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‘The Middle East and Africa offer huge potential’

Ludger Bökmann, Member of the Extended Board, Head of International Business, Europe, Middle East and Africa, TROX GmbH, discusses the move to invest in a Middle East production facility for regional activities, the company’s global expansion strategy and the need to enhance technical know-how to improve IAQ. Excerpts from the interview with Hannah Jo Uy…

| | Jan 8, 2019 | 1:17 pm
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Could you tell us more about the local production facility in the Middle East? What was the driving force behind the decision to establish the facility?

Ludger-Bökmann, Head of International Business, Europe, Middle East and Africa, TROX

The new production facility, for the regional activities of the TROX group, is a joint venture with TIBA Manzalawi Group in Egypt, and it is located very close to Cairo. For many years, the Manzalawi Group has already been producing several other products. We have now started to produce the air-handling units and the fan-coil units [in the production facility] and the next step, late summer/autumn next year, will be all our other air distribution devices and products.
This is the path of our general MENA strategy. We have been in the southern African countries since 1974 with our subsidiary. We are working on the West African countries via TROX Spain. Since three or four years, we opened an office in Casablanca, and now our focus is on the Middle East and North and East Africa. Because we don’t have the local production expertise, we were looking for a joint venture partner and we believe that it’s better that we are closer to the market requirements, than just offering German, Spanish or United Kingdom products.

What are the key advantages the company aims to achieve by having the local production facility?
First of all, we believe we will be quicker in the pre-sales, have quicker delivery times and be closer to the market-price level, by having a cheaper production location and shorter lead times. At the end, having such a plant in Egypt helps a lot to support our future after-sales activities, which we have not started in the region – we are just doing it in Europe at this time.

Is the decision to invest in the facility indicative of how the company views opportunities in the Middle East?
Yes, of course, this is one of our growth potentials in the world. We have quite mature markets in Europe, but when we look at the Middle East and Africa, [we see] huge potential. This is also seen as a long-term investment, because the market will not grow quickly, but it will grow constantly, for the next 10-15 years, if it’s politically stable.
Besides the United Arab Emirates, other major markets [in the region] are Saudi Arabia and Egypt, because this has the highest growth potential, in our opinion. In Egypt, in new cities like New Cairo, you see [the construction of] a lot of hospitals, offices, also infrastructure projects, like tunnel systems, which are also a big part of the TROX business.

From what we understand, in Germany there is a steady move towards digitalisation and greater integration of automation features in HVACR equipment. Do you foresee the same demand for such solutions in other parts of the world, as well?
Yes, digitalisation is a big trend, and we have already provided many solutions in Germany, Austria, Switzerland, France and United Kingdom. Now, we see the potential. We have this learning phase behind us, we know what we are doing, and now is the time to go ahead to other regions of the world.
We are just preparing this step also for South Africa, West Africa and also for Asia Pacific and Latin America, so we are doing a lot of innovation for automation systems. We will also go in the Middle East for the system solution within the next 2-3 years.

There is a lot of talk on the need to install energy-efficient equipment, mostly driven by respective national targets. Do you see the same level of investment for quality equipment in a bid to enhance IAQ in the Middle East and Africa?
Not at this time, but as you can see from our mission, ‘TROX the art of handling air for indoor life quality’, we want to bring this to the market. We want to work for this message because we believe people should have more of a healthy and comfortable and less noisy place to work, do sports and live in. This was the same when we started in Malaysia and when we started in China. It’s also our task, together with consulting officers and the investors, to increase the technical level of indoor air quality and increase the quality of the product and solution. We know that this takes years, but at the end it pays off for the TROX group.
This indoor air quality or life quality is based on many years of research and development in different universities and you can also see when the temperature in office is beyond 26 degrees C, there is no fresh air and it’s too warm, automatically the people get more tired and productivity is reducing a lot.

What is the company doing to ensure that energy efficiency and better IAQ do not have to be played off against each other?
This is a question of the complete system. [It depends] how you design the system, prepare the chilled water for cooling the offices, how you manage the system and maintain the system. This is where TROX has its strengths. We are not manufacturing only chillers or air-handling units, we understand and produce the complete system ourselves, we have huge R&D departments, and we believe in this.

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