Heinrich Jessen is Chairman of Jebsen & Jessen, a diversified industrial group in Asia, with roots in the colonial trading companies of the 19th century. He started his career as a tropical biologist before joining the family business in 1995, of which he became Chairman of the executive board in 2010.
The dialogue with Mr. Jessen was conducted by Wander Meijer, GlobeScan’s Asia Pacific Director, who has been living and working in Asia since 1998. Wander joined GlobeScan in the summer of 2015, with the goals to service GlobeScan’s clients in Asia Pacific locally and to amplify opinions and practices in Asia on sustainability.
Heinrich Jessen seemed a bit the odd man out when he addressed an audience of mostly social entrepreneurs at a CSR conference in Bangkok. Jebsen & Jessen is one of Asia’s most venerable companies, with sprawling activities including chemical, crane and cable businesses in 10 ASEAN countries. A few weeks later, in his office in Singapore, he reflected back on the conference: “I think that it was maybe tricky to combine Jebsen & Jessen, which is not a social enterprise, with panelists who were social entrepreneurs. The point I want to make is that social entrepreneurs are great and they do fantastic things. But the vast majority of companies are ordinary companies doing ordinary business. If you can get all of those companies just to do 10% better in whatever their social norms might be, then we’ll make great progress….”
Please tell me about your sustainability initiatives – have they become embedded into the DNA of Jebsen & Jessen?
We are a family enterprise and a lot of what we do, we do together. When we started our drive for carbon neutrality, for example, our sister company Jebsen & Co in Hong Kong joined us. We pooled our carbon footprint and the purchasing of carbon credits for the carbon footprint volume that we have. I have been very pleased with the way our initiatives have been supported in the wider family enterprise.
You originate from Denmark, where sustainability is quite established in the society. How does that compare to emerging markets in Asia, where the common mindset is that we first have to get out of poverty before we think about the environment?
I think that is one of the reasons why there is less interest in sustainability initiatives in this part of the world. Some countries lag behind because they have other priorities. They feel they need to develop and prosper first, before we can talk about sustainability. The thinking is “why should we forego a lot of benefits, which other countries didn’t have to forego. Why should we pay the price while everybody else benefits?”
Are there examples of how you have shifted mindsets internally around sustainability?
One initiative many years ago involved our chemical warehouses – we have around 500 different types of chemicals that we sell and on a typical day there maybe 300 different types of chemicals in our warehouses. When we first started, those chemicals were just standing in the warehouse. Not all warehouses had fire equipment or material safety data sheets. We never really considered what would happen if there was a fire, or what the responsibility of the warehouse manager was. The storage system did not follow any particular guideline in terms of separation, segregation and isolation. It was not because we were trying to be cheap or deliberately wished to cut corners. We were simply living in a kind of blissful ignorance.
Initially making a change was seen as adding costs and the resistance was “I have been doing it this way for twenty years and here is some young kid coming in telling me to change my ways.” That is always a bit tricky but in that particular case we did it all with the same people and when we were done with the program it was those same people running it. Everybody took on that change and they now live it. If you go to our warehouses in Singapore or in Kuala Lumpur today, the same manager would give you a tour of the warehouse and he would showcase our safety mechanisms with a lot of pride.
Does this approach lead to a competitive advantage?
We have always complied with regulations. In Malaysia we were probably the first company who actually met the new regulations for storage and transport of hazardous chemicals, so we were very much the pioneers there. Was it a competitive advantage? Absolutely! We had a number of customers who, when everything was equal, had certain procurement systems in place that favored suppliers who had a proper safety management system.
Today I would say if you are not compliant you are really on the fringe. Being compliant is not a differentiating factor anymore. All leading players are compliant; we all are doing what is right. If you are not, then you face a competitive disadvantage.
When it comes to the market’s response to our carbon neutrality initiative, however, we are somewhat disappointed. There is not a single customer that uses carbon neutrality in their procurement criteria. We might get an order because we are ISO14000 certified. We might get an order because our Environment Health and Safety Management System is better than that of our competitors. But carbon neutrality is not on the radar of our customers.
What do you see as the common denominator of the businesses you have?
A common set of values, although the degree to which each business lives those values differs. We have businesses that were recently acquired, and that have had recent management changes. When you are diversified, you also have a very flat management structure because we can’t run it all from one location.
We have specialists in each of the businesses in each country and we put a lot of trust in them to make decisions. That means that decisions are taken far away from the headquarters. But this also means that if you pursue a certain set of value systems, it takes a bit longer before that percolates throughout the whole organization.
How would you describe your set of values?
We place high importance on entrepreneurial spirit, which is necessary in such a diversified business. We also believe that honesty and integrity are critical. If you were to compare us to most of our competitors – whether it is cables, cranes, offshore equipment or packaging – when something goes wrong we work at it until it is put right again. We are highly committed. And we are here to stay.
Taking the common denominators of your businesses into consideration, what kind of industry or sector would you be interested to invest in?
We are active in many sectors, making us very diversified. We’ve actually never made a decision where we’ve said, “This sector here is really interesting, let’s see what we can do to occupy a space in there.” Perhaps we should but we’ve never done that. Historically we have evolved more along an opportunistic route: “We have these products, now where can we sell them?”
There is one sector we have strategically always said we want to be in – green technology. One example that we have in our portfolio are our steam turbines which are used to generate power from burning waste biomass. We put together steam turbine systems in Malaysia with components coming from different parts or the world, and we sell them to the biomass industry. Palm oil, sugar, rice, all of them have waste material at the end – rice husk, sugar bagasse or empty fruit bunches from palm oil. A great way to make use of that waste is to burn it, to create steam through a boiler and run that steam through a turbine which then can be used to generate electricity.
What is your big ambition for the coming years for your company?
The ambition, our next strategic thrust, is to become much more engaged in the value chain in everything that we do. One of the best examples from one of our family enterprise sister companies, where we have already achieved this value chain engagement, is garnet. Garnet (a very hard mineral that is used to replace sand, coal slag and copper slag as an industrial abrasive), is an important story in Jebsen & Jessen because we are mining, we are processing, and we are recycling in addition to distribution. Our main mine is in Western Australia. We take out the garnet and then the remaining material goes right back into the mine and we put the topsoil back on and within a couple of years it looks like what it did before the mining began. On the processing side the entire process is physical; it involves water, it involves centrifugal forces and it involves magnets. There are no chemicals involved whatsoever in that process to separate all the different minerals from one another. Some of our competitors still use chemicals.
Garnet is increasingly replacing other abrasive materials for cleaning ship hulls, building facades or oil and gas tanks and pipelines, because it is recyclable, it does not generate hazardous waste and it does not have any adverse health impacts during the blasting process. The way we mine, process, use and re-use garnet is differentiating us from other businesses and this has become a competitive advantage. From an environment and a health and safety point of view, garnet beats them all. We have built a great business without harming the environment or people.
Wander Meijer also wrote a related blog on Asian sustainability and COP21 in Paris. Read here