Watrec is ‘all in’ when seeking business in Vietnam
Watrec, which supplies biogas plants, is steadily progressing toward the first sale in Vietnam. Without support from Finnpartnership, the effort would not have been successful.
Watrec Oy, which is based in Forssa and focuses on environmental business, designs and implements biogas plants. The solution developed by the company allows renewable energy to be produced from organic waste and waste waters in a cost-effective manner. The company, which was established in 2003, has implemented several projects in Finland, but the international markets have also been a focus from the start. Watrec Director Kimmo Tuppurainen says that internationalisation, however, is difficult for a small company seeking organic growth. The company has prepared several internationalisation strategies and analysed different target countries over the years. “Despite good planning, surprises were often encountered that have either prevented or completely redirected operations to a new direction. This requires the company to be flexible and ready to change”, Tuppurainen explains.
Major benefit from Finnpartnership support
Watrec has not let difficulties hinder efforts and now seeks new opportunities particularly in developing economies. Business partnership support provided by Finnpartnership has a been a great help for this effort. The support received in 2015 was used by the company to commission country analyses of potential target countries and identify partners in them. “We commissioned country analyses for South Africa, Mexico, Indonesia, Thailand and Vietnam. After further analysis, we decided to focus particularly on Mexico and Vietnam.” Tuppurainen says that the support from Finnpartnership was a very important additional resource for the small company. “Without the support from Finnpartnership, we would not be here now, as we couldn’t have even gotten started with strictly internal resources. We were able to use the support to identify potential markets a lot quicker.”
Vietnam became the number one target market
Watrec has had its sights set on a large project in Mexico already for a while where a large biogas plant is being planned for processing the waste generated from the wholesale market in Mexico City. Preparations for the project are still under way, however. In Vietnam, Watrec has been working on a sale for over a year. Additional momentum was generated by a trade commission by Lenita Toivakka, Minister of Foreign Trade and Development in the spring of 2016. According to Tuppurainen, it opened doors to meet with both government officials and company representatives. “It looked like there was lots of opportunity in Vietnam right from the start. We have decided to be ‘all in’ with our efforts there. However, according to our estimation, creating the first sale there will require a few years of work.” Due to the support from Finnpartnership, Watrec has been able to carry out preliminary analyses in the country. Based on the analyses, the company has also hired a local contact person in Vietnam to be responsible for seeking contacts and building awareness on the technology offered by the Finnish company. “A contact person who understands local language and business culture provides Watrec with a local image.”
Local presence vital
Tuppurainen emphasises that local presence in a country like Vietnam is absolutely vital to create a sale. The management of the Finnish company must also become known on-site and allocate a lot of time for meetings. “There is no point in merely sending quotes via email. Instead, personal relationships must be created with potential partners and clients.” Potential Watrec customers in Vietnam include local companies and cities that are seeking effective solutions for accumulating waste heaps and waste water problems. According to Tuppurainen, the country also has a lot of interest in renewable energy sources.
Customer acquisition cannot be supported with the business partnership support offered by Finnpartnership, but in addition to customers, Watrec has also sought to identify cooperation partners to work with on biogas projects. “A partner may be a waste management company or a large construction company that assumes the overall responsibility for the project. We are responsible for the equipment and process design and delivery, installation, adoption and warranty service of the equipment. Watrec is also interested in Indonesia and Thailand. According to Tuppurainen, however, the company has decided to focus its resources currently on Vietnam. Vietnam has long been a target country for development cooperation for Finland. Tuppurainen has observed that Finns have a good reputation in the country. “However, it is a significant challenge to positively differentiate from Japanese, Korean and German competitors. The best way to accomplish this is to establish trusted relationships in Vietnam.”