An exemplary model from Borsod – the synergy between father and son is driving Mento Csoportot forward

An exemplary family model and a conscious approach to business development have been driving the Mento group forward for three decades now: the contrasting personalities of founder István Hercsik and his son Dávid Hercsik complement each other perfectly. The successes achieved across an ever-expanding range of activities required the courage and entrepreneurial instinct of the first generation; these were then complemented by the second generation’s conscientiousness and systematic approach. From waste management through the construction industry and machinery trade to agriculture, the same logic underlies every new venture:

understanding and capitalising on trends, creating as much value as possible in-house, and building on synergies and a customer-centric approach.

We interviewed the two owners at the group’s headquarters in Miskolc – we present their valuable insights in the form of monologues, whilst preserving the originality of their words.

From a bold idea to a historic step

István Hercsik: I’m a metallurgical engineer by training, and I used to work in the metallurgical industry, but this sector hit a bit of a rough patch after 1990. However much I loved this job, the people there and life there, I felt that the steel industry would not provide the career I had envisaged for myself.

There was a time when the Miskolc metallurgical company sold off some of its ancillary plants, and, driven by a bold idea, we bought the metallurgical slag processing plant together with two other entrepreneurs. That is how I entered the waste management industry in 1996; in fact, without any specialist knowledge or prior experience. At that time, in the early 1990s, it was actually quite typical for people to stumble into a line of work and learn the ropes because they didn’t really have any other choice. Once I got into it, I learnt the ropes, and today I might even be considered an expert – if that isn’t too presumptuous – but 30 years have passed since then.

A market opportunity spotted in good time: this is how the Mento came about

It was to be expected that, sooner or later, we would join the EU and that, with it, environmental protection would become something of a priority. The country had various scars on its landscape, sites of abandoned pollution and a municipal waste management sector that lagged terribly behind that of Europe. It was to be expected that we would have to implement something similar here to what operates in Western Europe, and I consciously prepared myself for this.

As well as blast furnace slag, I began to deal with other types of waste, and then we launched Mento Kft., which specialised in the processing of municipal waste. To be more precise, initially this involved only its disposal and landfilling, and later its processing; this led to the development of our various environmental protection and waste management portfolios.

We subsequently set up a joint venture with the local authorities in Zemplén. As a result, the Zemplén region was able to implement the same kind of municipal waste management system that was already in place in large cities at the time. Today, this organisation comprises 147 local authorities.

A far-reaching strategic decision

Even back then, we knew that the main guiding principle would be to minimise landfill and maximise recycling, and that is what we prepared for. There were two aspects to this. On the one hand, we focused on the technical aspects of waste management; on the other hand, we decided – and my son Dávid was involved in this too – that we would build Mento Kft. into a company capable not only of designing and building waste management equipment, but also of operating it. In other words, it is capable of covering this entire chain from start to finish.

We managed to achieve this goal by around the mid-2010s. I’m not sure whether there is such a thing as a market-leading company in this sector, so I would be cautious about using that term; but we are certainly a well-established player in the Hungarian waste management sector.

It’s not a good idea to jump straight to the top of the group

Dávid Hercsik: When I graduated from the University of Economics in 2009, I joined the company straight away and began to learn the ropes. It wouldn’t have been a good idea to jump straight to the top of the group and try to tell everyone what should be done. Instead, let’s just say I started by building from the ground up: here at the Bodrogkeresztúr site.

Step by step, I learnt how to run a landfill site, how the refuse collection vehicles are dispatched at 6 o’clock in the morning, and I began to get involved in whatever projects came up. Then came projects which I myself led across several areas of activity, such as waste management and, later on, the construction industry. As for our construction capabilities and ancillary activities, we built them up almost entirely together with my father during the time we worked side by side.

The path to becoming a co-owner

Between 2010 and 2014, when land reclamation projects were in full swing across the country, I worked on a great many of them. I learnt a great deal about waste management from these projects, and in the process I also learnt about the public service aspect of the waste management sector.

By around 2014–15, I had reached a level where I felt I could make a significant contribution to the group’s progress: I was able to generate the sort of added value that goes beyond simply learning. Then, around 2018–19, I reached the point where I felt ready to take on a co-ownership role.

