Dresser-Rand 2011 Sustainability Report

Transcription

DRESSER-RAND
AT A GLANCE
Dresser-Rand Group Inc. is among the largest suppliers of custom-engineered
rotating equipment solutions for the worldwide energy infrastructure, including
oil, gas, petrochemical, power generation, and process industries. Our high-speed
rotating equipment is also supplied to the environmental solutions markets within
the energy infrastructure.
Our products—centrifugal and reciprocating gas compressors, gas and steam
turbines, gas expanders, gas and diesel engines, and associated control panels—
are used in oil and gas production, high-pressure field injection and oil recovery,
gas liquefaction, gas transmission, refinery processes, natural gas processing,
petrochemical production, general industry (including paper, steel, sugar,
and distributed power), power generation, and military applications. Our
custom-engineered products are also used in other advanced applications in
the environmental markets we serve, where they reduce carbon footprint and
increase energy efficiency. These include, among others, hot gas turbo-expanders
for energy recovery in refineries; co- and tri-generation combined heat and
power (CHP) packages for institutional and other clients; and a large number
of steam turbine applications to generate power using steam produced by
recovering exhaust heat from a multitude of sources. Biomass and biogas
applications for our steam turbine product line include gasification of
municipal solid waste or incineration of wood, palm oil, sugar, or pulp
and paper residues to generate power. Our equipment is used in compressed
air energy storage (CAES) applications for utility-sized power generation that is
environmentally friendly and provides unique grid management features.
We have the largest installed base in the world of our class of equipment,
encompassing a legacy of more than 40 reputable brands.
Dresser-Rand has one of the most extensive global service and support organizations
in the industry. The company offers a full range of original equipment manufacturer
(OEM) parts, field solutions, revamps and rerates, remanufacturing, product
training, and upgrades.
Our clients know us best for our ability to bring equipment solutions and premier
service for rotating equipment to the energy infrastructure markets. We continue
to widen our markets by investing in new technologies and companies that offer
exceptional environmental benefits and the economic value propositions that allow
our clients’ facilities to operate more efficiently or help them to be more competitive
in their markets.
Our worldwide client base consists of oil and gas producers and distributors,
national oil companies (NOC), and chemical and industrial companies in
more than 150 countries. We have long-term supplier alliance agreements with
approximately 50 of our clients.
Dresser-Rand has headquarters in Houston, Texas, and Paris, France. The company
has approximately 7,500 employees and operates 13 manufacturing facilities in
seven countries (United States, France, United Kingdom, Germany, Spain, Norway,
and India), 49 service and support centers, including six engineering and research
and development centers, and 76 sales offices in 32 countries.
Dresser-Rand Group Inc. is a publicly traded company listed on the New York
Stock Exchange (symbol: DRC).
TABLE OF CONTENTS
Overview
Dresser-Rand at a Glance................................IFC
Overview ............................................................ 1
CEO Letter.......................................................... 2
Corporate Vision, Mission,
Guiding Principles, and Values............................ 3
Our Approach to Sustainability.......................... 4
Our Sustainability Principles............................... 5
Stakeholder Engagement..................................... 6
Key Issues............................................................. 7
Environment..................................................... 10
Climate Change................................................. 12
Driving Efficiency in
Our Clients’ Operations.................................... 14
Operational Excellence in
Our Operations.................................................. 16
Society............................................................... 18
Localization....................................................... 20
People................................................................. 22
Health & Safety................................................. 24
Community....................................................... 26
Suppliers............................................................. 29
Using Technology to Improve Lives.................. 30
Governance....................................................... 32
Our Approach to Governance........................... 34
Global Reporting Initiative (GRI) Index.......... 38
DRESSER-RAND
SUSTAINABILITY COUNCIL
Asier Alea
Business Development Manager—
Environmental Solutions
Blaise Derrico
Vice President, Investor Relations
Brad Dickson
Vice President, Chief Marketing Officer
Mark Mai
Vice President, General Counsel & Secretary
Ken Marcia
Vice President, Worldwide Supply Chain
& Process Innovation
Jim Methven
Director, Global Singular Processes
Gustavo Nechar
Vice President, Human Resources
Jesus Pacheco
Executive Vice President, New Equipment
Worldwide
Peter Salvatore
Vice President, Chief Safety Officer
Greg Stubbs
Senior Manager, Sustainability &
HSE Process Innovation
The Dresser-Rand Sustainability Council represents a
cross-functional team of senior managers and executive
leaders chartered by our CEO with board oversight. The
council is charged with developing a sustainability strategy
of competitive advantage that engages opportunities of
shared value for Dresser-Rand and its stakeholders. We wish
to thank Jim Methven, Ken Marcia and Jesus Pacheco for
their valuable input over the last three years, and welcome
Ann Ackerson, vice president, Supply Chain, and Scott Wisler,
director, Centers of Technical Excellence, to the Council.
On the cover: Dresser-Rand supplied this
turbine generator set to Portugal in 2007.
The plant burns 13 tonnes/hr of a forestry
residue/cork dust biomass mixture,
producing power for the grid.
ECONOMIC IMPACT
($ in millions, except EPS)
2011
2010
2009
2008
$2,311.6
$1,953.6
$2,289.6
$2,194.7
Cash flow from operating activities
108.1
375.6
129.8
234.8
Net income
119.7
146.7
210.8
197.7
1.53
1.80
2.57
2.36
DRC
17.1%
34.7%
83.0%
-55.5%
S&P 500
0.0%
12.8%
15.2%
-36.8%
Revenue
Diluted earnings per share
Annual shareholder return:
PHLX Oil Service Sector Index
-11.5%
25.8%
61.6%
-59.9%
$657.4
$574.2
$562.6
$534.5
$47.4
$111.5
$129.1
$109.1
$2,311.6
$1,953.6
$2,289.6
$2,194.7
1,397.1
1,116.9
1,377.1
1,328.1
Selling & administrative expenses
364.6
300.5
287.3
273.8
Employee compensation (wages
& benefits)
657.4
574.2
562.6
534.5
Donations & other community
investments
698.9
293.0
392.0
411.0
Retained earnings (end of period)
904.5
784.8
638.1
427.3
62.2
31.7
31.1
33.9
47.4
111.5
129.1
109.1
Wages and benefits
Taxes paid
EC1 & EC3 GRI METRICS
Revenue
Operating costs
Payments to capital providers
(cash paid for interest)
Payments to governments (gross taxes)
Coverage of defined benefit plan obligations
Refer to 2011 10-K notes 11 & 12
OPERATING COSTS:
Cost of sales
Selling & administrative expenses
Research and development expenses
Employee compensation
(wages & benefits)
Total operating costs
$1,662.3
$1,366.7
$1,632.1
$1,576.1
364.6
300.5
287.3
273.8
27.6
23.9
20.3
12.7
(657.4)
(574.2)
(562.6)
(534.5)
$1,397.1
$1,116.9
$1,377.1
$1,328.1
524
500
414
ENDING HEADCOUNT
Asia Pacific
Europe
2,099
1,472
1,498
Latin America
726
145
191
Middle East/Africa
104
91
29
North America
4,053
3,944
3,977
Grand total
7,506
6,152
6,109
HEADCOUNT PERCENT BY REGION
Asia Pacific
7.0%
8.1%
6.8%
27.9%
23.9%
24.5%
Latin America
9.7%
2.4%
3.1%
Middle East/Africa
1.4%
1.5%
0.5%
54.0%
64.1%
65.1%
100.0%
100.0%
100.0%
Europe
North America
Total
REVENUE BY BUSINESS SEGMENT
53% Aftermarket
Parts & Services
36% Refining
and Chemical
● 13 Manufacturing Facilities
31%
North America
EMPLOYEE BREAKDOWN
BY REGION (TOTAL 7,506)
32% Oil &
Gas Production
11% Gas
Transmission
WORLDWIDE OPERATIONS AS OF 12/31/11
■ 49 Service and Support Centers
22% Europe
18% Latin America
REVENUE BY END MARKET
4% Other
14% Middle
East & Africa
15% Asia Pacific
47% New Units
17% Environmental
REVENUE BY DESTINATION
54.0% North America
9.7% Latin
America
7.0% Asia
Pacific
27.9% Europe
1.4% Middle East/
Africa
OVERVIEW
The future success of DRESSER-RAND relies upon continuing our
legacy of supplying long-lasting, custom-engineered, energy-efficient
product and service solutions. A significant factor in our success
is our ability to operate efficiently, which is why we are focusing
company-wide on OPERATIONAL EXCELLENCE. We intend to
build on our strengths by implementing global singular processes
(GSP) so that we are maximizing our successes. When we operate
more efficiently, we reduce cost, cycle time and—importantly—waste.
Through our expertise and innovative technologies, we are creating
a more sustainable tomorrow—for our clients, employees, suppliers,
stockholders, and the communities where we work. We are using data,
processes, people, and technology to define a common way of doing
business with less repetition across operations. Dresser-Rand is truly
focused on bringing energy and the environment into harmony.
CORPORATE SUSTAINABILIT Y REPORT 1
TO OUR
STAKEHOLDERS
Dresser-Rand is proud of the progress we have been making on bringing energy and the environment into harmony. At Dresser-Rand,
our approach to sustainability covers issues relating to the environment, society and governance.
Our mission for 2012 and beyond is to grow value for our stockholders in a way that is sustainable. 2012 will be a year in which we
focus on our number one priority—safety—and strengthen the contributors to our long-term performance, with continuing emphasis
on Operational Excellence.
The Dresser-Rand sustainability platform includes activities to address climate change and expand our products and services for the
growing environmental solutions markets. We are reducing our environmental footprint through, among other things, our Operational
Excellence initiatives, and are contributing to our clients’ sustainability goals through our products and technologies. We continue to
invest in local communities and continuously work to create a safe and healthy workplace for our employees.
Over the past two years we redefined our markets from simply oil and gas to energy infrastructure. We are now squarely engaged in a
growth strategy in the environmental solutions markets, expansion of our footprint to meet localization requirements and a step-up in
technology investments to maintain our leadership position in the industry. Consistent with this strategy, this past year we invested more
than $700 million in businesses that enhance our ability to serve the growing environmental solutions markets, including the acquisition
of Grupo Guascor and our investment in Echogen Power Systems. More recently, on January 4, 2012, we acquired Synchrony, Inc.
Guascor is a leading supplier of diesel and gas engines and provides customized energy solutions across worldwide energy infrastructure
markets. Guascor has substantial experience in the design, construction and development of power generation and cogeneration plants
and mini-hydroelectric plants, and the development and exploitation of wind farms and biomass, used oil and landfill energy recovery,
photovoltaic solar energy, and aerobic processing.
Echogen is a technology development company focused on developing innovative heat-to-electricity power generation systems that use
supercritical working fluids to transform heat into power without creating new emissions. This technology drives value for the client
through its unique combination of a lower cost per unit of electricity produced, compact footprint, higher energy recovery from the
waste heat stream, and ability to generate power from a wider range of heat sources when compared to competing technologies available in
the marketplace today. Echogen technology may be applied in many of our oil & gas markets to reduce the adverse environmental impacts
such as in refining and petrochemical facilities. In addition, this technology will provide enhanced power generation in environmentally
friendly combined heat and power (CHP) applications and compressed air energy storage (CAES) systems.
Synchrony is a technology development company with a portfolio of world-class technologies and products including active magnetic
bearings (AMB), high-speed motors and generators, and power electronics for clean, efficient and reliable rotating machinery.
OPERATIONAL EXCELLENCE AND SUSTAINABILITY
Over the past 10 years we have made excellent progress in improving productivity and cycle times, while reducing waste and costs
through our focus on Operational Excellence. We are committed to further improvement.
It’s our belief that sustainability and Operational Excellence are inextricably linked. Operational Excellence is our commitment to
invest in people, processes, facilities, and supplier relationships that enable us to compete and excel in quality, cost and cycle time.
With ever-increasing pressure on resources, as well as the impacts of our operations and products on the environment and society,
sustainability must be at the very core of our efforts to achieve the greatest success. As we enter 2012, our initiatives will embrace
Operational Excellence as we strive to embed sustainability into our operations, our supply chain, our culture, and our workforce.
