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The Project Is in Texas. The Best Person for the Job Is in Ohio. Now What?

Mon, 09 Mar 2026 10:15:00 GMT

Why the traveling white-collar construction professional is becoming one of the most valuable — and underappreciated — figures in the US high-tech construction boom.

There is an old assumption built into how the construction industry thinks about talent: that the best hire is a local one. Someone who knows the market, knows the subcontractors, doesn't need a hotel room. Proximity as a proxy for fit.

It made sense for a long time. But the construction market that assumption was built for no longer exists — at least not in the high-tech sector.

The projects that are defining American construction right now don't follow population density. They follow power. And land. And permitting environments. A hyperscale data center campus goes to Northern Virginia or Texas or Louisiana because of grid capacity, not because that's where the commissioning engineers live. A semiconductor fab gets built in Arizona because of water access and state incentives, not because the Phoenix metro is deep in I&C specialists. Advanced manufacturing facilities are landing in Tennessee and Georgia and Ohio because of logistics and tax structures, not because those states have surplus project controls managers available locally.

The work is where it is. The people are somewhere else. And the gap between those two facts is one of the most significant — and most practically solvable — workforce challenges in the industry today.

This Is Not a New Career Path. It Just Has a New Urgency.

The traveling construction professional is not a new phenomenon. The pipeline boom, the LNG buildout, the nuclear construction wave — all of them ran on a workforce of experienced professionals who understood that the job was wherever the project was, and who built careers around that reality.

What is new is the scale, the technical complexity, and the concentration of demand. The current high-tech construction cycle is not spread across dozens of project types in dozens of sectors. It is concentrated in a relatively small number of project categories — data centers, semiconductor fabs, advanced manufacturing, clean energy infrastructure — that all require a very similar and very specific skill set. That concentration creates intense competition for the same professionals across a large geographic spread simultaneously.

A senior data center commissioning engineer finishing a project in Northern Virginia in Q3 is not choosing between one or two opportunities. They are choosing between five, in five different states, all of which need them within 60 days. The project that gets them is increasingly the one that has the logistics figured out — not just the compensation.

What "Traveling" Actually Means at the White-Collar Level

There is an important distinction to draw here, because the white-collar traveling construction professional operates very differently from the itinerant trades worker of popular imagination.

At the professional and technical level, project-based mobility is typically structured around assignments of six to eighteen months — long enough to see a meaningful phase of construction through from start to handover, short enough to maintain a sense of career momentum and portfolio breadth. Project managers, commissioning engineers, I&C leads, electrical project managers, and document controllers who travel for work are not living out of a pickup truck between short stints. They are professionals with a project CV that reads like a map of the most interesting construction happening in America.

The compensation structure reflects this. Base rates for traveling white-collar construction professionals carry a meaningful premium over equivalent local roles — typically 15 to 25% depending on discipline and project type — in addition to a fully covered accommodation package and a per diem allowance to cover living expenses. The 2026 federal GSA standard sits at $110 per night for lodging and $68 per day for meals and incidentals across most locations, with higher-cost project markets adjusting accordingly. For a professional on a twelve-month assignment, that package represents a significant additional component of total compensation on top of an already competitive rate.

The tax treatment matters too. Per diem payments that fall within IRS limits are non-taxable, which means the effective take-home advantage for a traveling professional relative to a locally based peer is often greater than the headline numbers suggest.

The Career Case for Mobility

Beyond the compensation arithmetic, there is a more durable argument for project-based mobility: what it does to a resume.

The professionals who have built careers moving between high-tech construction projects — commissioning a data center in Virginia, then managing the electrical scope on a semiconductor fab in Arizona, then leading completions on an advanced manufacturing facility in Tennessee — have something that no local hire accumulates in the same timeframe: breadth of direct, high-stakes project experience.

The US construction market is, right now, building a generation of genuinely novel facilities. The engineering challenges on an AI-optimized hyperscale data center are different from those on a conventional commercial build. The power density, the cooling architecture, the redundancy requirements, the BMS complexity — all of it is new territory for much of the industry. The professionals gaining direct experience on these projects today are building a knowledge base that will be in demand for the next two decades. Mobility, in this context, is not a lifestyle choice. It is a professional investment.

The construction professionals who move between the best projects also tend to build the strongest networks — with project owners, general contractors, engineering firms, and fellow specialists — that compound in value over time. In a sector where the next opportunity often comes through a referral from the last project, that network effect is not trivial.

What Employers Need to Get Right

For project owners and contractors looking to attract traveling professionals, the mechanics of the offer matter as much as the rate.

The professionals in this category have choices. They evaluate opportunities not just on compensation but on the quality of the project, the clarity of the role, the strength of the supporting team, and the logistical competence of whoever is managing their mobilization. A project that offers a strong rate but takes three weeks to sort out accommodations, provides vague per diem terms, or leaves the arriving professional to navigate compliance paperwork alone will lose candidates to a competitor that has all of that handled before day one.

This is where professionally managed mobilization — a recruiter or staffing partner that takes ownership of the full deployment process, not just the placement — becomes a genuine differentiator. The best traveling construction professionals have enough experience to know the difference between a managed onboarding and an afterthought. They choose accordingly.

The projects winning the talent competition in this cycle are not just the ones with the most prominent names or the largest scopes. They are the ones where the experience of arriving, getting settled, and getting to work is smooth. In a tight market for experienced professionals, that operational competence is a recruiting advantage that compounds across every hire.

SilverBack places professional and technical staff — project managers, commissioning engineers, I&C specialists, electrical project managers, and technical leads — on high-tech construction projects across the United States. We manage the full mobilization process so that our project staff can focus on the work from day one.

The Most Important Person on a Data Center Project Isn't Who You Think

Mon, 09 Mar 2026 10:14:58 GMT

Why commissioning engineers have become the most sought-after professionals in high-tech construction — and why there aren't nearly enough of them.

Ask most people to name the critical hire on a major data center project and they'll say the project director, or maybe the lead MEP engineer. Both matter enormously. But there is a role that has quietly become the single most schedule-critical, technically demanding, and hardest-to-fill position in data center construction today: the commissioning engineer.

Commissioning specialists are being locked into builds 12 to 18 months in advance. The best ones — those with genuine hyperscale experience and the technical depth to manage an L5 Integrated Systems Test on a live, energized facility — are committed years out. Senior engineering roles in this space often take 60 to 90 days to fill even when the search begins early. When it begins late, the consequences cascade directly into go-live timelines on facilities that may be costing their owners $20 million per megawatt to build.

Understanding why requires understanding what data center commissioning actually involves — and why the AI-driven evolution of these facilities has made it exponentially harder.

What Commissioning Actually Means in a Hyperscale Data Center

Commissioning in a data center context is not a single event. It is a structured, multi-level quality assurance process that runs from equipment manufacture through to operational handover — and every level requires different skills, different documentation, and different technical judgment.

The industry standard framework runs from L1 through L5, with each level building on the last:

L1 — Factory Witness Testing (FWT): Verification at the manufacturer's facility that critical equipment — switchgear, UPS systems, generators, cooling units — meets design specifications before it ships to site. A missed defect at L1 that only surfaces at L4 can cost weeks and hundreds of thousands of dollars to remediate.

L2 — Delivery and Pre-Installation Verification: Confirmation that equipment arrives undamaged, is positioned and installed per manufacturer and design specifications, and is ready for energization. The scope here is deceptively complex on a hyperscale build — a single campus may involve dozens of generator sets, hundreds of UPS modules, and thousands of individual cable terminations, all of which need to be documented before a single breaker closes.

L3 — System Start-Up: The first time individual systems are energized and verified to perform as designed in isolation. This is where a commissioning engineer's diagnostic ability starts to earn its pay — because individual systems rarely behave exactly as the drawings suggest when they first come alive.

L4 — Functional Performance Testing (FPT): Systems are tested under a range of operational scenarios and deliberate fault conditions. Does the facility transfer to generator power correctly when utility supply is lost? Does the cooling system respond appropriately when an CRAC unit fails? Does the BMS log, alarm, and respond as the Sequence of Operations requires? Every failure mode that can be simulated is simulated — because the ones that aren't tested in commissioning get discovered during operations, at full cost to uptime.

L5 — Integrated Systems Testing (IST): The final and most demanding phase. All systems — power, cooling, fire suppression, security, BMS, IT infrastructure — are tested as a single integrated whole under simulated full-load and failure conditions. The L5 is where a facility proves it can actually do what it was designed to do, at scale, under stress. The L5 phase involves integrating all critical equipment and systems and conducting rigorous tests to evaluate functionality, interoperation, and response to simulated failure scenarios — verifying that they operate seamlessly together before handover. It is the most technically complex phase of the entire construction process. And it cannot be delegated to someone learning on the job.

Why AI Has Changed the Calculus Entirely

A conventional Tier III data center is already a highly complex facility to commission. An AI-optimized hyperscale build is a different proposition entirely.

The power densities involved have changed the nature of the challenge at every level. Traditional data center designs were built around rack densities of 5 to 10 kilowatts. AI compute infrastructure routinely demands 50 to 100 kW per rack — and leading-edge GPU clusters are pushing beyond that. Facilities not designed for AI density from the ground up face $200 to $400 per kW in mechanical upgrades when migrating to AI workloads — translating to $10 to $50 million in retrofit costs for a mid-size build.

This density shift has fundamentally altered the cooling requirement. Air cooling — the industry standard for decades — cannot efficiently handle the heat loads generated by modern AI racks. Liquid cooling in various forms — rear-door heat exchangers, direct-to-chip cold plates, immersion cooling — is becoming the norm on new AI builds. Each of these approaches has different commissioning requirements, different failure modes, and a much smaller pool of engineers who have actually done it before.

The BMS layer has also grown in complexity. On an AI-optimized facility, the Building Management System is not just monitoring temperature and humidity. It is managing power distribution across multiple redundant paths, coordinating cooling response to dynamic load changes, interfacing with the DCIM platform, and logging the data that operators need to prove SLA compliance from day one. Commissioning the BMS on a facility of this type is a discipline in its own right.

Then there is the question of redundancy architecture. Hyperscale clients typically specify Tier III or Tier IV facilities — meaning N+1 or 2N redundancy on all critical systems. Commissioning a 2N power architecture means testing not just that the primary path works, but that the facility fails over correctly, returns to normal correctly, and behaves predictably under every combination of partial failure that operations engineers might realistically encounter.

The Supply Problem Is Structural

The challenge, as one senior industry figure puts it, is not simply the absolute number of workers available — it is the timing and intensity of demand. Data centers are not the only sector competing for engineers who understand high-density power and cooling systems. Semiconductor fabs, clean energy facilities, advanced manufacturing plants — all are drawing from the same relatively shallow talent pool.

Commissioning agents are among the hardest positions to fill across the entire data center construction sector — alongside MEP engineers and electrical specialists. Commissioning expertise commands the largest salary premiums in the sector, reflecting the complexity of AI infrastructure and the scarcity of qualified practitioners.

The experience gap makes this worse. There is no shortcut to commissioning experience on hyperscale projects. It accumulates over years of fieldwork — L1 witness tests at switchgear manufacturers, L3 start-ups on live HV systems, L5 ISTs on facilities where a missed fault condition means a failed handover and a delayed revenue date. The engineers who have done this work repeatedly, at scale, on AI-ready facilities, are a small and heavily in-demand population.

The second half of 2026 into 2027 will see massive activation of leased capacity across the country, and the industry simply does not have enough qualified workers to meet demand. The commissioning bottleneck is where that shortage will be felt most acutely.

What This Means in Practice

For project owners and general contractors, the implication is straightforward: workforce planning for commissioning needs to start earlier than it has in the past, and it needs to be treated with the same rigor as procurement planning for long-lead equipment.

The facilities that will hit their go-live dates in 2026 and 2027 are the ones whose commissioning teams were secured in 2025. The ones scrambling for CxEs at the L4/L5 stage will be the ones explaining schedule overruns to clients who are waiting on revenue.

For engineers and technical professionals with power, controls, or MEP backgrounds who are considering their next move: the data center commissioning space offers some of the most technically challenging, best-compensated, and most in-demand work in construction today. The learning curve is steep and the accountability is real. So is the opportunity.

SilverBack specializes in placing commissioning engineers, I&C specialists, MEP project managers, and technical leads on data center and high-tech construction projects across the United States. If you're looking to build a commissioning team — or looking for your next project — get in touch.

The AI Revolution Has a Construction Problem

Mon, 09 Mar 2026 10:14:56 GMT

The AI-driven data center surge is rewriting the US construction landscape — and the industry isn't ready for what comes next.

