How Brabant's SIAP won India's most prestigious project

The JIO World Centre in the business heart of metropolis Mumbai is the most prestigious convention centre in India and the first Indian customer of the Brabant acoustics specialist SIAP Acoustics. CEO Reinout Gerlach personally took the stand behind the piano to bring in his Indian customer Reliance.

The SIAP and Reliance team together in the concert hall of the JIO World Centre

First contacts with India

SIAP, based in Uden in Brabant, has developed a system with which you can electronically change the acoustics in a room. With this patented system, you can make an unamplified symphony orchestra sound like it is playing in a concert hall or play the sound of a film in surround, drawing the audience completely into the film. SIAP's system is used in various concert halls and arts centres from Amsterdam to New York, Hong Kong and Seoul. "At the beginning of the millennium, we successfully did several, large projects in South Korea," says CEO Reinout Gerlach. "We regularly worked with Samsung subcontractors in these projects. In 2015, Samsung knocked directly on our door. At that time, they were the contractor for the JIO World Center in Mumbai, India and asked us to be their VAS (Virtual Acoustic System) supplier."

Unannounced visit from India

After the first talks with Samsung, it remained quiet for a long time. Samsung's Indian client, Reliance, spoke with several parties who could provide image and sound, but no choice was made. "Reliance is one of the largest companies in India and is run by one of the country's richest families, the Ambanis. They naturally want only the best of the best and a competitive price, so all the major audio-visual companies in the world offered their services to Reliance. We feared that one of our international competitors would get the job." It wasn't until three years later, in 2018, that things started to move when Reliance reported to SIAP at an exhibition in Amsterdam. "They had specially travelled to the Netherlands with 12 people to talk to us about the acoustics of the Jio World Centre in Mumbai and how our system would facilitate the intended multi-purpose use of the hall ."

Playing the piano for an Indian customer

The first conversation between the two parties went well. "We understood how best to behave," says Gerlach. "Not too pedantic, but interested and respectful. That was to their liking." The Indians wanted a demonstration of SIAP's system, and not at a later date so that the company could prepare it calmly, but immediately. "We were totally unprepared for that. The closest system is at the De La Mar Theatre in Amsterdam and luckily, by chance, we were able to get there quickly. "It was all super makeshift. We started by demonstrating the presets for classical music, but that didn't catch on at all - it's not a well-known genre in India. I then decided to take up the piano myself. That worked!"  

Also at the JIO World Centre, SIAP CEO Reinout Gerlach played the piano to test the system.

Respect and flexibility

While playing, Gerlach tries to reproduce the typical sounds of Bollywood. "That was really a turning point. The fact that we made an effort to really build a connection by thinking about what music we played was proof to them that we had the right willingness, knowledge, but also attitude to be able to fulfil the assignment. We showed respect and flexibility that other, much bigger international companies apparently had not shown. I think the decision to choose us was made on the spot. " 

Negotiating with Indian customers: tough against tough

However, even after the signature of Reliance's CEO, the contract was not yet in: negotiations with Reliance really started then and went hard. 

"We were not well prepared for that. In our European view, Indians will go to great lengths to get the best price, almost to the point of rudeness. And because they always come across as very friendly and almost helpful in the rest of the conversations, this really came as a surprise to us. Therefore, start at a price four times higher than you would normally do, so that at least you are not undercutting your cost price. I can only advise other companies to take their time when negotiating." 

Local help saves lots of time 

For a possible next assignment, Gerlach would definitely enlist local help to take care of all the time-consuming business. "This time we took on all elements of the assignment ourselves, by which I also mean the peripheral issues such as various taxes, visas, permits, bank guarantees and local laws and regulations (safety standards on the work floor there), but we really had a day's work to do. It is actually not worth reinventing the wheel all by yourself, next time we will definitely outsource this and charge much more project hours. Analysis of our time expenditure showed that we had spent at least 400 hours on research and superfluous bureaucracy.

Is your company about to go to India for the first time to explore the market, roll out a first project, or hopefully land your first Indian customer? Then feel free to contact us about how we can help you with all the red tape that comes with doing business in India.

First time in India is a special experience

Last May was finally the day. SIAP travelled to India to install their acoustic system at JIO World Centre. "It was our first time in India, so just landing at the airport in Mumbai felt overwhelming," says Gerlach. The Dutch team had to get used to the Indian service in the beginning. "Everyone wanted to do everything for us; if we had asked them to brush our teeth for us, they would definitely have said 'yes'. But working together was also incredibly nice because of that helpfulness, everyone is constantly on the starting blocks and things are picked up super fast." 

SIAP has added special presets in their system that make traditional Indian music sound according to local preferences.

Adapting to local preferences

Not only in the run-up to the project and during the tough price negotiations did Gerlach learn a lot about doing business in India, but also during the testing of the system he came to surprising insights about local preferences. "In the Western world, we have been used to concert halls with their characteristic acoustics for a few centuries. In India, this is completely unknown and music is often played in temples. We found out during testing that they like a lot of reverb for certain types of music, so we made special presets for them with extra reverb for Indian music. Those are special lessons that you pick up from a project like that and hopefully we can take them to the next one."

