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‘Ready for more expansion in the region’

A year on from inaugurating its 8,000-square-metre facility in Dubai, Wilo says it is ready for further expansion. Yasser Nagi, Managing Director, and Group Director Sales Area MENA, Wilo Middle East, elaborates on growth plans and other aspects, in a mid-February interview he gave to Surendar Balakrishnan at the company’s facility…

| | Apr 30, 2020 | 10:51 am
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WHAT PLANS HAVE YOU ESTABLISHED FOR THE NEXT FIVE YEARS IN TERMS OF MARKET EXPANSION IN THE MIDDLE EAST?

You are sitting in a facility that is almost a year old, so our plans are pretty fresh. We have been in the region for more than 25 years through our local distributors. Wilo’s first presence was in 2008, by opening its first subsidiary in Dubai.

We acknowledge that the region has huge potential, and we are very keen on presenting our German-brand pumps in the level that they deserve. We are manufacturing very durable, high-efficient pumps that I do believe have a lot of advantages when it comes to energy saving and also sustainability issues – the two go hand in hand.

About two years ago, we thought of increasing our presence in the region. Dubai is a hub for the entire Middle East and North Africa. The investment environment here is much easier, and the proximity to the markets, in terms of language and in terms of importation and exportation, makes things easier here. With these in mind, the company decided to set up in Dubai. And last year, we inaugurated this facility.

It is one of the top facilities we have in terms of technologies we are employing. It sits on almost 8,000 square metres. It encompasses a talk-and-exhibition room and our sophisticated Wilo Academy, which is where we display all our new pumps, which are hooked up with the pipes and are workable through touchscreens. That way, we are able to demonstrate how the pumps will be working, and customers can check all the technical data. Also, we have an assembly area and warehouse.

So, in a nutshell, we have lot of plans. For the next five years, our plans definitely depend on how the evolution of the investment will move forward. We are ready for more expansions throughout the entire region.

DID YOU ESTABLISH THIS FACILITY TO GIVE YOURSELF A COMPETITIVE ADVANTAGE IN TERMS OF SPEEDING UP THE DELIVERY OF YOUR PRODUCTS?

Exactly. The lead time is a factor, and so also, of course, is the pricing. We have more local components manufactured by different multinationals. We use the components, if they match our standards, quality- wise, and if they are coming from approved vendors. Another factor is the proximity to the different markets we are serving in the Middle East and northern Africa. Our presence here gives us more flexibility.

HOW INTERESTING IS THE SAUDI MARKET, ESPECIALLY CONSIDERING THAT IT IS OPENING UP LIKE NEVER BEFORE IMAGINED? WE ARE EVEN SEEING INITIATIVES TO ESTABLISH ENTERTAINMENT FACILITIES, AMONG OTHER DEVELOPMENTS.

Saudi Arabia will continue to be the biggest market in the Middle East. We see a huge potential in Saudi – it has a huge pipeline
of projects. Of course, there has been some slowdown, last year, but it is never inactive. So, normally, it is a cycle, of course – it is affected by the different circumstances that come from the situations of the different wars going on in the region. There is instability in some countries that definitely affects the Saudi market.

All said, in Saudi Arabia, apart from the cinema complexes, we are seeing more infrastructure projects that are government related.

As for the Emirati market, it is definitely one of the top three, let’s say, and is more stable than the Saudi market. Maybe that has to do with the different components of the GDP of the country and the fact that it is
not just oil-dependent.

Generally speaking about the region, when the oil price goes up or down, it affects the influx of projects.

WHAT IS THE EXTENT OF YOUR INVOLVEMENT IN SAUDI ARABIA?

Our pumps have already been installed and commissioned and are running in new projects in Saudi Arabia. We are already there in the presidential palaces of NEOM City.

We are always following Saudi, which definitely is one of the biggest markets. And we will always be keeping the country under the scope. To give more specific examples, the Line 3 of the Riyadh Metro was also totally equipped with Wilo pumps and systems, including chilled water pumps, drainage and sewage.

We supplied to the Riyadh Metro on the back of our experience from having worked on the Dubai Metro. All Dubai Metro stations are exclusively equipped with Wilo pumps – even the new extension for the Expo 2020. The Dubai Metro is one of our very important references in the region, and we are able to replicate it in Saudi Arabia, though not to the extent we wanted, but then, Saudi Arabia is
a different market, with different players and different metrics.

WHAT IS YOUR STRATEGY FOR GROWTH IN THE UAE. GIVEN THE RELATIVELY FEWER NUMBER OF NEW-BUILD PROJECTS IN THE COUNTRY, ARE YOU VIEWING RETROFIT PROJECTS AS A REVENUE STREAM?

We are not really going for retrofit as a strategic option but rather out of a need to establish diversity. So, yes, we are definitely going in the direction of retrofitting and optimisation, and the direction actually fits within our scope of research and development and our product portfolio, which fits in perfectly with the vision of Dubai and the UAE, in general, when it comes to energy efficiency and sustainability.