A fresh new look and youthful vigour have propelled the company forward

H.I.: That’s a rather modest way of putting it on Dávid’s part. He started work here with a clear mind and tremendous drive. He even chose his school with a view to this career – unlike me, who’s always been involved in things I hadn’t studied before. In his own way, it’s a little easier: at least when it comes to company management, economic issues and organisational development.

I believe that if Dávid hadn’t joined us, we certainly wouldn’t have got to where the group of companies is today. Back then, a new team was taking shape, and he was largely responsible for bringing its members into the company – some from university and others from his secondary school classmates. A great atmosphere developed, the company took on a very youthful feel, and we were really making good progress.

As for the ownership level: in Hungary, a serious small or medium-sized enterprise cannot operate successfully without the involvement of its owners. There is no evidence to suggest that their involvement is not necessary for success. This is the case for us too, and it will remain so: my children can only become owners of the business if the value they add reaches this level.

In Dávid’s case, it was clear that by 2014 he had learnt how to manage portfolios and oversee major projects. It was also clear that by 2018 he had become capable of running the business. Accordingly, we divided up the responsibilities: today, he oversees the construction sector, as well as that part of waste management which involves not operations but development, planning, construction, implementation and everything else.

Two very different characters complement each other perfectly

We’ve got a good economist in the team who always works out what the right decision is. I’d say that Dávid is more cautious than I am: he’s not timid, but he is cautious, and he makes his decisions very thoughtfully. As for me, I’m a child of the 90s, so I’ve got a slightly more pronounced appetite for risk. My decisions tend to be more emotional, whilst his are more scientific – I think we complement each other quite well.

Can love and the pressure to perform be reconciled?

It’s interesting how roles are divided within a person’s mind when they are both a father and the owner. On the one hand, there is love; on the other, there is performance: and as an entrepreneur, performance is all that matters to me. As a parent, of course, only love matters. But overall, this is a family-run business, and that is, by its very nature, a performance-oriented endeavour.

So these two aspects need to be balanced somehow: this is no easy task for a parent. I believe that a family business runs smoothly when the first-generation entrepreneur – or perhaps a married couple – manages to strike this balance. Where the balance tips too far in either direction, either the children won’t join the business, or the business won’t be successful. No matter how much one loves one’s child, the business can only be entrusted to them if they are suited to the task; otherwise, the business will go under.

I think I’m lucky because, out of my three children, one is already at the level where they’re capable of leading this group of companies.

Discipline, discipline and discipline!

When does someone become a true owner? When they can see everything on some level, understand everything, synthesise it all and make good decisions. To achieve this, they need to familiarise themselves with the company’s areas of activity, and the path to this involves learning to manage individual activities or departments.

And there’s one more thing that needs to be clarified: does someone actually have the ability for this, or not? Because whilst leadership can be learnt, it’s something you need to have a feel for; not everyone is cut out for it. And I’d like to emphasise this, as it’s one of the most important things in business: the ability to cope with stress. In business, it’s all about discipline. Discipline, discipline and discipline! Tasks must be carried out consistently every day.

I had an elderly friend, who is no longer with us, who used to say that what distinguishes a professional from an amateur is that the professional always delivers 80 per cent, whether they’re feeling down or up. The amateur, on the other hand, fluctuates between 20 and 120, and always delivers 20 when they should be delivering 80. So you’ll be a successful business owner if you’re resilient. Because you have to rise to the occasion every day, and it’s not all good news: you have to be able to overcome the emotional ups and downs, and you mustn’t take them out on your colleagues or your family. That’s why, in a way – strange as it may sound – being an entrepreneur is a form of solitude. Even if you’re surrounded by loads of people, you always have to deal with your own problems yourself.

You can’t blame the world for changing, because it does change

The way I see it, this is a four-stage process: we yearn, we plan, we try, and then we analyse. In the worst case, we merely explain; in the best case, we analyse. You put a plan together based on certain circumstances, and then those circumstances change. I had planned all sorts of things in the early 2020s, then Covid came along and rewrote the script. We made new plans, and then the energy crisis hit…

So, being an entrepreneur is also about constantly adjusting your plans – and doing so with patience. And you can’t blame the world for changing, because that’s just the way it is. You need flexibility and adaptability. A successful entrepreneur is always rethinking their plans; I think that’s one of the most important factors for success.