Our focus will be on making sure continuous improvement is effected through process improvement programs. By identifying
concrete opportunities for these gains, we will strive for measurable improvement and clear accountability. These strategies are
aligned with achieving Operational Excellence and ultimately contribute to the overall value and sustainability of the business.
Our corporate sustainability report gives you the details behind our 2011 accomplishments and our commitments for 2012 in
each of three areas—society, environment and governance. We hope you read the entire report and that you sense our enthusiasm
and commitment to sustainability. We want to engage our stakeholders as a responsible corporate citizen that contributes positively
to the environment and society. We welcome your feedback.
We feel very good about the progress we’ve made, and we are confident about where we are going as we continue “bringing energy
and the environment into harmony.”
Vincent R. Volpe Jr.
President and Chief Executive Officer
2
DRESSER-RAND
OVERVIEW
VISION
Our vision is to earn client loyalty for life.
MISSION
Our mission is to provide the most reliable
and efficient rotating equipment technology
and service solutions and lead in safety,
environmental stewardship, quality, and
cycle time.
GUIDING PRINCIPLES AND VALUES
Safety and Environmental Stewardship
are our priorities and critical considerations
in everything we do.
Integrity and Ethics guide our conduct
and create the foundation for a sound
business reputation.
Employee Expertise and Responsibility
result from recruiting, training and developing
individuals, and encouraging cultural diversity
in an environment of integrity, teamwork
and empowerment.
Operational Excellence is our commitment
to invest in people, processes, facilities,
and supplier relationships that enable us
to compete and excel in quality, cost and
cycle time.
Innovation enables us to deliver unparalleled
value through leading-edge technology and
creative solutions.
Lifelong Support focused on servicing
a global installed base is essential for our
long-term growth and client satisfaction.
Lifelong Loyalty acknowledged by all
employees as the ultimate driver of our
success. Achieved through disciplined
processes and reflects a supportive
attitude that delivers long-term relationships
with clients.
Increased Stockholder Value through
superior financial performance and growth.
OUR APPROACH TO
SUSTAINABILITY
Sustainability provides a framework for understanding emerging trends, viewing
the world holistically and understanding how these emerging trends in society,
technology and energy resources should influence our business decisions.
By 2050, the world’s population is expected to grow from nearly seven billion
to more than nine billion people. Most of this population growth will occur in
developing countries. As the world’s population grows, the demand on all
energy resources will increase. Even as the United States establishes global
goals to achieve 20% of its energy coming from renewables by 2030, fossil
fuels will remain the prime source in its energy basket through 2050. And
with 75 years of oil and 130 years of natural gas available to us, these natural
resources will be sufficient to meet the energy demand and growth of the
developing countries into the future.
Dresser-Rand supports the prudent development of our oil, gas and coal
natural resources. Investment in technologies that enhance the efficiencies
of our clients’ operations and lower carbon intensity are aligned with our
sustainability principles.
Therefore, we believe we can support sustainability by investing in advanced
technologies and improving our core products and services. Also, we continue
to position Dresser-Rand in expanding our support of environmental solutions,
emerging renewables technologies and alternative energy markets. We
do this by using a diligent approach to innovation and investing in new and
emerging technologies.
We continue to build upon our sustainability principles and values by following
a business approach that deals with sustainability issues that intersect with our
value chain. This presents opportunities for shared value with our clients that are
also important to our stakeholders and the greater societies where we operate.
OUR SUSTAINABILITY PRINCIPLES
•Maintaining the highest standards of business ethics, governance, integrity,
and safety
•Embracing opportunities and managing risks deriving from economic,
environmental and social developments
•Responsibly using material and energy resources
•Providing environmental solutions with economic value for our clients
•Addressing issues of consequence to our stakeholders with sustainable
business practices
•Developing technologies, products, and services that bring energy and the
environment into harmony
•Investing in the development of our employees and the communities where
we operate
•Creating long-term stockholder value through sustainable processes,
products and services
By including our suppliers and clients across our value chain, and engaging
our employees and the communities in which we operate, we can identify and
provide solutions that create long-term stockholder value through sustainable
products and services that benefit society.
The future of energy demand presents an array of challenges, and we look
forward to the opportunities that come with it.
Brad Dickson
Vice President, Chief Marketing Officer
4
DRESSER-RAND
OVERVIEW
OUR SUSTAINABILITY PRINCIPLES EMBRACE ISSUES
RELATING TO ENVIRONMENT, SOCIETY AND GOVERNANCE
ENVIRONMENT
Climate Change
Facility Efficiency
Technology
Product Efficiency
Material Conservation
Waste and Recycling
Water Conservation
SUSTAINABILITY
AT
DRESSER-RAND
SOCIETY
People
Localization
Health and Safety
Community
Suppliers
Diversity
Labor Relations
Philanthropy
GOVERNANCE
Policies
Board Oversight
Compliance
Guiding Principles
Internal Committees
ECONOMIC IMPACT: By operating responsibly,
we improve our economic standing by decreasing risks
and enhancing our attractiveness to stakeholders
STAKEHOLDER
ENGAGEMENT
• ANNUAL MEETING OF
STOCKHOLDERS
• ANNUAL REPORT
• COMMUNICATIONS WITH
STOCKHOLDERS, INVESTORS
AND ANALYSTS
• FACILITY TOURS
• INVESTMENT CONFERENCES
AND QUARTERLY CONFERENCE
CALLS
Dresser-Rand recognizes the importance of engaging its stakeholders to
understand their concerns and issues. The dialogue developed between
Dresser-Rand and its stakeholders allows us to appreciate different viewpoints
and better understand how our business value propositions can be aligned
with the goals of our stakeholders and larger societal goals. We engage
our employees, clients, stockholders, communities, regulatory authorities,
and other stakeholders through various avenues of communication. Our
stakeholders and our engagement with them have evolved over our long
history, rather than as a result of a formal, defined process.
The stakeholders we conscientiously engage include clients, employees,
communities, suppliers, and stockholders. We strive to gain our clients’
loyalty for life through localization efforts and by delivering a superior value
proposition. We engage our employees by offering training and development
opportunities to help them advance in their careers and strive to reach balance
by creating a culture of teamwork, dedication and passion that encourages
their creative contributions. As a technology leader in our industry, we support
our communities by helping to develop educated and skilled citizens. We
view our Supply Chain as an extension of our manufacturing network, and
our business model requires strong, enduring supplier relations with globally
competitive companies. We keep our stockholders informed through regular
and timely communications and events.
We believe stakeholder engagement is important, because our understanding
of their priorities often leads to shaping our business strategy, technology
and geographical focus for investment and solutions. Over the past few years,
we invited industry analysts to address our leadership team at our worldwide
management meeting. The analysts shared their views on the industry and
on Dresser-Rand. We also have senior management participate in industrywide forums that provide thought leadership on pressing issues relating to
energy and the environment. These include EU Turbine (European Association
of Gas and Steam Turbine Manufacturers) and the Construction Industry
Institute (includes addressing sustainability for capital projects).
As we progress, we will continue to engage our stakeholders.
Blaise Derrico
Vice President, Investor Relations
6
DRESSER-RAND
OVERVIEW
KEY ISSUES
“
OUR MISSION FOR 2012 AND
BEYOND IS TO GROW VALUE FOR
OUR STOCKHOLDERS IN A WAY
THAT IS SUSTAINABLE.
”
At Dresser-Rand, we are providing premier-quality products and services for our
clients to address the needs of the worldwide energy infrastructure. We are driving
Operational Excellence through our global operations to reduce our environmental
impacts. Recognizing that our strength is in our employees, suppliers and service
providers, we are providing them growth opportunities with critical consideration
to their health and safety. We are supporting the communities where we work and
live through local sourcing and educational partnerships. By operating our company
with a consistent strategy and the highest standards of integrity and transparency,
we are creating value for our stockholders.
Our approach to sustainability is to integrate our sustainability principles into our
business processes. We require annual training on ethical business practices and
integrate safety into our daily work lives. We remind ourselves that the only way is
the safe, ethical way. We have a robust risk management system that
quantifies risk and helps us determine how to reach our goals in
the way that will reap the most benefit.
One of the major goals of our drive for
Operational Excellence is to reduce waste—a
major step towards a sustainable business. By
requiring the same of our suppliers, we reduce
waste up and down our entire supply chain,
passing increasingly sustainable products
on to our clients.
Another of our major initiatives on our
journey to Operational Excellence
is to singularize global processes,
ensuring that streamlining
efforts are replicated quickly and
efficiently and that we’re not
expending valuable time and
cost to reinvent processes at
each location. Our goals are
to reduce cost and cycle time
while increasing value—and
developing sustainable processes
and a sustainable business is
the smartest way to achieve
those goals.
Sustainability is becoming
a way of thinking and
a part of our culture as
we continue our journey
toward bringing energy and
the environment into harmony.
ECONOMIC IMPACT: By operating our company with a consistent
strategy and the highest standards of integrity and transparency, we are
creating value for our stockholders
8
DRESSER-RAND
❮
LIMATE
C
Innovate to create technology
solutions to mitigate greenhouse
gas (GHG) emissions and to
develop technologies for alternative
energy sources for the future.
❮
OCALIZATION
L
Expand our reach to extend the
benefits of job creation, local
sourcing and partnerships in
research and development and
education in the communities
where we operate.
❮
OMMUNITIES
C
Maintain and develop educational
partnerships that support science
and technology education to
enable tomorrow’s workforce.
OVERVIEW
❮
RIVING EFFICIENCY IN
D
OUR CLIENTS’ OPERATIONS
Increase energy efficiency
and reduce the footprint of our
products while providing superior
service to extend their usefulness.
❮
RIVING OPERATIONAL
D
EXCELLENCE IN OUR
OPERATIONS
Reduce the environmental
footprint of our operations through
operational excellence, which
embodies systematic measurement,
monitoring and continuous
improvement.
❮
EOPLE
P
Provide training and development
opportunities in a collaborative
culture to attract and retain superior
and creative talent.
❮
HEALTH AND SAFETY
Institute disciplined, consistent
operational processes to ensure
the health and safety of every
employee while striving to drive
our injury rate to zero.
❮
UPPLIERS
S
Drive operational excellence and
energy efficiency into our supply
chain through the deployment
of lean principles and supplier
partnerships.
❮
GOVERNANCE
Operate with strict adherence
to the highest standards of ethical
behaviors while considering
sustainability issues in our
decision-making.
SECTION 1
ENVIRONMENT
Bringing energy and the environment into harmony. We are focused on reducing the negative
impacts that our products, services, operations, and the energy industry we serve have on the
environment. Clients who use our technologies want to be responsible stewards of the world’s
limited resources while reducing their own environmental footprint. With regard to DRESSER-RAND
and its facilities, we realize that greater efficiency through OPERATIONAL EXCELLENCE results in
both cost reductions and conservation.
2011 COMMITMENTS
2011 ACCOMPLISHMENTS
Continue to focus on our internal
sustainability initiatives
Improved our workplace environment
across the company using Lean Six
Sigma processes
Continued “Lean to Green” training
which incorporates health and safety
aspects and eco-efficiency into our
Lean Six Sigma tools and processes
across the company
Continued Environmental and
Sustainability Awareness training
across the company
Continue development and implementation
of an eco-design process
Discussions with Process Innovation resulted
in a tactical plan to incorporate eco-design
criteria into our Value Engineering Initiative
and leverage existing engineering processes
Develop a company-wide waste management
program
Developed strategy and corporate waste
management standards
Improve and expand processes for
collecting and documenting data for
sustainability indicators
Formulated a process to collect critical
information and purchased software
Continue development of innovative
technologies that promote sustainability
New test facility for Rampressor with
application in carbon capture and
sequestration
Acquired Grupo Guascor and added
a broad range of sustainable energy
technologies to our portfolio
Invested in Echogen Power Systems for
supercritical CO2 waste-energy solutions
The Ebro river valley in Catalonia, Spain, where Dresser-Rand
has six facilities and approximately 700 employees.