So, definitely, retrofitting is a line of business that is on the rise. It can act as a buffer for any shock we can get from the slowdown in the normal business that we are having. Definitely, it is not going to compensate for everything, but at least, it acts as an option.

YOU USED THE WORD, BUFFER. WHAT PERCENTAGE OF THE PROJECTS YOU ARE SUPPLYING TO, CONSTITUTE BUILDING- RETROFIT ASSIGNMENTS?

We cannot say much, because we are new to retrofitting. And retrofitting itself is not an avenue that used to be pursued
by manufacturers. It was not a line of business for manufacturers. Maybe it has been so for the different distributors or, let’s say, the service partners but not for the manufacturing company itself. That said, maybe it is becoming more of a trend right now.

CONSIDERING THAT PUMPS CONSUME 5-7% OF A TYPICAL BUILDING’S ENERGY USE, WHAT IS WILO DOING IN
TERMS OF INITIATIVES TO IMPROVE ENERGY EFFICIENCY? FOR INSTANCE, ARE YOU UNDERTAKING R&D SPECIFIC TO THE REGION?

I cannot specify R&D that is related to the region. I can just speak about R&D, in general, for the entire Wilo Group. We are spending about 60-70 million euros annually on R&D. And that has always been on the rise. Last year, it was 66 million euros, exactly.

And whatever R&D is happening in the group, it is also considering the needs all over the world. People the world over are now speaking the same language of energy efficiency and sustainability, so whatever is happening in the group right now is affecting our region here in terms
of having digitalised pumps and interface feature, whereby you can control the pump from a BMS room without having to go to the sewage. And there is the smart pump, which you can connect to your Bluetooth and receive notifications of faults, and so on and so forth.

In terms of energy savings, as well, we have worked closely with Emaar to retrofit 15 buildings in the Downtown area. We replaced the 160-kilowatt chilled water pumps there with 45-kilowatt pumps. And we replaced the 45-kilowatt pumps with 7.5-kilowatt pumps. We also
worked with SEWA on their Falaj pumping station, where we replaced 30-year-old split-case pumps for the pumping stations with the aim of saving 30% energy, and the result was 46.5% energy saving for SEWA. So, we are also playing in that field, which is retrofitting and energy-saving.

WHAT IS THE NATURE OF THE TESTING OF PRODUCTS THAT YOU CARRY OUT? HOW COMPATIBLE IS THE TESTING WITH CONDITIONS SEEN IN THE GCC REGION?

We do have a sophisticated, digitalised testing facility, so we can test any pump or system we introduce here. We can conduct witness tests, so consultants can see for themselves the results of the pump according to the documentation they have received. The whole process is transparent, and this is one of the most important aspects of having a facility.

We can test the flow rate up to 200 cubic metres per hour, and the power up to 110 kilowatts. We can do a single-pump test and a full-system test – multiple pumps in parallel. So, we can show the customer a single-pump curve or a multiple-pump curve.

WHAT IS YOUR TAKE ON SINGLE SOURCING OF ALL COMPONENTS OF A PUMPING SYSTEM? DO YOU BELIEVE IN OFFERING VARIABLE- FREQUENCY DRIVES, CONTROLS, BMS AND THE PUMP AS A WILO TURNKEY SOLUTION? I ASK THIS, BECAUSE THERE IS A SCHOOL OF THOUGHT THAT SINGLE SOURCING ENSURES THE PUMPING SYSTEM IS WORKING IN HARMONY AND GIVING THE DESIRED OUTPUT OF BETTER ENERGY EFFICIENCY AND RELIABILITY AND OF BEING ABLE TO OVERCOME THE LOW DELTA T SYNDROME.

My point of view is that single sourcing is not a necessity anymore. If you were to ask the people working in our factory in Germany, they may have another opinion. But, according to what we assemble here, we are not dependent on only one source. Maybe we have a preferred one, and it’s also as long as it is according to our quality levels and it is an approved vendor.

ARE YOU ABLE TO OPTIMISE THE DESIGN, THE INSTALLATION AND COMMISSIONING IN A SEAMLESS MANNER? AND ARE YOU ABLE TO OPTIMISE THE COST WITH THAT KIND OF ARRANGEMENT?

Of course. We do have the capability to negotiate perfectly to reach our targeted cost structure.

DO YOU ALSO PROVIDE THE OPTION WHERE THE CUSTOMER CAN SOURCE ALL THE COMPONENTS FROM YOU?

It depends on a case-by-case basis. Some clients simply tell us that they like and trust a particular vendor, to which we say, “Fine, we do have it.” If we don’t have it, we provide an alternative. If you want a German component, of course, we have it. We have Austrian. Whatever, it depends on the component itself.

I AM TALKING ABOUT THE CORE COMPONENTS.

Yes, these products are Wilo products, completely inhouse. We are able to supply Wilo sensors, controls, pumps and VFDs,

as being the four major components of a pumping system. We outsource the motor, however. We outsource the PLCs from different well-known brands. We go to very well known manufacturers that live up to our expectations of quality. We reach out to companies like Beckoff and Schneider, because they are special in what they do. Quality is non-negotiable.


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