They have also become a leading company in the road construction sector

H.D.: After a while, the question arose: if we can operate waste management facilities, why shouldn’t we also be able to design and build them? We have carried out a relatively large number of our own investment projects, and we have endeavoured to complete these using our own resources as far as possible. We gradually built up our capabilities in this area in both the design and construction sectors. After a while, we were able to carry out construction work on a commercial basis.

It helped that, during this period, there were not only a significant number of waste management-related projects on the market, but also construction-related ones. Specifically, not only were land reclamation and remediation projects underway, but there were also a relatively large number of projects involving the construction of waste management facilities, funded by the EU, across the country up until around 2020.

Another important step was that, as part of our waste management efforts, we began constructing infrastructure networks: in particular, we built sewerage and drinking water networks within the county.

In addition to all this, we also deliberately built up our road-construction capacity during the 2010s. Today, with the exception of the mine, we have almost everything we need for road construction: amongst other things, an asphalt mixing plant, which we set up in 2020, and a construction laboratory alongside it. We have become a leading contractor in the region in the field of road construction as well. The competition is tough, as we have to compete with large companies, but we are trying to hold our own in this sector too.

The centipede mode isn’t easy, but it’s worth it

H.I.: To what extent does synergy feature in our projects? All our projects are like this: to a greater or lesser extent, synergy is always present. For example, when you’re carrying out construction work, no matter what you’re building, some form of waste is always produced. We have our own processing facilities for this, and if the waste cannot be reused, we have our own disposal facilities.

In many cases, we design, build and operate the projects ourselves; as a result, our activities build on one another and reinforce each other. We see in the market that, taken together, these factors give us a competitive advantage over, say, companies that do not have such a broad portfolio.

Of course, we do need to maintain these capacities. When I hear people say, „That’s great for you, because you’ve got several strings to your bow”, my reply is: ‘Go and have a word with a centipede – one of its legs is always hurting.’ Joking aside, in order to maintain these capacities, we need to secure work from the market as well as working on our own projects. All in all, at least based on our experience so far, we believe this ‘synergy venture’ is well worth it.

They are also making their mark on high-profile building construction projects

H.D.: Building construction, as represented by DHJ Építő, accounts for around 20 per cent of our group’s construction sector, alongside 80 per cent civil engineering. In terms of our machinery fleet and supporting infrastructure, we are better equipped for the latter; nevertheless, we have some excellent references in building construction. In this area, we typically construct specialised facilities that serve either a sporting or a cultural purpose.

We have a number of high-profile projects with DHJ, such as the Miskolc cave spa, which opened in August (and was featured in a detailed report in our newspaper – Ed.), is one such project. The construction of the Miskolc ice rink last year was similar, and what’s more, we have now also been awarded the contract to refurbish the old ice rink.

Beyond the prestige, I believe there are other reasons why it is important for us to build facilities of this kind. Even people who aren’t necessarily fans of ours recognise that my father and I are both staunch local patriots, so it always gives me a sense of satisfaction – and adds to the company’s standing – when we are able to successfully complete a project that is used by large numbers of local people and is an integral part of their everyday lives.

Wherever you’ve found success, that’s where you should give something back!

H.I.: The fact that both Dávid and I feel we belong to Miskolc has a fundamental influence on the company’s activities. We could have left, and it might have been easier to get by elsewhere, but we’ll always remain Miskolc locals: we see so much value and beauty in this city.

This ties in with our company’s social commitment, which began back in the early 1990s. It was under the influence of a friend of mine who worked in the steel industry that I developed the outlook I still hold today. I believe that if someone is able to succeed within a social context, then it is only right to give something back to that community, in line with their own interests or outlook.