There is a number worth sitting with for a moment.

US spending on data center construction starts reached an estimated $77.7 billion in 2025. That is a 190% year-over-year increase. To put that in context: US construction spending on data centers has more than tripled in three years. No other commercial real estate category is growing at anything close to this pace. And by every credible projection, 2026 is not the peak — it's an acceleration.

ConstructConnect is currently tracking 76 data center projects set to break ground in the US over the next six months alone, valued at over $88 billion. McKinsey estimates that $7 trillion in cumulative global capital expenditure will flow into data center infrastructure by 2030, with over 40% of that expected to land in the US. The major hyperscalers — Amazon, Microsoft, Google, Meta, and Apple — have announced a combined $710 billion in planned 2026 capital expenditure, much of it aimed at expanding capacity.

This is not a trend. It is a structural transformation of the American construction market.

What Is Actually Driving This

The blunt answer is AI. But that answer, while accurate, undersells the mechanism.

Every AI application — every query answered, every image generated, every document analyzed, every business process automated — requires computational power. That power lives in data centers. And the computational demands of modern AI are not just large; they are growing faster than the infrastructure being built to house them. Vacancy rates across North American data center markets are currently locked at a record low of 1%. The facilities being built today are already leased before they are finished.

The shift from AI model training to AI inference — the process of AI actually doing things in the real world rather than just being developed — is adding a new dimension to demand. Deloitte estimates that inference made up half of all AI compute in 2025, with that figure expected to grow to two-thirds by 2026. Unlike training, which is intensive but periodic, inference is continuous and revenue-generating. The business logic for building more capacity is not speculative. It is operational.

Meanwhile, the power requirements of these facilities are in a category of their own. Standard builds now cost $10–12 million per megawatt to construct. AI-ready facilities run $20 million or more. The electrical infrastructure, cooling systems, and building management requirements of an AI-optimized hyperscale facility are fundamentally more complex than a conventional data center — which was already one of the most technically demanding construction types in existence.

A Geography That Is Rapidly Changing

For years, Northern Virginia dominated the US data center market to a degree that made everywhere else feel like a footnote. That is changing fast.

64% of the 35 GW construction pipeline now extends beyond traditional mature markets, with Texas positioned to overtake Virginia as the world's largest data center market by 2030. In 2025, Virginia received $15.3 billion in data center construction starts — but Louisiana, Mississippi, and Texas were not far behind, receiving $15 billion, $13.9 billion, and $13.4 billion respectively. The buildout is spreading to states that can offer two things above all else: available land and access to power.

Power is, in fact, the defining constraint of this construction cycle. Not capital — there is no shortage of that. Not demand — that is growing faster than the industry can respond. Power procurement, transformer lead times, and grid capacity are the variables determining where the next generation of facilities gets built and how quickly they can come online. Transformer lead times now average 128 weeks for power units and 144 weeks for generator step-up transformers, according to Wood Mackenzie's Q2 2025 survey of the US electrical equipment market. When the critical path on a multi-billion dollar project runs through a 2.5-year transformer queue, the pressure on every other element of construction delivery — including the workforce — becomes intense.

This is one of the reasons clean, reliable power sources are becoming a decisive factor in site selection. Renewable energy — solar, wind, and increasingly nuclear — is not just an environmental consideration for the hyperscalers commissioning these facilities. It is an operational one. The data centers of 2026 require enormous, stable, continuous power. The energy sources best positioned to provide that, at the scale and reliability these projects demand, are clean ones. That alignment of operational need and energy preference is accelerating investment in states with strong renewable energy infrastructure.

What This Means for Construction

The implications for the construction industry are significant — and not fully appreciated.

Data centers are not big boxes. They are among the most technically complex buildings that exist. The mechanical, electrical, and plumbing systems in a modern hyperscale facility are more sophisticated than those in many industrial plants. The commissioning process — bringing all of those systems online, verifying their performance, and handing them over to operations — demands a depth of specialist technical knowledge that the construction industry is only beginning to develop at the scale now required.

Nine out of ten large infrastructure projects experience schedule overruns — and the top causes are power procurement, transformer lead times, and permitting delays. To that list, the industry should add a fourth: workforce gaps. The commissioning engineers, I&C specialists, electrical project managers, and technical leads who can take a hyperscale data center from mechanical completion to operational handover are in short supply. They are the same people being pursued by every major project in the pipeline simultaneously.

The construction firms and project owners who are winning in this environment are not just the ones with the best procurement strategies or the deepest capital. They are the ones who have figured out talent. Who have built relationships with specialist recruiters who understand these projects. Who have treated workforce strategy as a project-critical discipline, not an afterthought. Who understand that a commissioning team short by three engineers at a critical milestone doesn't just delay a milestone — it delays revenue on a facility that may be costing its owner $20 million per megawatt to build.

Eyes Open

It would be dishonest not to acknowledge the risks. The data center boom is real, but so is the weight of expectation built into it. Moody's projects $3 trillion in global spending over the next five years to keep pace with rapid data center expansion and AI capacity demand — but analysts also note that bubble concerns are present, and that over-reliance on data center work carries its own risks for construction firms if sentiment shifts.

AI itself presents questions that go well beyond construction — about productivity, about employment, about the kind of economy these facilities are being built to power. Those are important conversations, and the industry is not immune to them. But the infrastructure has to be built regardless of how those conversations resolve. The demand is here, it is funded, and it is accelerating.

For construction and engineering professionals, the question is not whether to engage with this market. It is whether you have the people, the expertise, and the workforce strategy to compete for the best projects in it.

SilverBack is a specialized technical recruiter focused on professional and technical talent for high-tech construction projects. We place project managers, commissioning engineers, I&C specialists, and technical teams on data center, semiconductor, and advanced manufacturing builds across North America.

The Buildings Are Ready to Go. The People Aren't.

Mon, 09 Mar 2026 10:14:51 GMT

Why the talent gap is the biggest risk to America's high-tech construction boom — and what responsible companies are doing about it.

There is no shortage of ambition in American construction right now.

The project announcements have been coming fast: new data centers in Texas and Virginia, advanced manufacturing facilities in Georgia and Tennessee, semiconductor fabrication plants in Arizona and Ohio, and clean energy infrastructure from the Gulf Coast to the Great Lakes. The investment numbers are staggering — tens of billions of dollars committed to individual projects, with pipeline valuations running into the trillions when you look across the sector.

The cranes are ready. The permits are being pulled. The funding is in place.

What isn't in place — and what almost nobody is talking about loudly enough — is the workforce to build it all.

A Boom Built on a Fault Line

The high-tech construction sector is experiencing a moment unlike anything in recent memory. Demand is being driven by two of the most powerful economic forces of our era: the electrification of the economy and the explosion of artificial intelligence.

Data centers are the physical infrastructure of the AI revolution. Every query processed, every model trained, every application run requires computing power — and computing power requires buildings. Not ordinary buildings, but highly engineered, energy-intensive, precision-built facilities that demand an exceptionally specialized workforce to construct. The US Department of Energy projects that domestic data center electricity consumption could double or even triple by 2028 — potentially accounting for up to 12% of total US electricity use. That electricity has to be generated somewhere, transmitted somehow, and the facilities generating it need to be built.

The scale of construction activity these forces are generating is genuinely historic. And it is landing on a labor market that was already stretched before a single shovel broke ground.

The US construction industry is facing a demographic reckoning that has been building for years. The average construction worker in America is in their mid-forties. Retirement rates are accelerating. The pipeline of young workers entering the trades and technical disciplines has not kept pace — in some disciplines, it has declined sharply. Meanwhile, the complexity of the projects being built has increased dramatically. You cannot retrain a general laborer in six months to commission a building management system or oversee the electrical infrastructure of a 100-megawatt data center.

This is not a temporary tightness. It is a structural mismatch between the workforce that exists and the workforce that modern high-tech construction demands. And it is the single biggest risk to America's ability to deliver on the infrastructure investments it has committed to.

What the Numbers Are Telling Us

The data is not subtle. Associated Builders and Contractors estimates the US construction industry needs to attract more than half a million additional workers above normal hiring levels in 2024 alone. McKinsey research identifies skilled labor shortages as one of the top three risks to major capital projects globally. A 2023 industry survey found that nearly 90% of construction firms report difficulty filling hourly craft positions — but the pressure on professional and technical roles is growing just as fast.

Project managers with data center experience. Commissioning engineers who have worked on advanced manufacturing builds. I&C specialists who understand the specific demands of high-tech industrial environments. These are not roles that can be filled from a general resume database. They require targeted search, technical assessment, and — increasingly — the willingness to look beyond the immediate local market.

The companies navigating this environment most successfully are not the ones waiting for the domestic pipeline to catch up. They are the ones proactively building access to a broader, more mobile talent pool — and putting the infrastructure in place to deploy that talent efficiently, compliantly, and at scale.

Mobility Is Not a Compromise. It Is a Strategy.

There is a tendency in conversations about workforce strategy to treat geographic mobility as a fallback — something you consider when local hiring fails. That framing misunderstands both the nature of the challenge and the scale of the solution available.

The US has one of the most mobile workforces in the world. Professionals and skilled technical workers have always followed major projects — from the interstate highway system to the shale boom to the buildout of the modern semiconductor industry. The same dynamic is playing out now in high-tech construction, and the states that are winning the project pipeline are increasingly the ones that can offer not just permits and power, but access to a ready workforce.

The gap, however, is not being filled by local hiring alone. Projects in Arizona, Ohio, Georgia, and Texas are competing for the same relatively small pool of experienced commissioning engineers, data center project managers, and technical specialists. The professionals with the right background often aren't next door — they're in a different state, finishing up a different project, looking for their next opportunity.

The companies navigating this environment most effectively are the ones who have built the infrastructure to find those people, wherever they are, and move them — compliantly, efficiently, and with the support systems that allow them to perform at their best from day one. Interstate mobility, managed professionally, is not a compromise on quality. It is a competitive advantage.

The Clock Is Running

The project timelines on these high-tech builds are not forgiving. Commissioning dates are fixed. Revenue models depend on facilities being operational by specific dates. When a workforce gap opens up mid-project — when a commissioning team is short three engineers at a critical milestone — the cost is not just a line item. It cascades.

The companies that will deliver these projects on time and on budget are not the ones scrambling for talent when the gap appears. They are the ones treating workforce strategy with the same rigor they apply to procurement, scheduling, and risk management — planning early, building relationships with specialist recruiters who understand their projects, and accessing the full depth of the available talent market.

The buildings are ready to go. The question every project leader in high-tech construction should be asking right now is a simple one: are your people?

SilverBack is a specialized technical recruiter focused exclusively on professional and technical talent for high-tech construction projects. We deploy project managers, engineers, commissioning specialists, and technical teams to data center, gigafactory, semiconductor, and advanced manufacturing builds across North America.

#Bright Spots Behind The Downbeat EV Headlines

Mon, 30 Sep 2024 15:13:48 GMT

September felt like the wrong kind of time travelling. Only backwards. For those of a certain age, the bankruptcy of Tupperware the food storage icon, the lethal mass-destruction of Hezbollah’s paging devices in Lebanon and a US President escaping two assassination attempts for the first time since the 1970’s were flashbacks to very troubled Cold War decades, political volatility and inflationary times. Hmmm…on second thoughts…..maybe not much has changed. And yet, the professional analysts of those challenging times never saw the imminent collapse of the Soviet Union, a mobile digital revolution and forty years of lower interest rates coming. Lesson learned on pessimism hiding progress? Let’s fast forward to today.

Perhaps, the bigger existential threat (vs nuclear war) for our planet is climate change and an urgent battle to electrify and decarbonise the global economy. But, the headlines on that battle have darkened too, and not just with catastrophic flooding in Europe and similar destruction in the US post-Hurricane Helene. The decarbonising poster child of the global economy has been the automobile transition away from internal combustion engines (ICE) to battery-powered electric vehicles(EVs). Transition progress up to last year had confounded the commentariat, as sales penetration rates for EVs kept beating forecasts and rocketed from 2% of total sales in 2018 to 18% just 5 years later. Research data from Bloomberg forecast a 33% rate of penetration by 2027 but the media have switched tone. Now, the wording is all about slowing, cooling, delaying, abandoning or even failing. Check out these headlines of recent months:

Europe Battery Factory Plans Are In A Shambles – Cleantechnica

Ford Shrinks Its EV Rollout Plans As Demand Lags – Wall Street Journal

EV Slowdown Steers World Further Off Course From Net Zero – Bloomberg

Toyota Cuts 2026 Global EV Output By A Third – Reuters

Tesla Sales Fall For second Straight Quarter – The Guardian

BMW Cancels $2 billion battery cells contract with Northvolt – Reuters

The final headline was a precursor to much bigger headlines for Northvolt in recent weeks. Having raised $15 billion of financing, Sweden’s Northvolt is possibly Europe’s highest profile project with a mission to be an all-in-one shop offering everything from material production and battery making to end-of-life recycling. Those full-cycle ambitions are now ‘on hold’ as the company seeks to put the enterprise on a more secure financial footing. The Guardian summarised the remedial actions as follows:

“The Swedish batterymaker Northvolt is to cut 1,600 jobs, in response to “headwinds” blowing through the electric car industry.

