visit www.pero.ag or www.pero-innovative.at

About BLAU
Automobiltechnik BLAU is an affiliate of Tesma Motoren- und Getriebetechnik Ges.m.b.H. With its own research and development department it belongs to the organisational structure of Magna Steyr. As a systems manufacturer, BLAU supplies the global automobile industry with re-fuelling systems and modules.

For further information visit www.magnasteyr.com

The TRADE DEPARTMENT (www.blau.co.at) is a branch office of Automobiltechnik BLAU based in Weiz, Austria. A dynamic team caters to the needs of global distributors, automobile accessory industry associations, and the utility and construction vehicle industry.

Automobiltechnik BLAU is involved as a customer in the Austrian chemical leasing pilot project.

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