10
DRESSER-RAND
ENVIRONMENT
2012 GOALS
Develop new standards and procedures
for company-wide waste management
Advance design for oil-free compressors
with active magnetic bearing (AMB)
technology
Incorporate HSE & “Lean to Green” into
key process Value Stream Maps
Develop the eco-design process with the
engineering community of practice (CoP) to
incorporate basic eco-design considerations
into our R&D engineering process
Initiate “green supply chain” discussion
and advance through the strategy and
planning stage
ADDRESSING
CLIMATE CHANGE
Innovate to create technology
solutions to mitigate
greenhouse gas emissions and
to develop technologies for
alternative energy sources
for the future.
Increasing global population and per capita income, centered primarily
in developing countries, will drive demand for energy and the products
and natural resources necessary to produce them.
A widely believed consequence of global economic growth and
increased population is a rise in greenhouse gas emissions and global
average temperatures.
We believe that Dresser-Rand is in a unique position regarding climate
change. Regardless of the source of energy, whether from traditional
sources (such as fossil fuels) or from emerging clean energy applications
(such as wind and wave energy), our products can lessen overall
environmental impacts.
Our focus on Operational Excellence allows us to provide competitive
solutions and equipment that increase energy efficiency and reduce
emissions for oil production, refining, petrochemical and liquefied natural
gas (LNG) facilities, pipelines, and a multitude of other applications. In
addition, applying Operational Excellence to our own operations improves
productivity, reducing resource consumption and the carbon footprint
of our operations.
We believe we can add value to our clients’ operations by increasing
the efficiency of our products and by providing solutions that lower
carbon emissions.
We are aggressively pursuing innovations and technologies that
help address our clients’ environmental concerns and reduce their
carbon footprints.
Greg Stubbs
Senior Manager, Sustainability & HSE Process Innovation
12
DRESSER-RAND
ENVIRONMENT
CARBON CAPTURE UTILIZATION
AND STORAGE—RAMGEN®
SUPERSONIC COMPRESSION
TECHNOLOGY
Interest in carbon capture and storage
(CCS) has been slow to attract investment
around the world as economic recovery has
taken center stage. However, the dialogue
on global warming continues unabated.
Currently, the investment is predominantly
directed towards enhanced oil recovery
(EOR), a form of carbon capture utilization
and storage (CCUS) that can provide
economic benefit without subsidies such as
a carbon pricing mechanism. Dresser-Rand
is a leader in the EOR compression market.
The cost of large-scale implementation of
CCS technologies is challenging, and the
ongoing issues of storing large quantities
of CO2 must be addressed. We expect that
the technologies associated with CCUS
will become economically feasible in the
near- to mid-term.
of a 10 MW Ramgen supersonic CO2
compressor. It is designed to validate a
10:1 compression ratio technology in a
single stage—which on an equivalent basis
takes eight to 10 stages using conventional
technology. This full-scale demonstration
testing is expected to begin in 2012.
OCEAN WAVE ENERGY—
HYDROAIR™ TURBINE
We are working to provide solutions for
harnessing renewable ocean wave energy
and efficiently converting it to electricity
for use on land. Dresser-Rand engineered
and developed the patent-pending
HydroAir™ turbine (shown at right)—
a variable-radius turbine (VRT) that
has substantially higher efficiency
than comparable devices. An initial
prototype was installed in Australia in
2010. Dresser-Rand and Ireland-based
Ocean Energy Limited, a market leader
in developing oscillating water column
(OWC) plants, signed a memorandum
In 2008, Dresser-Rand made an investment of understanding in 2010 to develop a
in Ramgen Power Systems LLC and began complete range of full-scale devices to
supporting the development of technology produce electricity. This partnership could
that is expected to reduce the cost of
lead to an Irish industry generating 600
compression by 50% when compared to
MW of electricity by 2020, enough to
the current cost of existing compression
supply the needs of 450,000 households.
technologies. The Ramgen technology
In addition, it was announced in January
also offers significant footprint savings
2012 that the Cornwall, U.K.–based
and high-grade heat for energy recovery.
Wave Hub selected Ocean Energy and
In 2011, Ramgen completed a dedicated
Dresser-Rand to deploy its technologies
CO2 closed-loop compressor test facility
at its flagship testing site in 2012.
at the Dresser-Rand Olean, N.Y., campus.
This one-of-a-kind test facility supports
Ramgen Power System’s demonstration
World’s first supersonic CO2 compression
test facility, located in Olean, N.Y., USA.
DRIVING EFFICIENCY IN OUR
CLIENTS’ OPERATIONS
We engage our clients at all levels of their organizations on a day-to-day
basis as well as in executive dialogue regarding their most pressing issues.
Through our alliance agreements with key clients, we have developed
performance metrics. We have also established semiannual or annual
executive-to-executive communications (executive sponsor meetings)
where collaborative exchange is held on issues such as safety, reliability,
operational performance, technology needs, future business projections,
and supply chain.
As with our 2009 report, we again chose to obtain an in-depth view of our
2010 Sustainability Report from one of our largest clients to obtain critical
“voice of client” feedback on our activities and the report itself. Some of that
feedback is incorporated into this report.
We maintain an intense client focus through:
• Our New Equipment and Services client-facing organization, whose mission
is to earn client loyalty for life
• 49 service and support centers and 76 sales offices in 32 countries,
with plans to add more to provide responsive support and service
to our clients’ installed base
• A global network of approximately 180 independent representatives,
all of whom promote our brand, sell our products and provide service
and aftermarket support to our installed base locally in more than
150 countries
• Enhanced relationships and alliance agreements with key clients;
we have more of these relationships in place than any other original
equipment manufacturer in the markets we serve
• Configuration sessions or tools that minimize cycle time and help
our clients optimize their equipment solutions
• Technology updates
• Our Client Interface Response System (CIRS)—an interactive, Web-based
tool that allows clients to communicate with Dresser-Rand technical
experts about an issue, technical query or problem on a specific piece
of existing equipment
• On-line, on-site or off-site product training
We are hard at work providing the most reliable and efficient rotating
equipment technology and service solutions with a view towards earning
client loyalty for life.
Jesus Pacheco
Executive Vice President, New Equipment Worldwide
14
DRESSER-RAND
ENVIRONMENT
PROVIDING OUR CLIENTS WITH
SUSTAINABLE SOLUTIONS
With a team dedicated solely to
environmental solutions, Dresser-Rand
is well positioned to serve the emerging
environmental solutions markets. We
support our clients in their efforts to
reduce the environmental footprint
associated with their day-to-day operations
through improving the efficiency of their
power generation activities, supporting
their renewable energy initiatives and
reducing the greenhouse gas (GHG)
emissions from their operations.
With its acquisition of Guascor,
Dresser-Rand now has capabilities in the
design, construction and development of
power generation and cogeneration plants
and mini-hydroelectric plants, as well as
the development and exploitation of wind
farms and biomass, used oil and landfill
energy recovery, photovoltaic solar energy,
and aerobic processing.
Our technologies support our clients’
competitiveness by improving process
efficiencies and reducing emissions,
enabling them to meet increasingly
stringent environmental regulations.
INNOVATION NORWAY
GRANTS AWARD FOR GREEN
TECHNOLOGY
In 2011, Dresser-Rand was awarded
$684,000 USD (4 million NOK) in
public grant funding by Innovation
Norway (IN). The grant will be used to
support testing a new, environmentallyfriendly turbine-generator set, known as
the Dresser-Rand KG2-3G unit.
IN, a development funding arm of the
Norwegian government that supports
environmental initiatives, awarded
Dresser-Rand the funding because the
KG2-3G turbine is expected to drastically
reduce fuel consumption, decrease CO2
emissions 35 percent, and decrease NOx
and CO emissions 80 percent when
compared to the rating of the existing
KG 2-3E turbine. The KG2-3G turbine
also comes with an acoustic enclosure for
onshore installation and is suitable for a
variety of applications, including biofuel
systems.
The unit will be installed at the WINGAS
Transport GmbH site in Greifswald,
Germany, where the North Stream
pipeline comes into Europe from Russia.
WINGAS will provide natural gas for
the field test in exchange for the heat and
power produced by the KG2-3G turbine.
The electric power will be exported and
the exhaust heat used to heat pipeline gas
coming out of the Baltic Sea.
CASE STUDY
More than 900 KG2 gas turbines have
been delivered for standby, industrial and
oil and gas applications worldwide.
GAME-CHANGING
TECHNOLOGY: THE DATUM® ICS
The DATUM® ICS is an advanced
technology platform that uses
high-efficiency DATUM centrifugal
compressor technology driven by a
high-speed, close-coupled, oil-free, electric
motor. The DATUM ICS is the first
technology to incorporate a proprietary,
integrated gas-liquid separation unit,
avoiding the use of a large static inlet
scrubber to protect the compressor. The
compression system is complete with
process gas coolers, process piping, valves
and instrumentation, all packaged into a
single lift module.
The DATUM ICS provides a complete
compression system for applications in
upstream, midstream and downstream
markets, and features the industry’s
smallest footprint with up to a 50% space
and weight reduction—all of which
translates into significantly less steel being
used offshore and delivering real value
through the lowest total installed cost.
Our first unit was built and shipped in
September 2010 and is expected to start
operation in 2012.
Working with subsea integrators, we plan
to take this proven DATUM ICS design
and fit it for service on the sea floor. In
June 2011 we partnered with Statoil in a
joint research and development project.
Initially, the companies will focus on
configuring the DATUM ICS package for
high-power applications in a nominal eight
to 12 MW range. Once the equipment
operating conditions and package
requirements have been clearly defined,
Dresser-Rand will build a high-power
ICS and test it in a unique liquid-gas
hydrocarbon test facility in Olean, N.Y.,
USA. In addition, Dresser-Rand plans to
conduct testing on a sub-sea test stand
to be constructed alongside the ICS test
facility.
DRESSER-RAND TEAMS UP WITH
KING FAHD UNIVERSITY FACULTY
AND STUDENTS FOR NOISE
REDUCTION RESEARCH
Dresser-Rand finalized a collaborative
research agreement with King Fahd
University of Petroleum and Minerals
(KFUPM), and last May we participated
in the first annual KFUPM Research Day
to highlight activity taking place under
the research agreement.
KFUPM organized the event, with lectures,
technical presentations and an exhibition
held on the KFUPM campus to enable
faculty, researchers, graduate students,
and guests to learn about research
activities at the university and build an
environment of innovation.
We exhibited the Dresser-Rand Duct
Resonator (DR) Array demonstration
rig and performed an interactive
demonstration of the DR Array noise
reduction technology. The KFUPM
students from the mechanical engineering
department presented findings under a
Dresser-Rand–funded research project
focused on improving the DR Array
technology.
The research team from KFUPM included
Dr. Samir Mekid and three students.
Two undergraduate students worked
on reducing the manufacturing cost of
DR Array technology, collaborating with
another team of students from Lehigh
University on the same topic. A graduate
student studied resonator arrays in
general to further improve the acoustic
performance of Dresser-Rand DR Array
technology.
Dresser-Rand and Saudi Aramco are
evaluating opportunities to apply noise
reduction technology to compressor
installations at production facilities within
the Kingdom.
OPERATIONAL EXCELLENCE IN
OUR OPERATIONS
Our primary environmental impact is derived from manufacturing our
products. We use a specialized software application to track our direct and
indirect energy usage for our Scope 1 and Scope 2 greenhouse gas (GHG)
emissions. We report under the Global Reporting Initiative (GRI) direct energy
consumption (EN3), indirect energy consumption (EN4), and total direct and
indirect GHG emissions (EN16). Our software uses the globally accepted
World Resources Institute GHG Protocol and the ISO 14064 standard to
collect our GHG emissions data. A third-party firm provides integrated
advisory, financial and implementation services for the energy value chain.
We continue to apply our lean manufacturing and lean office processes
to reduce waste in manufacturing and transactional processes. In 2011,
our Global Process Innovation group coordinated lean initiatives and
environmental stewardship through the Lean Sigma Certificate workshop
for the third year running. The workshop was expanded to encompass
more of our worldwide locations in 2011. A total of 189 participants graduated
in 2011 from the Lean Sigma Certificate workshops, and 54 Lean Sigma
improvement projects resulted from these workshops. The majority of these
lean improvement projects yielded increased capacity and reduced cycle
time via the elimination of wasteful, non-value-added activities.