The battery company announced redundancies across three of its sites on Monday, including 1,000 in Skellefteå, in northern Sweden, where it is suspending the expansion of Northvolt Ett, Europe’s first homegrown battery gigafactory.

The company, which has been seen as Europe’s most promising contender to China’s producers, will also cut 400 jobs in Västerås, in central Sweden, where Northvolt Labs is based, and 200 in Stockholm, home to its head office.

Peter Carlsson, the company’s chief executive and co-founder, insisted that “overall momentum for electrification remains strong” but that “tough” decisions were needed to ensure the company’s future”

There is no sugar-coating that messaging. However, we should remind ourselves that EV battery manufacture has huge technological hurdles and is subject to customer demand and supply chain risk, while trying to keep pace with phenomenal adoption growth rates and a global supply chain land grab.

In a more mature sector, battery production would be a classical cyclical manufacturing activity. Now, consider the pace of technology change and the global shift in consumer behaviours. Anyone reminded of the semiconductor chip manufacturing sector? Think back to the 2000s and the huge highly risky investment in fab factories required while the global economy hurtled into the digital age. For years the financial market orthodoxy was that semiconductor chip sector stocks like AMD, Intel, Micron, Samsung, TSMC, ASML, Broadcom or Nvidia should NEVER be owned by investors, only traded.

Tell that today to Jensen Huang and his colleagues at the 3 trillion dollar Nvidia chip superstar which is now described as more important to the world economy than the US Federal Reserve. Hyperbole certainly, but this elevation illustrates the emotional rollercoaster the media try to create for an audience gasping at yet another manufacturing rockstar following in Apple’s and Tesla’s footsteps. So too should we be conscious of emotions, and media neediness in the coverage of EV’s cyclical misses and growth bumps. Those nascent bumps and bruises should always be considered in the context of a structural super-cycle for EVs and batteries with a 2050 Net Zero end-game. More specifically, readers should think about how numbers and percentages can tell a story, or not. Also, we should know that the ICE to EV transition is two stories, not one. Try these numbers for size and perspective….

*EV sales are still growing, just not at year-on-year doubling rates (20% vs 100%).

*Slowing growth rates on much larger sales bases are still very big numbers. 12 million zero emission vehicles likely to be sold globally in 2024.

*The media headlines will say Norway’s EV sales only grew 5% in August. But, you probably won’t read that EVs had 94% market share in Norway last month!

*Electric cars and trucks make up 60% of all new vehicle sales in China.

*BMW has just passed out Tesla on EV sales in Europe. Tesla sales in Europe are actually off 16% but you probably won’t read that on Twitter/X….as chaotic leadership starts to hurt brand.

*Now the story that nobody reads. Global fossil-fuel ICE vehicle sales are DOWN by 25% since 2017, and the global ICE vehicle fleet is set to peak in 2025.

*Oh, and 97% of Chinese consumers say their next vehicle will be all-electric.

The cyclical aspect of manufacturing is often missed when there is a massive structural shift happening across decades. Every time one reads a new sales or growth figure for EVs, one should be checking the ICE figure too. The shift is massive and happening at a rapid pace. However, bear in mind the semiconductor industry analogy. Customers can disappoint, technologies and innovations can go wrong, manufacturing infrastructure can be delayed and interest rates/money can get tight. That’s the manufacturing business which Northvolt is seeking to revolutionise. But buckle up, EVs are the future and are still our planet’s best bet to ensure time for travel…

Germany Reaches For The Cloud

Wed, 03 Jul 2024 09:51:40 GMT

Germany can confuse. Consider its meticulous economic planning and then shudder at its disastrous pre-Ukraine war energy strategy. Similarly, a reputation for strict regulation jars with a history of accident-prone banks and recent memories of a breath-taking Wirecard fraud. Even today, financial commentators are scratching their heads at headline economic stagnation (measured by GDP) contrasting sharply with all-time-high levels for the nation’s key stock market index, the Dax. In fact, investor enthusiasm could almost be described as giddy.

Check out a 4% gain for the Dax in the past week and a Europe-leading 12% increase year-to-date, and that adds up to a better-than-tech sector performance. And yet, the combined value of Germany’s top 40 Dax constituent companies is less than the market capitalisation of just one AI and cloud computing superstar stock, Nvidia. It really is remarkable that one company’s future in the cloud(AI) could be worth more than the destiny of all of Germany’s biggest companies. However, the cloud is going to be a very big part of Germany’s future too….

May is the month of the Data Centre World conference in Frankfurt and the choice of venue is highly appropriate. Frankfurt is the 6 th biggest data centre market in the world and therefore is a critical part of Europe’s cloud/AI infrastructure story. Indeed, we have previously written about how the rapid acceleration of data centre construction should be viewed as the best indicator of the size of investment piling into AI and the cloud computing required to power this technology:

“….the bigger story according to Schroders’ analysts was “hiding in plain sight ”. Nvidia in their call with Wall Street’s analysts explained the uplift to their projections by mentioning ‘data centres’ no less than 56 times. Clearly, the destination for these advanced GPU chips needed to be premium performance, secure and stable data centre environments. The cloud and data centres have become interchangeable proxies for the same growth story, AI.”

If anything, this growth story has accelerated even further. Morgan Stanley research is forecasting cloud infrastructure spending (capital expenditure) to grow by 44% in 2024 compared to a sluggish 2% last year. Goldman Sachs analysts have taken guidance from the recent quarterly results calls of Amazon, Meta, Google and Microsoft and projected capital expenditure from these four alone of almost $200 billion by 2025. The investment numbers are staggering and, for the major cloud infrastructure centres like Frankfurt, the headlines announcing new spend are coming thick and fast. Check out the following in just the past few weeks:

Real estate firm Tishman moves into data centres, plans Frankfurt campus – Data Centre Dynamics

Digital Realty investment fund expands stake in Frankfurt data centre – Techerati

Clearly, the Frankfurt Data Centre World event will be busy. However, in reaching for the cloud, Germany and other fast-growing infrastructure centres will be increasingly mindful of other risk ‘clouds’ on the horizon. The sheer speed of data centre construction runs the risk of outpacing the other critical infrastructure required for cloud computing on a massive scale.

Think of the electricity grid pressures to power the data centres and a recent International Energy Agency report suggesting data centre electricity usage is set to double by 2026. Then consider a recent Financial Times article highlighting the same imminent doubling of electricity power demands and the stunning data point of Microsoft “opening a new data centre globally every three days”. Earlier this month Bob Blue, chief executive of Dominion Energy, one of America’s biggest utilities, said that data-centre developers now frequently ask him for “several gigawatts” of power compared to Dominion’s total installed power base of 34 gigawatts (GW). Strains on global power grids are now a fact of life but there might be an even more basic power being overlooked. Skilled labour.

A recent conversation with a City-based analyst highlighted the plight of the mining sector and the average worker age profile approaching 65 (!). However, it’s not just old economy sectors facing skills crises. A 2023 report from IT consultant, Onnec, stated that 94% of operators experienced a shortage of experienced data centre construction teams. In February Germany’s own Economy Minister, Robert Habeck, flagged 700,000 unfilled vacancies and official estimates of the country losing 7 million skilled workers by 2035. The double-whammy of a power and manpower crunch coming down the tracks is a real challenge which could derail the cloud opportunity. However, there is one encouraging development.

Money is not the solution to all problems but it certainly helps. Clearly, a huge amount of investment capital chasing dreams in the AI cloud will look at the risks and see a need for additional investment in new power grid infrastructure and skills training. However, big tech companies investing on their own can’t carry the entire investment burden. So, what is needed is probably government spend but also another big pool of private money. And there’s some good news.

The reports this week of private equity (PE) giant, Apollo Global, potentially co-investing $11 billion to help build a semiconductor chip factory in Ireland is the latest example of private equity getting involved in cloud infrastructure, in a big way. Also, another PE monster, Blackstone, has just announced the purchase of the abandoned Britishvolt gigafactory as the planned site for a $10 billion data centre campus. The entry of private equity and trillions of investment dollars into the data centre sector is hugely significant. Furthermore, the size of this private investment pool opens up the possibility of addressing the challenges of grid pressures and skills shortages. Or, as the financial markets commentariat might say… “money finds a way.” Germany hopefully will too.

Cleantech: Our World Is Our Bond

Wed, 03 Jul 2024 09:13:02 GMT

As the Indian subcontinent bakes in stifling 50 degree heat, there’s a financial market heating up too. And it might just help save us all. Bloomberg is reporting that European borrowers have accessed €1 trillion of debt capital in 2024 at a faster pace than any other year in history. This flurry of bond (debt) issuance has been driven by expectations of lower interest rates by investors but, hidden in this huge number, cleantech has emerged as a star sector. In fact, European cleantech debt investment surged to a record-breaking €16.7 billion in the first quarter, more than twice the debt raised by the sector in all of 2023. That data comes from Cleantech for Europe in their latest report and is nicely timed given the European Council has just adopted the Net-Zero Industry Act (NZIA).

The Act, which comes into force in June, will simplify the permit-granting process for strategic projects, facilitate market access for strategic technology products including via public procurement or auctions for renewables and enhance Europe’s clean energy workforce. It’s more than just words. There are targets to give NZIA teeth; the ultimate aim is to have a clean energy manufacturing industry, including solar, wind turbines, batteries and heat pumps that can meet 40% of the EU’s deployment needs, and 15% of global demand by 2040. More importantly, EU money is backing this aim. We have written previously on this significant financing shift and note that 8 out of the top 10 cleantech debt deals in Europe were partially financed by a public bank, six from the EIB alone.

The data from the Cleantech for Europe report reveals the EU finally getting serious about financing the scale-up of cleantech manufacturing, including first-of-a-kind (FOAK) plants. Indeed, the significance of public money backing has been recognised by a leader of one of the biggest deals, Henrik Henriksson CEO of H2 Green Steel:

“Developing a first-of-its-kind project requires all types of cleantech financing mechanisms and they need to interact. In H2 Green Steel’s case, this meant securing €4.2 billion in project finance, €2.1 billion in equity and a €250 million grant from the EU Innovation Fund for the world’s first large-scale green steel plant in Northern Sweden.”

A critical part of this “interaction” is the de-risking of investments with the participation of public lending institutions. The other key point is confidence. Lending activity in Q1 was a whopping six times greater than historical averages and that breeds confidence in even riskier parts of the investment world. Not every cleantech project is as big as Northvolt, Sunfire or H2 Green Steel. The little guys in the cleantech ecosystem need support too. Venture Capital (VC) investment funding activity of €2.8 billion was a 55% increase on Q1 2023.

A few other data points from the Cleantech for Europe report are also worth highlighting:

Cleantech VC deals took place in 17 out of 27 EU countries
The average VC deal size increased by 15%
Deal volume in late-stage investments grew by 31%

Perhaps the most encouraging development in a geopolitical race for cleantech independence was that Europe is closing the gap on a headline-grabbing US “Bidenomics” ramp-up in the sector. Europe’s less-developed VC investment pool achieved funding levels of 71% of North American investment totals in Q1 – the narrowest margin ever. The good news is that this gap can close even further if increased confidence and lending (bond) activity can attract more capital into the VC investment pool. US pension funds, university endowments and insurers are huge providers of venture and growth capital. Their European counterparts not so much. In fact just 0.01% of these multi-trillion euro assets are allocated to venture funding (Source: State of European Tech). At some point you’d hope these stewards of our savings and wealth will work out that a dead planet doesn’t really need a discounted cash flow model, or asset-liability matching risk frameworks.

The risk is very NOW but thankfully the headlines continue to encourage:

French gigafactory startup Verkor secures €1.3 billion loan – Financial Times
Inside Microsoft’s record-breaking carbon removal contract – GreenBiz
US, Europe battery factory spend triples – S&P Global Research

Lots of cleantech headlines to come. Lots of investment capital needed too. Clearly, the bond market is rapidly waking up to the cleantech revolution. So, let’s hope further institutional support follows the Net-Zero Industry Act and “interacts” with our threatened world.

