Lalu Samuel

Sharjah is striving to attract more investments into various sectors of the Emirates in the back of an ongoing economic boom. Last years Sharjah´s growth domestic product increased by whopping 12,3 % over the 42 billion recording in 2006. As a foreign actor what is your front assessment of the economic business environment in Sharjah?

The government is determined to encourage the manufacturing industry. If you look at the manufacturing scenario in the UAE, 47% of UAE industry is based in Sharjah. So the government and various departments are determined to support and develop this industrial base that gives more stability for the economical situation in Sharjah.

In your opinion what new business opportunities lie in Sharjah?

The government is pushing the manufacturing sector. Basically, the manufacturing sector wants cost-effecting manufacturing. If you look at the residential side of Sharjah. Most of the people who work in Dubai live in Sharjah. Sharjah industry has one advantage that investors are able to provide economical living conditions for people. It is promoted as the family oriented state: safe, alcohol-free environment where families can live peacefully.

So what are the advantages that Sharjah can offer to the investors coming here?

Excellent infrastructure and facilities, non-bureaucratic departments, availability of good road networks, electricity and accommodation facilities.

What kind of policies can be further improved to facilitate the operation?

Basically the only area that can be improved is the infrastructure and the industrial . They are already trying to develop an industrial city very close to Sharjah. So these are the areas that they can improve. But also the port facilities can be improved a little bit further.

We know that you are the general manager of several companies Clipsal, GP for the Middle East. I would like you to give us some background about these companies and then show us some structures and business here in the UAE.

Clipsal is a brand which originated in Australia in 1920. From there the Clipsal brand grew as a global playerAnd in 2003 the brand was sold to Air France multinational Schneider, which is a € 16 billion group with 120 000 people worldwide. Schneider wanted to buy this group because of its dominance in Asia and Australia,where we are the number 1 brand. Globally, Clipsal was one of the top fire brands. There is a clear domination of the brand in the regions where Schneider purchased. Schneider is committed to develop this brand further.We also have a very large presence in the region, we are doing Schneider and Clipsal, we have 600 employees in operations such as manufacturing, marketing and distribution operation. We have a very large distribution center which caters to about 35 countries in the region. We also have a full-fledged manufacturing facility that excludes about 300 km of conduits every day and we also have a molding operation. We have about 88 000 square meter of land area here and about 25 000 square meter of built-up area. With this operation we still have a lot more space to grow, so out of 88 000 we have only constructed 25 000. We have a lot of expansion capabilities. We as a company are committed to become a local industry, we are committed to invest in the region, to develop our business in the region we are committed to invest in the manufacturing segment.

How do you Schneider?

Geographically Schneider is split into 4, Asia pacific operating division (APOD), International operating division, European International Division and American Operating division. Geographically, we fall under the international operating division. We are supported by the APOD as far as Industrial operation is concerned because Australia and Asia come under this division. The majority of the products that we manufacture, develop and deal with, are supported by Asia and Australia because the R&D facilities are based in Australia.

Apart from Clipsal you have Pierlite and GP Middle East business units. How do these units compliment your corporate structure?

For Pierlite we have factory that manufactures light treating. It has always been a part of the Clipsal operation. As an industry it compliments the electrical products that are required for the construction industry.Its products are a synergy for the Clipsal products. So when we offer a package to a contractor or a developer we offer Pierlite along with Clipsal as a package. GP is a totally different business. It has also some products that compliments the Clipsal business. For instance it manufactures one of the most expensive home creator systems in the world called KF. In Clipsal we offer solutions for commercial buildings and hospitality industry. The KF speakers come as part of the Clipsal offer but a part of this GP has a battery business which is distributed to the FMC industry represented by the FMCT corporate like Jamal Majid. Jamal Majid´s FMCT represents the battery elution. GP is also the 3^rd largest battery company in the world. And GP´s 9 VOL T batteries have caught 60% of world market share. GP manufactures a lot of unique products e.g. recycling: today where the world is pushing for green environment, environmentally friendly products, sustainable energy. GP manufactures a lot of environmentally friendly products like recyclable batteries, rechargeable batteries. We have clearly researched on rechargeable and recyclable batteries in Europe and America.