We continue to expand the implementation of a client-focused, continuous
improvement toolkit to improve quality, on-time delivery, health and safety,
and profitability. Six Sigma workplace process implementation continues
within our manufacturing sites. Each site has established a scoring matrix to
determine sustainability improvement. A process is in place for self-audits on
the requirements of the scoring matrix, with follow-up audits by the respective
site leadership teams.
We are making significant progress introducing Standard Work Processes
in our service centers. Through 2011, more than 35,000 work instructions
have been standardized, written and translated into the respective service
center location’s local language. Results of this activity indicate significant
improvement in efficiency of such complex tasks as teardown and rebuild of
steam turbines.
In 2011, Dresser-Rand worked with its transportation and logistics providers
to continue to identify opportunities for decreasing its carbon footprint.
Actions taken included the consolidation of shipments where possible and
slow steaming of ocean-going vessels to reduce the carrier company’s
carbon footprint.
We also continue to evaluate our fork truck fleet for opportunities to reduce
the number of combustion engine emission–style trucks and replace them
with electric trucks. In March 2012, we entered into an operational lease to
replace 25 combustion engine–emission trucks with electric-style fork trucks.
Jim Methven
Director, Global Singular Processes
16
DRESSER-RAND
ENVIRONMENT
OPERATIONAL EXCELLENCE—
QUALITY, COST AND
CYCLE TIME
Dresser-Rand implemented an ongoing
evaluation of Quality Assurance programs
for its operations and those of its suppliers.
The intent of this initiative is to continue
to maintain a proactive productivitybased quality metric to link costs of
poor quality to volume; maintain a
high-level, productivity-based quality
improvement plan; and to focus on
preventing quality defects and defect
escapes to downstream processes.
Dresser-Rand aggressively pursues
quality in its developing country sourcing
program, which incents our legacy supply
companies to improve quality in order
to stay competitive. Our continued
focus is intended to improve our quality
year-over-year, but we still have much to
do in order to further improve cycle time
and delivery to our clients.
All of our Process Innovation and Supply
Chain management initiatives are focused
on improving quality, reducing cost,
reducing cycle time, and improving
on-time delivery—or in other words,
achieving Operational Excellence. We
have the right people in place to improve
cycle time and implement cost reduction;
now we need to focus on data and systems
in order to maximize and sustain these
improvements.
Our project prioritization process will
ensure that resources are efficiently
deployed with maximum impact on
the performance of the company. This
includes determining which operations
and suppliers need more support in order
to improve quality and reduce cycle time.
Actively pursuing supplier alternatives and
working with suppliers to reduce scrap and
rework help reduce costs.
Our strategy is to develop a supplier-toclient on-time delivery culture across
execution teams and to improve on-time
delivery performance against agreed-to
dates defined in the project master
schedule.
RESPONSIBLY USING MATERIALS
AND ENERGY RESOURCES
We have initiatives underway throughout
the company to use material and energy
resources more responsibly, including
through the reduction of waste and
increased recycling. A few examples of
this are mentioned below.
Our plant in Naroda, India, operates a
solar water heating system. The system
provides heated water to the plant
and office buildings at a savings of
approximately 44,000 kWh of energy
per year. In addition, the plant conserves
energy by using variable-frequency drives
in its compressor test facility and on its
compressor cooling water tower.
During 2011, our Burlington, Iowa, plant
expanded its recycling effort, adding new
types of materials for recycling. For the
year, the volume of material going to local
landfill was more than 90% less than
2009 levels and consistent with 2010.
The Burlington facility received the Des
Moines County Landfill Sustainability
Award for recycling.
In 2011, our Naroda, India, plant installed
an electrostatic oil filtration system and
recycled 4,741 liters of oil for reuse. The
plant’s wood recycling program resulted
in the reuse of 582 cubic feet of wood,
and the plant reduced its paper usage by
implementing a two-sided printing policy
and recycled 264 kg of scrap paper. In
addition, each employee was provided a
water bottle and a mug for tea, eliminating
the use of paper cups.
WATER USE
Our Naroda plant installed a water
harvesting system in 2010. In 2011 they
installed an oil skimmer and 5-micron
filter system to continuously filter the
coolant solution, increasing coolant life
and reducing coolant and water usage.
PLANT BUILDING SOLAR
WATER HEATING SYSTEM
Use:
Component cleaning
Energy saved per year:
44,000 kWh
System:
40 collectors
Indirect heating capacity:
6,000 liters per day @
70 °C (158 °F)
SECTION 2
SOCIETY
Our business success is supported by our relationships with our employees and the communities
where we operate. In the factory and in our global service operations, our priority is HEALTH
AND SAFETY. In communities where we have a presence, we are focused on achieving long-term
economic, social and environmental benefits through SUSTAINABLE INITIATIVES, job creation,
supplier engagement, research and development activities, and educational support. Our
commitment is to broaden these benefits by expanding our local presence in the places where
we operate.
2011 COMMITMENTS
Enhance our progress and oversight
for privacy issues
Established a Data Protection
Committee, consisting of the vice
presidents of human resources, law
and information technology, with
responsibility for overseeing our
compliance with international data
protection and privacy regulations.
Confirmed our compliance with
French and Spanish data privacy
regulations, and achieved safe harbor
status for certain data transfers from
France and Spain to the U.S.
Continue our training and development
investment in our employees
See “Training and Development”
on page 23
Create jobs and opportunities through
our localization initiatives
Progressed Saudi Arabia service
and repair center; increased local
employment at recently established
Pune India Engineering Center;
initiated localization plans in support
of the Petrobras 8 “replicant” FPSOs
award; increased local employment
opportunities through our gas turbine
repair and service center expansions
Strive to extend the reach of our corporate
charitable initiatives
See “Community” on pages 26-28
Pune, India, where our global engineering
support center employs approximately 200 people.
18
DRESSER-RAND
SOCIETY
2012 GOALS
Enhance our progress and oversight
for privacy issues
Continue our efforts to expand the reach
of our corporate charitable initiatives with a
focus on education, civic and social programs
and encourage participation of our employees
in these areas
Develop globally effective programs/
resources/policies and procedures
for implementing a world-class HSE
Management System with singular processes
Engage schools in communities in which we
work to foster education
LOCALIZATION
Dresser-Rand is committed
to building long-term
relationships with its clients
around the world by delivering
high-quality products and
services. To meet that
commitment, we are executing
a localization strategy. By
addressing local needs, we will
enhance our competitiveness
and improve response times.
We strive to employ local
resources.
10 Saudi engineers on staff and two
Saudi business managers.
SAUDI ARABIA SERVICE AND
REPAIR CENTER
The Saudi Arabia facility is under
construction and is expected to be
completed in 2013. The organization
is operational with a branch operation
located in Jubail.
Dresser-Rand is building an approximately 10,000-square-meter manufacturing
and repair facility in Dammam Second
Industrial City in the Kingdom of
Saudi Arabia. The facility’s capabilities
will include single-stage steam turbine
manufacturing, packaging and repairs
(including industrial gas turbines), field
support services, technical support
services, and training. The technology
center has been designed and facility
construction will begin in May 2012.
It will include offices, a training center,
cafeteria, and mosque.
The localization plan for Saudi Arabia
is focused on hiring locally and will
create employment opportunities at all
levels of the organization from the shop
floor to leadership positions. We have
An agreement was recently signed with
Saudi Petroleum Services Polytechnic
(SPSP), which is a vocational school
in Saudi Arabia. Dresser-Rand Arabia
is sponsoring 37 students of various
disciplines (welding, pipefitting,
machinists, and electricians) to participate
in a three-year training program. They
will complete their second year in
December 2012 and will then begin a
one-year, on-the-job training assignment
with Dresser-Rand Arabia.
We have established a supply chain
management (SCM) team that is in the
process of identifying, qualifying and
developing local suppliers for our activities
in the Kingdom of Saudi Arabia. We also
have a services organization in place for
installation, commissioning, and technical
support of our products in Saudi Arabia.
GLOBAL ENGINEERING SUPPORT
CENTER IN PUNE, INDIA
Dresser-Rand inaugurated a global
engineering support center (ESC) in India
in November 2010. During 2011, we
added 36 engineers, two project control
specialists and two SCM employees.
Located in SEZ, Cybercity, Magarpatta,
Pune, this ESC is currently home to
107 engineers and other employees
supporting Dresser-Rand worldwide
operations. With drafters, designers,
engineers, and other personnel, the ESC
will help meet demand for engineering,
designing, buying, expediting, and project
managing, and also provide support
The first unit packaged and shipped
from the Saudi Arabia service center.
This steam turbine-gear package is
destined for the Yanbu Export Refinery
Project in Yanbu, Saudi Arabia.
EMPLOYEE AND TEMPORARY WORKERS AS OF 12/31/11
Region
Full-Time Part-Time
Non-Union Non-Union
Temp.
Total
% of employees
covered by CBA*
Asia Pacific
355
3
166
0
81
605
32%
416
7
1,608
68
104
2,203
80%
North America
Latin America
Total
74
0
30
0
0
104
29%
2,688
5
1,359
1
613
4,666
34%
684
15
27
0
30
756
4%
4,217
30
3,190
69
828
8,334
43%
*Collective bargaining agreements
DRESSER-RAND
Part-Time
Union
Europe
Middle East/Africa
20
Full-Time
Union
SOCIETY
to other back office needs of IT, SCM,
finance, and HR on a worldwide basis for
Dresser-Rand products and services.
Magarpatta City practices various
sustainable practices like rainwater
harvesting, garbage segregation at source,
vermiculture, use of fly-ash bricks in
construction and has a solar water heating
system and biogas plant.
The Dresser-Rand localization strategy
focuses on hiring locally. Starting in 2012,
we also intend to visit local engineering
colleges to recruit the best in-country
resources. The long-range plan for the
ESC includes hiring approximately 250 to
300 employees over the next five years.
The ESC in India complies with all
statutory guidelines.
GAS TURBINE REPAIR
The Dresser-Rand Cilegon, Indonesia,
service center was established in 1999 to
serve Indonesia, Southeast Asia and the
Australian markets. We are in the process
of expanding Cilegon’s service capabilities
to repair gas turbines. This is part of the
strategy to roll out Dresser-Rand Turbine
Technology Services repair expertise to a
number of our strategically located service
centers. In this regard, our service center
in Campinas, Brazil, now has inspection
capability for gas turbines, and our service
Chevron’s Agbami FPSO located
offshore Nigeria. Dresser-Rand
supplied six 26 MW gas turbine
packages for main power
generation and compression.
Dresser-Rand is expanding
its local shop capability to
increase local content, which
is an important aspect of the
country’s investment plan.
center in Peterborough, UK, has full strip
and inspection capability, weld repair,
machining, heat treatment, and coatings
for component repair.
BRAZIL LOCALIZATION
Dresser-Rand Brazil locations are working
on executing awards to supply more than
$700 million of compression systems
and related maintenance services for
eight “replicant” FPSO vessels for Brazil’s
pre-salt fields. The awards were announced
in 2011. Engineering is on schedule and
we are in the process of arranging for
critical material deliveries. Construction
of the new facility is scheduled to begin in
the first half of 2012. The Dresser-Rand
Information Technology team is working
on the global singular processes (GSP)
requirements. Everything is on schedule
with regard to local hiring and training.
Standard work practices and safety
procedures are being translated into
Portuguese, and supply chain personnel
are evaluating local suppliers.
We are pursuing LEED certification.
According to the Green Building Council,
Leadership in Energy and Environmental Design (LEED) provides building
owners and operators with a framework
for identifying and implementing practical
and measurable green building design,
construction, operations and maintenance
solutions.
LEED certification provides independent,
third-party verification that a building
was designed and built using strategies
aimed at achieving high performance in
key areas of human and environmental
health: sustainable site development,
water savings, energy efficiency, materials
selection and indoor environmental
quality.
