India-based solution for engineering shortage Frames

Now that the economy is picking up, the structural shortage of engineers in the Netherlands is once again becoming painfully clear. An Indian branch can offer a solution, says Andre van Berkel, director of Frames Group India. Ten years ago, the Alphen aan de Rijn-based company took the plunge and is now reaping the rewards.

One of the Frames projects (Photo: Frames)

The economy is booming in 2006 and Frames is growing. However, the company that designs and builds process plants for the oil, gas and biogas industry does not have enough engineers to do all the work. This hampers Frames' growth. The company looks for a country with an abundance of engineers and decides to open an office in the Indian university town of Pune.

Since July 2012, Andre van Berkel has been director there. Van Berkel manages fifty Indian engineers. He likes it there and recently extended his contract. "Life is good here, the climate is nicer than in Mumbai. Our employees agree. Many Indians come to Pune for their studies and then want to stay here."

Experienced engineers
Frames designs complete systems that the company assembles worldwide. To do this, Frames needs experienced engineers. "Our HR manager advised me not to hire school leavers. It takes too much work for a relatively small company like ours to get them functioning." But even experienced Indian engineers still need extensive internal training, Van Berkel acknowledges. "In India, engineering work is highly specialised. An Indian engineer with five years of experience has spent five years working only on his own trick. But we need all-rounders. Indians have to get used to that, but they also like it, because they can learn new things."

"Our HR man advised me not to hire school leavers."

Initially, this training took place in the Netherlands, but the company soon changed its mind. "In 2006, we brought our first batch of Indian engineers to the Netherlands for internal training. We even gave them a certificate afterwards. Not so smart, it turned out. Within ten months, they had all left. With their international certificate from Frames, they could quickly make a career jump. Logical really."

The Indian team of Frames (Photo: Frames)

Since then, Frames has only brought its Indian engineers to the Netherlands as part of a project, emphatically never for training. "Because it is still useful to send them to the Netherlands: they come back better. It also means they stay with us longer, because such foreign working visits increase status. "Then an engineer can tell his parents-in-law that he has to go to the Netherlands for his company. You shouldn't underestimate how important that is here. The pressure from the family can be very great. It is often the first generation that has studied. The family has incurred high costs and wants their child to be successful. You have to see requests for promotion in that light. For the family, it is very important which title is on the business card. You sometimes have to make concessions to employees in this respect."

Staff turnover
Such insights are essential to combat staff turnover. Like many Dutch companies in India, Frames initially struggled with high staff turnover. "When I came here, we had 30% staff turnover. When I came here, I thought I couldn't change anything, but at some point I realised that reducing staff turnover is crucial to success here. Otherwise, as an organisation, you are constantly pushing the reset button."

But how do you ensure that your staff stay longer and that there is less turnover? "People often think that it's all about the money. That they will leave quickly if they can get a rupee more somewhere else. But that is nonsense. You have to make it clear to them what the vision of the company is, set goals and show them their role and growth prospects in it. Indians are competitive and like to be challenged, to learn new things. Just like Dutch staff, in fact."

In addition, there were a number of practical reasons for the high staff turnover at Frames, according to a survey of staff conducted by an external HR consultant. The office, for instance, was at an unfavourable location, making the travelling time for many employees long. Frames has since moved to a more central location near a large train station. Frames also extended health insurance from just the staff member to the entire family. In doing so, Frames won over the employees' families, who, as mentioned, have a crucial say in the matter. Van Berkel: "In job advertisements in India, we present ourselves as a multinational and that comes with certain expectations. A tidy office and health insurance for the family are part of it." All efforts bore fruit: staff turnover fell to 9 per cent in three years.

Bringing in Indian clients
Now that Frames has its implementing organisation in India in order, Van Berkel is also looking at India as a possible market. So far, the company has not yet served any Indian customers. "We are currently studying how we can best go about that. There are many opportunities in the Indian energy sector, but you only stand a chance if you have unique know-how, or if you are willing to give process guarantees that local competitors are afraid to give. Otherwise, you are always too expensive." But even if, like Frames, you sell high-tech products that Indian companies cannot match, patience is a must. "India's state-owned oil and gas company ONGC is bursting with capital, but projects are slow to take off. Also, you don't get on their list of potential suppliers just like that. To get on it, you have to have the right contacts. In fact, cooperation with a local party is necessary. How do you find them? "It is difficult," admits Van Berkel. So trial and error? "Yes, actually."

"In India, you only stand a chance if you have unique know-how. Otherwise you are always too expensive."

Many Dutch companies opt for a joint venture to enter the Indian market. "Indians love joint ventures," says Van Berkel. "In the start-up phase, it also has great advantages for Dutch companies. But a joint venture is certainly not eternal. You have to keep evaluating whether you still have the same objectives. After four years, that is usually no longer the case: that is my rule of thumb. Then you have cleared the biggest hurdles and the local partner has got what he wants out of it." To set up a sales office, Frames needs another new partner, Van Berkel thinks. "In fact, we need to set up a completely new company. Pune is a good place to attract engineers, but it is not the best location for a sales office. For that, we'd probably be better off in Mumbai or Delhi, because that's where our potential customers are."

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During meetings of INBA Pune, the Dutch business club in Pune, Dutch businessmen regularly discuss the desirability of a local management team. After all, that saves a lot of money. Moreover, Indians naturally understand better how the Indian business culture works. Van Berkel: "Still, the question is whether what you have established will stick under the leadership of a local director. There are plenty of examples where that is not the case. Then you notice that certain decisions are no longer made according to Dutch logic, but on a relational basis, for example. Or that it becomes chaos, in our eyes. We don't want to run that risk at Frames.

Want to share your vision of working in India? We would love to hear it!

