Siemens’s Althoff remains upbeat

Siemens’s Althoff remains upbeat

Prathaban V

AS one of the world’s biggest electrical engineering and electronics conglomerate, Germany-based Siemens is bigger than many world economies. Last year, Siemens’ net income was over EUR 3 billion As a conglomerate, the company dwarfs some major global brands in its expertise as well as experience in areas such as power generation and transmission, telecommunications networks, healthcare equipments, transportation systems, lighting and the oil and gas sector.

Worldwide, Siemens utilises a workforce of over 60,000 staff. In Malaysia, operating for 35 years now, it employs a relatively small workforce of over 650. More than 90% of their local staff are Malaysians. Last year, Siemens and Nokia announced that its telecommunications network group would be merging to become Nokia Siemens Networks. According to Siemens Malaysia Sdn Bhd’s President and Chief Executive Officer, Rainer Althoff, the merged entity will be located in Cyberjaya with over 450 employees.

Although the local telecommunications sector may appear to have reached its saturation point, Althoff is very optimistic that there is still much more room for growth. `We haven’t yet reached the end of the story in the world telecommunications industry. We can still grow in Malaysia and in the region,’ he says explaining that capital expenditure in the near future for the telco players will be driven by content for the broadband and wireless communications technologies.

Locally, Siemens’ oil and sector is its fastest growing segment, with an annual growth rate of 10-15%. However, its telecommunications division contributes some 35-40% of its Malaysian revenues, making it the most profitable segment for Siemens Malaysia. The Power generation and transmission division contributes about 30% while healthcare division provides at least 20% of its local revenues.

Siemens is also bidding strongly for the Bakun undersea power transmission project from the Malaysian Government. Althoff says Siemens has the required global experience to take the job, which should take about four to five to build the transmission lines. `Sarawak needs about 600MW of power, but the Bakun hydroelectric dam can produce 2,400MW of power,’ he says explaining that the extra power can be transmitted back to peninsular via undersea power lines.

From power generation, high tech telecommunications and even sophisticated hearing aids for the hearing impaired, Siemens is a household name. To understand the global giant better, mb-e met up with him in his large but cosy office in Kuala Lumpur for a chat.

What is Siemens Malaysia’s plan for 2007?

We are very positive about the business growth outlook for 2007. With local and/or regional activities, as far as operational excellence is concerned, we would be more focused on specific projects in order to develop a long term and sustainable business growth. Our plan for 2007 is to double our business over a period of three to four years and the profits are to grow accordingly.

In terms of investments, over EUR1 billion (approx. RM5 billion) was invested in the country since inception. So far, all of our strategic investments have well paid off. Siemens Malaysia has a proud and illustrious record of being chosen to operate several key regional hubs and centres for different sectors and business units. The Siemens Asia Pacific Regional Hub for Transportation Systems, the Siemens Communications Carrier Networks Asia Pacific Hub and the Siemens Regional Center for Crane Solutions at ports are all based in Malaysia. Most recently Malaysia was also chosen as the home for the ADB Asia Pacific Regional Headquarters for Airfield lighting and the Siemens Oil & Gas South East Asia/Pacific Regional Business Center. All spearhead development in their respective sectors in the Asia Pacific region. The investment into our factories in Penang will also pay off as so far, as we have set a sustainable growth in opto- electronic products and the automotive sector.

We continue to expand alongside with the market trends and our activities towards sectors such as Process Industries and Ports with new offices in Johor Bahru and Penang since last year. Our workshop in Bukit Raja, Klang, for example, specialises in the repair of electrical motors, generators and transformers.

How would all this be in line with the nation’s development?

We would like think that Siemens always seeks to maintain a longstanding relationship with our customers. With our presence in the country for 35 years, we value the nation as our most valued customer and happy to have the opportunity to grow in parallel with the nation.

