A landscape under transformation

The GCC countries are already struggling to meet growing demand for electricity. Can you give your view of the outlook for the region, and describe the projects that ABB is involved in that aim to respond?

Over the past decade many of the GCC countries have experienced growth in electricity and water demand and supply above the global average, and struggled to keep up.

Going forward we see the demand continuing to increase but at a more controlled pace than before. The electricity supply gap varies from country to country, with excess capacity in some countries and shortages in others.

Furthermore, owing to the climate, this region has an unusually high span between summer peak requirement and the cool season requirements. This forces the utilities to have a large amount of standby power capacity, which can lead to inefficiencies. Therefore the Gulf Interconnection Grid in which ABB is involved is such a strategically significant project for a number of reasons.

But it's not just about the transmission backbone. We also see a much greater focus on the expansion of distribution networks, partly as a result of existing drivers of industrial and infrastructure development, and increasingly to strengthen and develop the more remote parts and less industrialised parts of the countries.

The development of rail networks is another driver for grid expansion, and since the essence of a rail network is the supply and conversion of electricity, we have much to offer in this area. This will put a further requirement on the availability of power.

The hosting of the soccer World Cup will be an exciting driver for investment in Qatar and beyond. We are particularly excited to see the emphasis on doing this in a sustainable and environmentally-friendly way, and are ready to give support, not only with our technology for efficient and reliable power supplies but also with a range of technologies for stadia and buildings.

As to renewables, most GCC countries now have targets for renewable energy generation, and this will support investment and allow the region to gain valuable experience in developing renewable energy sources on a large scale in future.

Owing to the nature of the physical environment, water is a scarce and strategically important resource. Most GCC countries face a shortage of water generation, transmission and storage capacity, and we see a continuous stream of projects in the region.

One example is the construction of the largest water-pumping station in Kuwait, where ABB is the Engineering, Procurement and Construction contractor and main equipment supplier.

ABB is focused on all areas of the power generation and transmission sector utilising our global supply, but more importantly we have set up local operations to manage these projects and have more than 2,000 professionals employed and based in the GCC countries.

ABB's involvement in the region's oil and gas sector goes back many years. What are the key changes it has witnessed, and how has the company contributed to the industry's evolution?

The demands put on the oil, gas and petrochemical industries are increasing every day — whether it is [to do with] production, the environment or health and safety. As dwindling reserves force the exploration of more difficult oil and gas, plus the ever-increasing regulatory requirements in this industry, we also see trends where exploration is going to deeper waters offshore and more remote locations onshore. This creates engineering challenges for working at higher pressure and for transporting the oil and gas over longer distances, etc.

ABB's various products, services and solutions help optimise operations, eliminate losses, improve the quality and flow of information, and meet safety and environmental regulations. We can also empower the boardrooms of our customer with the tools to measure and improve their business performance.

Specifically over the years we have developed cost-effective solutions for extending the lifetime of installed systems and increasing oil recovery (IOR).

We have solutions for enhanced operation and productions, supporting customers to better tackle plant disturbances and reduce plant shutdown (or partial shutdown with reduced production), and operate with more stable plant conditions, thereby also improving plant safety (meaning the safety risks following unexpected shutdowns)

We can also improve energy efficiency by up to 50 per cent by providing technology to support the transition from gas turbine to electric motor-driven pumps and compressors, and we can improve maintenance regimes by helping our customers with condition-monitoring technologies for critical equipment such as switchgear, drives and compressors.

ABB has more than 1,500 professionals employed and based in the GCC focusing on this dedicated industry.

ABB participated in the recent International Association of Public Transport's 59th World Congress/Mobility and City Transport Exhibition held in Dubai. What are the key points to take note of, and how may ABB's experience and know-how be used in this relatively fledgling sector in the Gulf?

In the Middle East we see that governments are now very mindful of the importance of building rail networks for both passenger and freight, not only to cope with their rapidly-growing populations and increasingly-congested roads but also to help sustain their economic development. The Middle East and Africa has the second-largest expansion plans for light rail in the world.

ABB has a long history of providing reliable, innovative and energy-efficient technologies to rail suppliers that manufacture and service all the systems, subsystems and components used in modern, urban, conventional and high-speed rail systems. Our power supply infrastructure enables rail networks to run on electricity from main grid, and sophisticated controls such as our supervisory controls and data acquisition (SCADA) systems monitor rail power networks to ensure they are running as effectively as possible.

We are also one of the leading suppliers for traction components, either individually or as a complete engineered package to rolling stock manufacturers globally. So we are looking forward to sharing our expertise in the region, and have established a dedicated rail team to support this new business area.

In the GCC's rapidly expanding and increasingly industrial states, environmental management is a key issue. How can the detrimental effect of rapid industrialisation be curtailed?

ABB has been in the energy business for around 120 years. Our technologies are used along the entire energy value chain: in the extraction of resources and their transformation into electricity, liquefied natural gas or refined petroleum products, and in their efficient use in industry, transportation and buildings. We pride ourselves on helping our customers squeeze the most value from each unit of energy they use.

We seek to minimise the environmental impact of our technologies and products, passing on this expertise to customers and suppliers, at the same time as trying to ensure that our own manufacturing processes are environmentally friendly and energy-efficient. For example, by using variable-speeds drives in heating, ventilation and air-conditioning systems (HVAC) in a building, energy savings of between 30 and 60 per cent can be made.

In our own operations, ABB strives to reduce the use of energy and materials, streamline the means of transporting goods, reduce the impact of business travel, phase out hazardous materials, design eco-efficient and recyclable products, and enhance suppliers' performance. Much can be achieved through sharing best practice. Waterborne paint systems developed at one factory, for example, have been introduced at similar sites worldwide to reduce emissions of organic solvents.

The Gulf along with many other parts of the world has undergone a relatively severe economic downturn over the past few years. In addition, certain parts of the Mena region are experiencing political unrest. To what extent have the sectors that ABB is involved in been affected by the turmoil?

The past couple of years have been a mixed bag, with some markets experiencing a sharp downturn but others showing resilience, with reasonable growth rates, and other markets even increasing. In the last three years we have seen growth year-on-year, and continued expanding our operations. This we believe is a result of ABB's wide portfolio, which allows us not to be too dependent on one market or industry.

We continue to see investments in many projects, and see some good signs of capex increases in the industrial sector. However, regional risks remain, and we continue to be vigilant to ensure the safety of our people and assets.

The Middle East and Africa accounted for 13 per cent of ABB's turnover in 2010, and has been responsible for the largest percentage increase in sales over the group's other three regions in the past two years. Do you see this trend continuing; focusing on which countries and which sectors?

We have a positive view of the future in the short, medium and long term, and we continue with our strategy of growth in the region.

In the wider Middle East we have a focus on Iraq reconstruction and we are selectively building our resources there.

We have substantial operations in Egypt, which did suffer some slowdown because of the well-documented political changes. ABB in Egypt is now back to full operation, and we expect positive growth later in the year after the elections have taken place. We have 2,500 people in Egypt, and it is the hub for the development of our business in Central Africa.

South Africa was the one in the [Middle East and Africa] region that suffered the most from the economic situation, particularly as a result of the slowdown in the mining sector.

We are now seeing the sign of green shoots in this sector, and expect the South African market to steadily pick up over the next few years. ABB has around 1,600 people employed in South Africa, which is also the hub for developing our business in southern Africa. In the remainder of Africa the signs for continued and sustained growth are positive, and we are continually increasing our resources on the ground.