Being one step ahead is the key to success
Petr Vasiliev, CEO, NeoZeo AB, talks about the importance of finding new markets.
NeoZeo AB is a relatively small company in the biogas landscape. They have used their size to their advantage. Petr Vasiliev, CEO, NeoZeo, talks about the importance of ‘finding your niche’, business strategy for shock resistant energy solutions, and why they focus on India.
NeoZeo is quite a young company in the Innovation Accelerator process, and you have focused in on biogas. Where does this interest stem from?
NeoZeo started in 2010 as a spin-off from Stockholm University, focused on innovations based on porous material. We focused on developing our porous materials for gas separation, by focusing on innovation in structuring the materials, in the form of powders, into microscopic forms. We spent two years, up until 2012 to identify the best markets. In 2012 we decided to focus on separation of carbon dioxide from methane which is partly biogas upgrading. We decided to focus on small-scale biogas upgrading.
You spent two years working on the product and understanding which markets to work with, what did this process involve?
The decision was mainly based on market evaluations, customer feedback, and analysing the global situation. We realised, to develop new products in areas where there is already a lot to choose from is much more investment intensive. So we decided that we would rather focus on a new upcoming market that is still small, but with huge market potential. That is why we decided to focus all our energies into the biogas upgrading area. It is a new market with not so many players. Many questions are still unanswered and we are working with a niche perspective.
What markets were you looking at when it came to developing this niche?
Europe first. There was a momentum in Sweden for biogas development. We understood that this was the future, at least for Europe and for countries with focus to convert large amounts of organic waste into vehicle fuels. And this is where India, China and South East Asia come into focus. We know that it might not be a product that can go to the market quickly today, for these countries, but we are confident it will be sought after solutions tomorrow. We are in discussions with actors in India who understand this as well.
Biogas focuses on website small scale residential and farm landscapes. For ISIA and beyond Europe – your strongest discussion partners are urban?
We are looking at sewage and sludge profiles when we define residential or city size. And in India, although we are talking about big cities, many of these have decentralized and multiple sewage treatment plants and each of them can generate a sufficient size of raw biogas for small-scale solutions.
Our focus on small scale is exactly on the decentralisation of production of vehicle fuel. And decentralisation is good for the cities where growth moves faster than infrastructure, which is often the case in today’s India. Since we work with upgraded biogas for vehicle fuel, this gives you a good opportunity to produce vehicle fuel independently from place to place in order to not destroy the total infrastructure in the city. It is shock resistant.
When you present this to the Indian market, a solution that focuses on decentralised energy management and development, what has been the reaction?
Most of the people I have met are business people. They are interested to promote the technology in India, and cooperate in construction of facilities in India. But at the same time they need to be sure of a strong customer base. And this is what is lacking, the confidence provided by strong investment and finance. This is a barrier in any market, where you have to build the implementation and trust.
We continue to engage with our Indian partners, and develop possible and positive business models with very competitive returns on investment. We will have a full-scale demonstration plant operational by the end of April-May 2015, in Uppsala, Sweden. This will help the touch and see component for investment reassurance.
Do you think having this plant on site will be good for future market development?
Of course investors and potential customers from India and anywhere else can come and look at the plant and this helps. But I believe that real investors would require seeing such plants in the Indian condition. And that is what we hope to have soon.
What we did during our last three trips to India was to tell people about who we are and why our product is unique and worth the investment. We are looking to these people who are interested in reliable technology. I think this takes a long time, and this is why innovation technologies often need the strong support of government. Cash flow is not always easy in these first steps. This is important if it can be proven that competition is low, and that there is a strong niche that can be developed.
NeoZeo believes that it has a unique product and is well placed to develop niche advantage in the Indian context. We look forward to our next trip later in 2015 to follow up on our discussions.