Electricity Trends: Construction Friend Or Foe?

Wed, 03 Jul 2024 09:06:54 GMT

There is a well-worn phrase in financial market circles that “the trend is your friend”. Clearly, those following and investing in Artificial Intelligence (AI) trends in recent years will be nodding furiously in agreement with that mantra. In fact, there are probably ten trillion reasons why they love trends. More specifically, three companies perceived to be the biggest winners in AI – Apple, Nvidia and Microsoft – are now valued at a combined 10 trillion US dollars . However, financial trends can end. Often it will be an exhaustion of investment capital or over-investment which will kill a trend. But, maybe not this time.

We have previously written about the avalanche of investment capital pouring into the construction of data centres and the decarbonised industries of tomorrow. In parallel with these technology revolutions in cloud (AI) and climate (cleantech), there is a growing awareness of the massive spend required to keep up with electricity demand. As an illustration of the electricity grid pressures, US data centre power usage currently accounts for 22GW, or 4.5% of the nation’s power consumption. However, according to SemiAnalysis research, that figure is projected to reach 100GW, or nearly 20% of nationwide consumption by 2030 due to AI build-out.

Consultants, McKinsey, reckon the shift away from fossil fuels will require infrastructure investment of $9 trillion every year until 2050. That’s a great construction trend story but there’s a worrying basic materials story which could impact all trends; a shortage of base metals. For example, copper is critical to electrification and the storage of power/batteries.

Consider these three numbers:

S&P Global see global copper demand doubling from current 25 million tons per year to 50 million tons by 2035.
For historical context, 700 million tons of copper has been produced over the course of human history. Net-Zero targets for 2050 demands that humanity produces two times more than it has ever produced, or 1.4 billion tons.
There have been ZERO major new copper discoveries since 2014.

You get the trend. But, do the global mining industry and the giddy AI tech investment community ? Due to chronic underinvestment, planning delays, investment capital scarcity, genuine sustainability concerns, higher interest rates and AI tech excitement the global mining sector is currently projected to increase production by just….. 20% over the next 10 years. Indeed, the introduction of the EU’s Critical Raw Materials Act into law in 2024 is a reflection of a growing supra-national anxiety. The Act is an attempt to guarantee a supply for EU nations of 17 ‘strategic materials’ including copper for its green and digital transitions. Hopefully, investment capital will be diverted to the sustainable securing of new sources of critical materials but there’s a skills challenge too.

Check out these snippets from the mining industry:

More than half the mining workforce in the US (about 221,000 workers) is expected to retire by 2029.
A McKinsey survey found 71% of mining executives are finding a talent shortage is holding them back from delivering on production targets.
In the US there has been a 39% decline in mining graduations since 2016. In Australia, mining engineering enrolment has fallen by 63% since 2014 .

The investment capital and skills challenges are not easy fixes for the mining industry. However, it seems inevitable that investment will be drawn to a neglected sector which is critical to the decarbonisation and digital transition of the global economy. For context, the $10 trillion number cited for just 3 companies dependent on electrical power stands in stark contrast to a valuation for the entire global mining sector of around $2 trillion. The continuing divergence of these two sectoral trends is manifestly not sustainable but we have spotted a few encouraging developments in the broader construction arena:

Labour mobility: A recent Bloomberg article on the success of the state of Texas attracting major data centre equipment manufacturers l ike Siemens, Schneider and Eaton. The key driver in these project decisions was the healthy 1 million-strong manufacturing workforce benefitting from a trend of people moving to southern states. Lesson 1: People and skills will move in a modern economy.

Labour trends: Gen Z employees are increasingly focused on purpose or ‘ikigai’ in their working lives. Well, the decarbonisation of the world seems like a decent start. So, it was intriguing to see a Wall Street Journal article this month headline an article on careers with “ Gen Z Plumbers and Construction Workers Are Making #BlueCollar Cool”. The emergence of TikTok and Instagram influencers in traditional trade work is attracting renewed interest from young Americans in the construction sector. Lesson 2: Labour fashions can change.

Labour education: Microsoft might boast a $3 trillion valuation as a company but it also understands the value of access to skills necessary for its business growth. Check out Microsoft’s recent announcement investing €2.9 billion in Sweden over two years in cloud and AI infrastructure. Alongside the investment headlines, was an initiative to train 250,000 people in AI skills. Lesson 3: Labour learning grows wealth.

So, the above examples illustrate how companies, talent and capital are adjusting to massive growth in the construction of tomorrow’s infrastructure. Hopefully, these lessons will be urgently applied to the reversal of worrying mining trends. It should be clear by now that the futures of mining, construction, infrastructure and new technologies are inextricably linked. More bluntly, and using extremely basic maths, $10 trillion into $2 trillion just doesn’t go.

Teaming Up Danish And Celtic Cultures For A Win

Mon, 29 Apr 2024 05:46:39 GMT

In SilverBack we often talk about lived values demonstrated by leaders and employees alike. In particular, we want to be empathetic – understanding one another and mindful of staff’s needs and vulnerabilities away from home. So, we are thrilled to be sponsoring the Hillerød Wolfe Tones and congratulate them on their recent win in the 2023 Intermediate Gaelic Football Championships, their second trophy won over the last 12 months!

Working away from home can be tough so it is great to see community spirit build overseas and introduce different cultures to each other in a sporting way. Indeed, the Hillerød Wolfe Tones have been busy sporting ambassadors with visits to Malmö, Gavle and Den Haag over the past year. No doubt, there have been great memories and experiences gained on these trips and it’s nice to take a few photos to mark the occasion. Even better, if there’s nice SilverBack merchandise to wear too! Well done team.

What’s Bubblin’ in Lublin??

Mon, 29 Apr 2024 05:46:36 GMT

Our SilverBack colleagues in Lublin have been celebrating National Independence Day but there’s more than fireworks flying in Poland these days. Even during recent dark days. October was a grim month as the Israel-Gaza conflict joined Europe’s own war, Ukraine, in the horror headlines and financial markets balked. For the third consecutive month global stock markets experienced losses, but with one exception. Poland. The country’s twenty biggest publicly quoted companies in Warsaw’s WIG20 Index bucked the trend and clocked up a stunning 13% gain in just one month. Of course, the market commentariat were quick to identify the trigger for sudden optimism in Warsaw.

The surprise success of Polish opposition parties in ousting the incumbent PiS governing party in the October 15th elections appears to have excited international investors. Irrespective of politics, there is the potential for an immediate financial windfall as a new pro-EU Civic Coalition government will help Poland access up to €35 billion of Brussels’ funding earmarked for Covid recovery and digital/green economic transitions. However, it would be a mistake to think that Poland’s digital and green transition was paralysed by politics. In fact, the 13% October gain in Polish equities hints at more powerful drivers than just a changed government being unleashed. We would consider the following developments as significant strategic economic moves from earlier years which are now focusing minds and capital.

Gigafactories : Back in 2019, the European Bank for Reconstruction and Development (EBRD) loaned €250m, alongside Polish government grants of €95m, to South Korea’s LG Chem for the construction of one of Europe’s largest electric vehicle (EV) battery factory in Wrocław in Western Poland. Total investment was €3 billion in a plant which today has 7,000 employees and an annual battery production capacity of 70GWh. Furthermore, the knock-on effect of such spectacular cleantech execution has attracted other hi-spec industries to Wrocław.

Semiconductors: In June of this year US semi-conductor giant, Intel, announced a $4.6 billion investment in constructing a new chip factory in Poland’s third largest city. Interestingly, this below-the-radar readiness of Poland for mission-critical projects led to a surprising confession from Intel’s CEO, Pat Gelsinger: “When we began the process, we hadn’t considered Poland”. Again, it feels like that 13% October stocks rocket was not just politics, but the ‘coiled spring’ of Poland’s digital technology strategy.

Data Centres: Indeed, as a gateway to Eastern Europe, Poland has become the 15 th largest Data Centre market in the world(Source: Data Centre Magazine). For those readers who saw our recent article on data centres becoming a growth proxy for Artificial Intelligence (AI) it is interesting to see PMR analysis forecasting a doubling in power capacity from 107 MW in 2021 to 215 MW by 2027. Warsaw is the dominant market offering 61% of capacity led by Data4, Atman and Microsoft. Arguably, it’s all about Microsoft in recent weeks as it rides the AI wave to an all-time-high share price and taking Apple’s position as the world’s most valuable company ($2.7 trillion). However, it is very clear Poland has identified digital technology as a national wealth creator. Consultants, McKinsey, have taken notice with a 2022 report identifying Poland as the largest digital economy in the Central and Eastern European region, growing that sector by 20% per annum. That sort of growth could drive Poland’s overall economic status to the very top of the wealth tables.

The text books say financial markets discount the future so they might be looking at the recent projections of the World Bank for the remaining years of this decade. Indeed, recent policy papers from the UK’s Labour Party and articles in the Financial Times, based on these World Bank forecasts, have identified the real possibility that average Polish incomes will exceed those of Brexit Britain by 2030. Who’d have thought that? Well, the answer won’t be on the side of any red double-decker buses! The ministerial occupants of 10 Downing Street have had plenty of their own notorious parties in the recent past but it feels like our colleagues in Lublin will be the ones witnessing fizzy days ahead.

Finally, Lublin itself offers some clues to Polish success too. The city of just over 350,000 people has a massive student population of 60,000 and has been selected as European Youth Capital for 2023. One can’t help feeling that Poland didn’t just see technology and youth as its future. It backed both of them too. Brawo Polska.

Global Leaders At Cop 28 to Cop Out or Cop On?

Mon, 29 Apr 2024 05:46:35 GMT

November 17 is a date which history will forever link to revolution. In the last century it was a month and year marking the end of the Russian Tsars, the beginning of authoritarian Communism in power, and its aggressive multi-decade global clash with Capitalism. History will record that the planet and both sides survived a Cold War nuclear stand-off, but that one economic model did not. Fast forward to today, and this century has a new “November 17” moment with stakes equally high. Possibly higher.

This time the planet faces TWO existential threats and TWO seismic economic revolutions. The events linked to the first revolution on November 17 th last week have captured all the headlines but, in truth, their threat to humanity is not yet clear. Frenzied speculation will continue as to what spooked the board of OpenAI to ditch their revolutionary Artificial Intelligence (AI) leader, Sam Altman, but we would like to focus on the other less-discussed seismic events of the same day.

In this instance, the threat to the planet should be very clear but didn’t quite catch the same number of media eyeballs. We are a strange species. Despite fight or flight behaviours wired into our DNA, there has been remarkably little global leadership alarm triggered by the Earth’s temperature on November 17th briefly smashing through a significant warming limit for the first time in history(Source: Copernicus Climate Change Service). The scientists will tell you that when global average temperatures – as they were briefly last Friday – are more than 2 degrees hotter than levels before global industrialization, then we are moving into irreversible climate crisis territory .

The prospect of being too late to prevent cascading extreme climate events and destruction of Earth’s ecosystems makes for depressing reading, particularly when expectations for COP 28 leadership are so low. The annual UN gathering on climate change in Dubai will see 200 nations represented but pessimism dominates current commentary. For our part, we are less gloomy on climate change and the cleantech revolution rapidly developing. However, we are clear about the climate challenge. The report card for the annual COP gathering would suggest ‘cop out’ by leaders rather than real action. For illustration, the ‘success’ of the last 27 COP meetings has resulted in global CO2 emission increases actually growing by 50% since COP 1 (Source: NOAA). Ouch! The good news is that bad news might now be good news. And, of course, it’s related to money.

Best to start with the richest country in the world. The US in 2023 (by August) had already set a new annual record of 23 different disasters costing $1 billion or more, and mainly weather related. This doesn’t even account for extreme heat events (and damages to business, crops etc) but does rather starkly paint a picture of disaster striking every 3 weeks compared to the 1980s where frequency was more like 3 months (Source: NOAA). Those sort of risk intensifications tend to focus the minds of all providers of capital, from banks to insurers to pension funds. In turn, that level of capital angst begins to influence leaders relying on corporate/political donations. So, it was intriguing to see a major geopolitical shift in recent weeks.

Amazingly, the one area in US politics where there is bipartisan policy support is the current trading and technology “war” with China. And yet, the summit meeting between President Biden and President Xi in San Francisco went ahead with, seemingly, only political downside for the Biden administration. Thankfully for humanity, there was a mutual US-Sino desire to lead in the climate crisis. So, we should not underestimate the significance of both China and the US agreeing this week to target a trebling of renewable energy generation by 2030. Furthermore, the lead by the US, UK and 8 other nations to push at COP 28 the trebling of installed nuclear power capacity and a call for support from global financial institutions should be a real positive for global decarbonisation.

