Iraq and Iran can boost the sector

Opening up of the Iranian and Iraqi markets could provide a much-needed boost to the construction industry in the region, according to experts participating in SteelFab 2009.

Many international companies planning to expand into the Gulf Co-operation Council (GCC) region and Middle East are of the opinion that Iraqi reconstruction and access to the Iranian market could significantly improve business opportunities, despite a general slowdown across the GCC.

A few Italian companies participating in SteelFab 2009 said they are considering opening offices in the UAE to target opportunities in Iraq and Iran.

Daniele Parmigiani, Director of Parmigiani Macchine from Italy, said he plans to set up an office in the Sharjah Free Zone. "It all depends on the regional market. I am keen to find out about the opportunities in Iran and Iraq. These are emerging markets with great potential. If I find it feasible to do business with customers from these countries it would be worth setting up an office in the UAE," he said.

About 35 Italian firms are participating in this year's SteelFab under the umbrella of UCIMU-Sistemi Per Produrre – the association of Italian manufacturers of machine tools, robots, automation systems and ancillary products. The Italian participation this year is 60 per cent higher compared to 2008.

The region's construction industry is expected to get a boost with US President Barack Obama's declared intent of winding down the war in Iraq and Afghanistan and his announcement

of a massive $1 trillion (Dh3.67trn) economic stimulus package featuring smart grids, roads and bridges that will form the core of a rehabilitation programme for the two countries.

Prathun George, owner of Shrawn Engineering, speaking to an Indian media outlet, said: "Obama's new rehabilitation programme will create great opportunities for Indian engineering companies. We should be prepared to use Dubai as an entry point for steel and construction companies to supply materials."

Davide Orsenigo of the Marketing Department, UCIMU, told Emirates Business that while Iraq offers great potential for business, several roadblocks and hindrances prevent companies from aggressively entering the Iranian market.

"It is very difficult to even do banking transactions with Iranian companies. There is a big market for machines and tools in Iran," he said. "SteelFab this year has been satisfactory. We have had a few enquiries from potential customers. The situation overall is a bit gloomy and, naturally, we can see the effect here as well. There is a general slowdown in the machinery sector. We will have to wait for another six months to understand what is happening."

Parmigiani said his company had very good sales in 2008 and is expecting to do "very well" during 2009.

"We are presently negotiating about three contracts worth €3.45 million [Dh16.47m] for rolling plates and other machines for petrochemical industries in Abu Dhabi, Dubai and Sharjah. At the moment things are moving and I do not see a major slowdown. This region is doing well compared to others. The trend is positive. Our other major markets are the EU and Russia. The signs elsewhere are not very positive," he said.

The company managed to procure its 2009 orders in the third quarter of 2008.

"The company's turnover has been increasing at about 30 per cent annually and we have already crossed this percentage for 2009 orders. Most orders for this year were placed by last June.

"By the end of the show we will be able to get an idea of how our performance during 2010 would be. I have had some interesting visitors so far today. Everything depends on the banks. If they have more liquidity and are willing to finance our customers, things will be much better," he said.

For the first time at SteelFab, the latest high-tech equipment such as automatic beam welding lines, resistance welding machines and laser punching machines are being featured. There is also a special display area for CNC metal-cutting machine tools. Among the machines displayed are shears, press brakes, punch presses, CNC profile cutting, bevelling, grinding, oxy-fuel cutting, water-jet cutting, plate drilling/cutting, beam drilling/sawing, blasting/ painting, cut-to-length, slit-to length, welding displays and stud welding machines.

Follow Emirates 24|7 on Google News.