German efficiency gaining popularity in the region
Germany's renowned engineering and technology, combined with its methodical, orderly and precise execution of projects, means that its products and expertise are popular with the construction industry in the Gulf region.
Over the last year, the German construction industry has picked up tremendously compared to the last couple of years, where it was struggling at home with high unemployment and public debt. But its trade relations with the Gulf region have always been its strong point.
Relations between Germany and the UAE have grown and developed, so much so that Germany is now ranked among the top five trading partners of the GCC member countries with a total of US $19 billion (AED70 billion) worth of exports to the Gulf region in 2006.
Out of that, Germany's exports to the UAE alone have gone up from $6.3 billion in 2005 to $8 billion in 2006. Which accounts for more than a third of German exports to the Gulf.
About 25% of these exports, or $4.4 billion, are machinery products consisting in particular of construction and building machinery, water and waste water technology, materials handling technology, power systems, valves for domestic and industrial applications as well as air conditioning, ventilation and cooling technology.
"These numbers are not a surprise as the Gulf region has become more and more important for the German industry, also as a production location for various industries," said Pal Molnar, head of Trade Fairs & Legal Services at the German Industry & Commerce Office in Dubai.
"Another reason is the ongoing boom in construction business and impressive infrastructure projects. Consequently, German manufacturers of various industries - both investment goods, such as machinery as well as durable consumer goods such as bathroom equipment - are reliable partners to offer high-quality products and services to their customers in the Gulf."
There are approximately 500 German companies operating in the UAE, which is Germany's second largest trading partner in the Gulf after Saudi Arabia.
The region's construction and real estate development sector is no different, and has its fair share of exposure to German expertise, technology, services and products.
Germany's renowned engineering and technology, combined with its methodical, orderly and precise execution of projects, means that its products and expertise are used in construction across the Gulf.
Most major contracts that are signed between Germany and the UAE deal with the construction industry, with projects as wide ranging as a railway network to wind farms, through to the supply of transformers.
In the last few years, some important contracts have been signed with German companies in the Gulf, including the $860 million EPC contract for the fifth privatisation project in Abu Dhabi between the Asia Gulf Power Holding Company and a consortium led by Siemens AG Power Generation, along with Fisia Italimpianti (Italy) and Babcock Borsig Services (Germany); a $211 million deal for Rheinmetall to supply armoured vehicles to UAE Armed Forces, and a $132 million contract for Rohde und Schwarz for the supply of advanced communications equipment.
Not to be left out of the race to build a rail system in the Gulf, Germany's Dornier Consulting signed a Memorandum of Understanding (MOU) with Abu Dhabi in 2006 to conduct a feasibility study for a UAE railway system and its possible linkage with a system that will network the six GCC countries.
"Germany's presence in the country is growing each year," added Molnar.
"And with Germany's expertise in technology and construction, the presence of German companies in the Gulf is only expected to grow even more."
Some of the leading German companies currently operating in the UAE are Hochtief, Bilfinger Berger, Al Rostamani Pegel, Bauer, Doka, Peri and Hunnebeck.
As in previous years, Germany represents the biggest national group at the Big 5. In addition, the German pavilion is the largest German pavilion worldwide.
"The official German pavilion will cover about 6,500m2, with more than 320 German companies offering high-quality products and services all related to the construction sector," said Molnar.