Powering The Middle East And Africa

23 May 2016

BY ROBERTA PRANDI

Editor’s Note: Diesel & Gas Worldwide talked to Andrea Nono, CEO of MTU South Africa, and Anne Heiland, head of Sales at MTU Middle East, about the experiences in their posts and what the African and Middle East markets entail for a global engine manufacturer as MTU Friedrichshafen (part of Rolls-Royce Power Systems).

 

Anne Heiland
Anne Heiland

Andrea Nono joined MTU in South Africa (MTU SA) in October 2014, but she has been with MTU since 1999. Before becoming CEO of MTU South Africa, she had the opportunity to work at the company’s headquarters in Germany for Sales and Business Development. “Before I moved to South Africa, I was living in the U.S. and was responsible for MTU’s North American distribution network,” she said. “My experience with South Africa started way before 2014: I was actually doing an internship at MTU South Africa during my bachelor studies and always wanted to come back.”

For Anne Heiland, the experience as Head of Sales for MTU Middle East started about a year ago. About her experience so far she said: “The Middle East in general hosts a great diversity of different cultures. It is imperative therefore to know and have a good understanding about the different cultures, the religion and history of the various countries in the Middle East. This helps to overcome many of the stereotypes and myths which this region still maintains as a base for a successful navigating the business word of the region.”

It must not be easy to manage such a position in the Middle East area, as a young woman, but she said she feels honored as a European, but also as a woman doing business there, since doing business in this specific area of the world has so much to do with relationships, trust and respect for each other. “Having said that, there is no doubt that, as a woman, it is still possible to break into this mainstream male dominated corporate culture, which has its challenges in terms of interaction for both sides,” she added. “With performance, flexibility and support, my experience is that women can add a positive spirit to the business culture here.”

MTU SA is based out of South Africa, and is responsible for the Rolls-Royce Power Systems business in over 30 countries within Sub-Saharan Africa. MTU SA started in 2001, providing propulsion for the marine industry (naval and commercial) and for the mining industry. “Today we also supply power generation systems, as loose diesel engines, diesel and gas systems and decentralised power stations, and systems for the rail industry,” Nono said.

Andrea Nono
Andrea Nono

“MTU SA has about 180 employees. We work out of several locations throughout South Africa and have a branch office in Zambia as well as a presence in Nigeria. We are a lean organization and work with service partners as our extended arm into Africa while we have our MTU SA “flying service doctors” team as back-up.”

Last year MTU SA extended its business model, as explained by Nono: “While traditionally we sell and service MTU products in Sub-Saharan Africa and will continue to do so, we are now licensed to produce the new MTU 20V4000R63 rail engine for locomotives that will be supplied to Transnet SOC Ltd  (a South African freight logistic specialist). This is an exciting opportunity and has expanded our scope as an African business that is part of a global production organization.”

Concerning the market for MTU in Sub-Saharan Africa, Nono commented that, in general, the global economy slow-down has affected business. More specifically, commodity pricing has certainly affected MTU’s mining business with many mines either slowing down production or closing down.

“The energy crisis affecting our region has presented opportunities for us to offer Rolls-Royce and MTU power solutions both to governments and private companies. From that perspective our power generation business is driving our growth,” Nono said.

According to Nono, Africa is a very nuanced continent with different institutions and sensibilities that apply to each country.

“Being local is important. Collaborating with local partners in the different countries allows us to be locally relevant,” she said. “At the same time being global as part of the Rolls-Royce and MTU team is the other important success factor.”

In terms of local business and activity, Nono said last year MTU SA signed a contract to supply over 200 rail engines to CNRRSSA (Pty) Limited, the locomotive suppliers to Transnet SOC Ltd. as the end user. She explained that this project is significant because of the active development of the local South African economy and local suppliers. MTU will be assembling rail engines at its South African facilities that have been extensively upgraded for this purpose.

“This project has diversified our business from distribution, sales and after-sales to manufacturing.  We have developed and expanded the skills set of our technicians and support staff,” she added.

“Another project that comes to mind is the 100-MW power plant in Mozambique that went into operation in February 2016. The new power generation plant was designed to provide electric power for Mozambique’s rapidly expanding economy. Core equipment includes 13 20-cylinder, gas-based Rolls-Royce medium-speed engines, supplied by Bergen Engines, a Rolls-Royce Power Systems subsidiary.”

The plant is located near the border between Mozambique and South Africa just outside the town of Ressano Garcia. It is owned and operated by the independent power producer Gigawatt Mozambique and will supply electrical power to the national grid through a power purchase agreement with the state-owned utility Electricidade de Mozambique (EDM).

Nono said the most important lesson she learned in her position as CEO of MTU SA is that Africa has huge potential.

“In order to realize this potential, companies need to develop an inclusive approach. In Southern Africa this approach is often called ‘Ubuntu.’ While we offer the best technological solutions, we must also consider how we can make a positive difference in society at the same time.”

For Heiland, in the Middle East the market looks rich in opportunities: “With the widely diversified product portfolio Rolls-Royce Power Systems is offering, opportunities are seen especially in supplying power generation equipment, with which we expect to increase our footprint, especially in mission-critical applications such as those found in airports, hospitals and data centers,” she said. “In addition to power generation, we also supply propulsion systems for yachts, commercial marine and navy customers, who are interested in our advanced solutions for all kinds of marine and naval applications. Within the work in the Middle East we are very pleased with the collaboration and support provided by our distribution partners in the region.

“The situation for selling equipment to the oil & gas industry remains challenging, but there are opportunities since wells and rigs are planned in several parts of the region.”

Heiland said that despite the low oil price, the Gulf Cooperation Council (GCC) countries are still growing markets with excellent futures.

“Expansion in infrastructure, new cities (especially economic and green cities) in Saudi Arabia, Egypt, Qatar, along with new airports, medical centers, universities and many international events such as the Expo in the United Arab Emirates in 2020 or the FIFA world championships in Qatar in 2022, besides a diversifying landscape in local manufacturing facilities, are clear indicators of growth.

“The growing infrastructure of the gas network offers additional opportunities for Rolls-Royce Power Systems and is in line with a growing “green” mind set in the Middle East.”

Heiland added that despite the pressure on pricing, customers and business partners are looking for long-term stable and reliable business relationships along the entire value chain from the initial enquiry to consultancy services during the tender and project execution stage to supervision of the commissioning and after sales service. “There is no specific urge to promise too much, but there is a clear requirement not to deliver less than what has been promised, regardless of whether this is of a commercial or technical nature.”

In terms of new projects for MTU Middle East, Heiland found it difficult to name a specific one, as she said the opportunities are so diverse these days. “There are several infrastructure projects around the FIFA World Championship in Qatar and the Expo in Dubai in 2020. Recent successes for our company include the award of power generation projects for two airports and two of the biggest hospitals in the region.

“Generally speaking, however, the trend towards meeting the requirements and the economic benefits of highly efficient power generation systems is becoming important and will be given a much higher focus at Rolls-Royce Power Systems in the Middle East, while offering our solutions to the various industries and customers.”

As for Nono, Heiland learned some important lessons in her position at MTU Middle East too, but she said the most important has most probably nothing to do with her current position but more with general expectations of the business environment in this region.

“Personal commitments and delivering on promises is the key to opening doors and the negative long term impact of constant mismatches in that area should not be underestimated.”

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