Wondering about the opportunities in India for your product or company? Check our sector overview to get a better idea of the growth opportunities in India.

The Belgian company Soudal found a suitable business partner in India.

Soudal is the European market leader in the area of sealants, adhesives and PU foams. For 12 years the company has had a joint venture with the Indian company McCoy, which was initially a customer of Soudal in India. "Meanwhile, we are growing by about 20% every year," says Emmanuel De Smedt, regional director of Soudal.

In 2007 De Smedt travelled to India for the first time, to participate in a small trade fair and to make his first contacts in the country. At that time Soudal was expanding in and outside of Europe. For instance, they were working hard in China. India was not really in Soudal's sights at that time, but De Smedt did manage to win a customer during this first visit. "There I met McCoy, one of the players in India in the field of sealants, adhesives and PU foam", says De Smedt. "They were interested in us and our products, and of course we were interested in them too, because in the long term we wanted to conquer the Indian market too."

Soon McCoy became a Soudal customer and the Belgians started a sales office in India. "In the meantime, we built up an increasingly good relationship with McCoy. On every trip I made to India I met with them and they also came to our headquarters in Belgium. The relationship grew very organically and Soudal is always looking for new opportunities, so we decided to sit down with McCoy and set up a partnership."

"Indians are very gifted negotiators. They don't give up until you give in a little - whether you have a friendly relationship with them or not."

- Emmanuel De Smedt - Regional Director Soudal

In six months, they got out and the two companies set up a 50:50 joint venture. "We both had a good understanding of what our strengths were and what we could therefore contribute to the JV. McCoy had been active in our segment for 10 years and therefore not only had a good local team, but also the local know-how and an existing customer base," De Smedt says. "But they were not yet a strong brand, acting mainly as a distributor for a number of European brands. Our knowledge of sales, marketing, production and R&D complemented that perfectly. A strong story with which we could conquer the Indian market together."

Despite the good relationship between the two companies and the clear role they would play in the joint venture, negotiations were occasionally tough. "Indians, whether you have a friendly relationship with them or not, are very gifted negotiators and don't give up until you give in a little. I was able to improve my own negotiating skills considerably in India," says De Smedt. "It is important to have a good lawyer at your side. The specialist and local knowledge that a lawyer brings is essential in any contract you conclude. Don't automatically choose the biggest or most expensive firm, but really be guided by specific knowledge and experience."

Cooperating successfully

In the joint venture, the roles are also split 50-50. The managing director, for example, is from McCoy and Soudal has the local management. "But it is not the case that there are two captains at the helm. We both know very well where our strengths lie," says De Smedt. "In addition, we have regular board meetings where all partners come together to discuss the ins and outs of the company. We work towards a common goal and the different perspectives of the various partners are an advantage rather than an obstacle."

A good example of this is the lightning-fast construction of a production site near New Delhi. Thanks to McCoy's knowledge and network, a piece of land was purchased within a year of setting up the JV and the right parties were found for the construction. "As Soudal, we were able to bring in our technical know-how and thus set up a factory in which we can produce products that are a good match for the local market in terms of price and quality level and that also meet our requirements," says the Belgian director. "We have had to adapt our products to suit the Indian market and climate. In Europe, for example, people want a kit that can be used for many different jobs, but in India they want a specific product for a specific problem. With our production location, we can respond very quickly to specific wishes of this kind and also scale up quickly if the market starts to grow."

A growth market

The Indian market for McCoy Soudal products is still relatively small. "We are growing more than 20 percent a year and our ambition is high," De Smedt says. "In the urban areas we see more and more that sealants and foams are used, in the rural areas the windows, doors and sanitary facilities are still often finished with cheap white cement. We have therefore started an academy to introduce contractors to our products and to teach them how they can be used. Of course this will not double our customer base in a year, but we are taking it step by step. The Soudal motto is 'Dream, think, dare, do and persevere' and that is exactly what we are doing in India. We dream of great results and persevere to make them a reality."

Entering the Indian market with the right partner

Entering the Indian market with a local partner is advantageous for many international companies, as you do not have to reinvent the wheel and can rely on your partner's contacts and knowledge. A joint venture can therefore be a good option for you, but it is certainly not the only way to get started in India without worries.

IndiaConnected offers you the possibility to quickly, easily and cost-efficiently set up your own office, with staff, in India without having to register your own entity. We call this the business incubator, in which we take a lot of time-consuming processes out of your hands:

• Export to India and sales processes through existing IndiaConnected structures in India.

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Without its Indian joint venture partner, the Swiss global company Ammann would never have become the market leader

The Swiss family-owned company Ammann is the world leader in construction and road building machinery. "In almost all of the 100 countries in which we operate, we have started and become successful entirely on our own," explains Rolf Jenny, Ammann's managing director in India. "Except in India. There we quickly came to the conclusion that without local knowledge and support we would never make it."

