In the first of IWP&DC's series of company profiles, we take a look at the history and developments of Czech- based turbine manufacturer Mavel, a company described by its founding members as evolving from a combination of teamwork, Czech engineering and 'angel' investors

WHEN talking about mavel – a Czech-based designer and manufacturer of water turbines from 2kW to 20MW – it is easy to see that those behind the company are rightly proud of their achievements. They describe the company as a combination of entrepreneurial teamwork, historic Czech engineering capability and hand-picked international investors. This combination has helped Mavel gain an order backlog of over US$15M. It also has 150 employees, two production facilities, ISO 9001 certification, international installations, an average annual sales growth of 35% and virtually no debt.

Building Mavel from scratch, however, in the transitional economy of the Czech Republic, has not been simple.

The company was founded in 1990, less than a year after the Czech Republic regained its independence. The founders of Mavel were an ambitious group of young engineers with extensive experience in the planning, design and manufacture of water turbines. They combined their backgrounds to form a hydro-engineering company with offices on the outskirts of Prague and became part of a new generation of Czech entrepreneurs.

Manufacturing capability

The three-person entrepreneurial team of Jiri Vies, Jan Sip and Martin Sintak decided, however, that instead of pocketing profits, they would invest into developing manufacturing capability. Now, Mavel is headquartered about 50km southeast of Prague in Benesov, Czech Republic. The company transformed a former rail car repair facility into a 6000m2 manufacturing centre and administrative headquarters.

Mavel’s growth has, nevertheless, also required capital. In 1997, the management team decided to find outside investment. The ideal investor, according to co-founder and chief executive officer Jiri Veis, was ‘a retired, successful entrepreneur who understood manufacturing and had a long term interest in our success’. This kind of patient, wealthy investor is known in venture capital circles as an ‘angel’.

In 1998, Mavel signed an agreement to sell a substantial minority stake to a consortium of international angel investors. Jeanne Hilsinger, a financial advisor to Mavel during the transaction, subsequently joined the Mavel management team as chief financial officer.

While the new capital was used to improve every department from marketing to financial management, the majority was invested in upgrading the engineering and production capability. ‘As a result of this investment, Mavel can complete nearly every phase of turbine production in-house,’ says co-founder and director of manufacturing Jan Sip. ‘This shortens our delivery time and improves our ability to control and assure quality.’

The new capital also allowed for the acquisition of CKD TurboTechnics, a Czech firm specialising in the production of Pelton and Francis turbines. The additional expertise of CKD TurboTechnics personnel strengthened the capability of Mavel’s engineering department and allowed the company to further capitalise on the historic Czech engineering advantage known locally as ‘Zlate Ruce’ or golden hands.

Small hydro sector

Today, co-founder and director of technology Martin Sintak leads Mavel’s 30-person design and engineering department that consists of hydraulic, mechanical, civil, electrical and architectural engineers. This team works closely with each client to provide a customised solution providing everything from feasibility studies and conceptual drawings to a complete working set of production and construction documents.

The design and engineering department is also responsible for developing Mavel’s wide range of standard and customised turbines. Currently, Mavel produces Kaplan, Francis Pelton and Banki turbines, and designs and provides a complete range of auxiliary equipment such as inlets, draft tubes, trash racks, cleaning machines, stop logs and tilting gates.

The engineering department supports Mavel’s sales network that includes the management team, internal sales staff, joint ventures in Slovakia and Poland and representatives in Canada, Italy, Greece and the Baltics.

Annual strategy meetings between Mavel management and the angel investors have been held over the past four years in Aspen, Park City, Prague and Toronto. These meetings provide the forum for integrating engineering innovation, entrepreneurial imagination and business experience into new strategies for Mavel to better meet the future needs of its clients in the small hydroelectric power sector.

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