Clean energy is a start but clean manufacturing is a critical piece in the decarbonisation equation. Of course, in Europe with recent CBAM taxes on imported materials like cement, steel, iron and fertiliser, we are aware of how the cleantech revolution can impact non-European businesses in the manufacturing supply chain. However, for the world to really tackle the climate crisis all countries, big and small, need to be on board. The previously COP-promised $100 billion of funding annually to help poorer countries to deal with existing climate damage and transition away from fossil fuels really should be a major priority, in terms of delivery and building decarbonisation consensus/action. As a positive indicator in this direction, one news item this week caught the eye. Reuters gives the details:

Namibia began construction on Monday of Africa’s first decarbonised iron plant, to be powered exclusively by green hydrogen, the country’s investment promotion body said. Steelmaking is one of the most polluting industries in the world and the industry is seeking to shift away from coal-fired plants and towards the use of decarbonised iron. The Oshivela project in western Namibia is backed by the German federal government, which has injected 13 million euros, and will use renewable energy to generate 15,000 tonnes of iron per year with no carbon emissions, the Namibia Investment Promotion and Development Board (NIPDB) said in a statement.

Frankly, $100 billion is a tiny amount compared to the climate costs coming down the tracks. However, delivery on original commitments by richer (and polluting) nations should be a start. Also, with immaculate timing, Oxfam has released a report stating that since the 1990s the richest 1% of the planet emitted as much carbon as the poorest 5 billion (two thirds) people on the planet. Something, or more specifically, somebody has to give.

Finally, in a week where a disruptor CEO has dominated the headlines it might be worth remembering the business lesson of another industry disruptor CEO, Michael O’Leary of Ryanair. The connecting of developing less-wealthy nations to the cleantech revolution should be considered in a similar vein to Ryanair’s aggressive moves into smaller airports across Europe. Initially, Ryanair’s cheap fares were lobbied against as a threat to competition. But what actually happened? Total numbers of passengers flying into those airports dramatically increased, not just for Ryanair, but for other carriers too. And, the big winner was the destination town or city receiving thousands of new tourists every week. Dare we imagine that bold leadership in the financing of cleantech can dramatically change the trajectory of our climate crisis, but can also change the economies of less-travelled regions? Or….we could just ask the inhabitants of sub-Arctic Sweden, Quebec or Wrocław how cleantech investment can transform manufacturing, climate and lives with a bit of political ‘cop on’.

Reflection At Forty….One BIG Message

Mon, 29 Apr 2024 05:46:34 GMT

As we conclude SilverBack’s 11 th end-of-year get together, it is important to reflect on the journey thus far. Not many years ago there were only four people at our annual year-end events. This time, we hit the 40 mark and that growth in personnel gives us great pride. Our gathering was in the beautiful city of Warsaw, Poland, where we were joined by colleagues from Ireland, Sweden, France, Romania, Italy, Spain, the UK and our local Lublin office.

As a company with members of our head office based all over Europe, it’s a fantastic opportunity for us all to get together and report on developments made by each department during the year. There were lots of presentations and lots of messages which resonated. However, if there was ONE common thread throughout the presentations it was the ambition to standardise, digitalize and automate.

With the rapid development of workflow technology, there are now multiple resources readily available to people who might view themselves as “passive techies”. So, this relatively easy integration of new technology into our existing processes should make our clients’ and project staff’s working lives much easier.

Being user-friendly and conscious of how people experience engaging with SilverBack is at the forefront of our minds. It was clear from our review sessions that, as a company, our core values of being intentional, being respectful, being empathetic and being progressive are aligned with this commitment to user-friendly engagement. This must include how we sell, recruit, onboard and communicate with project staff, in addition to how we deal with financial activities.

We are really excited to see where 2024 brings us and we hope to continually improve the way we work. The world is changing in a dramatic way and SilverBack is committed to keeping pace with such change. Furthermore, we expect to be driving that change as a key player in high value technology projects, the decarbonisation of traditional industries and the build-out of those data centres which house all our new work tools in the cloud! Next stop…. 100??

In a recent Wall Street Journal article, Ed Ballard highlighted how two Swedish companies had to reconfigure the financing model for green start-ups. The traditional build-it-and-they-will-come strategy was way too risky for the future visibility and technology reasons touched upon earlier. So, two private investors – Harald Mix and Carl-Erik Lagercrantz – spotted the opportunity to de-risk these projects by lining up customers first. This was the critical third leg of the financing model which enabled these founders of battery maker, Northvolt, and green-hydrogen steel manufacturer, H2 Green Steel, to raise money.

Now, for another German starring role…. the first customers to pre-purchase product from Northvolt and invest in the project were German auto giants, BMW and VW. In the case of H2 Green Steel, its first customers to commit to buy green steel at a 25% premium to normal steel market prices were another German auto icon, Mercedez-Benz, and VW-owned truck maker Scania. Note these companies have invested in H2 Green Steel as well as ordering product. This is an interesting twist on the not-so-new practice of customers committing in advance to power supplied by capital-intensive renewable energy projects. In the case of Northvolt and H2 Green Steel the interests of all investors, government/state and private, are aligned with committed future customers. Arguably, market demand is more visible. Indeed, Harald Mix, one of Northvolt’s founders, has said, “The demand is becoming predictable”.

In a European context, the prospect of 250 more battery factories to be built further demonstrates that demand. However, Europe’s cleantech ecosystem features a few extra drivers which add to investment visibility and opportunity. Prices of credits in the EU emissions (CO2) trading system have been rising in recent years prompting companies to model the potential growth in the cost of meeting emissions targets. Furthermore, the EU’s new import tax on carbon-intensive goods (Carbon Border Adjustment Mechanism) entering the EU was a further incentive to upgrade company supply chains using non-EU steel, cement, fertilizer, aluminium, electricity and hydrogen which previously incurred lower carbon costs. All has potentially changed since the new regulations became law on Nov 1st 2023. For H2 Green Steel the timing of CBAM was excellent.

The sale of 40% of H2 Green Steel’s early production to customer investors underpinned the largest private equity funding round (€1.5 billion) completed in Europe in 2023, and we will be watching closely to see who participates in a further €3.5 billion debt funding round scheduled for later this year. In fact, at time of writing, news is breaking that 24 commercial banks plus the European Commission – via the European Investment Bank (EIB) – have just completed the largest ‘green loan’ raised in Europe to date; a whopping $5 billion of funding for Northvolt’s Swedish operation in Skellefteå. Clearly, for risk-averse lenders, the aligning of an equity risk buffer across public/state, private and customer investors plus emission credits and taxation incentives is a unique selling point for these European cleantech projects and many more to come. Be under no illusions, the “land-grab” for investment in the global decarbonisation race is very real. So, despite the downbeat front page economic headlines, consider Germany’s financing of the Northvolt Heide project as a significant positive illustration of Europe’s determination to strongly compete for investment capital.

Circling Sustainability And Cleantech

Mon, 29 Apr 2024 05:46:33 GMT

Oh dear. A couple of good Cop 28 headlines on the agreed funding of climate loss and damages for developing nations were followed by a howler from COP 28 President and host, Sultan Al Jaber. His poorly chosen words – to suggest there is “no science” indicating a need to phase out fossil fuels in meeting 1.5 degree global warming targets – was a leadership loss. However, global business is doing a much better job at leading a planet survival mission on decarbonisation. The umbrella term for this mission is sustainability and many businesses now ‘get it’. We recently attended a Cleantech Briefing for Senior Leaders at the Irish Management Institute in Dublin and were struck by a couple of key messages:

Cleantech projects are a very visible recipient of billions of dollars of funding but the concept of sustainability requires a bigger picture mind-set and understanding of how a number of technologies will fit into a sustainable circular economy. See the graphic below of the 10 technology families (Source: McKinsey).
The circular economy will fundamentally change business models for many sectors. Sustainable recycling of energy, waste and water means many businesses can no longer just sell goods and walk away. The ‘reverse logistics’ of the return of used goods will force a radical change in life-cycle costs on top of regulatory requirements for green materials in manufacturing and the building of proprietary clean energy sources.

The good news is that investment is already happening and demonstrating business action rather than words. An estimated $6.5 trillion will be spent on these cleantech technology families EVERY year until 2050. That equates to more than Japan’s GDP annually. Of course, it helps if the world’s most powerful nation leads. So, it was encouraging to hear former US Vice-President, Al Gore, state that the latest estimates show the Biden administration’s sustainability legislation (via the IRA Act) will probably allocate $1.2 trillion to deployments of renewable energy. As mentioned earlier, cleantech won’t be built in isolation. At the briefing there were a number of good examples of how projects will fit into a more systematic way of thinking about sustainability. Here are a few examples provided on the day of the IMI briefing:

A large construction firm with a multi-year track record in building data centres(DCs) is currently working on a DC project where the green energy source will be built in parallel with the data centre.
The built environment (construction and existing buildings) account for 40% of global CO2 emissions. In fact, the manufacture of steel and cement accounts for a whopping 15% of global emissions. The entire supply chain of construction is moving to more sustainable solutions from materials used, to transport, to energy, to water consumption.

So, even the construction of cleantech projects like battery gigafactories, bio-refineries or green steel manufacturing facilities need ‘joined-up thinking’ and sustainable practices. Bigger corporates are already implementing sustainable policies and practices in line with stakeholders’ (clients, investors, workers etc) requirements but, with increased burdens imposed by Scope 3 emissions reporting and Corporate Sustainability Directives (CSDR), there are huge implications for all sizes of companies in a supply chain. The large construction firm referenced above has more than 5,000 companies in its supply chain alone. All speakers at the briefing agreed that the following had huge roles to play in ensuring supply chain compliance in a circular economy:

Finally, finance. Money makes the world go round they say. Not quite, but the panellists were all agreed that the financial and trading penalties for failing to fit into the circular economy and meet sustainability standards will be business killers. The Head of Sustainability at one of Ireland’s pillar banks described the increasing scrutiny of loan books by their stakeholders (particularly bond holders) and their own intiatives in launching loan products which would be aligned with sustainability targets. In other words, if a borrower meets sustainability benchmarks they will benefit from lower interest rates and better terms. If they don’t, they will suffer higher funding costs. For serial offenders, it is likely they will be unable to access capital or insurance in the near future.

So, the message is clear. We are all in this circular economy to drive a more sustainable future. And, if we don’t …… well the expression “what goes around, comes around” springs to mind. However, keep that annual spend of $6.5 trillion in mind and imagine the opportunities to play one’s part in the sustainability mission. Because, it’s worth it.

Serious Money Eying Up Big 2024 Data Centre Build

Mon, 29 Apr 2024 04:55:21 GMT

Whenever one of the savviest private equity players on the planet moves into a new asset class it is worth paying attention. So, the news that the mighty Blackstone Group has announced a $7 billion joint-venture with Digital Realty to build four hyperscale data centre campuses in Frankfurt, Paris and North Virginia should focus minds. In fact, Blackstone COO and President, Jon Gray, makes it very clear what is driving their focus – “Data centres are experiencing once-in-a-generation demand growth driven by cloud adoption and the AI revolution. Digital infrastructure is one of our highest conviction investment themes as a firm, and this transaction with trusted data centre operator in Digital Realty is another example of how we are investing in this trend”. Regular readers of our analyses will not be surprised with the AI thematic linkage but the scale of some businesses servicing or operating in the data centre sector might wobble a few heads. Try Digital Realty for starters.

Founded in 2004 in Austin, Texas, Digital Realty is an investment vehicle (real estate investment trust) which owns, operates and invests in data centres around the world. In less than 20 years, it has built a portfolio of 300 data centres across 50+ metro areas in 25 countries on 6 continents with 3,500 employees and a combined asset value of more than $150 billion. Profits for the group last year were just shy of $2.5 billion. Nice business, if you can get it. However, if you were looking for the company which is doing the nicest business of all in the AI-powered data centre revolution then it has to be that other company nobody had ever heard of before 2023 and the arrival of ChatGPT…..Nvidia.

We wrote recently about how cloud adoption revenues were able to move valuations of tech giants, Google and Microsoft, by more than $200 billion in a single night (November 17th) of Wall Street trading but arguably Nvidia is the only trillion dollar mover at the moment. Its market value is now over $1 trillion thanks to a share price which has rocketed 240% in 2023 alone. And, if that feels a bit giddy, then check out Nvidia’s latest Wall Street quarterly update published on November 21st. For the second consecutive quarter the world’s best financial analysts were wrong. The company’s $18 billion of revenues were, again, $2 billion more than what the average analyst had plugged into his/her modelled projections. So, if you were wondering whether a share price moving by more than 200% in less than a year sounds like irrational exuberance you’d be wrong too. Nividia’s revenues generated by its best-in class chips (used in data centres) totalled $14.5 billion and was 279% higher than the same period a year ago. You can begin to see why Blackstone is joining the dots; digital infrastructure…AI chips…cloud computing…..explosive demand for data centres…..and their construction.

