Johnson Controls plans expansion in Middle East

The Johnson Controls Middle East operations is actively seeking to form legal entitites in Libya, Jordan, Bahrain and Qatar, said a senior official.

It is one of the leading international companies in the supply of integrated building solutions and services, security systems and fire alarm systems.

The company is also toying with the idea to set up its fourth modular chiller plant in Abu Dhabi.

"In the UAE, we are working on projects that have been in the pipeline from 2008. But we have experienced a 30 per cent drop in our business with the fall in construction," said Magdy A Mekky, Vice-President and Managing Director, Middle East, Johnson Controls.

"Hence, we are going to Libya, Jordan, Bahrain and Qatar and are forming legal entities in those markets. Other wild cards for future business are Iraq and Syria."

Johnson Controls currently serves the market through its offices in the UAE, Qatar, Egypt, Oman, Bahrain, Lebanon and Turkey, through its joint venture with Al Salem, a subsidiary of Saudi Bin Laden Group in Saudi Arabia and through its wide network of distributors and business partners.

"Additionally, we have shifted our attention from just equipment sales to services. We actually hired 160 employees in the first six months of this year in the midst of the downturn in order to increase the efficiency on our projects," he said.

In the Middle East, Johnson Controls has supplied its equipment and controls to projects such as Bahrain Bay Project, the Pearl development in Qatar and the Kingdom Tower and Jebel Al Qala in Saudi Arabia.

Mekky forecasts a conservative projection for this year. "We feel the first two quarters were slow for us and our bookings were about 30 per cent less than the target. On a conservative estimate, we will be lower by about five per cent than our expectations and compared to 2008, 2009 will be a flat year in terms of revenue," he told Emirates Business.

"Services are doing well, building controls is booming and security is going to fill the gap in terms of products," he said.

Mekky added that district cooling will slow down as a sector. "In Saudi, we have signed an agreement with Emaar for King Abduallah Economic City. We are providing them with temporary cooling solutions for now and will build them a district cooling plant," he said.

Johnson Controls has modular chiller plant factories in the Jebel Ali Free Zone, Saudi Arabia and Turkey. "In Saudi Arabia, it is a green-field project and we have invested about $40 million (Dh146.8m), while we have put in $10m in Turkey.

In Dubai, we have invested about $10m in the free zone," said Mekky. "The business is expanding for modular chillers and we are now getting an opportunity to move to Abu Dhabi."

Johnson Controls also sees huge potential is energy audits. "The government has implemented Law 27 last month and we are trying to drive it," he said.

"In a nutshell, the maintenance of a project will be sub-contracted to a registered contractor who will be transparent about the actual service charges of your property. Law 27 will enforce a BTU (British Thermal Unit) measurement to monitor air-conditioning usage of apartment and home. We will help and support this initiative and are in the process of getting the registrations."

Kevin Melton, Vice-President, Controls, Fire and Security, Major Projects, SAID: "We were recently asked to do the entire metering of Dubai Mall.

"We see enormous service opportunities in this region and one of the key needs of existing buildings will include metering services," said Melton.

"We are beginning to see that more owners want to save money and are looking at energy efficiency. We also see tremendous potential growth in the controls and automation business."

Mekky said there is still a shortage of skilled staff.

"We are focusing on energy audits and do not have enough people to cater to the market. People are ready hungry to address this issue," he said. "We are also able to all clients to get Leed accreditation."

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