JEDDAH: A top German official has confirmed that investments from German companies in the Kingdom are increasing despite the debt crisis in Europe.
The German 's economy has performed well during the financial meltdown and the euro crisis, he pointed out.
Andereas Hergenröthe, delegate of the German industry and commerce in the Kingdom, told Arab News in an interview that 700 German firms in Saudi Arabia are running 100 percent company-owned branches, joint ventures with Saudi Partners or simple liaison offices.
The small and medium enterprises form the backbone of the German economy, he said, adding that he believed they could contribute to the huge development of Saudi Arabia's economy.
He added: "There are German consultants who are keen to expand their activities in the Kingdom’s power sector. The delegation of the German industry and commerce in the Kingdom, in association with the German Ministry of Economics and Technology, will lead a delegation of German renewable energy companies in May 2012 to Saudi Arabia, in order to actively promote the transfer of technology and know-how.
Q: How do you evaluate the impacts of debt crisis in the euro zone on the activities of European companies in the Saudi market?
A: Obviously the situation in Europe is not easy. However, Germany's economy has been doing a good job during the financial crisis and also during the euro crisis. If you look at the numbers of bilateral trade and FDI to Saudi Arabia during the past thee years, you can see that the figures were increasing although Europe has been going through some difficulties. For this reason, I don't expect any bigger impact from the euro crisis on the activities of German companies in Saudi Arabia.
Q: Do you think that the financial crisis in the euro zone will contribute to the decline of German investments in the Gulf region?
A: The German economy was affected by the financial crisis but investments in the Kingdom were increasing. From an economic point of view, it makes complete sense to invest in Saudi Arabia, especially in difficult times. Because investing in Saudi Arabia is not about a short-term gain, but rather a sustainable and successful planning of the future.
Q: What do you think of the volume of opportunities for German companies to invest in solar energy in Saudi Arabia?
A: There are bigger companies like Phoenix Solar or Conergy that already have bigger projects in Saudi Arabia. Phoenix Solar is building in cooperation with Naizak Global Engineering Systems, its local project partner in Saudi Arabia, a 3.5MW Power Plant near Riyadh. Conergy installed the 2 MW roof top installation of the King Abdullah University of Science and Technology (KAUST). In general, all consultants are waiting for new regulations for the electricity sector to expand their activities in the Kingdom. Our office, AHK Saudi Arabia, is also very active in this field. In association with the German Ministry of Economics and Technology, we will lead another delegation of companies in the field of renewable energies in May 2012 to Saudi Arabia in order to actively promote transfer of technology and know-how.
Q: Do German companies face competition with other firms in Saudi Arabia’s solar energy sector?
A: Of course there is a competition with companies from East Asia and also inter alia from Spain. But Saudi customers know very well that there is a huge difference between German companies and their competitors. The "Made in Germany" tag is synonymous with state-of-the-art technologies and high quality. German partners are known for their fair play with their partners and the transfer of know-how is included in every package.
Q: What is the role of German companies in railway projects?
A: According to my information, it is wrong to speak of an absence of German companies in the rail network. For instance, the Mobility Division of Siemens has build up the entire electricity system of the "Al Mashaaer Al Mugaddassah Metro" project, which has been running to 50 percent of its capacity during the last Hajj. The German International Cooperation international Services (GIZ) and its subcontractor Dornier Consulting are currently developing a master plan for the whole railway system of Saudi Arabia. According to their plan, the new economic cities and the existing industrial cities shall be linked to the rail network. The network shall not just cover Saudi Arabia but also be linked to other GCC countries. On a larger scale, a connection to Europe via rail could be installed. Besides, Dornier, GIZ and public authorities have developed plans for public transportation systems for Riyadh and Jeddah. German interest lies not only in the rail network of Saudi Arabia but also in transportation and urban development in general. One can see this interest in the planned visit of Peter Ramsauer, German federal minister of transport, construction and urban development, in spring 2012. The Saudi rail network will certainly be one of the main topics that will be explored during his visit.
Q: How high do you estimate the percentage of German companies, specialized in medium and small projects in the Saudi market?
A: It is hard to answer such a question in numbers but I would estimate that it lies at 50 percent. In our directory of German companies and their representatives we list more than 400 companies with all their contact details, but there are many more. By now, we know that 700 German companies are active in the Kingdom. They are running 100 percent company-owned branches, joint ventures with their Saudi Partners or via simple liaison offices. SMEs are the backbone of the German economy and I think they can contribute to the huge development of Saudi Arabia's economy in the upcoming years.
By IBRAHIM NAFFEE
Source : Arab News, Dec 24, 2011 23:47