That is why we have applied the Sector Approach business strategy to complement the key sectors in the economy. As you might already know, the sectors comprise of Oil & Gas, Power, Water, Process Industries, Ports, Airports, Rail, Automotive, Healthcare, Hospitality and Telecommunications. With our bundled expertise and solutions strategically in place in line with our local presence, it provided us with the opportunity to play a role in the continual development of the country. Basically our roots of growth is in the infrastructure area, which are the traditional generations of economic growth namely Power, Telecommunications and Rail Transportation

The pro-activeness of the government to invest in infrastructure projects played a major part in the development of Siemens Malaysia. Our interest is not to merely participate but also playing a significant role in supporting the government’s current initiatives. In the airports sector for example, our baggage handling system project in KLIA is scheduled to complete this year in conjunction with the visit Malaysia year 2007. This we hope will further enhance the tourism experience and further propel Malaysia into achieving the developed country status by 2020.

What would be the main growth sector in Malaysia?

Firstly, it is the oil and gas industry. Growth prospects are bright for the oil and gas sector, given the recent new field discoveries in East Malaysia. The government’s budget allocation of RM43.80 billion in oil & gas projects under the Ninth Malaysia Plan (9MP) illustrates its importance in the current and future Malaysian economy.

We foresee greater demand for engineering equipment and marine support services. To meet these demands in Malaysia and in the region, Siemens recently set up a Regional Business Centre for the South East Asia / Pacific region right here in Kuala Lumpur and is looking into opening new offices in east Malaysia too.

With rising demands for oil, companies are looking for ways to maximise their oil and gas output. Siemens understands this and is supplying the latest services and solutions for the oil and gas industry using innovative and environmentally friendly technologies. Alternative fuels such as biodiesel will also be explored further. We have made a couple of strategic acquisitions over the past years in order to have the right portfolio for this industry. Through our bundled expertise across all divisions, we are able to offer the widest variety of products and services in the oil and gas industry.

In the rail sector, a great emphasis has been placed to achieve a balanced development in improving the quality of life. The government’s decision to expand the LRT System in the Klang Valley will definitely improve the efficiency of the urban transport and greatly benefit the people.

When we talk about the quality of life, we can’t run away from the most essential element of all – water. Siemens covers one of world’s broadest offerings of solutions, reputable in serving municipal, industrial, commercial and institutional customers worldwide. With our global expertise and local understanding, we are confident of undertaking the challenge to provide complete control of quality, supply and cost for our customers and prepare the nation to meet the future domestic and industrial demands for an enhanced quality of water supply and state-of- the-art waste water treatment solutions.

Another sector that I see would greatly benefit from the economic plan is power generation and transmission. The challenge for the country would be to balance the expected energy demand by year 2020 and satisfy the `First Class Mentality’ of environmental concerns, for example the emission of CO2 emission affecting the global climate.

The development of the Bakun Hydroelectric Project (BHEP) is in line with the nation’s energy policy. The project, which will use a renewable energy resource, is very clean in terms of emissions compared to power generating plants using fossil fuels. The project, with a capacity of 2,400 Megawatt (MW), will result in a more balanced generation mix, with hydro sources.

The Sector Strategy sounds like an extensive organisational challenge for you. How will you meet your customers’ demands?

In Malaysia, Siemens has been profitable for the 35 years that we have been here. Major factors for this success are our business excellence programmes.

Year 2007 is the year of Operational Excellence for us in Siemens Malaysia whereby vigorous implementation of our CRM processes will be carried out to achieve its full potential in reaching to our customers and meeting their needs even more effectively.

How is your company coping with the trends and challenges in the global and local economy?

Innovation is one of our company’s cornerstones. To maintain our position at the top, we are constantly assessing trends to ensure we can anticipate the products, services and solutions, which will be necessary in the future.

In Malaysia as well as the rest of the world, we see similar megatrends developing – urbanisation and demographic change. This will require infrastructure to house, to feed and to transport city dwellers in a compact area.

From water treatment to intelligent and alternative power generation to integrated automation, information and communications systems, we are working towards making the transition into the future that much smoother. Here in Malaysia, our portfolio of end-to-end solutions already serve the 11 key market sectors of Oil & Gas, Power, Water, Process Industries, Ports, Airports, Rail, Automotive, Healthcare, Hospitality and Telecommunications.

What will be your key driver for success in 2007?

In Siemens, we believe in utilising the complexities of technology to make things simple. The same goes for our principles for success. A good strategy to win more sustainable business, and of course the greatest asset of all, excellent people.

Copyright 2007

Provided by ProQuest Information and Learning Company. All rights Reserved.