SERVICE CENTER EXPANSION
Dresser-Rand is enhancing its Services
footprint to optimize its service to clients,
including establishing new locations,
expanding existing locations and
relocating facilities as necessary. Standards
are being developed to create consistency
in size, appearance, layout, tools, systems,
processes, and procedures of service
centers worldwide. Efforts are underway
to integrate new facilities acquired by
Dresser-Rand in 2011, including Grupo
Guascor. We continue to audit the
operation, efficiency, quality, skill sets, and
safety of our worldwide service network.
PEOPLE
We achieve client satisfaction, stockholder value and employee engagement
through our initiatives in safety, compliance, technology, and Operational
Excellence. We recognize the value of Dresser-Rand employees and their
ongoing contributions and engagement to the success of the company.
We have good practices in place, the right people in the right locations
and the stage is set for enhancing employee engagement. The idea is to
engage our employees in Operational Excellence initiatives. We believe
one of the best ways to do this is to use Process Innovation and Lean Six
Sigma principles. To that end, we are developing initiatives that will involve
employees in problem solving using Kaizen workshops.
Our employees have a passion for what they do. This is driven by their desire
to earn client loyalty for life. We are committed to streamlining our processes,
providing worldwide client support and product leadership in our industry.
We are implementing a mechanism through which we can use employees’
suggestions to contribute to reducing cycle times, increasing productivity,
improving on-time deliveries, and reducing the cost of quality. We recognize
the best way to make improvements is to ask employees for their input in
areas they work in every day.
We don’t want to reinvent the wheel. The Dresser-Rand STAR model,
introduced in the Americas and Asia Pacific operations in 2010, embodies
our work toward sustainable improvements in safety, quality, delivery,
cost, and people. We want to achieve and sustain a recognized leadership
position in health, safety and the environment by enhancing existing
programs and implementing new programs that protect the health
and safety of our employees, clients and suppliers, as well as protect
and improve the environment in the locations where we and our clients
conduct business.
A commitment to safety—our number one priority—involves considerable
focus and effort around work environment improvement, combined
with a culture of discipline and responsible behaviors.
We believe we have world-class Field Operations, which we have
enhanced through the application of lean tools and processes. The
speed, visual excellence, efficiency, safety, quality, and commitment
of our Field Operations creates value for our clients and fosters
employee engagement.
Employee engagement involves a commitment to continuous improvement.
We want to empower our employees at all levels of the organization and
encourage teamwork and leadership in their daily lives. We will continue
to remain focused on employee engagement because of its significant
importance and long-term benefits.
Gustavo Nechar
Vice President, Human Resources
22
DRESSER-RAND
SOCIETY
EMPLOYEE TRAINING
Dresser-Rand is committed to educating
our employees as well as our business
partners. We offer training and
development opportunities to help
them advance in their careers and strive
to reach balance by promoting a culture
of teamwork, dedication and passion.
• Graduated 11 employees from our
Engineering and Financial Management
Acceleration Programs (MAP). We
currently have 61 employees in global
assignments.
LEADERSHIP DEVELOPMENT
Through our MAP we recruit top
engineers and financial talent globally,
Dresser-Rand views employee training
which entails rotational assignments.
and development as a strategic investment that Employees graduate from this program
significantly contributes to the success of our with experience and exposure to our
company, our employees and our clients. We cross-functional business units.
have safety and compliance training and other
flagship programs that provide the leadership,
business acumen and technical skills needed
to support our corporate mission. We are
expanding our programs. As we acquire new
businesses, our training programs are vital to
their successful integration.
In this ever-changing marketplace, our
employees are provided with a variety of
educational platforms including on-line
learning in virtual teams, hands-on product
training, business acumen, and leadership
development. We maintain a competitive
edge through this continuous investment.
CLASSROOM LEARNING
Our Quality of Leadership program
helps develop exemplary leadership
We build for the future by continuing to
practices for employees at all levels of
enhance our well-established relationships
the organization. The course focuses on
with universities, colleges and technical
Ken Blanchard’s situational leadership
institutes, and developing research
model and Kouzes and Posner’s five
partnerships, additional apprenticeships, and exemplary leadership practices. The
co-op and intern opportunities for graduates. Quality of Leadership program has had
Employee expertise is one our guiding
more than 1,000 graduates since its
principles and values. We believe employee
inception in 2007.
expertise and responsibility result from
ON-LINE LEARNING
recruiting, training and developing
Dresser-Rand University contains more
people, and by encouraging diversity in
than 100 different courses in our on-line
an environment of integrity, teamwork
catalogue. To best serve our employees
and empowerment.
worldwide, we offer courses in French,
TRAINING BY CATEGORY
German, Italian, Spanish, and Portuguese.
Our courses range from legal compliance/
35% Technical
24% Safety
regulatory, safety, and environmental
responsibility to time management.
6% Legal
35% Compliance
TRAINING AND DEVELOPMENT
IN 2011
• Spent $768,000 in the United States
on education reimbursements.
• Graduated more than 200 employees
globally in the Business Acumen course.
• Graduated more than 1,000 employees
from our Quality of Leadership program.
Our Business Acumen course takes
place in a virtual classroom where
employees from around the world cover
topics such as finance, working capital
management, enterprise risk and mergers
and acquisitions, to name a few. Each
section concludes with a group project,
where participants take turns as a team
leader. Business Acumen enhances
employees’ understanding of our business
while promoting collaboration and
teamwork. Our CEO sponsors this course,
and it is taught by 11 senior leaders.
PRODUCT TRAINING
Using our training facilities, we offer
hands-on product training. Participants
include clients and suppliers, who learn
alongside our employees.
In 2011, Dresser-Rand expanded
its training capabilities with the
opening of a new 8,700-square-foot
(808-square-meter) training center in
Houston. The centerpiece of the facility is
the large hands-on area equipped with a
slip-resistant epoxy floor for safety. Here,
one 15-ton and two five-ton overhead
bridge cranes facilitate the movement
of full-sized training equipment such
as compressor bundles and a multistage
steam turbine, while two half-ton jib
cranes are available for disassembling
and reassembling smaller components
such as compressor cylinders and
single-stage turbines.
Each classroom is outfitted with
up-to-date audio-visual equipment and
the latest in training tools. The larger
hands-on area and an extra classroom
allowed us to set up permanent equipment
workstations and computers that are
readily available, making it more efficient
for service personnel to meet training and
certification requirements. To achieve
maximum effectiveness of the new facility,
designers employed lean methodology in
the layout to permit several classes to be
conducted simultaneously.
OPTIMIZING OUR
MANUFACTURING PROCESS
Dresser-Rand is dedicating resources
to teaching lean manufacturing and
Six Sigma principles. Certified trainers
travel to our facilities globally to educate
employees on value stream mapping and
set-up time reduction, and to conduct
Kaizen events. These efforts are part of
our Operational Excellence initiatives
and have helped to reduce waste and
increase throughput.
HEALTH & SAFETY
The safety of Dresser-Rand employees and clients is our number one
priority. Our belief is that with disciplined processes, thought and execution,
supported by a culture of caring for each other, we will return every
Dresser-Rand employee, contractor and client home safely. Keeping people
safe is not only the right thing to do, but it makes good business sense as
well. Our clients demand outstanding safety from us. We share our clients’
belief that safety excellence requires the same kind of discipline as quality,
on-time delivery and costs. We want to be the supplier of choice among
our clients, building “loyalty for life” and recognizing that overall safety is
their first priority, too.
Over the last four years we have made improvements in our safety
performance as measured by the total recordable injury rate (TRIR). We
use the same common OSHA-Recordable definition at all of our facilities
around the world. Also, if we acquire any company or operation,
Dresser-Rand waits and evaluates the newly acquired company for 12
months before incorporating its safety statistics into our global statistics.
This provides an opportunity to build upon our safety culture and better
reflects our performance.
In 2008, our TRIR was 0.90; in 2009 it was 0.81; in 2010 we finished the year
at 0.49, while in 2011 our final performance was 0.57. Our total recordable
incident rate was in the top quartile for our industry in 2011; however, we
did experience a tragic loss of one of our employees. As a result, our target
of zero injuries and our mission to bring every employee home safely has
added significance for all of us. And it’s a target that is achievable. During
2011, two of our regions, Asia Pacific and Latin America, achieved the elite
status of zero recordable injuries. Twenty-two of our service centers and
five of our factories were also included in this extraordinary achievement.
Safety is a critical, cultural value of Dresser-Rand that demonstrates our
organization’s ethics, caring and respect for its people. It is a key ingredient
in the glue that binds people to our organization.
In 2012, we plan to better leverage the centralized functional HSE reporting
relationship by providing strategic and process direction to all safety
professionals worldwide to help improve efficiency and effectiveness.
We recognize that we cannot achieve a TRIR of zero without becoming
operationally excellent. Our HSE team will collaborate with our Quality,
Process Innovation, Operations, Engineering, and Human Resources
organizations to take a comprehensive, holistic approach to Operational
Excellence. We will do this by identifying gaps in achieving “disciplined
processes” and “disciplined execution” and will implement appropriate
corrective actions. We will use safety discussions of at-risk behaviors and
conditions as a primary rallying point in discussions with our workforce.
Peter Salvatore
Vice President and Chief Safety Officer
24
DRESSER-RAND
SOCIETY
HSE MISSION
The mission of the Dresser-Rand HSE
team is to conduct its activities in a
manner that protects the health and
safety of our employees, our clients, our
communities, and the environment in
which we operate. The HSE team:
• Believes that all incidents are preventable
and continually challenges our processes
and our practices to improve our HSE
performance.
• Is committed to providing our employees
with training, knowledge and tools that
promote health, safety and environmental excellence.
• Holds personal accountability as the
cornerstone of its beliefs and values. We
believe that each of us has a responsibility for our own safety and a shared
responsibility for the safety of others.
Our policy is an integral component of
the company’s visible commitment to
corporate citizenship, social responsibility
and employee development.
INVOLVING OUR FAMILIES
WITH SAFETY
In 2011 we held many safety days and
weeklong safety and health awareness
events in which families were invited
to the workplace for awareness and
camaraderie. These events also included
participation by local emergency
responders (fire and police) as well
as health care providers from local
hospitals. The purpose of these events
was to welcome families and friends
of our employees to the workplace and
to reinforce our commitment to safety
beyond our shop and job sites. Safety
affects all aspects of our lives—at work,
at home and at play. Our hope is that
everyone understands that Dresser-Rand
truly values our employees and that we
are steadfast in our drive to protect them
from harm. We want our families to know
that Dresser-Rand is a family-oriented
company; we are all team members and
share a common goal to create balance and
harmony with safety in our lives.
PROMOTING HEALTHY
LIFESTYLES
Dresser-Rand U.S. employees have access
to many resources to help support, inform
and motivate them to improve their
health and reach the next level of wellness.
Programs include:
• 24/7 nurse line—around-the-clock
toll-free support
• Rewards for healthy living
• Making fitness easy, fun and affordable
• Maternity program
• Personal health managers
• Tobacco cessation tips
• Weight management programs
GAS ENGINE TECHNOLOGY
CENTER EMPLOYEES BIKE
TO WORK
On June 22, 2011, more than half of the
Dresser-Rand Gas Engine Technology
Center office employees left their cars at
home and participated in Bike to Work
day in Fort Collins, Colo., USA. In total,
the team biked 110 miles, reducing the
overall environmental impact of their
daily commute and promoting a healthy
lifestyle. The Dresser-Rand Gas Engine
Technology Center employees have
pledged to bike a total of 4,000 miles to
and from work. The mileage pledge is an
employee challenge in order to maintain
our ClimateWise Platinum status.
DRESSER-RAND WELLSVILLE
OPERATIONS PARTICIPATES
IN 5K CHALLENGE
When the second annual Balloon Rally
and 5k Run/Walk was announced,
the Dresser-Rand wellness team at
the Wellsville, N.Y., operation decided
to challenge another local employer,
with all proceeds benefiting the local
Island Park. The challenge was based
upon the number of employees that each
team had participating in the event.
On July 16, Dresser-Rand entered 38
employees. The team demonstrated their
commitment to health and fitness, and
to their community.
