Local water technology businesses were warned Tuesday to learn from the mistakes of others as they look to expand their reach beyond Israel's borders, especially into the very lucrative US water-tech market.
"When a company takes its technology to global markets, there are a number of things that it must do in order to make it work in those different places," said Tom Pokorsky, president and CEO of Aquarius Technologies Inc. "You need technology that is adaptable in other markets and to surround yourself with people who are respected in the field, but one of the keys a company must have is time and patience to wait out the expansion process, as well as adequate funds to make it for the long run."
Addressing a session titled "Implementing Israeli Technology Abroad," on the opening day of the WATEC Israel 2007 conference at the Tel Aviv Fairgrounds, Pokorsky said that, while these factors are very important in determining a company's success in a foreign market, it was most essential that they understand the subtle differences between markets in the US, Europe and Asia and have the wherewithal to build appropriate business plans to fit those markets.
"There is a large Israeli water-tech company that is still losing money on their US operations because they have not done the right things in moving their business to the US.," he said. "They did not have the right people to get the job done correctly, and while they are making money in Europe, until they go through the right channels they won't be able to turn around their US sales."
Pokorsky said he learned that lesson quickly when he took over the company and found that the company's chief technology officer was not approaching the expansion into the US market in the correct manner.
"Companies here must understand, that in the US, it's a very different system than exists in Europe," he told The Jerusalem Post. "A company must pitch the product to the municipality where the project is being built and the design engineer, before being listed in the bid to sell to the contractor, while in Europe it is more likely that the municipality will not care about the specifics of a product as long as it can accomplish the task at hand."
Meanwhile, Oded Weiss, partner and CFO of Tel Aviv-based L Capital Partners, told the Post that in their global expansionist aspirations, local water technology companies should adjust their focus away from the developing countries in Asia in favor the biggest water-tech market in the world - the US.
"The market in the US for water tech today is bigger than all the other markets combined," he told the Post. "The need for more recycled water is increasing as more people move to states, such as Arizona, New Mexico and Nevada, which are short on natural water resources."
National Infrastructures Minister Binyamin Ben-Eliezer noted Israel's important role in combating the global water shortage.
"Israel's activities in the water technology industry puts us on the front lines of the battle to help solve the world's water crises. There is no question that we are facing a global crisis and there is no doubt that Israel is playing a major role to alleviate the problem."
In addition to Ben-Eliezer, Industry, Trade and Labor Minister Eli Yishai and Environmental Protection Minister Gideon Ezra spoke at the exhibition, both praising the contributions made by Israeli companies to the water technology sector.
According to Weiss, the US has a very large and deep-pocketed venture capital sector that is willing to pay billions to incorporate the world's best water technology into US cities.
"This presents a great opportunity for Israeli companies to gain a market share in the US - there is really a need, I believe, for Israeli technology in the US," he said. "It will take work to penetrate the market, but once they do, the American VCs will pay for the technology."
The Israel Export Institute predicted this week that the country's $1 billion water technology export sector will grow to some $10b. by 2010,
WATEC, the International Water Technologies and Environmental Control conference, is an annual exhibition that seeks to create a global market place for state-of-the-art technologies and solutions to the global water crisis. Some 250 local and international companies and executives from some of the world's largest water technology companies, including Siemens, GE and Veolia, have been invited to participate in the exhibition.