Success through Added Value Selling and innovative products Prepared by Christian Martin, Jürgen Gebhard, Martin Hoffmann, Jürgen Aichelmann Jan 20, 2015 1

Group discussion – Personal input and feedback What is my experience with value-added selling (VAS)? What VAS example can I share? What was the driver to success? How can I increase business by VAS? What VAS opportunities do I see? What trends and regulations are coming up and creating needs?

Content Ecodesign Directive 2009/125/EC Success Story 1 – VSD for ICL Bitterfeld Success Story 2 – CM-1000 for Hapag Lloyd Success Story 3 – three-screw pump for BASF Group discussion – Personal input and feedback 3

ErP - General purpose and objectives What? European framework Directive 2009/125/EC defining ecodesign requirements for energy-related products (ErP) Limiting energy consumption and CO2 emissions. Compliance with EU REGULATIONS: 547/2012 for clean-water centrifugal pumps 640/2009 for electric motors CE-marking relevant Eliminates poor efficient products from the markets Increased competitiveness of premium supplier Objective? Impact on pump manufacturer? With the directive 2009/125/EC the EU has created a framework for defining ecodesign requirements for energy-related products. 20/20/20 Chance!

Overview: Regulation (EU) 547/2012 Water pumps Regulation sets minimum pump efficiency of centrifugal pumps pumping clean water: The dimensionless variable "Minimum Efficiency Index" (MEI) was introduced to enable identification and comparisons of hydraulic pump efficiency. The pumps must exhibit the following: MEI ≥ 0.40 by January 1, 2015 MEI is based on operating points at the Best Efficiency Point (BEP), at partial load (capacity 75% of BEP), and at overload (capacity 110% of BEP). It is applicable to the full impeller diameter and nominal speed of 1450 and 2900 rpm. The MEI ≥ 0.40 shall be durably marked on or near the rating plate Colfax satisfies this requirements stipulated by ErP regulations. Many of Colfax’ water pump hydraulics even exceed the minimum requirement by far!

Overview: Regulation (EU) 690/2009 Electric motors Baseline: EU regulation 640/2009  related to efficiency of electric motors in industrial environments. Motors with rated power of 7,5 – 375 kW (from Jan 1, 2015) and 0,75 – 375 kW (from Jan 1, 2017) need to be according efficiency level IE3, or efficiency level IE2 and equipped with an electronic speed control (frequency converter) Second stage valid from 2015 Third stage valid from 2017 6 Source: ABB

IE2-motor w/o speed control IE3-motor w/o speed control Energy consumption * IE2-motor w/o speed control 100% IE3-motor w/o speed control 98% Speed-controlled IE2-motor (depending on load) 50% Speed-controlled IE3-motor (depending on load) 49% sp.-controlled SR-motor (depending on load) 39% *qualitative examination 7

Strategy Allweiler: price-neutral change to IE3-motors also for motors <7,5 kW = 2017-ready Valid for industrial purposes! No change for motors used in marine applications Standardized VSD-program for industrial purposes in preparation Immediate market feedback:  Customer HTT “highly appreciates” that Colfax even outperforms regulation 640/2009 by delivering ALL motor sizes in IE3-standard without surcharge  doing more business with Colfax in 2015! 8

Success Story 1 - ICL Bitterfeld Application: Cooling water / cooling tower application in a chemical plant for flame inhibitors Customer’s Pain Point: Expensive On/off control (manually) Project Scope: Retrofitting of 3 existing Allweiler-NT-pumps with a new drive unit, consisting of DANFOSS-VSDs ‘FC-202’ and ‘ABB IE4-SR-motors’ + new impellers with full diameter = premium super high efficiency package! Colfax Solution: 3 x pump aggregates with intelligent cascading functionality depending on actual cooling demand Added Value & Customer Benefit: Consultancy by Colfax >50% energy savings <10 months ROI Intelligent control Turn-key commissioning

Success Story 2 – Vessel Owner Hapag Lloyd Application: Engine Room Application – Main Sea Water Cooling Service Customer’s Pain Point: Low freight rates – tough competitive situation – high OpEx, low profit! Reduce energy consumption! Project Scope: Equipping the Sea Water Cooling System on-the-fly with Colfax’ intelligent speed control system CM-1000 incl. VSDs for non-Colfax pumps Colfax Solution: Eliminate non-efficient ‘full-speed operation with by-pass control’ and install load-dependent CM-1000 with VSD for optimized pump speed. Added Value & Customer Benefit: Consultancy by Colfax, global & turn-key commissioning, increased level of automation with lower risk of maloperation, <10 months ROI, up to 93% energy savings = 100k€/a. 2x 138 kw @ 1750 rpm 1x 18 kw @ 560 rpm Evaluation of saving potential and ROI, Definition of feature-package and scope of supply, Implementation of intelligent system control into vessel environment and Installation & Commissioning of CM-1000 on board w/o interruption of the sailing vessel ( on-the-fly) according vessel’s schedule ! Hamburg Express-Class 13.200 TEU Containervessel

Success Story 3 – three-screw pump for BASF Application: Tank removal pumps for different new fluids (similar to lube oils) with a viscosity range of 45 to 3770 cP in the chemical plant BASF Ludwigshafen GER Customer’s Pain Point: High reliability for coupled supply Interchangeability of spare parts Performance test with max. operating visc. Project Scope: 12 pump aggregates acc. to ATEX consisting of Allweiler 3-screw pumps in stainless steel with magnetic coupling, ABB motors Ex de IIC T4, WIKA resistance thermometer PT-100 TR10, DANFOSS VSD ‘FC-302’ Colfax Solution: Conform to complete specification with SNH 660 AR40 due to modular system Performance testing in the R&D test field with similar test fluid viscosity Added Value & Customer Benefit: Consultancy, Technical Expertise, Risk and Cost Minimization

Proved way to success… TOTAL PACKAGE is more than just QDC! Beside the product features many other facts are important for the customer and finally make the difference! Delighting the customer by: Reliable partnership Risk minimization Application understanding Technical expertise Consultancy Energy savings Extended features Commissioning Service network … Market status: high level of competition, Higher demand of environment friendly equipment (“green image”)

Group discussion – Personal input and feedback What is my experience with value-added selling (VAS)? What VAS example can I share? What was the driver to success? How can I increase business by VAS? What VAS opportunities do I see? What trends and regulations are coming up and creating needs?