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Schneider's Gur sees Mideast infrastructure spend continue despite downturn

By Alice Johnson
13 December 2011
Despite the global economic downturn, investment in infrastructure across the Middle East has continued and is continuing, according to Goktug Gur, Country President of UAE and Oman at Schneider Electric .
"Despite the challenging economic climate, Middle Eastern countries are continuing to invest heavily in infrastructure projects and that is being reflected in our continued growth. Only today I read a report stating that the GCC region would spend USD 97 billion on road and rail projects by 2020, which covers power, airports, seaports, ICT and water," he told Zawya in an interview.
The GCC numbers are part of a report by the Kuwait Financial Centre ( Markaz ). Markaz estimates the total value of railway projects (including rail, metro, tram and stations) is USD 79 billion including the USD 30 billion GCC rail network. In the road network sector, the total value of ongoing projects amounts to USD 18 billion, which covers power, airports, seaports, roads and railways, ICT and water.
These figures are "encouraging", Gur said, citing the huge developments in the Saudi five-year plan, "which runs till 2014 and aims to build 25 new technology colleges and 50 vocational schools by the end of the period, valued at approximately USD 384 billion". The five-year plan is Saudi Arabia's ninth, and aims to improve the standard of living, increase employment, balance development across Saudi regions as well as increase the competitiveness of the economy.
Schneider, a global energy management company, showed strong growth in the Middle East, South America and Russia, according to its third-quarter financials. "We accounted for 18% of group Q3 sales with a 10% year-on-year growth mainly driven by our IT and Power operations," Gur said.
Western Europe accounted for 31% of group Q3 sales, Asia-Pacific accounted for 27%, while North America accounted for 24%.
Western Europe turned over EUR 1.755 million in Q3, Asia-Pacific turned over EUR 1.576 million while North America turned over EUR 1.352 million.
Schneider was founded in 1836 in France, moving from steel production in the 19^th century, to electrical distribution and automation in the 20^th century and energy management in the 21^st.
The company made EUR 19.6 billion in sales in 2010 and employs more than 110,000 staff in 100 countries, making 37% of its revenue in new economies.
The Q3 2011 report shows organic sales were up by 7.7%, with reported sales of EUR 5.7 billion. New economies maintained good momentum (up by more than 14%) and there was a balanced overall contribution to growth by the IT, power, energy and industry sectors. Gur joined Schneider in 1995 and has held a number of managerial positions in the company over the past 16 years. His current role's responsibilities include P&L management for the UAE and Oman; general management; sales and marketing; business development; pricing and commercial policy.
For Gur, the Middle East region and the Gulf is "extremely crucial" to the overall growth of the company, which has "continuous expansion plans" across the region, which will be tackled through recruitment, increasing the number of offices and hiring additional partners.

This prospective plan will not be affected by the economic issues currently being experienced in Europe, due to the "differences in economic dynamics" between the regions, Gur said.

"Without doubt there is cause for concern based on the intrinsic nature of the global economy today. However... we are enacting various measures, which will help cushion us against adverse developments," he said.

Forward Looking

Gur expects the Q4-2011 growth rate to fall in line with the company's targeted range and expresses the importance of its "healthy solutions backlog, which will cushion us against any further sell-down".

"Beyond 2011, the focus will be on attaining further solid margin and cash performance," Gur said.

So how will profitable business growth be effectively achieved while ensuring customer satisfaction? "The logic behind profitable growth and customer satisfaction is synonymous. If growth is suffering, the likelihood is that a lack of, or poor, customer experience is a contributory factor," the avid outdoor sportsman said.

"Likewise, a poor customer experience will inevitably have consequences on sustainable growth," he said.

© Zawya 2011

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