What are your plans for Danfoss Turkey, Middle East and Africa (TMA), with you as the Regional President?
Just to give you a bit of background, two and a half years ago, Danfoss decided to reorganise all of its Turkey facilities to take advantage of the country’s improving economic conditions and to better prepare the company’s future. At the time, I met with Danfoss and told them that I could do it.
The first thing I did was to visit all our customers and get their expectations and evaluation of the company. I asked them who they believed were our biggest competitors and what we could do differently from those competitors. When I completed the visits, I took with me all kinds of feedback and reached a few realisations, one being that our customers only knew one segment of Danfoss. They also only thought of the company as a product producer, though we wanted them to think of us as a system solutions provider.
Now, in Turkey, we had three areas that we focused on – heating, cooling and drives. They were managed separately, like they were different companies, instead of being operated under one umbrella. The teams had different targets, different strategies, different services and different working styles.
Having realised all that, I put several ideas on the table, based on which we could develop our strategies. These ideas included changing employees’ mindset so everyone would work together as one team, and developing a centralised system to create awareness among our customers of the different segments of Danfoss, as well as make the market aware that the company is more than just a product supplier.
With the Board approving the strategies we came up with, we reorganised all structures into one company. We built a customer service centre that handled all concerns from all customers of all segments. The idea behind the centre was to make sure that support was given to customers within a 24-hour period. We also reviewed our logistics, improved our after-sales and e-learning facilities, looked into new software programs that would allow us to follow- up customer visits and worked closer with our dealers.
All of those made us unique in the market, and as a result, in two years, we saw 40% turnover growth in Turkey.
Based on reports, it would seem that Turkey itself as a market saw growth in the last couple of years.
Yes, but Turkey is only one part of the region, and as the TMA President, I want to continue the success we’ve achieved in Turkey. The improvement in that market was in fact so dramatic that top management wants to apply the Turkey blueprint to the whole region, which is composed of three sub-regions. One is the Turkey sub-region, which covers Turkey, Afghanistan, Pakistan, Iran and Azerbaijan. The second is MENA; and then there’s the South African and Sub-Saharan sub-region.
Around 70% of the food produced in Nigeria is wasted, because there is no cold chain
One of the biggest challenges in the region is that it’s a large territory of 68 countries, with over a billion people. Having witnessed our success in Turkey, our challenge now is to unify the different business units of the company. We want to have a unified team, to become one company with one voice, despite coming from different cultures.
So, like what I did in Turkey, I prepared a visit programme to meet our customers across the region and get their perception of Danfoss. And like in Turkey, we’re going to implement a customer service centre and e-learning facilities, and look into improving awareness of us as a system solutions provider.
Another strategy that I’ve proposed, considering the size of the territory and considering that it’s a growing region, is that we select a few markets to focus on, instead of going everywhere – just select the most important and well-performing markets. We’ve mapped out seven of them. They are the UAE, Saudi Arabia, Iran, Egypt, Turkey, Nigeria and Maghreb – particularly Morocco, Tunisia and Algeria.
How do you intend to maximise your presence in those markets?
There are three subsets to our strategy. The first is, as has been mentioned, identifying focus countries. The second is to identify the hotspots of those countries, because some, for instance, require cooling, but then, we go deeper and determine which kind of cooling is needed. Is it refrigeration? After all, Danfoss has four growth areas, namely, infrastructure, energy, food and beverage and climate. After identifying the hotspots, the third subset to the strategy is to determine how we can cover the countries’ specific hotspots. To achieve all that, having an effective customer service system in place is very important. There has to be a 24-hour communication channel with the customers.
Once all the systems are in place, we will proceed to extract key takeaways from the experience and apply them to the other countries in the territory.
Speaking of food and beverage, what opportunities are there in the region’s refrigeration sector?
One of the biggest challenges in this region is technical expertise
Let’s take Nigeria as an example. It is among the richest countries in Africa. It has immense potential, but the cold chain is completely broken. Around 70% of the food produced in the country is wasted, because there is no cold chain. Millions of people there are going hungry, and the same thing can be observed in the other parts of Africa. That’s where Danfoss can come in – be part of the cold chain.
We are also lobbying with different governments and ministers, asking them to introduce new regulations.
What kind of regulations?
One of them is to improve subsidies or incentives that support energy-efficient products and solutions. That’s very important.
In Europe, they have really tight regulations on energy efficiency, with governments providing support through incentives. They need to provide those incentives, because without them, nobody would think about using energy-efficient products.
Historically, the Middle East has been the least concerned about energy. The utility bills are low, so nobody has been looking into it. But the world is changing, and our goal should be to do more with less. We need to use energy-efficient products to reduce our spending. This kind of thinking has to catch on, especially in the MENA region, where around 90% of the economy is dependent on oil & gas. MENA countries have to do this, and they need to decide as quickly as possible, because being energy efficient will benefit them in two ways: It’ll give them savings, and since they’re not using as much energy for their daily use, they’ll be able to sell more.
Other than the size of the territory and the energy-efficiency issue, what are the biggest challenges in the industry?
One of the biggest challenges in this region is technical expertise. We’re not there yet, but that doesn’t mean we need to reinvent the wheel. We already have technologies we can use. To address this challenge, we have decided to take it as one of our missions to provide a kind of practical support.
Of course, we need to reach people first, but how can we reach everyone at the same time? We thought of that, thought of how we could reach them and help them gain more knowledge. And that is the reason why we implemented – last year in Turkey and now in the Middle East – an e-learning programme. Today, we have more than 3,000 e-lessons, starting from beginner courses up to system solutions. And mind you, this learning platform has nothing to do with the commercial aspect of Danfoss. It’s all about the technologies that we use and the solutions that we need, like cold rooms and how to build or design them.
Are the e-lessons available for everyone?
Yes. Those interested just need to go to our website. We are also going to be taking the lessons to students through a project involving 64 technical universities, or around 1.2 million students, in the TMA region. The project, which will start in September, aims to help students learn real-time engineering, because there’s often a gap in what is being studied in school and what is being practised or used in the workplace.
There is a test after a lesson, and if you pass the test, you’ll get a certificate from Danfoss, which you can print. In the region, we already have close to 4,000 users, with the majority coming from South Africa and Pakistan. But we want to promote the e-learning platform more. We’re especially looking at countries that have a high number of engineers, like Saudi Arabia, Iran and Jordan.
(The writer is the Assistant Editor of Climate Control Middle East.)