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The Warsaw Voice » Business » May 7, 2008
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Making Every Drop Count
May 7, 2008   
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Kompania Piwowarska, the biggest beer producer in Poland, says it prides itself on being environmentally friendly. The firm has reduced the overall amount of water it uses to produce its beers-which include some of Poland's most popular brands including Tyskie, Żubr and Lech-by more than half over the last decade. Over the same period, the company's share of the beer market here has increased from 19 to over 38 percent. Managing director Dieter Schulze talks to Jolanta Wolska.

In the past Kompania Piwowarska focused on water efficiency mainly in the production process. Why has the company broadened its scope to now include the amount of water used in growing its raw materials and in packaging?
Indeed, historically our approach to water issues has been focused on efficiency in the production process, but more recently we have broadened our scope to include our wider responsibilities; from understanding how much water is used in the growing of our raw materials through to water availability in our local communities.

Water scarcity and quality is becoming an increasingly urgent and politically sensitive issue and is of immediate relevance to us.

How has the company managed to reduce water consumption in production over the years?
It has been a long-term process. Once we started to prioritize then we spent time, energy and money at looking how and in what way water is used throughout our process... It is a combination of focusing on how we can use water and through investment in technologies to improve water usage.

Do the savings in water through new equipment compensate for the cost of investment in new plants?
Not always. Obviously one tries to look at it from that perspective, but investing in new technologies is not only a matter of improving water usage efficiency but it is also looking at the broader picture. When we invest in environmental and sustainable development projects we do not always necessarily expect it to pay back a financial return. Because that is not always possible, it then becomes a strategic investment and not a financially motivated one.

What about your responsibility to your shareholders to maximize profits?
I think that our shareholders understand that it is the cost of doing business. One of our top five values as a business is our reputation as a good corporate citizen. So with that in mind sometimes we have to invest in things that do not always make financial sense, but make a broader sense to the community in which we operate.

For me one of the biggest issues that the world and world economies are facing today is the environment. It not only focuses around water, but also around waste and recycling, and carbon emissions. Fortunately as an industry we are not one of the biggest carbon emitters but even there we have to play our part in managing these problems.

What water consumption practices and water-efficient techniques has the company employed recently in Poland?
It is not something that we have only recently focused on. Kompania Piwowarska has been at the leading edge in terms of water usage for years now. We have a clear business imperative to take action in three specific areas. Firstly, our operations need to reduce the amount of water they require to produce a unit of beer. Secondly, our operations must consider the needs of the communities in which they operate. Lastly, there is a case for engaging with our suppliers to research and gain a better understanding of our extended "water footprint."

According to the recognized industry measure, in terms of the amount of water used to brew a hectoliter of beer, we have achieved a 3.6 ratio compared to over 10.0 ten years ago, while the industry average is nearly 5 hectoliters. There is also a case for engaging with our suppliers to research and gain a better understanding of our extended "water footprint." We are developing a watershed assessment tool that is soon to be tested with the aim of rolling it out across the rest of the group. We have been gathering information on water availability and quality in the context of future requirements to protect local communities from potential drinkable water shortages. As you see our results have been achieved not through one major change but it is an ongoing process in our company.

In many cases if you reduce water consumption then you use more energy. How do you balance this?
It is not necessarily a direct equation that if you use less water then you use more energy. In fact, in some instances we have reduced energy consumption with the reduction of water consumption in our production.

This is a difficult question as both are finite resources. At least with water there is some sort of ecosystem that replenishes it in a sense, although the world cannot produce more water. However, I think that probably energy consumption is the greater evil at least at this stage when we do not really have alternate sources of energy.

What effect will climate change have on Kompania Piwowarska's water consumption? Are you already penciling in an increase in costs that will be passed on to the consumer?
The biggest impact that we have seen so far is on the supply of our raw materials. Their costs have increased drastically in the last two years, specifically our barley and hops. In the past we have had to absorb a lot of those increases in our cost structure because it was not possible to pass that on to the consumer. Obviously, if you want to maintain the business you have to pass costs on at some stage.

From a consumer perspective, the end result of water becoming more expensive will be that people will have to become disciplined and responsible citizens, and use water responsibly. And the same applies to all industries.
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