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INTERVIEW

He strides through the corridors of the building, with all manner of cabinets lining the walls. “We've had to temporarily move the archive into the corridor. We need all the space we can get for extra workspaces.” In December 2012, Menno Holterman took over the reins at Nijhuis Water Technology and his plans for the company soon became clear. He wants to have the water technology firm from Dinxperlo in the Achterhoek region of the Netherlands expand to become a robust international player. “Nijhuis is currently operating in 50 countries, but we're definitely aiming at getting that up to 176 countries.” He isn't picking a figure out of the air; this is the number of countries in which Holterman's previous business, Norit, was active. In 2011, the water and environmental technology arm of Norit was sold to the American company Pentair for 750 million dollars. Smart takeovers and solid development of technology had also led to Norit elevating its international status to that of a major supplier of clean process technology. Together with one of the former senior finance executives from Norit Clean Process Technologies, Ronald Ruijtenberg, Holterman has now made the move to Nijhuis Water Technology. “Are we looking to turn Nijhuis into a new Norit now? No, that makes it sound like a copycat job.” Holterman wavers momentarily before continuing. “Though, obviously, I would like to build a new world-leading business one more time, a company that makes a difference throughout the world. The sale of Norit was a good deal, for us and the shareholders too. Nonetheless, I had a sense of things still being unfinished for me.”

this is highly ambitious, particularly in the current climate”, Holterman acknowledges. “I know that several parties have attempted to tackle the water technology market in recent years. Many have fallen by the wayside. The water technology market is difficult to fathom for external investors, not least because of the strong influence exerted on the market by the public sector. I'm not saying we've got the magic touch, but we know the ins and outs of the market and we've done business in a large number of countries. And that's the crucial factor. Of course, we saw a great deal during our time with Norit, and we'll be able to put those lessons learned to good use now.” Holterman stresses that this is where Naesta will have to distinguish itself. “We aren't a standard investment fund; we're an ‘industrial private equity’ fund. It's precisely our ‘industrial’ focus that makes us unique as investors. We're focused on this specific sector, which we know like the back of our hand.”

Revenue model He flips open his laptop and uses a few graphs to show the significant shifts in the market. Major multinationals such as Danaher, Xylem or Pentair are looking to scale things up more and more in order to satisfy shareholders on the stock market. This entails increasingly big takeovers. “The big boys are heavily influenced by one another. The bar is set at around 250 million dollars in terms of turnover; that's where a takeover becomes interesting for them. At the other end of the spectrum there are plenty of new companies springing up with new technologies. Often spin-offs from the universities. However, there is a vacuum emerging in the middle group of solid SMEs, and we think we might be able to play a role there.” The magic touch He cites Nijhuis as an example. “It's got a rock-solid position in Following his departure from Norit, Holterman proceeded the industrial wastewater market, particularly when it comes to to focus his efforts even more intensively on the innovation dissolved air flotation, a tried-and-tested, robust purification strategy of the water technology sector and the top sector technique.” And yet Holterman believes there is still plenty water, organizing an industrial leaders forum at International more to be gained on the market, though to this end the Water Week in Amsterdam and taking a seat on the advisory company's revenue model will have to be adapted. He would like council of the Blue Tech Forum, an annual event for to offer more ‘total solutions’ and make things ‘hassle-free’ for international investors in the water sector. the customer, e.g. by taking over management of purification, Behind the scenes he was working with Ruijtenberg on a new processing and anaerobic digestion facilities as well. This will also investment company, Naesta, specifically focused on the enable Nijhuis to increase the share of repeat business water technology market. “Naesta is Icelandic for ‘next’. The contributing to its overall turnover. name reflects what we're aiming for”, says Holterman. The The step towards an integrated approach is striking, precisely first step for Holterman and Ruijtenberg was to acquire a because various major technology companies are moving in the 20% stake in Nijhuis Water Technology. This is a strategic exact opposite direction – partly prompted by the economic move too, since Nijhuis was owned by Egeria, an investment crisis – and shifting their focus back towards the hard supply of firm set up by Peter Visser and members of the components. “Exactly, which frees up space”, says Holterman. Brenninkmeijer family in 1997. Over the next few years “This is essential. Partial solutions are not what customers are Naesta aims to invest 50-100 million euros in the water looking for. Certainly not in the markets we have in mind, such technology market in conjunction with Egeria. “Obviously 17


INTERVIEW

‘The industry needs to put its back into it. That's where we'll see the real innovation’ as agriculture, food & beverages, where we already have solid representation, though also in the gas and oil sector, for instance.” These ambitions will call for investments to be made, Holterman realizes. “We need to have even more proprietary technology and innovation in-house. Only then will we be able to maintain a grip on pricing and capitalize on developments in emerging markets. What's more, we are expanding rapidly, and we're in need of at least forty new staff both in the Netherlands and at our sites abroad.” Champions league Holterman is fully aware that he has been turning the company upside down since he arrived. Nijhuis Water Technology was primarily known as a company experiencing gradual growth and which, despite major international assignments, was keen to avoid being exposed to excessive risk, as well as to excessive publicity. Now that the new management has upset the apple cart by embracing the risk of such a new venture, the company could be in for a shake-up. “The company has done really well over the past thirty years, but the handbrake wasn't fully off. We're releasing the handbrake now and obviously I realize that this means we'll be asking rather a lot of everyone. So we'll have to make sure we're not getting too far ahead of the troops. That's the first law of change management. Sometimes, though, I like to compare it with a football club. We've got a great squad, and so we're aiming to get into the Champions League.” Nijhuis is thus the pivot in the investment plans, but as the financial backer Holterman also wants to look emphatically at other companies. This may be from the perspective of Nijhuis if the activity ties in well with its business, but it could also be from investment company Naesta. “A start-up could profit from this were Nijhuis to back it. This makes it easier to win customers. Or you make the most of offices' international network.” His ideal is to ‘create a community’ of complementary water technology firms, including leading universities and research institutes. “This doesn't have to be limited to the Netherlands or Germany; we're also looking at the USA, Canada, Israel and Asia, for example.” Straightforward equation In view of the current economic slump, the plans sound almost too good to be true. At present, the Dutch water sector too seems to have become vulnerable to the recession. 18