Gold Safety Award winners from Chevron El
Segundo. Front Row (l-r): Franck Degueure,
Suzanne Worley, Chris Grapsas, Greg Gabel,
Kyle Nicklas, Frank Semancik. Back Row (l-r):
Rob Marsters, Mike Riggs, Bruce Perry.
AWARDS AND RECOGNITION
RECEIVED IN 2011
•D
resser-Rand U.K. was commended
by Talisman Energy for Best Individual
Intervention
•U
.S. Field Services (PACS) Contractor
Safety Recognition by Chevron
•U
.S. Field Services (GSE) Honorable
Mention Safety Performance from
Hovensa
•B
urlington (NAO) recognized by the
Iowa-Illinois Safety Council for Incident
Rate Less Than the Manufacturing
Category
•B
urlington (NAO) recognized by Des
Moines County—Waste Management
(Landfill) for Recycling—Dropped
Landfill Usage by 90%
•D
resser-Rand Canada awarded
Certificate of Achievement from
Saskatchewan Workers’ Compensation
Board for Making the Workplace Safer
Participants were Brad Billings, Tanya
Black, Danielle Brant, Joe Callahan,
Gus Cavalletti, Robert Chase, Jesse
Coats, Bill Cunningham, Jim Dello, Dave
Drew, Holly Dunaway, Mike Dunaway,
Mary Fanton, Rhonda Geffers, Ed
Grandusky, Cassie Hawley, Amanda
Jadwin, Sharon Johnson, Irene Kaechele,
Katherine Kinnicutt, Laura Kintner, Jim
Lanzo, Lisa Lewis, Mike McGee, Joe
Menichino, Mike Porter, Vince Rybicki,
Shiloh Sherwood, Glenn Smith, Terah
Soule, Sara Weller, Lisa Young, and
Buddy the dog. Not shown: Jesse Coats,
Sherry Fisher, Jim Biddle, Mike Babcock,
Balbino Arevalo, and Sue Hanbach.
•D
resser-Rand Canada awarded
Certificate of Recognition from Alberta
government for Injury Reduction
•R
ecognized by Petroleos de Venezuela,
S.A. (PDVSA) for Excellent Profile
and Attitude in Health, Safety and
Environmental
•G
old Eagle Safety Award from Chevron
El Segundo for Excellence in the Los
Angeles Branch
COMMUNITY
ENGAGING OUR
COMMUNITIES
•E
ducational partnerships
in our main countries of
operation
•E
mployee volunteerism and
local contribution programs
•E
nlisting local universities
with environmental projects
The Dresser-Rand community philanthropic programs focus on the
communities where we operate. Our employees require a broad range of skills
to meet the needs of the organization. Through our partnerships and funding
initiatives, we engage and educate students, from middle school to college,
about the opportunities available in science-based learning. We strive to give
students the skills to handle complex economic, environmental and social
concerns. As a technology leader in our industry, we support our communities
by helping to develop educated citizens.
• Since 2007, we have supported U.S. educational partnerships in New York
State’s Southern Tier region through our support of regional schools, such as
Saint Bonaventure University and Jamestown Community College in Olean,
SUNY Alfred in Wellsville and Corning Community College in Painted Post.
• Since 2009, we have held partnerships with SUNY Buffalo and with Texas A&M
University. Partnerships in 2011 included the Rochester Institute of Technology
and Pennsylvania State University, where students actively participate in
applied learning at Dresser-Rand including turbomachinery R&D projects.
• We continue to develop educational partnerships to support our global
operations, such as the ones established in 2009 between King Fahd
University in Saudi Arabia and Lehigh University in Bethlehem, Pa., U.S.A., and
with Nirma Institute of Technology in India. In 2010, several partnerships were
created or continued, including Ecole de Management de Normandie and
Association de Formation Professionnelle de I’Industrie in Le Havre, France,
and CESI Engineering School in Rouen, France.
• In Germany, we have maintained several long-term relationships with
schools, including University of Essen/Duisburg, University of Bielefeld, the
Engineering School at FH Bielefeld and the Business School at FH Düsseldorf,
allowing students hands-on experiences through cooperative opportunities.
In the United Kingdom, Dresser-Rand has maintained relationships with
Peterborough Regional College and Cranfield University in Bedford for
continuing and higher-level education for employees.
• Dresser-Rand and five other technology companies in Norway are parties to
an agreement with Høgskolen i Buskerud (HiBu) Department of Technology
to establish a three-year Systems Engineering Master’s Degree program. The
program combines on-the-job training with studies and a semester at Stevens
Institute of Technology in New Jersey. Students who complete the program
receive a dual master degree from HiBu and Stevens.
• In Indonesia, we have created relationships with Balai Latihan Kerja and
Lembaga Pendidikan Pengembangan Profesi Indonesia, where we provide
students with on-the-job training.
Dresser-Rand is continuing its efforts to support and engage universities
globally. Several additional partnerships are in the works to engage students
around the world and encourage them to join our exciting industry.
Mark Mai
Vice President, General Counsel & Secretary
26
DRESSER-RAND
SOCIETY
SOCIAL RESPONSIBILITY
Providing energy supply for isolated
off-grid areas is quite a challenge
and adventure for Guascor Brazil, a
Dresser-Rand company. The company´s
commitment to provide continuous
and quality power forges a long-term
relationship with the communities
served. Dresser-Rand hires local workers
and provides ongoing training to
improve technical skills. The quality of
life within the communities served is
enhanced by supplying power essential for
everyday activities.
Dresser-Rand is well aware of its role
in these communities, and its influence
goes beyond selling power. For example,
the company is a sponsor of the Vaga
Lume Association. Since 2001, Vaga Lume
has operated in rural communities in
the Brazilian Legal Amazon, developing
projects in education and culture, and
stimulating writing and speaking skills.
The exchange takes place through libraries
and reading mediators. In 2011, the
association distributed more than 15,000
new books and created 19 new community
libraries benefiting more than 23,000
people (according to Schools Register).
Over time, Vaga Lume intensified its
cultural exchanges with communities,
creating new initiatives and expanding the
scope of their actions. The literature, the
expeditions, the formation meetings and
cultural exchange are ways in which Vaga
Lume expands the worldview of children
and adults. Vaga Lume has become a
well-recognized and award-winning
institution and received the important
UN Intercultural Innovation Award
in 2011.
SOLAR ENERGY
One of the most successful and innovative
programs that Dresser-Rand jointly
developed with Vaga Lume was a pioneer
training project for future users of new
solar farms in Amazonas, Brazil. These
solar farms are located in 12 off-grid,
small riverside towns. Before the solar
farms went into operation, the Vaga Lume
Association trained representatives from
these communities to raise awareness
for the sustainable use of solar energy.
The program was a complete success,
and many other clients are now interested
in similar programs. So as we say in Brazil:
“This partnership promises!”
Employees at Dresser-Rand’s Naroda, India, facility are helping the underprivileged
by donating textbooks and working on community initiatives.
COMMUNITY SERVICE
INITIATIVE BY DRESSER-RAND
NARODA EMPLOYEES
A community service team was formed
at our Naroda, India, facility to help the
underprivileged in their community. Their
charter specifies that they coordinate,
mobilize and support their fellow
employees’ efforts by donating their
services and taking various initiatives for
the benefit of those in need of assistance in
the community.
The team donated textbooks that benefited
more than 100 children. The books were
purchased using voluntary contributions
from employees.
The Naroda team is working on a number
of community initiatives including
donating woolen clothes, organizing
events at an orphanage, a medical camp, a
health awareness workshop, and planting
saplings in the community.
Naroda’s community service team
members have volunteered their time,
treasure and talent and are having a
positive impact on their community.
COMPRESSOR DONATION TO
RIT PROMOTES EDUCATION AND
RESEARCH
Rochester Institute of Technology,
Rochester, N.Y., received a donation of
an advanced reciprocating compressor
from Dresser-Rand in 2010 valued at
$90,000. It was installed in the Kate
Gleason College of Engineering and is
being used by faculty and students on
multidisciplinary design projects and
research. The university is using the
equipment for educational laboratorystyle experiments for several engineering
courses, senior-design teams and co-op
project experiences. Its primary function
is to support graduate research in machine
health monitoring and fault detection. In
2011, Dresser-Rand made an additional
donation of a data acquisition system,
valued at $45,000, to further support work
being done in that area. Both donations
are part of the Dresser-Rand University
Project Sponsorship program designed to
provide universities with equipment and
information to help advance knowledge of
the engineering workforce and further the
company’s initiatives, from recruitment
to research.
For further information, please visit
www.vagalume.org.br.
BRAZIL TEAM DONATES MORE
THAN 2,000 POUNDS OF FOOD
The Brazil Service Center collected about
2,244 pounds of food for the Paulo Freire
Institute during their annual Health and
Safety Week, helping approximately 120
needy children.
Congratulations to the entire Brazil team
for such a fantastic accomplishment, and
to the 2010–11 Brazil Safety Commission
Team for launching the campaign.
The team was formed by the following
employees: Fabricio Braga, Antonio
Barros, Arthur Moura, André Macorin,
Reinaldo Celestino, Marco Antonio, and
Reinaldo Miranda.
The Freire Institute is an organization
committed to community-based learning.
In February 2011, Dresser-Rand
employees provided home repairs for
a family in Needville, Texas. Shown are
field service coordinator Don Greer and
Charlie Carnes from the Houston Training
Center, and field service technicians
Benjamin Barclay, Daniel Scalfaro,
Jerry Carnes, and Pappy Colvin from
the Naperville, Ill., Service Center.
28
DRESSER-RAND
FAMILY HELPS WITH TORNADO
CLEANUP IN ALABAMA
In April 2011, a violent tornado outbreak
devastated the small Alabama community
of Harvest. After viewing pictures of the
destruction, Kyle DeBerg, a Dresser-Rand
senior designer from Burlington, Iowa, his
wife Nora and their five children, ranging
in age from 12 to 21, spent their family
vacation in Harvest helping with the
cleanup. The DeBerg family unanimously
agreed to make the 10-hour trip and spent
most of their time helping a local retired
couple attach tarps to the roof of their
home, tear down damaged buildings and
clear debris.
VOLUNTEERS ASSIST WITH
HURRICANE RELIEF EFFORTS
In late August 2011, tropical storm
Irene struck several states, including
New York and New Jersey, producing
heavy rainfall that resulted in extensive
flooding. Seven Dresser-Rand employees
from the company’s Wellsville, N.Y.,
facility traveled to Greene, Rockland
and Schoharie counties in New York,
to help victims of the storm by pumping
water out of basements, salvaging personal
belongings from damaged residences,
and conducting door-to-door checks
on residents in areas that suffered
extensive damage and flooding. They
also provided relief for local firefighters
in those counties, many of whom had
not had the opportunity to check on
their own homes following the storm.
All seven employees serve as volunteer
firefighters with different fire departments
in Allegany County.
SOCIETY
SUPPLIERS
ENGAGING OUR SUPPLIERS
• Supplier globalization
• Operational excellence
• Safety and compliance
•T
echnology-based risk
management
Our business model requires strong, enduring supplier relations with
globally competitive companies. In 2011, we spent approximately $1.1 billion
with suppliers for engineering, manufacturing and services. We view our
supply chain as an extension of our manufacturing network. Training and
knowledge transfer helps new and established suppliers provide consistent,
efficient and safe delivery of our products and services. Contractual
requirements with our suppliers include the normal commitments to
quality and on-time delivery; however, we also include requirements for
implementation of a sustained continuous improvement program and
adherence to our Supplier Code of Conduct. The latter is particularly
important as our supply chain is globally expanded.
Both in 2011 and continuing in 2012, global supply chain expansion is
imperative and includes added focus in Brazil, Saudi Arabia, India, and
China. The expansion is particularly important in sustaining our expanded
client support in those regions.
Our requirements are the same for any supplier, independent of region,
with an overall focus on Operational Excellence—quality, cycle time and
total value.
As an advocate of minority and small business development, we are fully
committed to the economic growth and development of minorities, women,
veteran-owned, and small business enterprises, spending approximately
$200 million with them in 2011. We embrace our social responsibility to
support businesses locally, regionally and nationally where we conduct
business. We recognize the importance of maximizing our procurement
opportunities to welcome diverse business enterprises with compatible
value propositions.
