What is BITZER’s outlook for 2023? And what specific products are you focusing on offering as solutions to customers in the region?
We at BITZER welcomed 2023 with a positive notion that “all will be well”. Presently, the economic indicators are cause for concern, but we hope and believe private consumption and willingness to invest will not weaken.
What economic indicators are cause for concern?
We are referring to the overall view of what’s going on. The war between Russia and Ukraine and the talk of recession in the United States are key aspects. We don’t know how they will continue, but the Middle East seems to be on the right track. Usually, I collect forecasts from customers, and many are saying, “We don’t feel so bad, and we hope to perform as the year before.” I somehow have the same feeling that something is going on around us, but we are not affected as much as other countries are. The Middle East, especially, is a winner with oil prices at a high level, which means budgets are increasing, opening up government investments in infrastructure and pharma cold chain.
What challenges do you see as a manufacturer and supplier in the region? As a company, have you resolved pandemic-induced supply chain disruptions? Or, are you facing residual challenges?
We have solved supply chain disruptions in a good manner, actually. We have buffer stock available, and we could manage even during pandemic times. So, the situation is quite good. Even during the pandemic, we had not closed down the factory or resorted to short-term working schedules. We were able to service our clients, and this was an outstanding feature. In general, we are well prepared, and we can produce and manufacture as usual. You also spoke of challenges in the market. The challenges, on one side, are opportunities on the other side. We always try to find gaps. The good thing of operating in the Middle East is that we are responsible for 22 countries in the Middle East and parts of Africa. In some of these countries – Syria, Lebanon, Pakistan – there are some issues. What we lose here, we can gain elsewhere, and vice versa. On the other hand, if you are responsible for one country – say, Russia – if the economy is down, then you are down. So, that way, the Middle East is easier to maintain.
When it comes to product development, a nagging issue is the pressure to meet stringent norms, with insufficient time to do so. What is your take on this?
This is definitely a challenge, because regulations are done to protect the local market. And of course, you have to react quickly, and there is never enough time. But we have been meeting the challenge for years. I am convinced that it is possible to meet the standards issued by SASO and the others. People need to have suppliers that can fulfil these expectations, and until now, we could always do so. Saudi Arabia is one of our really good markets in the region. I am observing Saudi Arabia with a lot of interest. The Saudi Vision 2030, issued by the country’s Crown Prince, and the Neom project are impressive. I wish the project will become a reality as soon as possible. We are following the developments in Saudi Arabia. We sometimes find some tenders available, but it is more talking than acting. I hope we soon get to see some big business in our industry.
Pricing wars and counterfeiting are causes for concern for manufacturers and traders of HVACR equipment. A word please on that. Do you see anything changing for the better?
For sure, it is affecting us, but we have a good loyal customer base, and they know what they get from us. It is not just the product but also the service around it. And we are willing to provide service around the lifecycle of the product. We are fighting against Low Price Technically Acceptable (LPTA) and duplicates.
Counterfeiting is a major problem, and of course, we have a legal department that is fighting against it, but we still have a long way to go, unfortunately. We do have a system of QR Codes and special tracking mechanisms, so customers are able to understand whether a product is original or not. We are trying to protect, but counterfeiters will always find ways to jump in. On one side, there is pain; on the other side, when you realise it is you they are copying, you know you are the leader of the market.
What areas of investment do you see as representing bright business prospects?
Starting 2-3 years ago, during the pandemic times, there was huge investment with respect to pharma products and food storage technologies. Many governments are issuing programmes of having enough food for three months without outside supply; this has opened up the cold storage sector, and we are happy. In the future, we see a strong thrust in the areas of electronics and data collection, serving products over their lifetime and providing information about application, about preventive maintenance and the condition of the system. In my opinion, this is the future milestone.
In this year of COP28, with the UAE hosting it, do you see the event as providing the impetus for greater uptake of products that score high on energy efficiency?
Let’s say that energy-efficient systems are more and more in focus in the Middle East. When we look back to 5-8 years, energy-efficient products were nice to have but were not mandatory. In the world of today, though, green footprint has to be applied everywhere, and energy-efficient systems constitute the future direction the Middle East will go in. I see the countries of the Middle East as willing to invest and going the extra mile. We are ready with inverter technology, and this, of course, comes from a European perspective. We have strong direction on decarbonisation. All fossil fuels are not really banned, but we are going in that direction. The momentum is gathering to heat apartments with heat pumps and to use waste heat. And this is something we are strongly focused on. For instance, our ElectraTherm ORC solution, which is produced at ElectraTherm – a 100% BITZER company, in the United States – makes a major contribution to minimising the carbon footprint by turning waste heat into electrical power. This solution can be used in the Oil & Gas industry. Likewise, the waste heat that is produced can be used to generate power in chicken farms in the d