At SilverBack, we too are joining the construction dots. Hence, we were delighted to attend and present at the recent Ireland-Poland Data Centre Forum in Warsaw. Presentations highlighted the two decade experience of Irish firms building hyperscale data centres for global technology firms like Amazon, Microsoft and Facebook/Meta. More importantly, this project experience has created a cluster of 60 Irish companies bringing their expertise and services to high-tech construction projects all over the world. Businesses range from general contractors to engineering specialists to energy/grid connectivity to fit-out systems suppliers to recruitment services. Clearly, with the ramp up of data centre construction the services of these firms are in demand. Indeed, the rapid expansion of the Polish data centre sector and the early involvement of Irish firms in these projects makes these networking and introductory events very timely. It is also apparent that data centre construction is evolving too.

In the past, only large enterprises could afford the space, resources, and IT teams required by the data centres. Due to the development of AI, machine learning, IoT, blockchain and cloud computing services the big tech corporations like Google, Amazon and Microsoft need to operate modular ‘hyperscale’ data centres. These facilities don’t serve one enterprise but multiple companies dependent on mission-critical digital applications. In order to deliver those services, more than 5,000 servers are required to be housed, powered, cooled and secured.

Data centres must also cope with big swings in demand and workloads while also capable of adding more computing power and hardware. Hence, the modular approach now required in their construction which will typically occupy a minimum of 10,000 square feet and provide at least 40 megawatts (MW) of capacity. However, this increasingly looks like a historical minimum as ‘scale’ moves into true hyper territory; see Apple’s Mesa data centre in Arizona which spans 1.3 million square feet. But… a shift in scale is not the only indication of growth.

According to Precedence Research, the global market size for hyperscale data centres was estimated at $62 billion in 2021. This market size is expected to reach $593 billion by 2030, representing a 28.42% compound annual growth rate (CAGR). There are even more bullish projections out there – Dell’Oro research forecasts capital expenditure in 2023 alone to reach $266 billion and on a trajectory to hit the half a trillion dollar mark in the next three years. For 2024, the explosion in AI demand will quite likely drive data centre project spend over $300 billion, provided Nvidia can deliver those chips.

Returning to Poland, the country has become the 15th largest Data Centre market in the world(Source: Data Centre Magazine). For those readers who saw our recent article on data centres becoming a growth proxy for Artificial Intelligence (AI) it is interesting to see PMR analysis forecasting a doubling in power capacity from 107 MW in 2021 to 215 MW by 2027. Warsaw is the dominant market offering 61% of capacity led by Data4, Microsoft and Atman. Oh, and Atman has an interesting partner too.

Atman has been a local leader in the Polish data centre market since 2011. Then, in December 2020 they were acquired by Global Compute Infrastructure for an undisclosed amount. However, the backers of Global Compute are actually Goldman Sachs’ merchant banking division who have funded the vehicle with $1.5 billion to buy digital infrastructure around the world. And, the management team installed by Goldman Sachs in Global Compute happen to be the former co-founders of Blackstone’s new partners, Digital Realty. Small world you might say, but clearly the money people at Blackstone and Goldman Sachs see big things ahead for data centres.

HUGE: Europe Flexes Its Cleantech Financing Muscle

Mon, 29 Apr 2024 04:44:22 GMT

Positive January news came from an unlikely quarter in recent weeks – Germany. The Berlin government already has its challenges due to a disastrous energy policy bet on Russia and a growth-killing constitutional ban on government deficit spending. Add official confirmation of a GDP recession to the sclerotic mix and you would half-expect a fresh raft of headlines declaring Berlin’s return to 1990s “sick man of Europe” status accompanied by euro-sceptic fears of a potential implosion of the European single market ‘experiment’. But, no. The most significant headline of recent days put Germany and Europe at the forefront of moves to meet a challenge of global rather than national budget dimensions. The climate crisis is not new but financing the industrial revolution and new technologies to remove fossil fuels from the global economy has required new thinking.

Clearly, providers of capital funding require a degree of certainty and visibility. But… these start-up projects and their financial models can’t fully envisage the future. Nor, is there any certainty about whether these new technologies will be commercially viable or not. That makes it very difficult to structure the financing of projects with huge up-front capital needs. However, market demand and market-fit can be hugely helpful as a confidence-builder for providers of investment capital. So, where better to start than with one of the planet’s biggest industries, the auto sector. The shift to electric vehicles (EVs) continues to exceed analyst projections and is expected to hit the critical 20% market penetration threshold globally in 2024 (Source: HSBC). The sheer pace of EV adoption has exposed two potential growth hurdles;

Charging infrastructure needs to catch up with consumer buy-in and
The manufacture of batteries to power EVs is too dependent on China (56% of global total).

In particular, EV battery manufacturing capacity has become a critical focus for European and US governments. And, it’s at governmental level where the new thinking is emerging.

The cleantech research team at Buck Consultants estimates Europe alone needs to build 250 battery manufacturing facilities by 2033. Meanwhile, the US and the Biden White House has recognized a once-in-a-generation opportunity to reinvent the manufacturing base of the US with legislation (the IRA and CHIPS Acts) to allow Federal funding assistance for multi-billion dollar projects building renewable energy infrastructure, battery gigafactories and economy-critical semiconductor manufacturing fabs. Furthermore, Covid-19 and Ukraine have focused minds on economy-critical supply chain disruption which, in turn, has catapulted EV batteries very close to the top of national vulnerability lists.

This has resulted in the US and European governments competing for battery gigafactory construction projects. But… Europe up until recently had strict rules on how governments can use state-aid to lure big investment projects of private companies and potentially breach competition and single market (EU) protections. Until now. Under a new EU state-aid framework the German government last week was able to commit €902 million of funding to Swedish battery manufacturer, Northvolt, for the construction of a facility in Heide, located in Schleswig-Holstein. By creating funding flexibility, the EU were able for the first time to ensure Germany secured the Northvolt project AND prevent the probable migration of the factory to the US. This hybrid public-private financing model is a ‘must have’ given the huge up-front cash costs of these projects. Note also the cleantech reality that traditional taxation offsets and incentives on future profits don’t get projects built. In fact, there is a third unique financing leg to these cleantech projects, and Germany again is playing a prominent role.

Mixing In Łódź

Mon, 29 Apr 2024 04:20:01 GMT

This week SilverBack had the pleasure of attending the International Business Mixer event in Łódź, Poland. This was a New Year’s networking event where we had the opportunity to network with companies associated with 16 bilateral chambers of commerce.

National Independence Day of Poland has prompted more than fireworks this year as significant investment is set to accelerate into projects such as battery gigafactories, semiconductor fabs, and data centres. It was also helpful for us to learn more about the products and services like logistics, compliance and new technologies which have become critical to the successful completion of these projects.

Famous private equity house, KKR, has just completed a record $6.4 billion raise for an infrastructure fund to invest in the Asia-Pacific region. Australian infrastructure leader, Macquarie Group, went further afield and raised a record $8 billion for a European infrastructure fund. Meanwhile, General Atlantic was busy last month buying UK sustainable infrastructure play, Actis, and its $12.5 billion of assets mainly located in developing countries. Oh, and CVC swooped for Dutch infrastructure manager, DIF Capital, in a $1 billion deal. Are you sensing there’s a bit of an infrastructure ‘land grab’ happening? Well, you would be in professional company. In fact, a January survey by pension consultants, Mercer, found that 54% of large asset managers polled were most likely to increase funding allocations to infrastructure. However, there is still an enormous gap between what the global economy is due to spend on cleantech decarbonisation transition and the $1.3 trillion of capital currently deployed in infrastructure funds. McKinsey reckon we will spend over $6 trillion every year until 2050. That might seem like an overwhelming funding challenge but there are a number of positive developments to report.

Like our earlier attendance at the Ireland-Poland Data Centre Forum in Warsaw at the end of last year, these events are great for engaging with new and established businesses helping to build such important economic infrastructure in Poland.

A Trillion Reasons To Check Data Centre Projections

Mon, 29 Apr 2024 04:20:00 GMT

In January Blackrock announced its biggest acquisition since it acquired Barclays’ asset management business in 2009. Fink wrote a cheque for $12.5 billion to buy Global Infrastructure Partners (GIP) and its $100 billion of infrastructure assets, including Gatwick Airport, Suez Group(water) and Port of Melbourne. Now recall the “transition finance” thinking earlier and consider Blackrock’s specific language in the deal announcement. The company in its press release cited “a movement toward decarbonisation and energy security in many parts of the world”. Fink went further, identifying infrastructure as “one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy.” They are not alone in their excitement, or actions.

When Larry Fink uses the word ‘revolution’ we should probably pay attention. As the CEO of the world’s largest asset manager, Blackrock Inc, it has become increasingly difficult for Fink to find new assets which can truly move the allocation and performance dial for the $10 trillion money monster. Size is a Blackrock problem. So, if Blackrock sees opportunity it must be really big or… a revolution. More precisely, Fink believes the global economy is on the cusp of an “infrastructure revolution”. Typically, this sector was perceived as public-private partnerships financing the construction or management of critical infrastructure like utilities, bridges, roads and transportation hubs. In return, private financing houses like Blackrock would receive steady single-digit percentage returns on their investment capital. The infrastructure asset class has grown to a circa $1.3 trillion pool of capital projects but Fink recently wrote to shareholders that “some of the most attractive opportunities in the years ahead will be in the transition finance space”. Then he took action.

Firstly, we have written previously about the funding innovations which have been used to help Northvolt and H2 Green Steel raise billions in equity and debt capital. Critical to these European funding successes has been the commitment of corporates as both customers and investors with pre-orders providing a vital de-risking piece in the investment framework. Governments are also a key part of this re-configuration of industry. In our earlier article we highlighted efforts in Washington:

“Meanwhile, the US and the Biden White House has recognized a once-in-a-generation opportunity to reinvent the manufacturing base of the US with legislation (the IRA and CHIPS Acts) to allow Federal funding assistance for multi-billion dollar projects building renewable energy infrastructure, battery gigafactories and economy-critical semiconductor manufacturing fabs.”

Europe is also getting in on the act and competing for projects connected to the global decarbonisation drive:

““Europe up until recently had strict rules on how governments can use state-aid to lure big investment projects of private companies and potentially breach competition and single market (EU) protections. Until now. Under a new EU state-aid framework the German government last week was able to commit €902 million of funding to Swedish battery manufacturer, Northvolt, for the construction of a facility in Heide, located in Schleswig-Holstein. By creating funding flexibility, the EU were able for the first time to ensure Germany secured the Northvolt project AND prevent the probable migration of the factory to the US. This hybrid public-private financing model is a ‘must have’ given the huge up-front cash costs of these projects.”

Clearly, the traditional infrastructure asset class is evolving to meet not just the demands of a changing industrial landscape, but also participating in the race to digitize the global economy. Not surprisingly, we have seen digital infrastructure, namely data centres, become a focus of private capital. Blackstone, the private equity giant, has acquired 80% of Digital Realty for $7 billion with the fresh investment capital being used in a JV to build hyperscale data centre campuses in Frankfurt, Austin and Northern Virginia. Closer to home, Blackstone (again) is also reportedly in talks with data centre engineering specialist, Winthrop Technologies, with its circa $1 billion of annual revenues. Furthermore, the data centre eco-system is attracting cash-rich Big Tech investment and vested interests. Last week Google announced investment in two Dutch off-shore wind farms and a pre-purchase of their energy output to power…. yes, its own data centres. Given the potential size of digital and decarbonised economic infrastructure you might ask where else apart from government, customers and Big Tech can investment capital come from. We would suggest two areas based on history.

China is currently struggling with huge debt levels in its economy. The Shanghai stock market has already dived by 30% in the first few weeks of the year and some are quite correctly seeing parallels with Japan’s problems over the last three decades. However, China will continue to generate great wealth and build huge pools of capital. Like Japan, that capital will seek foreign opportunity rather than domestic stagnation. Think about Japan’s status today as a leading aviation leasing player, key global commercial real estate (CRE) investor and world number one creditor(lender) to the global economy. Investment capital, irrespective of country of origin, never really stops moving but follows opportunity.

