The Netherlands lacked solar power plant builders. That gave us a boost, says Aleš Spáčil

Knowing your strengths

Let me return to your entry into foreign markets. How significant are the barriers you have to overcome when you establish a Czech company targeting Germany and other European countries?

I tell myself that perhaps one day, when I finish with my own business, I will advise companies on how to enter foreign markets. Czechs tend to be overly cautious and afraid to venture out into the world. Another major Czech weakness is poorer foreign-language skills compared with countries such as the Netherlands, Belgium or Denmark. My basic advice would be not to be afraid to do things honestly, clearly and transparently. And to have a clear idea of the strengths I can offer the market. I will not lie to your readers – we started out by competing on price. Today, our clients are interested in something else – above all, flexibility. All of Europe is struggling with a shortage of people to build power plants. We have the know-how to assemble teams of workers from former communist countries and manage them operationally. At the outset, it is important to study the legislation of the particular EU country thoroughly and then monitor legislative differences in other member states. A huge advantage of the EU is the harmonisation of law. Once you learn the basic rules, you are able to work in any European country. This applies not only to labour, but also to supplying goods.

Do you encounter any protectionist barriers?

We do. They are more about the problems in different countries with recognising Czech occupational safety standards and individual certifications. We have always found a way in the end, but in Italy and France specifically, it is very bureaucratically demanding. They have very detailed standards that discourage many companies. A local consultant can help.

So among your subcontractors, which send worker teams to foreign projects, there are also companies from other Central and Eastern European countries. Do Czech companies remain among them?

Czech companies are still among them, but their share is declining. If you compare current inflation in Czechia with relatively lower inflation in the eurozone, while the koruna-to-euro exchange rate has not changed significantly, you find that Czech labour has become relatively expensive. At the same time, opportunities in Czechia are genuinely increasing substantially. There are not many available workers, which is why we are bringing in worker teams from neighbouring countries. And for certain work, we hire teams directly in the country where we deliver our installations – typically electricians who connect the power plant to the grid.

Could we look at where you source the individual components? Solar panels probably come mainly from China…

They come from Asia. It is not always China…

Which other countries?

Vietnam, India, Turkey. However, a great deal has changed in this respect since I started. Panels have effectively become a commodity. If a contractor chooses from standard panels recognised by banks and included in the top tier of Bloomberg’s list, they cannot go wrong. Banks conduct their own technical analyses, and Bloomberg’s list is updated once a quarter. Another key component is inverters, which are supplied to Europe mainly by four companies – two are Chinese, while the other two are not Chinese but also manufacture largely in China. Europe accounts for a smaller part of total production. You cannot go wrong here either. From this perspective, the most complicated choice is the mounting system, where surprisingly, in our experience, mistakes can be made. The mounting system must not damage the roof; it has to last not only for the warranty period but for twenty-five or thirty years, it must not rust and must not start wobbling after a few windstorms. Choosing a good mounting system is an art; there are a vast number of manufacturers. Fortunately, thanks to our long-term experience, we have already selected suppliers that we know are of very high quality.

Nobody took up the challenge

Are there any Czech suppliers among them?

No. To be honest, I thought there would be an opportunity for Czech suppliers in this segment and that they could thus make an impact on the global solar industry. But nobody took up the gauntlet. There are manufacturers of mounting systems in Czechia, but their products would have to be significantly better and they would have to want to venture out into the world. We work with foreign suppliers because they have proven themselves for us.

Do you think Czech manufacturers could still establish themselves in this segment on foreign markets?

I am afraid the cards have already been dealt. The product would have to be distinctly better than what is currently on the market.

So from Czechia, you export services – besides the final solution and your know-how, you also supply labour. In the category of goods exports, these may be more like re-exports?

Not even re-exports, rather exports of goods from another country. We purchase them at a port in the Netherlands and transport the components directly to the installation site.

Your first step on the way to the Netherlands was a trade fair stand. I assume that participation in trade fairs remains important in your sector…

Certainly. We do not target consumers; we provide the final delivery for investors in photovoltaic projects. I would recommend that everyone in an industrial market arrange as many meetings as possible in advance at a trade fair. At a recent trade fair in Munich, we had nearly one hundred pre-arranged meetings with potential partners over three days. These are not visitors who happen to notice that we are there. Such meetings do not, of course, have to take place only at trade fairs. In cooperation with the CzechTrade agency, for example, we invited local companies to a seminar at the Czech House in Brussels. A similar meeting took place at the Czech embassy in The Hague. We presented what we do, but also arranged for the participation of a local Dutch lawyer, a representative of an insurance company specialising in solar power plants, and one of our satisfied customers. A lively discussion was followed by networking, with Czech food and beer available. Within four months, we had orders in the Netherlands worth more than one million euros from new clients we met at the embassy in The Hague.

Will you continue with similar events?

We thought CzechTrade was the right channel. We are now preparing a similar event in Rome and may organise it ourselves. It is good to have a mention of the official patronage of a Czech state institution on the invitations and for the event to be opened by the ambassador. But it can also be done without the Czech lion emblem. The important thing is to invite representatives of local companies to an attractive venue that feels suitably prestigious.

How else could the Czech state support companies in your sector?

I do not think direct financial support is entirely necessary. Knowledge-based and image support are important. For certain volumes, export loans are a good thing.

Would you use, for example, an export loan backed by state export credit insurer EGAP?

We do not need one; we are growing organically and do not have a single koruna in loans. Hypothetically, I can imagine that a company from the Vysočina region could manufacture mounting systems and succeed in the first phase – someone abroad might say they would like to buy from it and like its product. Such a company would probably need help financing the delivery, because foreign competitors are more or less able to arrange this.

What should knowledge-based support look like?

When most companies enter foreign markets, they need high-quality market analyses – from both a customer and a competition perspective. Such analyses must be carried out by someone who understands the nature of the particular delivery and does not confuse different business models. A number of companies would probably also welcome initial help finding potential customers. None of this should be done formally, but with expertise and a genuine desire to help.