Case Study: AVAESEN / Cluster / Search for Partners in Japan

AVAESEN - VALENCIAN ENERGY INDUSTRY ASSOCIATION

AVAESEN was founded in 2006 with the aim to represent, promote and defend the energy sector of the Valencian Region.

Field of Activity: Renewable Energy and Clean Technologies.
Cluster Activities:
Promote the development and innovation of the Valencian energy sector; identification of business opportunities on national and global markets; internationalisation through strategic contacts, projects, international tenders.

Size: 150 members, representing 80% of the energy sector in the Valencian Region in Spain. Most of the associated firms are SMEs (98%).

Interests in Japan: Strategic business and technological partnerships.

AVAESEN’s substantial membership contains companies active in all renewable subsectors: Photovoltaic, Wind power, Solar, Biomass, Biofuel and Geothermal. Moreover, it represents these enterprises across the entire renewable value chain, from engineering to consulting, installation, testing and even promotion.

AVAESEN has developed multiple tailor-made initiatives designed to train and inform, to develop business collaboration within the Valencian region and abroad, and to support the innovation of sustainable energy generation and energy efficiency. Additionally, through contributing to its 6 Working Groups (Photovoltaic Energy, Thermal Energy, Wind Energy Energy Efficiency, Biomass, biogas and cogeneration Manufacturers) and committees, the Cluster offers its members the opportunity to actively engage in its activities and actions.

WHY JAPAN?

Since its creation in 2006, AVAESEN has been aware of the need of the renewable energy sector to go global. This was evidenced by the fact that 80% of its companies had internationalised by 2012. Thus the cluster made the decision to turn from an “inward” looking local cluster to an “outward” facing global network.

Because of Japan’s substantial efforts to diversify the country’s power generation sources, it became an increasingly attractive market for AVAESEN’s member companies. Especially the 11 March 2011 Fukushima disaster, after which the government began an incentive program to encourage investment in renewables, became a turning point for the renewable energy sector. Several SMEs in the cluster became strongly interested in the Japanese market and some were already performing commercial activities in Japan.  When AVAESEN was given the opportunity to participate in the EU-Japan Centre’s 2012 EU Cluster Support Mission to Japan, it evidently grabbed this opportunity with both hands.

STEPS TAKEN – 2012 EU-Japan Cluster Support Mission

Previous to the 2012 mission, AVAESEN had unsuccessfully tried to get some contacts in Japan. The cluster’s first real contacts were, however, the direct result of the 2012 mission, in which the match-making event played an especially crucial role to get in touch with potential partners. Moreover, the cluster even managed to sign some agreements with Japanese companies; not only to develop plans together and sign bilateral agreements, but also for them to enter the Spanish market. These agreements - at first only letters of intent - developed around 6 months after the mission, but they have been evolving ever since and cooperation is definitely growing.

So far, AVAESEN has sent representatives to Japan twice, but its member companies have been going there quite often, since they managed to use the cluster’s acquired contacts in Japan to develop real business there.

All in all, the cluster gained about 25 successful contacts to do business in Japan; the first non-Japanese company that has successfully built a solar farm in Japan, is even one of AVAESEN’s member companies. Furthermore, the cluster managed to help a Japanese partner to export its products to Europe.

CHALLENGES

Japan is a peculiar market. In the words of Marcos J. Lacruz, President of AVAESEN:

“You really have to get in the Japanese way of doing things, and it’s not a market where you can go to and be doing business after one week. You have to make contacts, obtain their trust in order to start doing business there. It’s not a quick market.”

Currently, at least 5 of AVAESEN’s member companies already have a Japanese subsidiary, and at least the CEOs regularly travel to Japan. This is very important because of the Japanese way of doing business: they have to trust you, which is quite difficult. They need to know you and they need to know that they can count on you as a partner.

CURRENT STATUS – NEXT STEPS

Thanks to the contacts made during the 2012 mission, at least 10 of AVAESEN’s member companies are doing real business in Japan now, and up to 25 are expected to be doing business there in the coming years. So far, the cluster has not been successful in establishing partnerships with Japanese cluster organisations, but it is still trying to identify potential partners.

“I think the best collaboration we have had so far has been with the EU-Japan Centre. I can only say how grateful we are for the help we received, and it has been a really good opportunity for us to help our companies enter such a complex market.” Marcos Lacruz.

In December 2014, Mr Lacruz, together with some of AVAESEN’s associates, visited Japan in order to see how the member companies are conducting their business in Japan, and to see if the cluster’s support is being successful – which is the case. Furthermore, Mr Lacruz had a meeting with the Spanish ambassador to Japan, in order to see if and how the Spanish embassy may assist Spanish companies in establishing their business in Japan more easily, avoiding some of the natural difficulties of the Japanese market. AVAESEN evidently hopes to see some practical results of this meeting in the near future.

Interview made with Marcos Lacruz