For us, this way of thinking is most evident in sport. Initially, we supported the girls’ basketball team in Miskolc, and since the 2010s we have also been supporting the local water polo team. In 2018, I took on the role of chairperson of Miskolci Vízilabda Club, and for the past 11 years we have been organising a junior water polo tournament: the Mento Kupa in Miskolctapolca is a highly reputable international competition featuring strong teams. In addition, we have a number of sports- and culture-related sponsorship initiatives, both large and small, which we have been supporting consistently for many years, including support for individual athletes.

When synergy leads to a thriving partnership

H.D.: To come back to the idea of complex thinking for a moment: it’s a significant achievement for us when we can, so to speak, sell the entirety of our segments to a partner. For example, we have been working for a large local company, BorsodChem Zrt., for more than 10 years: we have built roads for them, as well as public utilities and a landfill site, and we have also carried out land reclamation work for them. This is also important because it shows that we can hold our own not only in the public procurement market but also in the private sector.

BorsodChem is a Chinese-owned company, and anyone who has ever worked for a Chinese firm knows that there are quite stringent compliance requirements there. And given that they operate in the chemical industry, the requirements are even stricter. So I consider it a significant achievement that we’ve been able to carry out some form of construction or waste management work for them year after year.

This also demonstrates that we strive to build long-term relationships by earning the trust of market players, whilst adhering to high quality standards. In this regard, our in-house quality testing laboratory – and the resulting ability to keep quality control of our construction activities entirely in our own hands – is a crucial element.

Thanks to the high standard of their work, they act as local representatives for leading global brands

In the machinery and vehicle trade, too, our constant aim is to capitalise on synergies and complexity. When we began to expand into waste management, our objective was to provide our partners with solutions on as broad a scale as possible: by integrating the design, construction and operation of waste management systems and facilities. However, waste management also requires waste collection vehicles, waste collection bins, and various pieces of equipment for loading, logistics and compaction. In line with these needs, we have incorporated the supply, assembly and servicing of waste management equipment into our portfolio.

So, when we propose a waste management facility to a client, we are already in a position to provide a quotation for the equipment required to operate it. As a result of many years of high-quality work, we act as the local representative for the Zoeller, Haller, Stummer and Farid machine brands, which are global leaders in waste management. To meet our customers’ needs, we mount their products onto the chassis. So, for each vehicle, we supply the chassis – say, from Mercedes or another major brand – and then, tailored to the customer’s requirements, we fit a superstructure designed for compaction and collection, for example.

In addition to sales and assembly, we also have strong servicing capabilities, which handle the after-sales activities for the vehicles we sell: warranty and servicing tasks. At the same time, we also carry out servicing for our own fleet.

This is the kind of asset that not many companies possess

We have colleagues who possess a wealth of experience and engineering expertise in preparing waste management projects. We have accumulated significant know-how over the years, which enables us to identify the best solution for the task described by the client. Not many companies can do this, and perhaps our advantage lies in the fact that we do not simply want to sell a piece of equipment; we also have a clear understanding of the problems and solutions, having been involved in waste management for many years. Consequently, we have a much broader perspective on the factors that a client needs to consider when making a purchase.

They’re not looking at what earns them more, but at what will be truly useful

H.I.: We find that this comprehensive overview appeals to customers, as it saves them a great deal of thought in the investment process – areas they may not be familiar with. There are many small but important details we need to pay attention to: for example, how the vehicle will operate, whether it will fit on the customer’s street, whether it can make it up a hill, and so on. In this process, we don’t focus on what will earn us the most money, but on what will actually be useful. We strive to build long-term relationships, and I have to say that this approach always pays off. It’s not about making a lot of money from the first deal, but about laying the foundations for the future.

But what do customers value most of all? Discipline! When you secure a contract with a reputable company based on your capabilities, you cannot afford to have any health and safety issues, staff turnover, deadline problems or quality issues. If, for example, your workforce is not disciplined when working at a chemical plant, you will never be allowed back into that company again.

Neither small nor large: they replicate the structure of the special medium size

H.D.: We’ve always had the problem that we’ve grown much faster than we’ve been able to reflect in our organisational structure: we’ve had to integrate new areas of activity one after the other. In recent years, this very rapid growth has perhaps slowed down slightly. Taking advantage of this, we are striving to make our existing activities increasingly efficient and better organised.