Of course, some countries and sectors can be the ‘loser’ in these structural and cyclical shifts. And, if there’s one sector under pressure right now, that must be the enormous commercial real estate(CRE) asset class. For context, the value of the global CRE sector was estimated in 2023 at $115 trillion (Source: Statista). As we write, New York Community Bank has lost 60% of its value after its shares collapsed on problem real estate loans losses. Confidence in CRE as an asset class is slipping and it’s a global phenomenon. Shares in Japanese bank, Aozora, dropped 20% in one day last week on news of US property losses and Germany’s Deutsche Bank has quadrupled its CRE loan loss provisions. That is not good news for the CRE asset class but does mean chastened investment pools will look to de-risk portfolios and search for safer assets. Global infrastructure and decarbonisation could be the big winner and it looks like the biggest beasts in capital markets are already moving.

Look East: Romania On Track For Oriental Inspiration

Fri, 26 Apr 2024 11:26:34 GMT

The financial news these days is devoting quite a bit of attention to Japan. Of course, a recovery of Tokyo’s stock market to highs not seen since 1989 has been the catchy headline, but that would still seem an unusual prompt for this article’s focus on Romania. Indeed, at first glance, you might think the 1989 date has overlapping significance with the break-up of the Soviet Union and the fall of the Ceaucescu totalitarian regime. Again, not so much. In fact, the fortunes of both countries had very different starting points in 1989. Japan was the globally dominant industrial economy of the time while Romania was in a state of economic collapse. So, our interest in potential parallels is focused on more recent years and three macroeconomic factors which are grabbing Japan headlines, and pointing to potential Romanian opportunities.

A recent chat with an Asian hedge fund manager revealed that almost 80% of his portfolio was currently invested in Japan. This did surprise given India’s rapid economic growth, China’s massive consumer market and South Korea’s embrace of technology. The fund manager’s investment thesis inevitably had a relative value argument as well as a catalyst presented by recent regulatory rules to force listed companies to put their huge cash piles to work or hand the cash back to investors. Clearly, these financial drivers have no real relevance for Romania watchers but additional observations on change in Japan really did resonate. What was particularly interesting was Japan’s embrace of perceived national-specific challenges and turning them into opportunities.

* Demographics : Japan’s ageing population and shrinking workforce has prompted a significant upsurge in female work participation rates to 74% in 2002. That percentage was just 63% a decade previously.

*Artificial Intelligence/Technology: Like demographics, the perception of AI has attracted its fair share of negativity. In Japan, reduced labour pools have accelerated the deployment of robotics, machine learning, AI assistants and even chatbot romance! This early forced adoption of tech-assisted work has placed Japan very much in the vanguard of AI revolution readiness.

*Friendshoring: No, not a dating innovation. The battering of the rules-based world order by Russia and the saber-rattling by Beijing on Taiwan has forced global companies to re-consider China-centric supply chains. One of the key beneficiaries of this move to more reliable friendly nations has been Japan as a steadfast Asia-Pacific ally of NATO countries. This has attracted a wave of investment in the manufacture of critical engineering and technology items.

Perhaps, the best way to capture the scale of Japan’s reversal of fortune is to watch what famed investor, Warren Buffett, is doing. In recent years, Buffett, has been buying ownership stakes in some of Japan’s biggest industrial trading houses, known as sogo shosha . He clearly is aware of Japan’s challenges but also sees how adapting quickly could give it a competitive edge in Asia. Back in Romania, it is not difficult to recognise similar challenges. However, there could be related opportunities too.

First, on the economic front, Romania is delivering some excellent numbers. GDP per capita has jumped from 53% to 75% of the EU average since 2010 and could reach EU parity by 2030. This may seem paradoxical in the context of perceptions of poor governance and brain-drain demographics. And, it is true that Romania’s population has fallen from 23 million to 19 million since 1990; a staggering 16% decline exacerbated by the emigration of 5 million people. However, if we look to Japan for encouragement, then the current Romanian female workforce participation rate of just 42% looks like an opportunity for an economy which has ranked second to Ireland in the EU for post-pandemic GDP growth. This is not just catch-up growth. There is, like Japan, an interesting technology story happening behind the headlines.

Romania’s IT sector recently received favourable coverage in Forbes magazine. The thrust of the article was that “Romania can leverage its robust IT ecosystem to establish itself as a distinguished player on the global stage and, in turn, become the country’s defining brand.” Big words, big mission but do they stand up to data scrutiny? A bit of data digging would indicate very encouraging building blocks. Try a few of these for size:

*Romania has 17.8 million internet users, an 89% penetration rate which is one of the highest in Europe. Note recent progress in internet connectivity has been credited as one of India’s key growth drivers.

*This broadband access appears to be paying dividends in embedding IT skills in the workforce. Romania has more IT specialists per 1,000 residents than the US, ranking highest in Europe and 6th globally.

*A graduate pipeline of almost 10,000 ICT students every year (9,308 in 2021 from 40,000 students) augurs well for the future and foreign direct investment (FDI)….

Finally, given the destructive conflicts in Ukraine and the Middle East the strategic move to “friendshoring” will continue to be a consideration for global companies needing to de-risk their supply chains. Romania, as a member of both the EU and NATO, is well positioned to pitch its merits as an attractive home for capital investment. It also feels like perceptions are about to change. In fact, the Harvard Kennedy School of Government tracks the productive capabilities of national economies and ranked Romania in 2023 as the 19 th most complex and sophisticated in the world on its Economic Complexity Index (ECI). The ECI is a more nuanced measure (vs GDP per capita) of an economy’s structural potential, and is likely to catch the eye of supply chain risk manager types.

Closer to home, SilverBack can attest to Romanian growth from a different perspective. The percentage of Romanian workers in SilverBack projects, constructing new technologies and industries for the future, has tripled from 10% to 30% in just three years. This might appear like valuable skills being lost to other countries but, as an Irish company, we can look to history and know that the building of knowledge, standards, aspirations and leadership in foreign lands can ultimately be very positive for the home country. Right now, Japan’s re-invention of its economy should be an encouragement for those who look behind the challenging headlines for opportunity. As you can see above, Japan’s challenges are not unique and Romania could, in time, be Europe’s own eastern inspiration.

A Trillion Reasons To Check Data Centre Projections

Fri, 26 Apr 2024 07:40:20 GMT

Stock markets and share prices reflect a mix of the expectations of investors for today and for the future. We can debate the weighting of that mix but there is one universal truth. When share prices and financial markets move significantly they are telling us there is change in current market conditions or investors’ expectations. So, when the valuation of one company which nobody had heard of a year ago increases by one trillion dollars in just 4 months we need to pay attention. In December we wrote about Artificial Intelligence (AI) chip maker, Nvidia, and its meteoric 240% growth in value to a $1 trillion market cap during 2023. However, we were quick to point out that it was not just Nvidia’s share price which was rocketing; revenues from its AI chips used in data centres were moving at a similar 279% clip. In fact, we suggested there was more in the tank for Nvidia:

“So, if you were wondering whether a share price moving by more than 200% in less than a year sounds like irrational exuberance you’d be wrong too”

Fast forward to last week’s quarterly results from Nvidia and another forecast-busting report. In the 24-hours after those results the valuation of Nvidia increased by the greatest dollar amount ever seen in history for one company in a single trading session. The $277 billion change in Nvidia’s market value in just one day grabbed the headlines but there are a few other numbers which we believe better capture the quantum of change being additionally recognised by investors:

* Investors in the space of just 4 months have decided that Nvidia’s AI and data centre opportunity has increased in value (market capitalisation) to $2 trillion. Yep, the company’s value has doubled from $1 trillion since late October last year.

*Total revenues for Nvidia grew on a year-on-year basis by 265%. However, the key revenue number for investors was the division which provides AI chips for data centres. Revenues at the Data Centre division grew by 409%.

So, let’s accept that the revenues and valuations attached to Nvidia are driven by an explosion of spending by data centre operator clients. However, in the wider world of cloud computing is there a danger our expectations for data centre infrastructure are already out-of-date? Investors have signalled to us (in their purchase of Nvidia shares) that there has been a trillion dollar change to Nvidia’s prospects in a matter of months. Of course, there can be hype and metaverse or crypto-type hoopla about a future market but Nvidia is telling us that real customers are buying real AI chips for real money (up to $40,000 each) in order to run their AI models and applications. Furthermore, Nvidia’s founder, Jensen Huang, is predicting an additional $1 trillion invested in data centre infrastructure “in the next few years”. Two other snippets stood out in that Wired interview with Huang:

*Nvidia is building a new type of data centre. Huang is calling them “AI factories” and that every company (and sovereign nation) will need these factories.

*On a global basis, Huang expects the number of data centres to double in the next 5 years.

Clearly, this is not just a Nvidia story. We have previously written about an infrastructure boom attracting global financial institutions, but we should continue to watch out for interesting moves, specifically in the data centre space. Also, it is worth keeping an eye on significant shifts in investment strategies by global private equity houses. One deal in the past week, and quite close to SilverBack’s back yard, caught the eye. Starwood Capital which has been a huge player in global real estate seems to be stepping up its data centre exposure. They have just taken an $850 million stake in Irish-owned Echelon Data Centres, valuing the company at $2.7 billion. This follows earlier news that private equity giant, Blackstone, is in talks (or a race!) to acquire Winthrop Technologies for a reported $1 billion. However, it’s not just Wall Street titans suddenly flexing their computing infrastructure muscles. Arguably, Big Tech companies have more investment dollars than anybody and Microsoft is showing form.

In recent days, the Seattle-based co-owner of OpenAI has announced $2.1 billion of investments in Spain. The spend is focused on AI and cloud infrastructure; sounds like more data centres. Indeed, Microsoft has spent more than $9 billion on European digital infrastructure in just the last 3 months. That also includes $3.5 billion invested in AI infrastructure and cloud capacity in Germany (we will be writing more on Germany soon). The Berlin government has its challenges, but Germany’s proud industrial history and its world-beating export culture is currently driving its stock market (Dax Index) to an all-time-high. However, performance is all relative. Indeed, who would have thought Nvidia would now be worth more than all 40 of Germany’s biggest companies…..combined!

Didn’t we say earlier that share prices reflect investor expectations of the future? Arguably, investors believe Nvidia’s future has changed to become potentially even bigger than the future of all of Germany’s greatest companies combined. That implies significantly more data centres in the future than in current projections. So, watch out for those announcements, as digital infrastructure tries to keep pace with Nvidia and its AI chip-buying customers.

Welcome aboard- more talent, more growth!

Tue, 09 Apr 2024 09:48:39 GMT

We don’t just write about the exciting growth in data centre and gigafactory construction. We are always looking for great talent to help SilverBack support that growth. So, we are super excited to announce the newest additions to our team at Silverback. Join us in welcoming three talented individuals who are set to increase our efforts in resourcing professional and technical talent within the electrical industry, particularly focusing on data centers and gigafactories.

Meet Sarah Carroll, Sofia Dolores Ojeda and Franciele Vieira.

Combining a huge wealth of experience, they bring a fresh perspective and unparalleled expertise to our dynamic recruiting team. We believe their focus on sourcing top-tier talent will play a pivotal role in meeting the evolving demands of the industry.

Join us in extending a warm welcome to Sarah, Sofia and Franciele. Also, if you’re interested in joining SilverBack to embark on any of our projects, please feel free to make contact.

We’re incredibly excited to have our new colleagues on board and look forward to hearing from you!

Construction Tech Is A Big Safety Win

Fri, 01 Mar 2024 05:46:21 GMT

As another Construction Safety Week is ticked on the calendar you might think the average construction site has not changed much in decades, and therefore almost time ambivalent. That observation might hold up on first sight of scaffolding, manual bricklaying and concrete mixing trucks but dig a bit deeper and time is catching up on construction. Fast.

Deadlines were always a part of the $12 trillion global AEC industry (Architecture, Engineering, Construction) but the recent emergence of skilled labour shortages is not just threatening completion dates but also exposing an industry overly dependent on human fixes. McKinsey research confirmed the suspicion of construction as an ‘innovation-free zone’ when its analysis in 2017 showed the sector had averaged labour productivity growth of just 1% a year over the previous twenty years compared to 2.8% for the global economy, and 3.6% for the manufacturing sector. Something had to give. And, that was investment…..in technology.

Investment in AEC tech amounted to $50 billion in the years 2020 to 2022(Source: McKinsey). That’s an 85% increase on the previous 3 year period which followed the original McKinsey productivity report. Technology is becoming a game-changer in how construction is done, and how critical risks to worker safety can be dramatically reduced. If one considers how the manufacturing sector has upped its game on productivity thanks to digitization, the construction sector always struggled to apply digital solutions to a fragmented market with huge levels of customization (materials, tool preferences, geographies etc). Now, all those variables can be digitized thanks to 3D printing technology. In fact, Dubai has announced that 25% of all construction projects will use 3D printing by 2030. This ambitious target also includes project costs being reduced by 50%, alongside labour costs cratering by up to 80%. Clearly, this all-in-one solution has a dramatic labour dependency(and safety) impact but there are there other technologies developing which will change roles rather than replace them completely.

