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China

Apple Manufacturer Foxconn Goes Green in China's Guizhou


Terraced fields of rice paddies are farmed on June 4, 2013, in Jinping county, Guizhou province, China

Photograph by ChinaFotoPress via Getty Images

Terraced fields of rice paddies are farmed on June 4, 2013, in Jinping county, Guizhou province, China

Guizhou may be one of China’s poorest and least developed provinces. But the flip side is an environment so pristine that President Xi Jinping recently joked its air should be bottled.

Now, Taiwan’s Foxconn Technology Group (2317:TT), the world’s largest consumer electronics producer, with more than a million employees working in 30-some industrial parks across China, has set its sights on backward but beautiful Guizhou.

The maker of Apple’s (AAPL) iPad and iPhone and Hewlett-Packard (HPQ) servers is building an industrial park in China’s southwest, seemingly worlds away from its massive and gritty Shenzhen manufacturing base, that aims to be state of the art in energy efficiency and environmental friendliness. Set among karst hills on the outskirts of Guiyang, the provincial capital, the 500-acre park will keep about 70 percent of the natural vegetation undisturbed.

The eco-friendly park will produce smartphones, large-screen TVs, as well as have a 130,000-square-meter R&D center and 2,160-square-meter big data center. By March 2015 it will employ 12,000 workers and have an annual output of 35 billion yuan ($5.6 billion), the company says; three years later it plans to more than triple in acreage, employing 50,000 workers, and reach 50 billion yuan in sales.

The highlight of its green cost-savings model is the use of a north-south wind tunnel, already bored through one of the area’s many hills, for cooling the 12 containers of servers in its big data project. While usually 35 percent of energy consumed to run servers goes toward air conditioners for cooling, Foxconn aims to reduce that portion to just 10 percent, by using wind to naturally blow over its servers and dissipate the heat generated.

“We have succeeded in leveraging technology to enhance all aspects of manufacturing, and we are focusing our investments in areas that link technology with sustainable economic growth in a way that also protects the environment,” said Foxconn founder and Chief Executive Terry Gou, speaking at a forum on environmental protection in Guiyang today.

It is using close to 100 percent recycled steel in the construction of the zone’s buildings. And to reduce energy use while operating, Foxconn is installing its own patented heat-reflective laminated glass for all windows. Meanwhile, for outdoor lighting, it is installing 170 “intelligent” street lamps of its own design; not only do they rely on solar panels for energy, they come equipped with sensors that are able to determine traffic load as well as sun or fog conditions, and adjust the strength of the light accordingly to minimize wastage.

Foxconn also says it’s changing how its smartphones are made in Guiyang to cut energy and water use, as well as reduce the paint and chemicals needed. Rather than spray paint onto its smartphones, the usual method where 70 percent of paint is wasted and chemical fumes are released into the air, it’s now using a special mold process where less than 1 percent of the paint is lost, according to Dai Fengyuan, chief technology officer at Foxconn. Similarly, the traditional film used in smartphone touchscreens has been replaced by a new carbon nanotube film, which requires 80 percent less energy to produce and cuts water use to near zero. “We have all these innovative technologies, now we have to get them into our mass production process,” says Dai.

Foxconn not surprisingly is facing pressure from its top customers to ensure its production process has fewer environmental costs. “Carbon emissions from our manufacturing partners remain the largest portion of our carbon footprint, an area we’re committed to addressing,” Apple said in its latest environmental responsibility report, posted online earlier this month. Last September, Hewlett-Packard announced a goal of reducing greenhouse gas emissions at its top manufacturers by one-fifth in the decade through 2020.

“In the past, people thought being green would increase costs or lower efficiency. That is not the case,” said Foxconn’s Gou at a July 10 press conference in Guiyang. “This industrial park represents a new model for growth: green and responsible.”

Dexter_roberts
Roberts is Bloomberg Businessweek's Asia News Editor and China bureau chief. Follow him on Twitter @dtiffroberts.

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