Interview with Metito Holdings CEO

Amidst buzz about the largest water sector partnership of 2014 between Metito Holdings, Mitsubishi Corporation, and Mitsubishi Heavy Industries, and Japan Bank for International Cooperation, Frost & Sullivan spoke to the visionary Chairman and CEO of Metito, Mr. Mutaz Ghandour on what he thinks are the biggest challenges faced by the water industry, and how the growth chart for Metito will look like in 2020.

Mutaz Ghandour has worked for Metito since 1966 and currently holds the position of CEO – Metito Holdings Ltd based in the UAE. Mutaz has worked alongside his brother Farouk, who established the company in 1958 as the first and foremost specialist water treatment company in the Middle East. Mutaz is dedicated to ethical practices, which is at the core of Metito operations and as a CEO, provides a strong commercial focus for the business.

What are the traditional challenges that you have faced in the water industry, and how will the new improved Metito address them?

Ghandour: The traditional challenges faced by the water industry in the Middle East are:

Bureaucracy and slow decision-making:

People tend to accept private sector participation in power projects or building roads more than they do for water, though what we need to do is further utilise the PPP model. Water-related issues take time to resolute and hence, to most people, it is conceivable that power may be cut but not water. 

The water industry is heavily regulated because it is highly politicised. 

Resistance to change:

Due to heavy regulations, it is always difficult to introduce any new technology; no one wants to try something new, as they prefer to adhere to the conventional methods of treatment. 

Innovations:

It takes time to get something done and accepted. We cannot innovate quickly enough. 

Other challenges include convincing people to conserve water, implementing an equitable fee that reflects the true value of the water, changing people's habits, and perceptions towards treated wastewater, and convincing stakeholders and decision-makers to increase their reliance on recycled water. 

The present-day Metito, in its intricate structure, now holds strong, renowned, and respected brand names. It is stronger and more powerful and this helps us gain confidence on innovation from our clients.

The new Metito, with its unrivalled shareholders' structure, is now better equipped to face these challenges, head on. We are now more technically able and financially sound, enabling us to do better what we already do best: providing intelligent and sustainable solutions that can close the gap between the demand and supply of water in some of the most arid regions around the world.

The new Metito has the global network required to further engage in public discussions and better reach to governments / decision-makers around the world.

With the new stakeholders — Mitsubishi Corporation and Mitsubishi Heavy Industries — joining the Metito bandwagon, what are your expectations from this partnership?

Ghandour: We actually now have three great partners, namely, Mitsubishi Heavy Industries (MHI), Mitsubishi Corporation (MC), and Japan Bank for International Co-operation (JBIC). This truly synergetic partnership will support us to venture into larger projects due to a global network, huge R&D facilities, partners' strong balance sheets, and their experience in large projects.

JBIC will give us access to Japanese funding and Japanese-funded projects by Japan International Co-operation Agency (JICA).

With Metito's effective and proven management capabilities and experienced leadership, coupled with our formidable strategic and financial shareholders that also include International Finance Corporation (IFC) and Gulf Capital, we will become more competitive globally as we expedite our company's successful and sustainable growth plans.

In terms of Geography, Business Line, and Products, what kind of growth do you envisage in the coming years?

Ghandour: We will remain focused on the water industry only, anything that flows into a pipe. Although we cover most of the spectrum in treating water and wastewater for human consumption and industrial use, we expect to expand our product line, given our access to some of the world's greatest R&D facilities at MHI and MC.

We will continue our focus on emerging markets. We are already growing into new markets in Africa and Asia and, in the not too distant future, we look forward to a full global emerging market coverage that will include Latin America as well.

Would you be focusing on organic growth for Metito or do you think expansion through inorganic growth (through acquisitions) would be the way forward?

Ghandour: We will focus on both organic and inorganic growth. Although it is a slow process, we will continue to grow organically. However, we are quite active into growing by acquisitions through acquiring companies that are both compatible and complementary to our business.

We have been, for example, successful in acquiring Berlinwasser China Holdings (BCH) in China. When we acquired it four years ago, it had only two wastewater municipal assets. Now it has 11 assets for municipal and industrial wastes. We will be looking at larger and more transformational acquisitions in future, including assets for desalting seawater.

In China, we are now one of the most established and successful foreign operators in the water industry.

What according to you are the key factors for success in the dynamic Middle East water industry?

Ghandour: We have simple success mantras like:

Local presence, global knowhow:

For a company to succeed, it must understand the local market and become local in a way, following global standards while being supported by the global knowhow of the acquirer. We cannot expect a company in Europe or the USA to do business in Asia or Africa and succeed by doing it their way. They need to understand the local environment and at same time operate to global standards.

Quick decision-making:

Quick decisions are of key importance. People like to talk to decision-makers, not messengers. We empower our locally stationed highly qualified and experienced executives to make decisions. There is no bureaucracy, there is decision-making at its best.

What is your vision for Metito in 2020?

Ghandour:  We envisage becoming the largest pan emerging market private utility company.