WisBusiness: Water businesses fight through rough seas for international sales

By Kay Nolan

For WisBusiness.com

Opportunities for Wisconsin’s many water-related industries to find business in other countries appear as vast as the ocean – but just as tricky to navigate.

Countries like Brazil and China have yet to install widespread wastewater treatment systems — the few that exist are only in the largest cities — and Canada is among nations whose water facilities are so aged and leaking that in Montreal, it’s estimated that 50 percent of water is lost on its way to consumers. But although the global market for water technology is undeniable, it will take patience, savvy and money to tap it, participants at Tuesday’s Wisconsin International Trade Conference in Milwaukee learned.

Representatives of Wisconsin companies already doing business in other countries offered tips, and Wisconsin Department of Commerce trade office directors in Brazil, China, Mexico and Canada offered help, as business professionals heard about the enormous need for equipment and processes to conserve, sanitize and reuse water in other nations, where rivers and lakes also need to be restored, after having been polluted or clogged with weeds and sludge.

The reality for American businesses eager to share their technology and sell their products, however, is that they’ll be dealing with unfamiliar governmental bodies, in places where fewer regulations exist to demand better water quality, and where local bidders are heavily favored for the work.

If you manufacture a standard product, find a local distributor, advised Anselmo Teixeira, a senior vice president at Siemens Water Technologies Corp., a Waukesha firm that has nearly 6,000 employees worldwide, and is part of the global electronics and engineering giant Siemens AG.

Siemens’ long-term international view is “Be there, localize, understand the language and produce locally,” Teixeira said. But it can be challenging, he noted, to find local workers with the technical expertise to fabricate and service your products; you must take measures to protect your company’s intellectual property; and importation taxes can be very high.

When scouting opportunities in other countries, be critical and realistic, said Teixeira. “Regulations are a key driver when analyzing potential markets,” he said. Unlike the U.S., where water quality regulations were established decades ago and are strictly enforced, in some countries, regulations are weak. The best business opportunities are in countries where regulations are evolving, creating a need for technology and services, he said.

Dennis Webb, vice president of sales for Milwaukee-based Badger Meter, whose company is eager to expand its worldwide presence beyond the North American water meter market, said “the water shortages all over the world are really driving the need to expand.”

But, he cautioned, “the standards in different parts of the world are completely different, so we have a good opportunity to help write some of the standards going forward.” And, he said there can be a large capital investment, especially for a company like Badger that manufactures products involving a lot of testing, a lot of automation and a lot of metal.

For companies willing to tackle the challenge, the Wisconsin Department of Commerce is eager to help arrange connections and foster what it sees as a wealth of opportunity.

In Brazil, for example, there is a huge market for wastewater treatment and environmental sanitation, said trade office director Magda Volker. She said 70 percent of Brazil’s water is in the Amazon region, but only 7 percent of its population lives there.

Only 49 percent of Brazil’s 192 million people have access to sewage collection, and of that, only 32 percent is treated.

The Brazilian government is committed to providing basic sanitation by 2020, but to do business there, U.S. firms must have a local presence in order to participate in project bids and must be prepared to face high tariffs.

Jane Dauffenbach, whose North Prairie business, Aquarius Systems, manufactures weed harvesters, said it’s been both rewarding and frustrating to sell weed-eating machines to countries as diverse as Nigeria, Malaysia, Iceland and Italy. As environmental awareness grows worldwide, the practice of using chemicals to kill weeds in rivers and lakes has dropped off, expanding the market for weed cutters, she said.

But, “you have to understand how to market and sell to various forms of government,” Dauffenbach said. “Ninety percent of our business is done with some form of government, from local, state and federal to international agencies like the World Bank. Only 10 percent is with private contractors or private entities like a golf course.” The bidding process can be extremely slow, she said.

Is the Milwaukee area seen as a water technology hub by other nations? Not yet, the speakers said, but the potential is there.

A lot of cities are vying for that distinction, including Toronto, which hopes to establish itself as a freshwater hub, said Nancy Ward, Wisconsin Dept. of Commerce trade office director for Canada.

Ontario has a governmental “center of excellence” focused on water technology, and boasts many environmental consulting companies that are doing remediation in the Great Lakes, she said. “But they don’t have level of (water science) academics, such as the degree program that Milwaukee has with the University of Wisconsin-Milwaukee.”

In any case, Teixeira urged water industries to “market America” to overseas customers. “Our water technology is very well-regarded globally,” he said. “It’s an industry in which we excel.”

But Dauffenbach added: “I encourage all companies to be ethical and expect to be doing a lot of educating … there’s a real good chance to sell snake oil, if you want to. People are depending on people in our industry to be the experts.”

Photo source