Germany’s Man Truck and Bus expects Middle East sales to grow by as much as 15 per cent year-on-year, helped by the demand from the construction industry.
“We are expecting a huge growth in the Middle East based on all the construction that is on the agenda right now,” said Rudolf Wiegand, vice president and head of after sales for the Middle East and Africa.
“We have a market share in the Gulf countries of about 25 per cent in 2013. When it comes to the UAE it is roughly between 10 to 15 per cent [of that],” he added.
In 2006, Man Truck started its operations in the region by offering goods and passenger transportation to importers in some 14 countries.
Mr Wiegand said that Saudi Arabia, UAE, Oman, and Qatar are the biggest markets for Man Truck in the region, thanks to the construction and transportation projects in those countries.
“This is because a lot of projects are going on, a lot of business,” said Mr Wiegand. “The biggest number of cranes in a single place is in Dubai. Wherever you look there are cranes,” he added.
He anticipated construction demand coming from the public transportation projects in Saudi Arabia, in addition to Dubai’s bid for Expo 2020 and Qatar’s 2022 Fifa World Cup.
On a global scale, the sales and market share of the region continue to grow, according to Mr Wiegand.
“If you compare all the regions globally, the top four ranks are European countries and on the fifth place is the Middle East,” he said.
Meeting the growth of demand is not the sole challenge for the Munich-based company. At Dubai’s Big 5 Expo, a Middle East building and construction convention, Man Truck launched its Man TGS WW 6x4, a heavy tractor especially tailored to the demands of the Middle East.
The company also plans to develop its maintenance and service business with as many as 15 service centres in the region over the coming two years.
“If we grow 15 per cent year-on-year you can imagine, you need to have more service staff to cope with this demand,” said Mr Wiegand.
Man is also rolling out portable container-based workshops to serve customers on site.
“We developed this concept in the Middle East, in Dubai, in order to meet the market needs. The first one will be delivered to Saudi Arabia. We also received a positive feedback from other parts of the world,” said Mr Wiegand.
The process is designed to reduce the truck’s downtime or the time the truck is off the road, which can subsequently delays projects and add costs for clients.
selgazzar@thenational.ae
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