You said “ our business has recorded 60 to 65 % of average products for the last 4 years and your market share also recorded $ 200 million in 2007. How confident are you that this growth will continue in the wake of the recent economic slow-down?

To achieve a greater market share we will push forward for further penetration into all the regions. So the US economic slow-down is not going to have an immediate impact on the industry here. If you look at the construction spending we are talking about $ 1,1 trillion of investment in the construction industry, by Saudi-Arabia alone followed by the UAE, followed by Quatar and Kuwait. So we are talking about almost $ 3 trillion in the construction industry in the next 5 to 10 years in the region. The investment regions have already started. I think it is very difficult to hold it in the middle, adding the industry boom activity and expansion.

What happens in some of the lightness investment retort striving for having new capacities, product ranges, brands, in tour-existing portfolios to cut a 4 additional growth?

As a group the biggest acquisition we have done in the last 7 to 8 months was APC, American Port Corporation at the value of € 5.5 billion which was done by Schneider, a parent company. Another acquisition was done in Germany, a company called Martel which is providing energy of management and lighting control solutions. We acquired several other companies called Pelco, GT, Ritto, Owa. A few of these companies which we acquired form a seniority for the existing business. In terms of capacity, expansion here, we expanded our capacity from 150 km of conduits per day Which we are further expanding to 400 km per day in the next 3 months.

What do you expect from these acquisitions? What kind of targets would you like to achieve in 2008/2009?

With the new acquisitions the company’s turnover has gone from € 13 billion to € 17,1 billion. The growth target for this year is about 14 %.

As a private company would you be able to disclose some of the key financial and chart the growth Clipsal Middle East is experiencing in the regions and some of the key figure?

We said that we have achieved 200 million dollars in 2007. We are targeting a 50% growth this year. In terms of orders, order books and exhibition maybe about 20% less.

What is the group’s strategy in terms of the expansion development plan?

We are heavily committed to investments in the region because we feel that there is a market. The manufacturing capacity what we have caters maybe to 10% or less than that of the market demand. So there is a capacity expansion in our forward strategy to meet more demands. Our mission is to become the number one brand in the region. In this process we will do everything to contribute to the growth and remove road dogs e.g. If you want to bring products from Australia it may take a longer shipping time and it is more expansive to ship products out of Australia. If we manufacture locally we will be able to respond to customer’s requirements faster. And us a multinational here it will also support the government’s initiative to diversify into manufacturing and industry.

Clipsal Middle East received the Mohamed Bin Rashid Al Maktoum Business award for 2007 under the UAE manufacturing free zones. What does this award mean to you and what makes you outperform your competition?

This award is an endorsement of the capabilities and the manufacturing, the quality and methodology that we follow. When you are a local manufacturer there is certain amount of criteria: are we meeting international standards? Are we able to meet the required standards in the region? Do we have the capacity to follow?The evaluation was very very tough. It went for nearly 7 to 8 months. We were given some clear guidelines on6 or 7 topics and then asked to submit a report. Out of 210 companies we submitted the report. 60 companies were shortlisted and these companies were evaluated. There was an evaluation team, experts from various departments, financial, industrial, quality and human resources. They came and spent their full day with usevaluating and verifying the documents that we submitted to them. They had a discussion with us and did a short listing of the 60 companies. An international committee which form a group from different countries in the world exported the evaluation. They did the shortlisting and then it was transferred to the stearin committee which included the heads of various departments in Dubai and the royal family. This is how we were evaluated. So we underwent a very tough evaluation. So this also helped us to become aware of areas where we are strong where we are weak where we need to improve. It was a very neutral evaluation.

What does Clipsal brand represent here in the Middle East and what do you want to achieve in terms of recognition and image. What are your major plans where Clipsal products can be used?