Geleen top location for Indian chemical company Technoforce

More and more Indian companies are investing in the Netherlands. Manufacturer of physical separation devices for the (chemical) industry, Technoforce from Nashik, Maharastra, settled at the Brightlands Chemelot Campus in Geleen five years ago. "Thanks to the Dutch branch, the whole company professionalises," says Ben Bovendeerd, Managing Director of Technoforce in the Netherlands.

Pilot plant Technoforce (Photo: Technoforce)

Indian company Technoforce develops and manufactures separation plants for the manufacturing industry, in Nashik, a city some four hours' drive from Mumbai. "We build enormous industrial machines, sometimes as high as four floors, that can separate all kinds of complex mixtures such as chemicals, waste water, oils and fats," explains director Ben Bovendeerd. "Think, for example, of water treatment plants from which components must be removed before factories are allowed to discharge the waste water." The customer base includes large pharmaceutical companies, producers of (bio-based) chemicals and the food industry. "In principle, wherever production takes place, separation is required, because without separation there is no pure substance."

Technoforce has a European Pilot Plant Development Centre in Geleen. Bovendeerd: "Customers come to us for tailor-made solutions. Since this involves capital-intensive installations, ranging from one tonne to several million, it is important to minimise the investment risks for customers. Optimisation and evaluation in pilot plants is crucial in order to be able to offer a robust and economical solution. In the pilot plant sufficient tests are performed to be able to calculate a reliable upscaling to industrial production scale and to make a process design, for which Technoforce also gives a process guarantee. Then the final product, a modular separation plant complete with piping, instruments, pumps, vacuum systems and automation is built in Nashik."

Before the Indian company opened a branch in Geleen, it regularly received requests from Europe, but these deals often fell through somewhere in the process. "In our business, you have to be able to spar with your customer, exchange products/chemicals and carry out tests," says Bovendeerd. "That was simply too difficult because of the distance. Just try exporting a container with 1,000 kilos of waste water to India for a test. You can't do that just like that."

Director Technoforce Netherlands Ben Bovendeerd (Photo: Technoforce)

Five years ago, the management decided it was time for a pilot plant development centre in Europe. The company chose the Netherlands, partly because of its good command of the English language. The Brightlands Chemelot Campus soon caught their eye because of its favourable location (between Germany and Belgium and three airports in the vicinity) and the good facilities on the campus. Bovendeerd: "Chemelot is a perfect match for our business; in theory, half of the companies at Chemelot could be our customers. The campus' umbrella environmental permit was also an important reason for choosing Chemelot. "It would have been far too expensive and time-consuming to set up our test centre outside this complex."

The Dutch branch does not only help to win European orders, notes Bovendeerd, but also leads to further professionalisation of the entire company. "By establishing ourselves here, we are raising the level of the entire organisation. We already complied with European legislation, but we have now obtained all kinds of new certifications. ICT has also been improved and we have taken a firm grip on the company's image. An international advertising agency has developed a new house style, including a new logo and strict guidelines for all our communications, which has improved the image."

As an Indian company, Technoforce sometimes has the wrong impression, acknowledges Bovendeerd. "Many customers think that Indians produce inferior quality, but that is a thing of the past. I always encourage people to visit our workshops in India, because then the penny drops. Our factory is heavily automated, with welding robots and production management systems, for example. Most people don't know what they see. Technologically, we can measure up to the European competition. We have to, because we're not just competing with them in Europe, but all over the world."

Do not settle for the Indian way of working

With co-working Ministry of New, entrepreneurs Marlies Bloemendaal and Natascha Chadha show what the Dutch have to offer in India. In this oasis for entrepreneurs in the heart of Mumbai, everything revolves around quality. "Indians are happy to pay for that."

On the third floor of a beautiful colonial building in the hectic centre of Mumbai lies a true work paradise. The founders call it a professional oasis. The name is well chosen. The beautiful building is decorated in a clean but attractive and playful way: hip design furniture, large wooden tables, high white walls, hanging plants on the ceiling, lots of natural light. Ministry of New radiates peace and quality. This week Forbes proclaimed the co-working space as the second best in the world. Co-founder Marlies Bloemendaal, designer by profession, was looking for a nice place to work in Mumbai, but couldn't find it. "So I made my own ideal place," she says, laughing. 

Apparently, Bloemendaal was not the only one looking for a good place to work in India. Almost all the tables in the large open space are occupied, there are busy meetings at a large table in the lunchroom and creative people are also staring into their laptops in the lounge. Dutch serial entrepreneur Aernout Dekker is one of them. Dekker sells high-end sound systems of the British brand Audio Note in India and is working on a business plan for a new company. He has been a member of Ministry of New for over six months now and comes there almost every day. "This is just a great place to work. The facilities are top notch, the food is good and the network is interesting."

Founders Marlies Bloemendaal and Natascha Chadha (Photo: MoN)

According to Dekker, Ministry of New is a good example of what the Dutch have to offer in India: quality. Dekker: "There are enough bright minds walking around in India, but they cannot organise. The Dutch are perfectionists. If you want to be successful here, you should not be satisfied with the Indian way of working, but simply maintain that Dutch mentality. Then you get quality and Indians are happy to pay for that. Just look around you. The Indian middle class is used to quality from abroad and now they want it at home. At Ministry of New, they find that."

Dekker sees a parallel with his own business. "In thirty years of entrepreneurship, I have never experienced that finding customers is no problem at all. Not even for an expensive, unknown niche product like Audio Note. There is a need for everything here, the challenge is in the execution." 

Bloemendaal has succeeded with flying colours. To keep the peace in Ministry of New, it is looking for a second location in the trendy Bandra district. No doubt Indian entrepreneurs will soon be lining up there as well.