Rolf Jenny and Apollo's managing director, Asit Patel, open the joint venture's first factory

"Ammann's first steps in Asia were made in China. At the end of the 1990s, the Chinese government was extremely interested in our technology because they wanted to improve their entire road network in a short space of time. We were therefore given a warm welcome with attractive tax rates and special support programmes," says Jenny. "We didn't have to make many changes to our product in China to be successful, just a small reduction in price. That was easily solved with a local production site and we had the market in no time."

With this smooth experience in his back pocket, Ammann then set off in good spirits for the other big market in Asia: India. "There we were suddenly at a loss for words. The Indians were not interested in our advanced products and certainly not at the price we were offering them," says the managing director. "What worked great in China did not work at all in India. In India, we couldn't get away with just minor adjustments to our products, so we said to each other: 'We're not going to manage this ourselves, we need a partner who understands the Indian way of thinking'."

Know well what you have to offer an Indian partner

Ammann starts a big market research in the hope of finding a company they want to buy, but instead comes across the Indian company Apollo. At the time, Apollo was the leading producer of road building materials in India. "And that was exactly why they were interested in our technologies, but immediately said no to the idea of a possible partnership," says Jenny. "They said that they had been operating at the top end of the Indian market for 50 years and so there was no advantage in entering into a joint venture with an inexperienced European company. With this harsh rejection, they wiped out our possibility of a successful start-up in India in one fell swoop."

But the Swiss company was lucky: two years later, Apollo sought contact again and this time the Indian manufacturer was open to a joint venture. "That was the start of tough negotiations, because we didn't immediately agree on the terms of our partnership," says Swiss top executive. "Ammann is normally always a 100 per cent shareholder in the companies we set up abroad, so for us it was unmentionable to own less than 70 per cent of the joint venture. Apollo, on the other hand, wanted the shareholding to be split 50-50. We also wanted the joint venture to focus only on India, while Apollo wanted to start exporting to neighbouring countries. Once again, we were facing quite a challenge in India."

Bridging differences

In order to bridge the differences during negotiations, Jenny initially focused on the similarities between the two parties. "We are both family businesses, which immediately created a bond. We decided to invite Apollo to Switzerland to get to know our company even better and gain more insight into how we could complement each other," explains the managing director. "We are the world leader in high-tech products, Apollo in low-tech, low-cost versions. So together we could deliver a good quality product at a mid-price. By building up trust and proving that we really saw them as an equal partner, we were able to convince them of the benefits that the joint venture with us would bring them. Without compromising on our own terms."

According to Jenny, a successful joint venture rests on a number of basic principles. "You have to be able to trust each other completely and treat each other as equal partners, even in our case where we owned 70 per cent of the company. All decisions within the joint venture were always made by mutual agreement. From the very beginning, we also had it agreed what would happen if one of us wanted to leave the joint venture. A joint venture should always be equally beneficial to both parties. That is why it is so important to think not only about what a happy marriage will look like, but also about a friendly divorce if one of the two wants to go on alone."

Ending the joint venture 

After eight years of running a successful joint venture together, Ammann and Apollo decided to call it a day last year. "We have learned a lot from each other over the years and have always worked well together without any disagreements. But Apollo was ready to stand on her own two feet again," says Jenny. "The 70-30 ratio meant they were more like investors than the entrepreneurs behind the business and something was starting to itch again - they wanted to get back to work." Apollo sold the remaining 30 per cent for almost 27 million to Ammann. "Not only did they get a very good deal with this sale, but they also benefited from the boom that the company has experienced in recent years. Together, we have not only increased the value of the company enormously, but also tripled its turnover. The joint venture has always been a success for both parties, despite the separation. We are therefore parting as friends and will continue to have a good relationship."

Jenny therefore recommends an Indian partner to every European company that wants to start up in India. "You can only be successful in India if you understand the wishes of the customer and if you adapt your product and price to these wishes. To do that, you have to manufacture in India, the product has to breathe India. If you are confident that you can do that on your own, then go for the adventure. In our case, we knew our products didn't fit the market, but we needed the local knowledge to understand how to improve that. If you go it alone, you have to be in it for the long haul and expect it to be a process of trial and error. We wanted a quick market entry without too many setbacks and we couldn't have done it without our great partner. So do your research and strategise accordingly, but be aware that local help makes a lot easier in India."

Opportunities in infrastructure and construction

Ammann is looking forward to the future in India. "Construction and infrastructure are two sectors that will grow significantly in India in the coming years. Indeed, more infrastructure is needed in the country if it is to maintain the same high economic growth rate in the long term," says the Ammann foreman. "But even though these sectors will offer interesting opportunities, it is important that foreign companies realise that India is not a quick fix. I have seen many international companies come and go, hoping to get a slice of the investment in the road network. But if your product doesn't fit India's needs and Indians don't trust you, you have a choice: either invest for the long term or pack up."