We are an international brand. And when you have a non-brand especially in the electrical industry it has to contribute to the safety of human beings. Electricity is the life and blood of the industry. It is operated by human beings. So our mission is to provide a safe and uninterrupted electricity, electrical power. When you want safety we need to look after the confidence of the people. So when the people show confidence in buying Clipsal brand products we have to make sure that the society’s confidence is not abused. We want to become the number 1 brand in the region.

You have participated in the Public Private Partnership Program that aims to foster private partnership that encourages private sector to play a greater role in the economic and social activities in Sharjah as well as promoting opportunities of culture, commerce, industry and tourism. As a foreign and private actor how do you see your role in the development in Sharjah?

In the public private partnership we had a very clear interaction with the heads of all the governmental departments such as the municipality, electricity, immigration.This was also a very clear vision of our Highness who wanted to bring the public sector and private investorstogether to build up their relationship thereby he wanted to improve communication between those two sectors, work together on several projects and thereby enhance the capabilities of Sharjah, evaluate and improvethe weak and strong areas. We suggested several projects which both sectors could do together and we are also working on several suggested projects which are submitted to his highness for approval.

Could you shed some light on the projects?

Unfortunately we are not allowed to publish that.

In what kind of sectors do you want to contribute in the development of Sharjah?

We suggested the areas of mass-transit, transport and strategy but it will be discussed as a project and submittedto his Highness.

In your opinion how has the group’s operation impacted Sharjah economically and socially?

We invested almost Drs 100 million over here and 50% of our turnover is exported which brings an additional revenue. Since we started operation here we are one of the largest companies based in Sharjah. 50% of the turnover is traded in the UAE where we pay customs duty. We have also created job opportunity for about 600 people. We are one of the largest investors in the safe zone. We also have operations in other parts of the UAE like Dubai, Abu Dhabi, Alain etc. but we are also represented outside the UAE: Oman, Qatar, Bahrain, Kuwait.We have our own offices managed by our own country managers.

One of the underlining themes was also the promotion of culture and tourism. In this context, in what way are you promoting this?

It is a regional company based in Sharjah. We bring people from almost 35 countries into the region handled by us. We bring distributors, customers, we organize conferences, training. As a company we bring a lot of foreigners in to the country we make them stay in Sharjah we get them the experience . they really enjoy staying in Sharjah and the UAE as a whole. So this itself is a promotion of Sharjah and the culture made by us.

What kind of other initiatives are you initiating in order to address corporate of responsibility?

We bring students to local schools and offer them training. We bring them closer to technology. We also promote green initiatives. Being an Australian company we are one of the most concerned companies in the world. 6 out of 10 Australians have skin cancer. Australia pushes green initiatives. Recently we spent $ 35 million in enhancing our manufacturing facility. So we manufacture a lot of products which are environmentally friendly. We are also promoting the solar lighting system being part of the sustainable energy.

How do you see the future of Clipsal in the Middle East in 5 years ? What are your future expansion plans?

There is a clear vision to become the number one brand. So we will aggressively promote our business, new product additions, untapped markets. When we say untapped markets it can be in the country itself. The acquisition of new companies which is a synergy of the existing business. So that itself is a diversification and expansion of the business. We want to expand our manufacturing capabilities, we have sufficient space for expansion, we have a 150 square meter land area for expansion.

What is your final message to our viewers, audiences and readers?

We are trying to do our best to support the vision of the rulers of the UAE. As a company we feel responsible, we have been given the facility to operate here, we have been given excellent support by the rulers and government to operate in a free and secure environment. The country also provides excellent infrastructural capabilities like communication, road, transport and port network and a safe environment for families and kids to live. So it is an excellent environment that the government is trying to create. As an international company based here we feel that we have to support the initiatives of the government. So we will heavily invest into manufacturing to become a major local industry for the region.The message for our clients: it is a safe, secure and an excellent environment to invest. It is a hub for the region with excellent infrastructure capabilities, safe for money, safe for living and safe for business. The UAE created a market for UAE investors. If you talk about the region, there are 357 million people living in and around the UAE, Arabic speaking people alone. So it is a big market and it is also supported by the market.