One in five worker deaths in the USA are in construction. And, 34% of those fatalities involve falls from heights. Working at height is a necessity on many projects but, again, tech can help. Drones are not just transforming the battlefields of Ukraine. They are gaining real traction in the construction industry as they can be used to inspect difficult-to-reach positions on worksites, minimising the need for workers to access dangerous locations. Also, these remote-controlled ‘eyes in the sky’ are identifying potentially hazardous situations on sites before they become accidents. The use of drones for security is an added safety benefit and the overall cost savings could be significant. Indeed, PWC in their 2021 research estimated cost savings in the UK manufacturing and construction sectors alone of £1.6 billion by 2030, and a GDP uplift of £2.8 billion. Of course, these drones will need experienced human eyes and operators to deliver these benefits and should be considered productivity tools rather than human replacements.

While we should keep our drone expectations grounded, there is no doubt robotic systems on the ground are definitely going to become a more visible feature on construction worksites. The global construction robotics market was valued at just over $1 billion in 2022 and is expected to grow at a compound annual growth rate(CAGR) of 17.5% in the years 2023 to 2030(Source: Grand View Research). The following four companies appear to be leading the charge:

Construction Robotics : Its SAM100 machine that automates masonry work, completes the work of six skilled masons. The effectiveness of the machine has led to a 50% reduction in work costs and doubled the speed of building. It also provides MULE that lifts materials up to 135kg and can be fixed to a robot and operate in hazardous environments.

Fastbrick Robotics: Leverages innovative technology to automate bricklaying processes. The company’s bricklaying robot can lay up to 1,000 bricks per hour, equivalent to three masons. This means that a brick wall can be built within a few hours, a task which would take days if done manually.

Advanced Construction Robotics: Its key product is TyBot, a rebar-tying robot that fastens rebar on big building projects for bridges, tunnels, and more. Tybot helps reduce the time it takes for workers to tie rebar by about 8 times and cut workers’ time in hazardous areas by up to 70%.

EksoWorks: Company designs industrial exoskeletons to provide increased support for workers performing manual tasks such as lifting or drilling. This technology helps workers to maintain full range of motion whilst minimizing physical stress, resulting in fewer injuries, improved efficiency and decreased worker compensation.

All of the above look set to transform costs, speed and safety. Also, as an asset heavy industry, construction might seem to be a natural fit with technology hardware. However, there is a real opportunity for a massive leap forward in the integration of digital/software intelligence(AI) and hardware. The connectivity of the internet and the data-gathering abilities of all hardware through IoT sensors(‘Internet of Things’) opens up new ways to pair hardware with high ROI insights. In particular, we can see four key benefits from better project intelligence:

Optimize equipment usage and work schedules
Model best practices and education using predictive AI
Monitor worksites and mitigate risk by identifying hazards and unsafe practices
Use AI insights and predictive abilities to reduce waste

This is the ‘holy grail’ for heavy industries like construction; connecting hi-tech equipment with advanced analytical power to boost worker productivity and safety. As a final observation, there is a genuine probability that workers’ mental health will also benefit from this investment in making work better and safer. It feels like there are lots of technology safety wins to come and it will be super-interesting to see what the Construction Safety Week will be celebrating or printing in 2030!

Watch The Virtuous Circularity Of AI, Data Centres & Community Renewal

Mon, 01 Jan 2024 05:46:38 GMT

As Big Tech reported its latest quarterly results to Wall Street last week it became very clear the ‘swing factor’ for investor comfort has become the performance of the respective cloud businesses of Amazon, Google and Microsoft. Cue some gnashing of teeth at Google’s Mountain View headquarters as poorly received cloud business revenues pushed the Google share price down almost 10% at one panicky point. It wasn’t that Google’s $8.4 billion of quarterly revenues were bad. It’s just that market expectations are very very high, and it’s all about beating those lofty expectation.

Microsoft did just that, posting intelligent cloud revenues of $24.2 billion. That big dollar number isn’t even the driver. It’s the growth, a whopping 28% increase on last year’s quarter compared to Google’s ‘disappointing’ 22%. This fired Microsoft’s share price 6% higher, joining Amazon, another cloud-driven 6% positive share price mover, in the cloud-happy zone. However, don’t let cloud services, ahem, “cloud” the big picture. The cloud is the big tech hosting environment for all of our business and personal digital apps and services but there’s a new kid in town. An intelligent one, or almost. Artificial Intelligence(AI) has its fear-mongers thanks to the rapid ‘creative’ impact of generative AI applications like Dall-E and ChatGPT but AI data science has been around since the 1950s. The key to the recent rapid evolution of AI has been big tech companies leveraging scale to reduce costs and huge advances in semiconductor chips’ computing power. This has had a massive knock-on effect on the data centre industry and its infrastructure footprint.

Data centres, like AI, are not new. Originally, they were the hubs used by telecommunications companies in the 1990s for hosting the internet. Then the iPhone and smartphone revolution came along and data generation exploded. Data centres became critical for storing this data and for processing capacity which brough big technology companies into the mix. The data centres became larger, housing state-of-the-art cooling systems, redundant power supplies and hi-tech security systems. Resilience was key, and SilverBack assisted in the ‘mission-critical’ construction of these data centres as the backbone of the digital economy. However, what we are witnessing in more recent projects for Microsoft in Gävle, AWS in Västerås(and Eskilstuna + Katrineholm), and Eco Data Centre in Falun suggest a step-change in the pace of data centre infrastructure build. The clue as to why was probably a few months after ChatGPT had raced to 100 million users in less than half a year.

In May 2023, the newly crowned trillion dollar poster child of AI, Nvidia Corp, upgraded their projections for demand (revenues) for their market-leading AI model training chips – known as Graphic Processing Units (GPUs) – by a whopping 50%. Yet, the bigger story according to Schroders’ analysts was “hiding in plain sight ”. Nvidia in their call with Wall Street’s analysts explained the uplift to their projections by mentioning ‘data centres’ no less than 56 times. Clearly, the destination for these advanced GPU chips needed to be premium performance, secure and stable data centre environments. The cloud and data centres have become interchangeable proxies for the same growth story, AI. The size of the growth is up for debate given we are in the early stages of AI but there are estimates of data centre power consumption in the US alone, doubling by 2030 to 35 gigawatts. We will return to power consumption a bit later but let’s first deal with construction.

Microsoft has put aside $13.5 billion for the building of data centres to support cloud and AI growth. And the headlines keep coming. Check out the following:

Green breaks ground on two data centres in Zurich – Reuters

Japan Govt To Subsidize Half Of Y40-60 Billion Cost For Softbank’s Data Centre Construction – Nikkei

Amazon To Build Three Data Centres In Dublin – The Irish Times

Arguably, data centres are the most obvious digital shovels for the $15.7 trillion AI ‘gold rush’ contribution to the global economy by 2030(Source: PWC). However, in a climate emergency, the huge power consumption of these data centres is rightly becoming a sustainability issue. Thankfully, big tech is meeting the challenge head on with increased focus on using renewable energy sources and upgraded efficiencies. The key metric for efficiency is PuE or Power Usage Effectiveness and the average for data centres globally is 1.6. The highest possible efficiency is a PuE of 1.0 but Microsoft’s data centre in Gavle, Sweden, is hitting very impressive levels of 1.2. In fact, Microsoft has a goal of transitioning to 100% renewable power by 2025, and a further goal to becoming carbon negative by 2030. Other initiatives to partner with local power utility, Vatenfall, to increase efficiencies and a separate project to digitize Gavle’s port operations are further demonstrations of a regional government building on a sustainable future for data centres. Dublin is not going to miss out either.

Recent announcements by Amazon to build three data centres in Dublin have been accompanied by encouraging data on the impact of Amazon’s cloud business, AWS, on Ireland already. The report card looks pretty good:

AWS has contributed €11.4 billion to Irish economic output since 2012, and €2.4 billion in 2022 alone.

4,200 direct jobs with AWS and a further 10,000 jobs nationally, supporting skills training and partnerships with third level educational institutions.

Creation of world-class ecosystem. AWS data centres provide emplyoyment for 3,000 working with 500 AWS suppliers. Many of these firms have expanded abroad as market leaders in data centre construction materials and services.

Community education: The AWS Think Big Space promotes STEAM related learning and careers. Since launch, 7,000 students and 425 teachers have engaged with the programme.

AWS is on track to power its operations 100% with renewable energy by 2025 and is committed to be water positive by 2030. Currently AWS is managing to cool its data centres for 95% of the year without using any water, and just using outside air cooling systems.

It would appear that AI, data centre sustainability and community builds are all enjoying the right direction of travel. And, just to juice those positives further, what about “mind blowing” new chip processing speeds? Only last week, Davide Castelvecchi for Nature reported, “ A brain-inspired computer chip that could supercharge AI by working faster with much less power has been developed by researchers at IBM in San Jose, California. Their massive NorthPole processor chip eliminates the need to frequently access external memory, and so performs tasks such as image recognition faster than existing architectures do – while consuming vastly less power.” Scientists have described the energy efficiency as “just mind-blowing”. If so, it won’t just be Nvidia and Microsoft recording blow-out quarters. The global roll-out of data centre facilities might only be in its second innings. Telecoms first, internet next…… Skynet anyone?

Green For More Than One Day

Sun, 18 Jul 2021 06:20:48 GMT

As St Patrick’s Day celebrations approach, it is worth reflecting on the tradition of the world ‘going green’ for one day every year. And, then knowing that the world has changed. It might have been the horrors of Ukraine’s invasion and the subsequent energy crisis which ended St. Patrick’s annual monopoly on lighting-up the planet’s most famous monuments, but that one-day colour make-over has now been adopted to drive an everyday existential mission for Europe and the world. Climate change threatens us all and has prompted an update Communication on the European Green Deal from the EU Commission in the past week. The Commission’s messaging was stark and clear:

*2023 was the hottest year on record.

*A whopping 37% of Europeans already feel personally exposed to climate risks.

*The most recent data from the European Environmental Agency indicates air pollution caused 240,000 people to die prematurely in the EU in 2020.

*€1 trillion from NextGenerationEU Recovery Plan and the EU’s 7-year budget will finance the EU Green Deal.

Back in October 2023, the Commission detailed the Green Deal Industrial Plan, which is designed to scale up mass production of clean technologies in the EU. Indeed, Ursula von der Leyen, European Commission President, was in no doubt that an industrial revolution is under way.

“So, if you were wondering whether a share price moving by more than 200% in less than a year sounds like irrational exuberance you’d be wrong too”

SilverBack’s own mission statement features its commitment “to build the industry of tomorrow” and, as Stockholm’s parade sponsors for St Patrick’s Day again this year, we believe Sweden is a fantastic illustration of Europe’s determination to drive the cleantech revolution. Of course, there is a touch of Irish green in the cleantech story as SilverBack and many other Irish firms are key players in the construction of battery gigafactories, hydrogen-fueled manufacturing plants and high-precision life sciences facilities, not just in Sweden but across Europe. The most recent available data (2022) from Enterprise Ireland highlights the rapid growth of Irish exports of goods and services to Europe in the hi-tech construction sector:

*Engineering exports to EU increased by 21% to €2.33 billion

*Hi-tech construction &housing exports increased by 17% to €2.79 billion

*The top 10 Irish contractors (per Irish Construction News) generated a combined €4 billion of sales globally (ex Ireland).

Undoubtedly, these figures grew again significantly in 2023 as investment accelerated into industrial projects shaping Europe’s decarbonised future . We have written previously about the huge funding rounds achieved by two Swedish companies, H2 Green Steel and Northvolt, but we have also seen corporate investment activity pick up in the hi-tech construction and engineering sector. Ireland’s H&MV Engineering, majority-owned since 2022 by UK private equity firm, Exponent, has recently purchased Tipperary-based Skanstec, Blackstone is reportedly acquiring Winthrop Technologies and Jones Engineering was bought by US-based Cathexis Holdings in 2022. Clearly, there will be more green cleantech deals, and not just Irish ones.

At a European level, the EU Green Deal is thankfully a real multi-year mission to lead in the net-zero technology sector. So, from Stockholm, we take a St Patrick’s Day opportunity to wish all our staff, partners and clients well, as we work together for a successful everyday green future.