Siemens Targets Middle East Infrastructure Deals
Dubai: A slowdown in real estate development in key global markets? Not too much of a concern if you are the president and CEO of Siemens and have all the infrastructure and energy projects to pitch for.
That’s exactly what Peter Loscher is playing at.
“The Gulf states are among the fastest-growing economies in the world and have massive requirements as far as investment in infrastructure is concerned,” Loscher said.
“This means there is a constant flow of major infrastructure projects to the markets. These are supported by a mix of continuously strong crude oil prices and high production levels, which give regional governments the financial means to push forward with these investments.”
Siemens closed last year on an all-time profit high, and carried the momentum into the first quarter of its 2012 financial year.
But the second quarter was not as productive, even though revenues were up 9 per cent year-on-year.
“Orders [were] coming in below 2011 levels due to lower volumes from large orders,” said Loscher.
“The Middle East traditionally accounts for a large share of our overall order intake and also did so last year.”
This includes a $1 billion (Dh3.67 billion) plus deal for a power plant in Saudi Arabia and a $1.4 billion contract for the Shuweihat 3 power station in Abu Dhabi.
“Generally, we see opportunities in all of the countries of the Middle East as they all face similar challenges such as fast-growing populations and the need to create jobs,” Loscher added.
“As a general rule, the current situation will not reduce the demand for energy-efficient and resource-saving infrastructure solutions. We’ve rigorously focused our company on our core businesses, green technologies and the growth markets of the future.
“The same applies for the Middle East. In the region, there is a pressing need to accommodate rapidly growing populations.
“This, in turn, requires investments in infrastructure and industries across the region, and these developments far outweigh any drop in the real estate segment.”
According to industry sources, there has been a marked increase in new tendering activity in Saudi Arabia and Qatar, though it could be post-Ramadan before most of these are signed off and translate into work on the ground. Libya, in the throes of reconstruction, offers another area of opportunity.
A fact that is acknowledged by Loscher.
“In light of the recent events in the country and the transition it is going through, we are committed to helping rebuild it,” the CEO said.
“We completed earlier this year a fast-track programme to restore full capacity at Misrata power plant and to repair the 400-kV Misrata substation to ensure uninterrupted electricity supplies to large parts of the population in the northwestern Libyan city. So we are already heavily involved and we see more opportunities opening up as reconstruction and the development of the economy continues to accelerate. We have a large installed base in the country, which ensures ongoing engagement and involvement for us.”
Having had an exposure to the region for more than 150 years, Siemens sure knows its way around.