Swiss businesses have deep ties with the UAE, going back to the 1950s, when Arab traders from around the region would buy a Rolex in Bur Dubai souq. As the years have ticked past, trade between the two countries has grown by leaps and bounds, clocking in at an impressive $20 billion (Dh73.46 billion) last year, according to official data.
GN Focus talked to some of the major players in the UAE to take a closer look at the business.
For the past eight years, Switzerland has been the world’s most innovative country, topping an annual index by the World Intellectual Property Organisation. The nation is home to the largest number of patent applications — in 2015, it had 873 applications per million inhabitants, double that of the next country, the Netherlands at 419 per million. So it stands to reason Switzerland would be at the forefront of new technology. “The Swiss expertise benefits many other countries worldwide, including the UAE, which actively encourages innovation and application in this space as part of its aim to be a robotics hub,” says Alain Kaddoum, General Manager, Swisslog Middle East, a specialist in integrated automation solutions for warehouses, distribution centres and hospitals that has worked with regional companies Mai Dubai and Almarai.
Swisslog, part of German manufacturer Kuka, has been instrumental in driving robotic warehousing solutions in the UAE that meet the requirements for next-hour delivery, Kaddoum says. “Through the integration of the latest warehouse automation technologies with state-of-the-art software, as well as a variety of innovative services across all warehouse operations, Swisslog’s Industry 4.0 solutions portfolio is pioneering in warehouse automation.”
When the world’s largest chocolate producer, Switzerland’s Barry Callebaut announced the ruby chocolate last year, the event made newspaper front pages around the world. Behind the first new natural colour chocolate in over 80 years, however, is a more nuanced story: Swiss chocolate companies need to depend on emerging markets for growth. Last year, sales inside Switzerland dropped 1.3 per cent, but total sales grew by 3.1 per cent to CHF1.85 billion ($1.98 billion) for the year, due to foreign demand.
There seems to be room for expansion: Nielsen reports that export rates of the entire chocolate volume of Swiss chocolate manufacturers have risen continuously in recent years, from 60 per cent in 2012 to 67 per cent in the last calendar year.
That could explain why the UAE has seen Swiss brands launch boutiques and representative offices here in recent years. Lindt & Sprüngli opened a Dubai office to serve distributors across the Middle East, Africa and India in 2014; since then Läderach, maker of thin-walled pralines, and Sprüngli, famous for its Luxembergli macarons and not to be confused with Lindt & Sprüngli, have opened shops in the country, buoyed by an F&B expansion that has seen new confectionery brands from around the world come to the UAE.
“The demand for good-quality chocolate is very high and increasing,” agrees Marc Wirth, Managing Director of Sprüngli Middle East, which manufactures its products in Switzerland and flies them to the UAE. “Our customers appreciate our recipes. We are expecting a growth in demand next year and are confident to have the right product available.”
Banking on safety
Swiss banks began sharing account data with foreign tax authorities for the first time this month, ending decades of secrecy, but their reputation for safety remains as strong as ever. Mario Al Jebouri, Head and Managing Director, Dubai Representative Office — Banque Cantonale de Genève (BCGE) agrees. “Clients now bank in jurisdictions such as Switzerland due to the stability, both political and economic, that is being offered, professional services and their quality, access to asset classes and opportunities coupled with valuable networking that banks and their employees provide to their clients,” he tells GN Focus. “For many more equally persuasive reasons, the industry has been able not only to survive but is also now showing signs of growth and innovation through its new guise.”
The industry has certainly reorganised the way it approaches business. Some players, such as UBS and Credit Suisse, have focused on wealth management instead of investment banking. Elsewhere, mergers and acquisitions are adding to operational scale, as is the case with Vontobel and Raiffeisen Switzerland. A third category is focused on new markets, such as Lombard Odier, which has announced an Islamic banking push in Saudi Arabia and the UAE.
Growth prospects are strong here in the region, where Swiss banks have historically deep connections, BCGE, a 200-year-old institution offering a range of services, including private banking and wealth management, trade and commodity financing and asset management, reports. “The demand for Swiss banking has increased in 2018 compared to 2017,” Al Jebouri says, identifying the main driving factors as the desire of individuals as well as corporates to diversify their banking relations and jurisdictions. “There has been a significant shift towards safety and conservatism in taking investment decisions.”
As for 2019, he adds, “Banks that listen and truly deliver bespoke and tailored services and solutions rather than template/mass product will succeed in winning over the trust and loyalty of clients.”
Time to rejoice
Watches, which have been inextricably associated with Switzerland’s national identity for centuries, weathered one major crisis with the advent of quartz timepieces in the Seventies. As of this year, the industry appears to have clocked past what was seen as a second – the rise of smartwatches. Industry exports began to recover at the end of last year thanks to several timely changes, including a push into new markets, taking the digital sales route, and creating desirability through increasingly complex designs. All six top markets grew this year, rising 9.5 per cent to CHF13.8-billion in the first eight months over the corresponding period in 2017, according to data from the Federation of the Swiss Watch Industry.
Here in the UAE, a strategy to focus on the local market instead of relying on tourist purchases has paid off. “Swiss brands have strong ambitions for the region and particularly for the UAE,” explains Mehdi Rajan, IWC Schaffhausen’s Regional Brand Director. “We at IWC have clients from all over the country who are interacting with us. The success of our Portugieser Chronograph Al Jalila edition is a prime example of how brand should localise their approach and be respectful of the diverse culture of the Emirates.”
Several other brands, such as Perrelet and Franck Muller, have launched UAE-focused editions, many around National Day each December.