Building Your Dreams on the Pacific Coast Highway

I had the chance to visit two interesting companies last week in Shenzhen, a new metropolis in the Pearl River delta region of China which is a hub of economic activity in China. Shenzhen used to be a fishing village in the 70s, before it was turned into a Special Economic Zone and is located close to Hong Kong. Today Shenzhen is a sprawling  metropolis of about 400 sq. km with over 9 million inhabitants and with a GDP of 120 million US$ (roughly the size of New Zealand economy) and growing at over 10% annually.

I met Alan Cuddihy at PCH International (www.pchintl.com) an Irish company whose operational headquarters is in Shenzhen. PCH helps large global companies such as Apple to manage their supply chain in China managing their outsourcing operations. PCH is also helping global markets to source renewable energy and energy efficiency products from china such as PV, solar lanterns, LED lamps, batteries etc. They employ more than 1000 people and had a turnover of more than 200 million $s last year. It was interesting to see that PCH was working with D.Light, an Indian company to supply asolar lantern which is used under the World Bank’s lighting Africa project which is also supported by REEEP. Alan tells me that the expansion of the company’s acronym is Pacific Coast Highway. The founder of the company was driving down the Pacific Coast Higway in the US when his lawyer called him urgently for a name to register the company. As they say the rest is history.

I had an interesting talk with Alan and Terry Foecke about the efforts by Wal-Mart to reduce the carbon footprint of their supply chain. Terry has a deep knowledge and expertise in industrial energy and waste management issues and a lot of his insights were very rewarding. There seems to be significant potential seems to be in energy efficiency in air-conditioning, pneumatic tools and compressors as well as solar vapor absorption air conditioning and hot water supply. It was also good to hear that the Wal-Mart management has a significant involvement in the efforts and that eventually the initiative could extend beyond energy to water and waste management. Apparently more companies are looking into sustainability issues around their supply Chain. I also see opportunities for REEEP to work with local governments in the Pearl River Delta such as Shenzhen to put in place low carbon manufacturing and supply chain policies and also efforts in creating frameworks to increase the supply of finance for ESCos (or EMCs as they are called in China).

I also had a chance to visit a company BYD (www.byd.com.cn) located about an hours drive from Shenzhen. Alan had set up a visit for me and my colleague Megan Tang along with Terry. BYD stands for Build Your Dream and is active in
Automobiles, batteries, smart electronics and communications. BYD CEO Wang Chuan-Fu is considered a shining example of Chinese entrepreneurship and BYD had attracting some well publicised investment from Warren Buffet of Berkshire Hathaway. The company’s six sided headquarters in Shenzhen called the Hexagon has a picture of Wang handing Buffet a toy car and receiving his wallet in return. We were given a tour of the company’s automobile range including the new xxx, a hybrid car with dual motors. We also saw their other communication and IT products including mobile phones, palm tops, laptops, display screens etc. We also had a tour of their power products including the Fe batteries that are BYD’s core product. We also saw LED luminaries, PV modules and power electronics products. BYD has acquired a silicon mine and has set up a pilot PV plant of 100 MW and is in the process of ramping up production capacity to 1 GWp as a first step. BYD also gave us a tour of their net zero energy home and a battery charging station for electric vehicles where it takes 15 min to charge a car. While most of BYD’s product offerings are not new the innovation, cost advantages and the scale the company brings to the manufacturing processes will be a key determinant for its future.  It is quite possible that the company could also change the markets for electric vehicles and solar electricity in doing so. A personal highlight was that I got to drive my first hybrid vehicle – the BYD F3DM. It took me couple of minutes to realise that the engine was on!

BYD and PCH represent two new types of companies – BYD as a Chinese multinational using innovation, cost advantages and scale to transform its markets and PCH of that of an Irish multinational connecting the world to China and bringing China to the world. Watch out for these two companies in the future.

Over breakfast the next day, Alan replied to my question on how long he intended to stay in Shenzhen that “This is where the action is and I want to continue to be part of it.”

I think Alan is right… This clearly is where the action is.

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