Representatives from 12 German smelter and roller plant technology specialists visited the Eastern Province recently as part of a business and trade mission to explore opportunities in the kingdom.

The three-day visit, organised by AHK Saudi Arabia (the official representative of German industry and commerce in Saudi Arabia and Yemen and part of the German Chambers of Commerce network), and co-financed by Germany’s Ministry of Economy and Technology, included a networking event at the Eastern Province Chamber of Commerce headquarters in Dammam, and site visits to Sabic affiliate Hadeed in Jubail and what will be one of the world’s largest aluminium production complexes, the 400,000 tonnes per year Alcoa-Ma’aden joint venture currently under construction at Ras Az Zawr, north of Jubail.

Andreas Hergenroether, Riyadh-based head of AHK Saudi Arabia, which helps German companies enter the Saudi market and vice versa, told Gulf Industry on the sidelines of the networking event that the kingdom is now the biggest market for German exports in the Middle East and North Africa.

“Trade between Germany and Saudi Arabia rose 17 per cent in the first half of this year. In 2010, German exports to Saudi Arabia were valued at six billion euros, up 20 per cent year-on-year. Germany is currently the third largest exporter to Saudi Arabia after the US and China,” he says. Meanwhile, AHK Saudi Arabia says the value of Saudi imports to Germany reached 262 million euros in the first five months of this year, up 29.3 per cent from the previous year.

Hergenroether says German companies are placing greater emphasis on more sustainable business models in the kingdom.   

“There is a growing need for technology and knowledge transfer in Saudi Arabia,” he says, citing the efforts of German companies such as Siemens, EADS, Merck, Mercedes and MAN Trucks in this regard.

“We want to adapt our strategy to better meet the kingdom’s needs as it diversifies its economy away from hydrocarbons and further into industries such as steel and metals,” he adds.

(From left) Hergenroether, Abdulrahman F Al Homiyn, Eastern Chamber of Commerce and Industry assistant secretary general for PR & media, and Alammawi,

Building capabilities
German companies have been busy building regional capabilities in these specialised sectors.

For example SMS Siemag, whose regional headquarters is in Dubai and which has been supplying Hadeed for 30 years, is supplying a complete integrated hot and cold rolling complex, including the electrical and automation package, for the mammoth Alcoa-Ma’aden project.

“The timetable of delivery of the rolling mills to the project is 14 to 19 months from project start in August 2010 and the first coil is foreseen in November 2012,” Hans-Ulrich Breuer, president of Dubai-based SMS Gulf FZE, told Gulf Industry. Meanwhile, Rami Al Ashqar, the Dubai-based business development manager at Bosch Rexroth, which supplies drive and control systems for clients including Hadeed, Emal, Dubal, Emirates Steel, Aluminium Bahrain (Alba), Qatalum and Qatar Steel, says the visit was a useful fact-finding mission.

“It is an opportunity to find out more about the Alcoa-Ma’aden project and identify further potential for Rexroth here,” he says.

For Alfonso Stein, area sales manager Lechler GmbH, which manufactures some 20,000 different types of nozzle at sites in Germany, the UK, US, Hungary, India and China, a key  objective of the Saudi trip was to meet potential local representatives for the company.

“Our objective is to be closer to where steel is produced. We currently have six interested parties,” he explains.

Bernd Laemmlein, executive officer at the Department of Foreign Trade at the German Federal Ministry of Economics and Technology, who accompanied the delegation, told Gulf Industry that his Ministry was committed to supporting German small and medium-sized enterprises (SMEs).

“Ninety five per cent of the German workforce is employed in SMEs. This is one reason why Germany has survived the global economic crisis so well – our companies are very flexible and are able to adapt their strategies during challenging times.”

“In 2010, exports accounted for more than one third of Germany’s GDP. One in three euros earned by Germany is earned abroad. Every fifth job in Germany depends on foreign trade,” says Laemmlein.

According to AHK Saudi Arabia, more than 700 German companies are currently active in Saudi Arabia.

“Saudi consumers already have an awareness of the quality of German products, whether it is machinery for rolling plants, or cars, and there is particular interested in highly specialised, high tech products,” says Laemmlein, reflecting on further bilateral business potential.