With what technology did you enter the Southeast Asian and Chinese market?
We invented technology that reconfigures the idea of waste-water treatment by designing and building water recycling plants that are much smaller than regular distributional plants. They are actually botanical gardens placed in green houses using complex ecologies. It is a habitat for diverse bacterial culture which metabolizes the contaminants in waste water. These water recycling facilities can be built inside cities, where the waste water is generated, so the urban water cycle can be closed and water reused. And thus urban sustainability on the water cycle can be achieved. There is an unprecedented urbanisation going on in China and in other parts of Southeast Asia. And we naturally go to places where the most new cities are built, where people are moving to cities because that is where the action takes place.
What is your biggest competitive advantage in Southeast Asia?
For example, the city of Jakarta has around 10 million people and there is no sewage system. Almost 100 % of the population is served by septic tanks. Our particular solution, can be similar to jumping from landline telephones to mobile solutions, so Indonesians can forget about building these huge facilities 30-50 kilometres outside the city and then pumping the treated water back. They can scrub that stuff and build localized treatment plants in the city. Indonesians recognise the advantages and they have the right mind-set to implement such solutions. The developed countries went through the same path. If there is better solution today, why not to skip the traditional path.
Do you think it is easy to fail doing business with Southeast Asia?
It would be interesting to develop some statistics on the failure rate of non-Chinese companies trying to do business in China. Anecdotally, I think that the rate is very high. The answer to the question is yes. There are several reasons. One is that the culture is so different and that it takes a lot of effort to tune in, to understand, to avoid misunderstandings which are built into the situation. Just trying to understand how the system works over there is a tremendous challenge.
Did you experience any culturally difficult situations?
Yes, there are strange situations, but my philosophy is to try tuning in as much as possible. On the assumption that there is a reason for everything that is happening. What looks funny to me is totally normal to another culture, and I am the one who, with the particular customs, with the particular set of manners, is the laughable one. So these situations happen mutually. I can´t emphasise enough the importance of trying to bridge cultural differences. Usually it is not enough to know that their relationship to time is different. If you can´t adjust to that relationship then you are due to fail.
How do you build partnerships in China?
One of my early experiences was that time is warped in China. By that I mean that the time when nothing is happening in our society, at least in my business practice in Europe and the US, is relatively homogeneous. It is happening evenly. In China, things don´t happen for a very long time and then there is an incredible acceleration. The idea of momentum is very important in China. It took me a good year to understand what that means. We had a meeting with our Chinese colleagues on Tuesday, and on Thursday I said we should write a memo about this meeting. And the colleague said: What for? It is two days later, the momentum is gone. Even if it was a good meeting, if we didn´t follow up within 24 hours or even within hours with a phone call – they don´t read emails – or some formal follow up, it is gone. The whole idea and engagement cools down and it is very difficult to revive. We can illustrate it with the table tennis that Chinese play very well. They try to serve to you and if you cannot reply, they just move on. They wouldn´t try to play with you again, because apparently you cannot return the serve.
How many employees do you have in China right now?
Currently we have our engineering and R&D centre in Hungary. It is functional to expand your activities to local markets by definition, but we know today that our engineering office is more efficient, less expensive, and much more competitive than if it operated in China. We started with stabilizing sales office in these countries. We currently have 15 people in China and 15 projects under construction in China. Because these projects are already signed and are going to be executed soon, we have to hire project managers, so they could manage the process.
How did you manage your projects in Southeast Asia and China? Did you receive any governmental support at the beginning?
We were not supported by the Hungarian state, or any other state. Our company has 5 private equity funds. You can consider us more like a start-up. We invented our technology and went through regular ABC rounds of raising capital. Market entry requires a tremendous amount of financial resources and commitment that partners and potential buyers recognise as a commitment.
What is the meaning of commitment in China?
It depends on what people do in China. When you are engaged infrastructure projects, they have a long development cycle of up to four years. So two years ago, a mayor of Shanghai happened to come by sheer luck to our office, listened to me for an hour, visited our plant and said that Shanghai is a very progressive city and he would like to see if we can build our plants in Shanghai. And then you have to start to engage with a number of agencies, design organisations, export panels. And when you start the construction, in the middle of the project development cycle, will you still be in China? Or will you find the Chinese to be too difficult for you. The city officials also have to decide for a solution that hasn´t been tried in China and it can be risky. Particularly in the infrastructure field, everybody plays very safe for good reasons. There is an inherent, perceived risk in choosing untested solutions in that country. That is why the first phase, establishing yourself as a reliable partner, is difficult because they have to assume the risk. That risk might be perceived as technological, but there is also a huge financial and human element to that. When we went to China, there was no office, just nothing. So why would they commit with us? We needed a very strong convincing power, so one of our founders moved to China. You are no longer in a position that after you have had enough of Chinese food you go back. No, you stay. And all the Chinese people can see with their own eyes that it is true and we can do this.
Is it difficult to get new solutions adopted in China or Southeast Asia?
It is true universally. This is not the Chinese problem. As a matter of fact, we found out that this problem is stronger in more developed countries. I am not sure that China is in the developing countries category, but in some ways it is, and I think China likes to play this role to keep inviting new technologies and using all the benefits of being labelled as a developing country. So we find that the more the country is developed, the bigger this particular problem is. In Australia or the US, the regulation and also the level of conservatism increases – particularly in infrastructure projects. In our experiences, it is actually easier to get new solutions adopted in Southeast Asia.
Attila Bodnár, Organica Water Company
Attila Bodnár has over 30 years of experience in corporate management and architectural design. Prior to co-founding Organica, he was Managing Partner of Denker & Bodnar Architects, an architectural design and construction firm that received numerous architectural awards in both New York and Hungary. Previously he co-founded and managed a safety technology start-up PAJ America.
Organica Water is a wastewater treatment plant company founded in 1998 and based in Budapest, Hungary. The Company’s mission is to provide products and services which enable customers all over the world to build and operate space and energy efficient biological wastewater treatment plants that blend harmoniously into urban and residential population centres, ultimately lowering infrastructure costs and facilitating reuse and recycling of treated wastewater. Organica is known for designing unique wastewater treatment plants that look more like greenhouses than traditional sewage facilities. More than 72 plants around the world have been built or are under construction using Organica’s plans.