Gulf States: a worthwhile challenge

Four Swiss companies talk about their successful involvement, and the economic prospects, in the Arab Gulf States.

Four questions to four companies, answered by:

  • Stephan Koch, Managing Partner of 42technology AG (Ltd.) in Aarwangen
  • René Vuillemin, General Manager, Europoles Suisse GmbH in Mollis
  • Simon Ackermann, President of the board of Habegger AG in Regensdorf.
  • Ralph Siegl, CEO of Confiseur Läderach AG, Ennenda

All of these will be speakers at the S-GE Impulse: Gulf States event, during which they will talk about their experiences of everyday business life in the countries of the Gulf Cooperation Council (Bahrain, Qatar, Kuwait, Oman, Saudi Arabia and the United Arab Emirates).

What prompted you to expand into the Gulf States?

Stephan Koch: Long-term personal relationships and the huge potential of the market in Saudi Arabia resulted in the establishment of a local company IPU-SA, in Riyadh, which handles energy and automation projects.

René Vuillemin: Some pilots from Qatar Airways, who were in Munich for training purposes, found the Europoles systems used at the airport there so good that Qatar Airways subsequently decided to consider Europoles for the Qatar Airport project.

Simon Ackermann: In a nutshell, the huge market potential in the events sector. Completely different sums to those we are used to in Switzerland are involved in the Gulf States, resulting in larger, more complex and more ambitious events, making the market exciting and rewarding for us.

Ralph Siegl: The target markets have a “sweet tooth” and are very demanding. We are focusing our export strategy on Swiss-sensitive markets which have a huge liking for high-quality chocolate and have the appropriate purchasing power/willingness to buy. These aspects are very attractive in the target region. As a long-standing partner of both technical clients and professionals, the market is now also presenting us with interesting prospects in the upscale HORECA channel.

What presence do you have in the Gulf States?

Stephan Koch: IPU in Saudi Arabia has a similar portfolio of services to those of 42technology. As a shareholder, we at 42technology are endeavoring to pass on our technology, products and experience as much as possible to our partner company. Increasing the vertical range of manufacture is allowing IPU-SA to acquire new skills and strengthen its position in the local market.

René Vuillemin: We completed an initial project in Qatar, then another in Saudi Arabia and are now working in the United Arab Emirates with our latest projects, and have a local presence with a branch office in a UAE free zone. We would like to convert this branch office into a local office, in order to be able to have our products registered.

Simon Ackermann: We have been present in Qatar with our own branch office since early 2014. A local presence creates the necessary proximity to customers – and that is important in the Gulf.

Ralph Siegl: We work with various independent distributors in the United Arab Emirates (based in Dubai), in Kuwait, Qatar and Saudi Arabia.

What do Swiss companies need to pay particular attention to in the Gulf States?

Stephan Koch: IPU-SA had to overcome a few hurdles as a “Foreign Investment Company”. We consider the following to be key factors of our success: close cooperation with the local authorities, expert assistance with legal issues and recognition of social responsibility, for example consistent implementation of the Saudization program.

René Vuillemin: Coming from Switzerland it is very difficult to access important, market-relevant information. You have to have a local presence to be able to participate in projects and orders promptly. And don't forget: you have to have registered your products to have any chance at all of being considered for invitations to tender and projects.

Simon Ackermann: You have to build up a good network of relationships, cultivate contacts intensively and be present locally as often as possible, even as an owner and CEO, particularly during negotiations with contracting authorities. It is also a question of respect.

Ralph Siegl: Nothing happens without well-connected local partners. It is essential to operate here with a high degree of relationship management instead of legalistic contractual approaches. In my opinion Switzerland, which has its own pronounced relationship culture in its business practices, is in a good position here. Our experiences of a “handshake” philosophy are positive. It takes a lot of time, but it is worth it.

How do you evaluate the economic prospects in the Gulf States?

Stephan Koch: There will be considerable investment in infrastructure projects in Saudi Arabia in the next few years. Energy systems and our services will be required for this. We are investing in close cooperation and in training in the areas of technology and sales, in order to further expand our position in the market.

René Vuillemin: The economic prospects are very good, but competition is fierce.

Simon Ackermann: The prospects for the coming years are good. I estimate the potential in our market to be approximately 150 to 160 million USD per year. If we manage to secure approximately one order in ten, we will be doing extremely well.

Ralph Siegl: We see great potential, especially in the private sphere, and will gradually continue to establish long-term solutions with the right partners.

Learn more about the individual countries of the Gulf Cooperation Council, the challenges they present and the potential for Swiss companies at the S-GE Impulse: Gulf States event..

Country Consulting: Gulf States

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