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Home / Business / Markets / Commodities

Kiwi companies strike oil in Dubai

By Karyn Scherer
NZ Herald·
4 May, 2008 04:00 PM5 mins to read

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KEY POINTS:

If you're planning to visit Dubai in the near future, make sure your map is no more than a few weeks old.

Any older than that and you're probably going to get lost, warns former Rangitoto College associate principal Jo Mullins.

"It's extraordinary. I've been going there for close to five years and, physically, it's unrecognisable. Every time I go away for two or three months, I have difficulty finding the right roads."

Mullins has a four-year-old photo of a well-known city block which back then, had three towers on it.

"There are now 60 in that space. There are 60 new hotels opening this year. In September, they're opening 20 new kindergartens to replace 11 old ones. The pace is phenomenal."

In her new role as executive director of international market development for Cognition Consulting, Mullins spends a lot of her time in the United Arab Emirates.

In 2004, Cognition was contracted to help implement educational reform in Qatar. It has since expanded into Abu Dhabi and Saudi Arabia, and its next target is Dubai.

One of the attractions, says Mullins, is that the UAE has a long-term vision, and the money to ensure that vision is carried out.

Dubai has a clearly mapped out strategy that stretches to 2030.

That said, it is also in a big hurry. In education, English is being brought in as the first language and state-of-the-art technology is being introduced almost overnight.

One of the advantages for New Zealand companies is that they are used to dealing with issues on a national basis, she says.

"These are nation states that really want to take their place in the 21st century and so for a small state with a national approach to initiatives such as health and the environment, as opposed to a federal system, there's lots of resonance there that we're only beginning to tap into."

Last year, the UAE ranked as our 29th most significant bilateral partner, taking more than $220 million of our goods, including building materials, fruit, wine, refrigerators, machinery, underwear and medical equipment, as well as milk powder, logs, butter and cheese. New Zealand companies are also involved in public sector management, ICT, postal services, and building construction and management, as well as education.

But in dollar terms, our exports are still worth only half of what we import in crude oil from the region and those already doing business there fear New Zealand is missing opportunities.

In an attempt to make it a little easier, New Zealand Trade and Enterprise set up a Beachhead office in Dubai in 2005, focusing on high-tech industries. Nearly a dozen companies now use the office.

Experienced exporters agree it can take longer than in most markets to make the right contacts and establish credibility - but once you're in, you'd better be ready, says Mullins.

"When the doors open, they open with a rush. You are expected to walk through that door - you can't hesitate. That also means a challenge for companies in terms of meeting expectations. It's quite a different mindset from working in a New Zealand business environment. You have to respond in ways that are almost unimaginable [in terms of speed and quality]."

And just because they have money to burn doesn't mean they aren't interested in value.

"The UAE is a bit like a village, in that family networks are strong and important. You can't hide poor performance."

Fisher & Paykel Healthcare is another of the pioneers, as is Wellington telecommunications company 4RF Communications.

4RF makes long-distance microwave radios that are perfect for rapidly expanding economies that do not already have extensive fibre or copper networks to rely on.

Since becoming involved in the Beachhead, sales in the Middle East have grown by at least 50 per cent, says marketing co-ordinator Kelly Harlen.

Nine months ago, the company appointed a local sales manager.

"Obviously there are cultural differences, so having someone on the ground who is a native speaker helps," says Harlen.

Parnell construction company Metal Forming Technologies also recently hired two Arabic speakers for its Dubai office.

Company president Mark Taylor suspects more companies will choose Dubai as a base rather than Singapore, because of its proximity to Europe and Asia, and potential as a launching pad into the Middle East and Africa.

"I can't see any busts at all in the next five years and probably not in the next 10. What's going to happen in there is going to be migration. In UAE, any slack that's lost in Dubai will be taken up by Abu Dhabi and the need in Saudi Arabia is probably bigger than those two combined."

Many New Zealanders are already aware of Dubai's airline, Emirates, which sponsored Team New Zealand in the America's Cup. It would be understandable if its politicians had a grudge against us, after ours made it clear that a Dubai bid for Auckland Airport was unwelcome.

Taylor says he hasn't detected any backlash and, in fact, New Zealand is perceived as a neutral and inoffensive business partner.

Glidepath chief executive Ken Stevens has also done a lot of business in the region, selling airport baggage-handling systems.

"It's got to flatten out at some stage, I suppose, but it's one of those markets that's going well at the moment and you need to ride those waves."

Mullins believes the time is particularly ripe for newcomers, given that companies such as Cognition have paved the way.

There is a greater depth of knowledge about New Zealand than we seem to realise, she says.

"We're really good at developing respectful partnerships and I think we often under-rate ourselves in that ability to work with government and individuals in really positive ways."

Like most other Kiwis doing business there, she has nothing but praise for local NZTE staff.

"It's a very small handful of people doing huge hours ... It's amazing that they've done as much as they have, but a lot more could still be done, I think."

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