Investors are wary about entering the sector, to say nothing of the banks' position. “It goes without saying that the current situation is completely different to what it was like a decade ago. Back then you'd have no trouble financing a takeover with 90% borrowed capital. Now it's cash upfront”, states Holterman. He is nevertheless convinced that he will fulfil the plans for growth. “It's a straightforward equation. Firstly, the industrial wastewater market is still growing. Secondly, regulations are getting stricter, particularly at international level. And thirdly, industrial customers throughout the world are realizing that sustainability leads to lower operational costs. We can profit from those three developments. I call it ‘realizing the value of (waste)water’. A shift in the value chain is under way. Consider the attention being devoted to recovering raw materials and energy; the water sector is in the midst of all that.” For years now there has been talk of the significant potential of water technology, but the breakthrough has yet to be made. Holterman regards the industry as the potential crowbar. “The industry needs to puts its back into it. That's where we'll see the real innovation. Within the Dutch Top Sector Water approach, the triple helixer cooperation between government, industry and science to boost innovation and market growth, the emphasis is still far too much on the public domain. I've been arguing for years for increased equilibrium between innovation strategies”, Holterman says, giving in to the temptation to reflect upon the sector as a whole. He has the impression that the Netherlands is overly fixated on working on high-tech development. He sees a strong need for simpler technology in the emerging markets. “High-tech is obviously great, but in India or Africa it's often the case that you're not going to do very well out of it. For those markets you'll frequently find yourself having to downgrade a high-tech solution until you end up with an inexpensive, properly functioning, entry-level model. Us Dutch are not particularly good at doing that. We're fixated on thinking high-tech.” For that reason he contends that more attention should be devoted to project management and development of integrated system solutions. “What we are really good at is linking up various systems and developing innovative processes within a number of niches, such as in processing and recycling wastewater and recovering valuable raw materials. This is where we can distinguish ourselves across the globe. Incidentally, this will enable the water technology sector to learn a great deal from other top sectors.”


INTERVIEW

Water purification facilities at a chicken slaughterhouse in Russia. (photo: Nijhuis Water Technology)

Transformation of a water technology company ‘Sustainability’ “We're keeping a close eye on the market. It's increasingly all about sustainability”, says Area Manager Johan Hekkenberg. “When I started out at Nijhuis eighteen years ago, the only thing that mattered was getting pollution and contaminants out of the water. Now we extract useful substances from the waste streams, obtain biogas and generate energy. And the developments in this regard are thick and fast. At present, we're looking with customers at going beyond merely satisfying the requirements and actually reducing the discharge levy, looking at how the customer can generate maximum returns.” Egeria Thus Nijhuis is designing the entire processing line for a Based in Dinxperlo, a stone's throw from the German border, major slaughterhouse and meat processor, the upshot being the company has been around for eighty years now. Nijhuis that nothing is wasted and everything is put to good use. is chiefly active on the market for industrial wastewater The oil and gas markets have their eyes on us as well. purification, such as in the food and beverage industry, oil Nijhuis has supplied water purification equipment for such and gas, and agriculture. Thus it supplies a large quantity of entities as a refinery in Basra (Iraq). It is also supplying the equipment to slaughterhouses and meat processing firms. purification for a refinery in Kazakhstan twice the size of In 2008, Nijhuis Water was acquired by Egeria, a private Botlek. investment company, among other companies. The company 140 people work for Nijhuis Water Technology, 40 of set out on a new course and proceeded to expand beyond whom are at sites in Moscow, Warsaw, Chicago, Jakarta and classic water treatment. In 2011 it acquired biogas specialist Bogota. Over half of the staff are educated to higher or Thecogas, enabling Nijhuis to offer its customers complete, university level in technical subjects, says Hekkenberg. integrated wastewater treatment, anaerobic digestion and “We're not far off being an engineering firm with its own energy recovery. The arrival of the new investors and production facility. Apart from the engineering, we have a directors means that Nijhuis is now undergoing a remarkable separate research department which develops a great deal transformation. The strategy is geared towards rapid of proprietary technology.” Hekkenberg is anticipating that expansion and bringing in new technology and knowledge the future will see Nijhuis doing more research-related work so as to fulfil its ambitions of becoming an integrated in partnership with other companies and research institutes. technology company. “Just take a look at the number of vacancies on the website”, laughs Debby Martinus, Sales & Marketing Coordinator at Nijhuis Water Technology, when asked how much the company has changed since the arrival of Holterman and Ruijtenberg. “We're growing very rapidly.” She shows us the production area, where staff are hard at work making towering flotation units. This purification technology, dissolved air flotation, has made Nijhuis Water Technology big. In the same production area several engineers are also installing a digestate treatment unit in a container, which is to be shipped to a customer in the UK.

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"We have to grow rapidly"  

“We have to grow rapidly” is the title of an interesting article about Menno Holterman / Nijhuis Water Technology published in Water Forum m...

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