EcoLive is an international investment and industrial group focussed on fast growing industrial sectors in the emerging green economy. During the WFES’08, Earthwitness caught up with one of the speakers, Vassily Pozdyshev, Director and Vice Chairman of EcoLive
EcoLive is pursuing a highly targeted growth strategy by investing in clean energy and clean technology; their current portfolio includes companies centred on solar energy, sustainable forestry and advanced materials technology. With a focus on primary investments in leading emerging markets, such as Russia and China, EcoLive has embarked on an ambitious journey in the field of renewable energy.
EcoLive's business approach is to acquire traditional industrial assets with substantial environmental potential. Through the introduction of new technology, management expertise and fresh market orientation, EcoLive creates alternative value chains in the new green economy for these businesses.
Pozdyshev is convinced that these traditional companies can be transformed into industrial-scale manufacturers of commodities and products vital to such industries as non-fossil fuel energy and the emerging clean-tech sector. This transition of businesses from the traditional to a green and sustainable model has resulted in significant returns for EcoLive.
Given the fact that Clean Development Mechanisms help earn a considerable amount of capital through carbon credits, EcoLive has been reorienting the conventional assets to low carbon businesses, such as polysilicon photovoltaic production, first generation bio-fuels (pellets and charcoal) and advanced material development, while the management teams have secured customer bases for their high volume products.
Pozdyshev is highly optimistic about the emerging green economy, “The big businesses will move to the green sector once they figure out the right balance between profit and environment protection. Until recently, the green sector was represented mostly by a vast number of venture capitals and small projects, which made it a very risky proposition.” Pointing out to the success of WFES’08 in bringing so many big players in the renewable sector, such as Solar and Wind energy, Pozdyshev considers it to be a very good sign of what future holds for clean energy and clean technology.
Pozdyshev, speaking in his remarkably assured style, states his company’s game plan: “EcoLive is an industrial group that holds and manages several industrial assets, mainly in Russia, and reshapes them in order to supply major commodities and raw materials for the green economy.” Talking of raw materials that shape the green economy, Pozdyshev says, “The easiest example is polysilicon, you see here a lot of companies exhibiting solar panels but we are the only company present here producing a commodity out of which the solar panels are made.”
Pointing to a block of silicon kept in a glass case at the EcoLive stall, Pozdyshev explains, “This is metallurgical silicon (almost 98% pure), out of this raw material, at our chemical company, we produce Trichlorosilane, which after a distillation is used to produce ultra-pure Silicon (99,99% pure), out of which the crystals of polysilicon are produced. It is then cut into wafers and made into panels. It is very easy to produce wafers and not very complicated to produce the panels. But it is very complicated to produce polysilicon.”
One of EcoLive strategic buy-outs was the chemical manufacturer Nitol. By reorganising and reshaping its infrastructure, Nitol was transformed into a major production facility for polysilicon, a critical commodity for the solar energy market. The shift from traditional chemicals to the solar industry helped create an outstanding value for their shareholders, whilst helping to advance environmentally friendly energy generation.
Speaking of Nitol, Pozdyshev explains, “A part of chemical company was converted into a production of polysilicon. It is a massive chemical plant in Siberia, which produces more than 30 chemical products. One of the chemical products is Trichlorosilane and now Nitol produces polysilicon out of it. With increased output, we are confident that our supplies will reduce the bottleneck of polysilicon in the market.”
The solar power industry, historically represented by the downstream players (panel producers), is suffering because of the high cost of the raw material. Pozdyshev explains, “The long term contract prices are between 60 - 70 US Dollars and the spot price now is close to 300 US Dollars. The difference in price is a direct result of polysilicon shortage in the market. If we have more industrial players like Nitol, it will definitely help the green economy move forward. ” Underlining the significance of Nitol’s transformation, he adds, “The traditional chemical production is projected to have an average growth rate of 4.4 per cent until 2010. On the other hand, conventional polysilicon business that we have launched out of this has more than 30 per cent average growth rate.”
According to a strategic study done for EcoLive by Accenture, another fast growing sector in solar energy will be the Thin Film production (slightly less but roughly 30 per cent annual growth rate). Several major renewable energy and technological companies, present at WFES, has already invested in thin film production capacities. Pozdyshev categorically says, “EcoLive is not going to produce thin film coating, but is going to supply the fast-growing thin film producers with major raw materials (high purity gases) for this coating. As per oil industry terminology, EcoLive is an upstream player of clean and renewable energy sector.”
EcoLive’s other exciting portfolio is sustainable forestry; with substantial investment in the Russian Timber Group Limited (RTG), which is the second largest timber harvesting group in Russia, with production facilities in China. RTG, through its subsidiaries, harvests trees in Russia under harvesting licences granted through leasing agreements of state owned forest plots. Currently RTG leases approximately 2.4 million hectares of wood reserves in Irkutsk and Amur regions, which contains approximately 200 million m3 of mature and over mature reserves. Based on the forests characteristics and the forests’ growth rate, the group’s sustainable annual felling rights, as defined by the Russian government, amount to approximately 3.3 million m3. Much of the forest products are exported as roundwood and sawn timber to the fibre deficit Asian markets of Japan, China and the Koreas.
On the biomass industry, Pozdyshev sees it as an interesting paradigm. He says, “Currently the problem with biomass is it doesn't exist as a market because of the lack of volumes. Generation of bio-energy is mostly through pellets. A lot of small companies buy saw-dust and waste at a “waste price” from timber companies, produce pellets and sell them to the energy producers. The biomass sector is small and scattered; there is no mass producer of biomass. But single 150 mega watt power station needs at least 500,000 tonnes biomass a year.”
EcoLive was quick to spot the big opportunity for the fibre reserve as Pozdyshev explains, “In the UK, where biomass becomes a real issue for alternative energy generation, utilities that moved into the biomass sector have already invested in energy plants to produce energy out of biomass. What is most interesting is – they do not have long term contracts for biomass. Their supply is not secured in volumes because there are no big producers of biomass, who owns the forest resource. All of the biomass energy producers buy the raw material, because it is cheap for now. Once timber companies start to understand that there is a strong and long-term demand, they might raise the price. Once there is volatility in terms of price and volumes all this value-chain (energy of biomass) becomes extremely risky. And any biomass company going public without the secured access to the resource should be considered a very risky investment because of the volatility.”
Emphasising the significance of securing a steady supply of raw materials that shape the green economy, Pozdyshev hits the nail on its head, “The first thing to do, while launching what they call a low carbon economy is to secure the supply chains in major commodities at an industrial scale. And this is exactly what we are trying to do.”
Pozdyshev delivers a knockout punch to the sceptics of the green economy, “We are experiencing the success; an intelligent switch from traditional industrial assets to low carbon economy gives very high returns.” With a bourgeoning and extremely convincing bottom-line, EcoLive challenges and encourages everyone to embrace the green economy.