By identifying and strategically aligning strong suppliers capable of
adding value to our business needs, we are able to provide a competitive
advantage in the marketplace while fulfilling the expectations of our clients
to support minority business development. Our efforts to proactively seek
qualified suppliers and share with them potential business opportunities
are never-ending. In 2011, we continued our participation in a variety of
affiliate outreach trade fairs, procurement forums and company/supplier
matchmaking events nationwide.
Expansion of our supply chain also requires skill, competency and talent
growth within the functional discipline. It requires higher skill sets and
understanding of global complexities. We have committed to training and
recruitment to meet these ends.
It is always the talent in our organization that drives the success of this critical
element of our business.
Ken Marcia
Vice President, Worldwide Supply Chain & Process Innovation
USING TECHNOLOGY TO
IMPROVE LIVES
Access to electricity and drinkable water remains a common problem for
hundreds of millions of people living in remote locations around the world.
Bringing electricity to these remote communities in a conventional manner
is expensive because of the need for hundreds of miles of power lines. The
distance electricity would need to travel from the power plant would result
in large load losses along the way. In addition, building miles and miles of
power lines can damage the ecosystem in these remote areas.
Dresser-Rand, through its acquisition of Guascor, has the expertise and
technology to provide power in off-grid rural locations by means of diesel
generation or photovoltaic (PV) systems (as shown at left).
Dresser-Rand provides distributed power to 56 off-grid locations in Brazil.
We also operate four equipment recovery centers in the Amazon region.
Engines from power generation sets that cannot be economically repaired
are recovered, disassembled, refurbished and inventoried for future engine
repairs. This process reduces raw material consumption and pollution
related to the manufacture of new parts.
The majority of rural electrification projects using photovoltaic systems are
based on individual kits. Each house has its own panel, regulator, battery
and, if necessary, a solar inverter.
Maintenance is often neglected because of the distance the provider might
need to travel to work on the kit. Consequently, the solar kits tend to suffer
irreparable damage within a few years.
Dresser-Rand, in conjunction with other companies, provides utilities
throughout the Amazon with reliable and proficient O&M capability, helping
to keep a dispersed set of PV installations running. The aim of the project is
to establish guidelines for companies maintaining an efficient, sustainable
rural electrification infrastructure.
Dresser-Rand also develops centralized power generation systems
(“mini-grid” systems) using PV solar energy. These mini-grid systems tie
the PV generation system (solar panels, controller, batteries, and inverter)
to a central location within a village and connect power lines to each house.
Photovoltaic generation systems are a sustainable resource that offers the
end user environmental, economic and social benefits.
The advantages of the mini-grid system compared to individual kits include:
• Continuous availability of photovoltaic generation
• Increased energy availability
• Grid expansion to new housing at reduced cost
• Public street lighting
• Remote system monitoring
The main advantage of distributed power generation solutions, whether
engine-based or based on solar PV energy, is that they are available to
most rural villages.
Asier Alea
Business Development Manager—Environmental Solutions
30
DRESSER-RAND
ENVIRONMENT
CASE STUDIES
PIG MANURE MANAGEMENT
The Spanish swine herd amounts
to more than 25 million head (20%
of the entire EU), and generates
about 50 million cubic meters of
pig manure each year.
Pig manure (slurry) is used to
fertilize crops because it is high in
nutrients. However, the use of the
nitrate-rich manure in certain rural
areas has resulted in soil and water
contamination. Restrictions have
been imposed in areas designated
“vulnerable,” and the slurry must
be treated to prevent negative
environmental impact. Treatment
costs are high and damaging to the
farming economy.
Dresser-Rand developed a
proprietary slurry treatment
technology. This technology uses
an engine-based process to dry the
pig manure, converting it to a dry
WIND ENERGY
Wind energy is currently one of the
most tested and efficient forms
of all renewable energies. It does
fertilizer. It was first used in a slurry
treatment plant in Catalonia, Spain,
which became operational in 1999.
Today, there are six such plants with
approximately 40 Guascor engines
in operation, treating 100,000 cubic
meters of pig manure per year.
Manure is transported to a slurry
treatment plant, and the organic
fraction is transformed into a fertilizer.
This technology is important because
it stops nitrogen compounds
from contaminating the soil and
groundwater and eliminates odors
and methane emissions from the
slurry. In addition, it creates a dry
fertilizer or degradable sludge with
high agronomic value.
Compliance with the strict
environmental criteria has already
allowed the installations to receive
environmental certification
UNE-EN-ISO-14001.
not pollute, it is inexhaustible and it
reduces use of fossil fuels, helping
to reduce carbon emissions.
The electricity produced by a wind
turbine is void of CO2 emissions
(responsible for the greenhouse
effect), and SO2 and NO X emissions
(responsible for acid rain).
Furthermore, and contrary to what
can happen with conventional
energies, wind power produces no
adverse environmental impacts to
ground water and aquifers.
The wind farms maintained by
Dresser-Rand throughout the Iberian
Peninsula generate approximately
1,060 GWh of electricity per year,
which is equivalent to the power
consumption of 235,000 households.
Compared to conventional power
alternatives, these wind farms
produce significantly lower levels
of emissions. On an annual basis,
the reduction in emissions to the
atmosphere is estimated to be
approximately 636,333 tons of
CO2, 1,410 tons of SO2 and 1,771
tons of NO X.
Wind power represents a great
opportunity for local development
in disadvantaged areas because
remote, off-grid areas can gain
access to electricity and land
owners to economic resources.
Dresser-Rand recruits local
personnel to operate and maintain
(O&M) the wind farms, creating jobs
locally.
Dresser-Rand wind O&M technicians
assist with the maintenance of wind
farms in Mexico, Morocco, Egypt,
Dominican Republic and China,
among others. These technicians
work closely with local technicians
on corrective and preventive
maintenance. They also transfer
skills and know-how to increase
local self-reliance.
SECTION 3
GOVERNANCE
Dresser-Rand promotes the HIGHEST STANDARDS of governance. These standards remain at the
core of our company’s reputation and stability and provide a foundation upon which we are able to
serve our stockholders, employees, clients, suppliers, and other stakeholders with passion, hard
work, confidence, and an INNOVATIVE SPIRIT. Beyond our long-standing commitment to abide by
laws and regulations applicable to us, we work hard to engender a culture of conducting ourselves
ethically. Simply put, our management team continually encourages our workforce to do their jobs
THE RIGHT WAY. Our governance systems are the cornerstone of our corporate management and,
in conjunction with our principles and values, guide the decisions and actions of all employees.
32
DRESSER-RAND
2011 COMMITMENTS
Provide periodic reporting to the Board
with respect to the company’s risk
management and mitigation program
Provided periodic updates to
the Board
Improve our program for implementing,
reviewing and communicating our
corporate policies
Developed process to ensure greater
consistency in communication and
training for newly adopted or amended
policies; executed compliance training
for Guascor employees
Address global legislative developments
relating to combating corruption
Implemented new global anti-corruption
policy with a supplement addressing the
U.K. Bribery Act; conducted employee
training; enhanced Due Diligence review
process for third-party intermediaries
Improve the effectiveness of the company’s
hotline review and resolution process
Provided additional training for
employees who investigate hotline
reports; developed process for Internal
Audit to monitor implementation of
designated corrective actions
Continue to leverage the organization’s
investment in Global Singular Processes
Completed GSP implementations in Olean,
N.Y., and Dubai; implemented customer
relationship management for D-R Services
GOVERNANCE
2012 GOALS
Provide periodic reporting to the
Board with respect to the company’s risk
management and mitigation program
Enhance Board governance through the
adoption of a majority voting standard
for uncontested director elections
Continue improving our program
for implementing, reviewing and
communicating our corporate policies
Respond to regulatory developments relating
to governance and disclosure issues
Identify critical process controls for key work
streams; continue to expand the GSP footprint
into new locations, including Canada
OUR APPROACH TO
GOVERNANCE
BOARD OVERSIGHT
The business and affairs of the company
are managed by or under the direction
of its Board of Directors, comprised of
eight members, each of whom is elected
annually. With the exception of Vincent
R. Volpe Jr., our president and CEO, all of
our directors are independent, including
the Chairman of the Board, William E.
Macaulay. More information about our
directors, including their backgrounds,
can be found in our Proxy Statement,
which is available on our website.
At its February 2010 meeting, the Board
approved the Dresser-Rand Sustainability
Principles, which apply to our strategic
decision-making at all levels of the
organization. Our CEO directs the
Dresser-Rand Sustainability Council
with oversight from the Board. The
CEO and other officers’ and managers’
performance reviews include assessment
of their success in achieving certain
sustainability objectives. Improving
our safety performance is an objective
of all our key managers. Consistent with
market practices, non-employee directors
are paid compensation for their services,
which includes an annual cash retainer,
grants of restricted stock, meeting fees,
and fees for serving as a committee
chairperson. Further information
regarding director compensation can
be found in our Proxy Statement.
There are three standing committees
of the Board: Audit, Compensation,
and Nominating and Governance. All
committee members, including the
chairs, are independent. Each standing
committee annually reviews its written
charter and conducts a self-evaluation.
The Board reviews its performance
annually under the direction of the
chairperson of the Nominating and
Governance Committee.
GOVERNANCE DOCUMENTS
The company’s Corporate Governance
Guidelines, Code of Conduct and
the charters of its Audit Committee,
Nominating and Governance Committee,
and Compensation Committee are
available on the company’s website at
www.dresser-rand.com/corpgov. In
conjunction with our Enterprise Risk
Management program, these core
documents direct the Board’s activities
and address the Board’s responsibilities,
which include, through oversight and
direction of management, reviewing
the company’s business strategies and
financial performance, compensating
and developing senior managers, insuring
appropriate processes for promoting the
integrity of the conduct of our employees
and our financial reporting, and promoting
our compliance with all applicable laws
and regulations in the countries where we
operate.
GLOBAL SINGULAR PROCESS
To increase process discipline and
information sharing across global
operations, we are implementing Oracle®
software. We refer to this common
approach as the Dresser-Rand Global
Singular Process, or GSP. When we identify
a best practice as part of our quest for
Operational Excellence, we seek to
uniformly adopt it across the enterprise.
In February of 2011, GSP went live
in Olean, N.Y. Additionally in 2011,
GSP was implemented to support the new
Dresser-Rand materials center in Dubai.
This included integration with third-party
logistics providers for automation across
the value chain, increasing efficiency and
customer responsiveness in the region. GSP
went live in Canada in February 2012. We
continue to leverage the common platform
to improve financial transparency and
enable Operational Excellence across the
organization.
BOARD OF DIRECTORS
William E. Macaulay
Vincent R. Volpe Jr.
Philip R. Roth
Rita V. Foley
Stephen A. Snider
GOVERNANCE
SUCCESSION PLANNING
The Board plans for succession to the
position of CEO as well as other senior
management positions. To assist the
Board, the CEO annually provides
the Board with an assessment of senior
managers and of their potential to succeed
him. He also provides the Board with an
assessment of persons considered potential
successors to certain senior management
positions. The Board meets annually to
evaluate such succession and to oversee
the company’s management development
process. A procedure has been adopted
to facilitate communication and outline
a process in the event our CEO is unable
to perform his duties due to unforeseen
circumstances.
ETHICAL BUSINESS PRACTICES
Dresser-Rand has a robust program
of policies and procedures that guide
our decisions. We are in the process of
reviewing and categorizing these to better
ensure that the right people are getting the
right information in a timely manner to
improve decision-making.
Chief among our policies is our Code
of Conduct, which is applicable to all
directors, officers and employees. It
includes provisions relating to ethical
conduct, conflicts of interest and
compliance with the law. The Code
outlines the values and standards of
behavior that make Dresser-Rand a
trusted and respected organization. It is
each employee’s responsibility to exercise
sound business judgment and act honestly,
ethically and with integrity.
Employees receive training through
computerized modules. We hold an
annual worldwide Management Meeting
with approximately 145 managers
participating, where we review and discuss
infractions of the Code in the prior year
and the disciplinary consequences.