In the process, we’ve had to take steps that are less typical of small businesses and more in line with those of large corporations. We have to be very mindful that we operate on a unique scale: what is large for us is small, and what is small for us is already large. This gives us a certain flexibility in the market, but it is also a kind of constraint, as we do not have the unlimited financial resources to operate large-corporate structures.

I now believe we are on the right track in mapping this specific ‘middle ground’ onto some sort of organisational structure. A good example is executive decision support: we need to maintain an overview of a wide variety of companies and activities at any given time; whilst at the same time we may have to make decisions relating to several different companies and activities within the space of a single day. This obviously requires appropriate information, and we have made significant progress in this area: amongst other things, we now have more accurate cost statements and post-calculations, which enable us to price our products more accurately.

They have set the bar high in agriculture too

H.I.: The group also has an agricultural division; this has been my labour of love for the past 10 years. I’m half country, half city – I grew up in a house on the edge of town, next to a wood, very close to nature: I didn’t play on a laptop as a child, but with a slingshot, a bow and arrow, and a bike. Perhaps that’s why, when I stumbled upon an opportunity – even though there was no precedent for this in our family – I bought a few hectares of land near Aggtelek, in picturesque surroundings. I didn’t do anything with it for quite a while, but then, following a conversation with a friend, I decided we should breed cattle on this land.

We now have nearly 2,000 beef cattle; we breed Angus cattle and have also built a meat-processing plant. Naturally, we’ve brought the synergy into this too: we strive to cover everything from farm to fork. This is where my youngest child comes into the business: my daughter is developing the marketing strategy for this venture, and she’s doing a brilliant job of it.

You mustn’t produce poor-quality products, and what’s the point of producing mediocre ones? This is a saturated market, and you cannot break into it with a mediocre product. We have therefore designed our Naragh product, named after Felsőnyárád, to be a kind of hallmark of quality. We are striving to create a truly premium product, and it is looking more and more as though the plan is coming to fruition.

A beautiful little patch of land – just how can it help in so many ways?

The surroundings on the pastures at Felsőnyárád are beautiful, and it always feels a bit like we’re going on an outing when we head out to our fields. I’m really pleased that my grandchildren love going there too.

This is perhaps, in the best sense of the word, a form of putting down roots: I would like my children to live in Hungary, if at all possible, and to find their place, their happiness and their livelihood here. I believe that this little patch of land, these farm animals and the facilities there will help with that. Then, of course, they’ll decide for themselves whether this is what they want or not.

This could lay the foundations for success over the next 30 years

H.D.: When I was a child, my father taught me that, in order to move forward, you need to know what you’re doing, be able to do it, and want to do it. I think that, in this interview, we’ve explored this core idea from several angles. To achieve success, you need to be persistent, disciplined and motivated. Ultimately, these can serve as core values in every situation, and they are what can carry a company through difficult periods.

If we can continue to uphold this set of core values and instil them throughout the entire group, there is a good chance that we will be able to remain in business over the next 30 years and even continue to grow.

It is also important to realise that a body of work on this scale can only be built up if you love what you do. So the idea that the group of companies is one of our children applies to both my father and me: for him it’s his fourth, for me my third. We nurture it practically every day; we want to make it better every day, and we put a great deal of energy into it.

This could be the key to a successful generational transition

H.I.: I wouldn’t really add much to that. One of the reasons I let Dávid have his say was because it’s important that he has a clear understanding of this. It hardly matters what I think; what matters is what my children think, because they are the ones who have to carry this forward. I really did hammer home the ‘know, be able, want’ philosophy: apart from the fact that it’s nice to hear such fatherly teachings echoed back, I also feel it’s true – without it, it really doesn’t work. The fact that these kinds of thoughts are in Dávid’s mind, just as they are in the minds of my two younger children, I see as a guarantee that the company will be successful even without me.

I am therefore not worried about the generational handover: whatever we have built up so far will be carried on by one of my children or my children – there is no question about that. This is, incidentally, a great source of happiness for a parent who also happens to be an entrepreneur: their children will, so to speak, carry on the ‘child’ they have created – their business…