GEA Group Aktiengesellschaft: doing business in the Middle East
GEA Westfalia Separator Group a subsidiary of international GEA Group has come a long way in its 119 year history. In May 1893, Franz Ramesohl and Franz Schmidt applied under No. 14625 for a design patent for a drive arrangement for milk centrifuges to the Imperial Patent Office. Since those days the company strove to produce better products and offer better services than the competition. The aim of the organization from the word 'go' was to produce superior work under the "Made in Germany" label. Mr. Steffen Bersch, Vice President Service International reinforced this as he stated "basically what is key for us, is that our companies in the group have a very detailed knowledge of our customers, products and processes and hence 90% of our products today are market leading". The company has become an international brand, and well on its way to becoming a global operating company, it has built new manufacturing facilities in Wuqing, China and Bengaluru, India in addition to the already existing European sites. With such megatrends like "steady growth in global population", "urbanization and the growth of the middle-class", and "rising energy cost and environmental regulations", the company has seen these as growth drivers for its food and energy sector of business, which makes up more than 70 % of its sales in the world. Mr. Sunil Kumar, General Manager GEA Middle East FZE ponders as to how the company can seize such opportunities in the high growth Middle East markets? GEA had always been stead-fast in its objectives of product innovation and fast and reliable customer service. Service lead times are between 4 and 48 hours. This customer focus leads to a 90% rate of reputational (word-of-mouth) business in the Middle-East region. The company has faced challenges like lower cost competitors from Italy, India and China whose products were priced between 20-50% lower than GEA. The other challenge faced by GEA pertained to their Middle-East markets with countries such as Syria and Iran that almost shut down for business. In the 1970s and 80s Iran used to be the company's leading market in this region. How can GEA executives cope with these macro environmental opportunities and challenges?