Greening Production at the World's Biggest Brickmaker is Yielding Record Profit

Greening Production at the World's Biggest Brickmaker is Yielding Record Profit

Record earnings at the world’s biggest brickmaker shows how profitability is becoming increasingly linked to measures that reduce energy consumption, according to Wienerberger AG Chief Executive Officer Heimo Scheuch. 

Sales and net income hit new highs through the first nine months of the year while greenhouse-gas emissions fell 6% due to lower energy use, the Vienna-based company reported Tuesday. Wienerberger’s results convey a message to delegates gathered in Glasgow for the COP26 climate summit, the CEO said in an interview. 

“It’s no use making pledges to 2040 or 2050,” Scheuch said. “We need short-term goals that can be implemented right away. It’s our obligation to be as energy efficient as possible.”

The International Energy Agency calls energy efficiency the first fuel of the transition to greener economies. Doing business while reducing fuel and power consumption will have to account for some 40% of the decrease in global energy emissions over the next two decades in order to prevent dangerous temperature increases. 

Wienerberger’s spending some 60 million euros ($70 million) this year to boost efficiency at its plants in Europe and North America and is already almost half-way toward its 2023 goal of cutting carbon dioxide emissions by 15% compared to levels last year. Company data compiled by Bloomberg show the energy intensity of manufacturing has fallen about 13% since 2017. 

“Reducing energy consumption per unit of sales has a big effect,” Scheuch said. “But what makes it sexy is that it has a payback.”

Wienerberger headed for its biggest daily gain in more than a year Tuesday, climbing as much as 6.3% after third-quarter net income soared and sales surpassed 1 billion euros. 

Lower Prices

The CEO said that keeping energy costs low amid a spike in European gas and power prices has been key to maintaining profit margins. About 30% of Wienerberger’s annual costs go toward energy and it’s locked in “significantly lower” prices for the vast majority of its gas through 2023. 

“We have always believed that buying gas on the spot market is too risky,” Scheuch said. “We are an industrial company and don’t want to speculate.”

Wienerberger sees energy-efficiency playing a bigger role in its broader business over the next decade as consumers tap government subsidies to support refurbished roofs and building insulation. “We’re growing into becoming a system provider,” Scheuch said. 

©2021 Bloomberg L.P.

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