Reporting unethical or illegal behavior
is the responsibility of every employee.
Employees who discover a potential
violation of the Code are encouraged
to call our confidential and, where
permitted by applicable law, anonymous
Ethics Hotline. The hotline is available
in most countries in which we operate. A
third-party provider tracks the number of
calls and the basic nature of them. These
and communications received directly by
management are reviewed quarterly by
the Audit Committee of the Board and
annually by the full Board. An Ethics
Committee established by the CEO
reviews disciplinary recommendations
resulting from significant violations to
the Code to determine whether discipline
is appropriate and to ensure consistency
throughout the organization. Following
review by the Ethics Committee, our vice
president of Internal Audit monitors the
implementation of any disciplinary or
other corrective actions.
There were a total of eight incidences
of alleged discrimination reported in
2011 (four of which involved EEOC
complaints, while the others were through
our Ethics Hotline). Regarding each
of these allegations that has not been
resolved, we are defending our actions
through due process.
Since 2007, the company has continued
to contest allegations that it engaged
in unfair labor practices in connection
with the handling of a lockout of its
employees at its Painted Post, N.Y., facility
after a strike. See the company’s periodic
filings with the Securities and Exchange
Commission for further discussion.
Our Whistleblower Policy, available
at www.dresser-rand.com/corpgov/
whistleblower.php, protects employees
against retaliation.
HUMAN RIGHTS
The diversity of our employees is a
tremendous asset. We provide equal
opportunity in all aspects of employment
and will not tolerate discrimination or
harassment of any kind. Derogatory
comments based on racial or ethnic
characteristics, unwelcome sexual
advances and similar behavior are
prohibited. Employees receive annual
training on our anti-harassment policy.
In addition to the direction they receive
in the Code of Conduct, their actions
are guided by our policies on equal
employment opportunities, harassment,
workplace violence prevention, and
retaliation. We do not face issues of
child or forced labor. Dresser-Rand
supports the Universal Declaration of
Human Rights adopted by the United
Nations in 1948.
ADVISORY DIRECTOR
Louis A. Raspino
Michael L. Underwood
Joseph C. Winkler
Joseba Grajales
LOBBYING AND POLITICAL
CONTRIBUTIONS
Our limited lobbying activities are
used to support sales and community
relations in the U.S. Total expenditures
in 2011 were less than $200,000 with
$100,000 going to the Coalition to
Advance Renewable Energy through
Bulk Storage, an association promoting
compressed air energy storage (CAES)
solutions before Congress. In addition,
during 2011 Dresser-Rand was a member
of the U.S. Chamber of Commerce,
which is the world’s largest business
federation, representing the interests
of more than three million businesses,
as well as state and local chambers and
industry associations. Dresser-Rand has
not made political contributions and
does not currently have a political action
committee. However, certain management
members make political contributions.
MARKETING COMMUNICATIONS
All marketing materials are reviewed
internally to ensure they adhere to relevant
laws, standards and internal guidelines,
and to ensure they do not infringe on
any third-party trademarks or copyrights.
We have not been subject to any fines
in 2011 for noncompliance with laws
concerning the marketing of our products
and services.
The company has a number of policies
that promote the adherence to laws
related to marketing communications,
such as advertising, promotion and
sponsorship. Among these are our
Code of Conduct, our Media Contact
and Communications Policy, and
our Policy on Fair Disclosure. Any
information presented on our website,
or set forth in advertisements and product
literature is prepared and reviewed
by subject matter experts, reviewed
by our Director, Market Services, and
finally reviewed by the company’s
Disclosure Committee, or subcommittees
thereof, prior to being distributed.
Moreover, all press releases and articles
intended for public distribution are
approved by the company’s Disclosure
Committee, or subcommittees thereof,
prior to publication. This process is
36
DRESSER-RAND
undertaken to ensure the accuracy of
the information being disseminated,
and in-house counsel also reviews the
materials for legal compliance.
COMPLIANCE
It is Dresser-Rand’s goal to periodically
train all of its employees in the Code
of Conduct, the global anticorruption
policy and other significant company
policies. During 2011, the company
was not the subject of any legal actions
alleging anticompetitive behavior, and no
significant fines or sanctions were assessed
against or paid by the company in 2011
for noncompliance with laws
and regulations.
ABOUT THIS REPORT
This is our third Sustainability Report.
Our goal is to provide a balanced view
of the key issues we face and outline
the major achievements we have made
that affect Dresser-Rand stakeholders
across environmental, social and
governance areas.
SCOPE
This report, published in June 2012,
covers information across our global
operations for the year ended December
31, 2011, unless otherwise noted. We
include information from previous years
where it is appropriate to provide context.
Dresser-Rand is reporting on the
operations for which it has operational
control, including as applicable, all
business units, joint ventures and facilities
owned or under lease (for example, office
and vehicle leases). For acquisitions, we
report information commencing from
the date the transaction is completed.
Currency is reported in U.S. dollars.
HISTORY OF SUSTAINABILITY
Sustainability is not a new concept.
Dresser-Rand and its legacy companies
have been providing energy-efficient
solutions to clients and supporting
communities for many years. This report
represents a snapshot of our progress to
date, and expands upon our capacity to
measure and document our progress with
regard to corporate responsibility. Our
Sustainability Council, comprised of a
passionate, cross-functional group
of senior executives, is guiding our
evolution as we implement initiatives
to drive us toward improved performance.
We believe we are making good progress
and look forward to regularly reporting
on this progress.
REPORT CONTENT
In determining the scope of this report,
we looked at the best practices in
reporting. We are pleased to be reporting
at level B, according to the Global
Reporting Initiative G3 Guidelines
(www.globalreporting.org). Responses
used data that were available to
Dresser-Rand, and recognized standards
(e.g., the Greenhouse Gas or GHG
Protocol) were used to calculate the
indicators. To determine the information
material to our performance, we also
reviewed a variety of resources, including:
• Corporate plans, strategies, policies,
and initiatives
• Input from our Board of Directors
• Client feedback
• Stockholder dialogue and financial
analyst input
• Employee and community input
• Media coverage
• Industry benchmarking
• Issues ranking from the Sustainability
Council
REPORTING GOALS
Our goal is to engage our stakeholders
and solicit their views on this report’s
coverage and transparency. We
will use their input to improve our
communications going forward.
Environmental data has been collected
and verified by a leading energy consulting
and management company. (At this
time, we have not undertaken additional
third-party assurance.)
FEEDBACK
We welcome feedback about this
report. If you have any questions
or comments, please email:
sustainability@dresser-rand.com
GOVERNANCE
GLOBAL REPORTING INITIATIVE (GRI) INDEX
PROFILE
GRI#
DESCRIPTION
PAGE
STANDARD DISCLOSURES: PROFILE
1.1
CEO Letter to Stakeholders
Statement from the most senior decision-maker of the organization (e.g., CEO, chair,
or equivalent senior position) about the relevance of sustainability to the organization
and its strategy.
2
1.2
Key impacts, risks and opportunities
Description of key impacts, risks, and opportunities. The reporting organization
should provide two concise narrative sections on key impacts, risks, and opportunities. Section One should focus on the organization’s key impacts on sustainability
and effects on stakeholders, including rights as defined by national laws and relevant
internationally agreed standards. Section Two should focus on the impact of sustainability trends, risks, and opportunities on the long-term prospects and financial
performance of the organization.
4-7
2.1
Name of the organization
IFC
2.2
Primary brands, products and/or services
IFC
2.3
Operational structure of the organization
IFC, 33
2.4
Headquarters location
IFC
2.5
Countries in which the company has operations
IFC
2.6
Nature of ownership and legal form
IFC
2.7
Markets served
IFC
2.8
Scale of the company
IFC
2.9
Significant size, structure or ownership changes in 2011 (N/A)
2
2.10
Awards received in 2011
25
3.1
Reporting period
36
3.2
Date of most recent previous report
36
3.3
Reporting cycle
36
3.4
Contact point for questions about the report
36
3.5
Process for defining report content
36
3.6
Boundary of the report
36
3.7
State any specific limitations on the scope or boundary of the report
36
3.8
Reporting on other corporate entities or subsidiaries
36
3.9
Data measurement techniques and the basis of calculations
36
3.10
Re-statements of information
36
3.11
Significant changes from previous reporting periods
NA
GRI Content Index
3.12
GRI Index
38, 39
Assurance
3.13
Accuracy and completeness of report
36
Strategy & Analysis
ORGANIZATIONAL PROFILE
REPORT PARAMETERS
Report Profile
Report Scope
& Boundary
GOVERNANCE, COMMITMENTS & ENGAGEMENT
Governance
Commitments to
External Initiatives
38
DRESSER-RAND
4.1
Governance structure of the organization
34
4.2
Indicate whether the Chair of the Board is also the CEO
34
4.3
Independence of the Board
34
4.4
Shareholder and employee feedback mechanisms
35
4.5
Linkage between performance and executive compensation
34
4.6
Conflicts of interest
35
4.7
Qualifications of the Board
34
4.8
Relevant corporate mission, values, codes of conduct, and principles
IFC, 3, 4, 25, 26
4.9
Board oversight with regards to risks, opportunities and international standards
34
4.10
Processes for evaluating the Board’s own performance
34
4.11
How the precautionary principle is addressed
Online
4.12
Externally developed charters, principles or other initiatives
35
4.13
Memberships
6, 36
GOVERNANCE
PROFILE
GRI# DESCRIPTION
PAGE
GOVERNANCE, COMMITMENTS & ENGAGEMENT (CONT.)
Stakeholder
Engagement
4.14
Stakeholder groups engaged by the organization
6, 7
4.15
Basis for identification and selection of stakeholders with whom to engage
6
4.16
Approaches to stakeholder engagement
6
4.17
Key topics raised through stakeholder engagement
6, 7
STANDARD DISCLOSURES: PERFORMANCE INDICATORS
Environmental
DMA
Disclosure of management approach
Online
Energy
EN3
Direct energy consumption by primary source
Online
EN4
Indirect energy comsumption by primary source
Online
EN5
Energy saved due to conservation and efficiency improvements
16, 17
EN6
Energy-efficient or renewable energy-based products, and subsequent energy savings
13, 15, 30, 31
EN16 Total direct and indirect GHG emissions by weight
Online
EN18 Initiatives to reduce greenhouse gas emissions, and reductions achieved
16, 17
EN23 Total number and volume of significant spills
Online
Compliance
EN28 Fines for non-compliance with environmental regulations
36
Human Rights
DMA
Online
Investment & Procurement
HR4
Total number of incidents of discrimination, and actions taken
35
Labor Practices and Decent Work DMA
Online
Employment
LA1
Workforce by employment type, employment contract and region
IFC
Labor & Management Relations
LA4
Percentage of employees covered by collective bargaining agreements
20
Occupational Health & Safety
LA6
Workforce represented in health and safety committees
Online
Training & Education
LA10
Average hours of training per employee by employee category
23
Society
DMA
Online
Corruption
SO3
Percentage of employees trained in anti-corruption policies
36
Public Policy
SO5
Public policy positions and lobbying
36
SO6
Political contributions
36
Anti-Competitive Behavior
SO7
Legal actions for anti-competitive behavior, anti-trust and monopoly practices
36
Compliance
SO8
Significant fines and sanctions
36
Product Responsibility
DMA
Online
Customer Health & Safety
PR2
Non-compliance with product health and safety regulations
36
Marketing Communications
PR6
Programs related to marketing communications
36
PR7
Number of non-compliance marketing incidents
36
Compliance
PR9
Significant fines for products and services non-compliance
36
Economic
DMA
Online
Economic Performance
EC1
Direct economic value generated and distributed
IFC
EC2
Risks and opportunities due to climate change
12
EC3
Defined benefit plan obligations
IFC
EC6
Locally-based suppliers
29
EC7
Local hiring in the community
20, 21
Emissions, Effluents & Waste
Market Presence
www.dresser-rand.com
© 2012 dresser-rand. printed in the U.S.A.

Dresser-Rand 2011 Sustainability Report

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