Sharp sets $500m target for the Middle East by 2011

GOING GREEN: Isogai is planning to ride the ever-increasing demand for eco-technology to meet his targets for the region (FILE)

The Middle East electronics market barely registers on Sharp's global radar, if you look at it purely in terms of revenue generated. At just under five per cent of worldwide sales, the region stands in stark contrast to the success the Japanese firm has achieved in its home market, where it is now the number one supplier in LCD television

sets with a 45 per cent market share.But for growth potential, the Middle East is Sharp's runaway sensation. It expects a 40 per cent expansion in the region this year to see annual turnover hit $500 million (Dh1.83 billion) in 2011, up from $200m today.

To get there, Middle East Managing Director Tomio Isogai is planning to ride the ever-increasing demand for eco-technology and has laid out ambitious growth targets to boot.

He is plotting a green revolution to liven up his lacklustre portion of global sales and expects more than 50 per cent of these sales to come from eco-friendly product lines in the coming years. The launch of Sharp's latest projector in Dubai recently is in-line with this strategy, boasting a significant reduction in power consumption.

The product is also tailored for conferences and hotels, as the firm looks to expand its business-to-business (B2B) base and capture the UAE's hospitality boom. Isogai reveals Sharp's tactic for maintaining the sales momentum from the green spend at a time when a global economic slowdown is squeezing consumer purses. And how to outwit often entrenched competitors such as Panasonic and Sony in the Middle East's electronics industry.

How has Sharp's business taken shape in the Middle East in recent years?

Last year our turnover was $200m in the Middle East and we are targeting $500m in less than three years. We want more than 50 per cent of these sales to come from our green product lines.

The UAE Government is looking to sustainability and this will spread to the rest of the Middle East, so our strategy fits in with this thinking.

Our Middle East operation is still less than five per cent of the global business, but because the region is growing faster than any other of Sharp's sectors the overall representation will become much higher.

We expect 40 per cent growth rate here for 2008. In the UAE, for LCD and solar cells we come in the top two suppliers, which is around 15 per cent market share.

Because of the boom in the GCC and high oil prices, growing government expenditures and new projects means more B2B business for us. This is different to the US, where there are so many financial problems and a fear of rising oil prices. In places like the US, Europe or Japan people are pessimistic about the future but here in this part of the world we see a lot of potential and faster growth for our business.

What is Sharp's latest green product for the UAE market?

We have launched the new flagship projector, which is a part of our B2B business. We've been in the Middle East dealing with projectors for B2B for some time but have never introduced a model that can fit into theatre or ballroom situations.

The advantage of the product is it has low consumption of power and longer life span. Other competitor projectors have better brightness, but you pay higher prices and the lamp uses a lot more energy.

Sharp is trying to become the most advanced environment-friendly company, so all the new products that we bring in are designed to consume less energy and be more user friendly.

For example, our new projector model will have an Arabic interface on top of the 10 languages that are already built in.

We see potential for our project or business in Dubai given the future prospects of the hotel sector and other event venues for conferences. We expect major demand here for these type of projectors. It's the right time to enter into this range of projectors that we didn't have before.

We have very limited market share representing the high-end projector business. With the introduction of this latest project will open up this new market and will make Sharp a major supplier.

What is your definition of green products?

When we say green we mean a product must be user-friendly or environmentally friendly or health conscious. It could also consume less energy or be recyclable. There are many elements but it has to be contributing to lessening the impact of global warming.

When do you make the money back from more costly investments in green technology?

We have already seen the returns from our investment, for example LCD, which consumes a lot less energy. We created a whole new market with the introduction of LCD televisions 15 years ago. We are the leader in this technology, for instance in Japan we are the number one supplier in LCD TVs with more than 45 per cent market share. This has meant a real return on our initial investment. This recognition also helps other product lines to sell. For our new green projector it will take three to four years to pay off the investment.

In the current global squeeze on consumer spending, how do you continue to attract buyers to the high-end products market?

Our strategy is to make customers recognise us as a unique brand in terms of quality and environmental consciousness. Sharp has also been successful in supplying the first cutting edge products in the past, which caters to the ego of high-end buyers. The feeling of being first in product innovation gives Sharp the edge.

Sharp was the first in LCD technology and in thin technology, and in the largest LCD commercial television available today. So we believe in first leadership.

Our advertising spend in the Middle East has been a small amount of the investment we have done in the past. But starting this year we are going to launch a new campaign with LCD as a major import business for us for both commercial and consumer sectors. This will be to increase presence and coverage here.

Why green technology at the moment?

Global warming is getting more serious than ever and the UAE Government is now focusing on green business and society, and sustainability is the new buzz word at the moment.

Sharp has already been working in direction and has set a global goal to be the most advanced environmentally-friendly company. In our LCD televisions we use components that can be recycled again and again and ensure sustainability and long-life. Most importantly we have been the leading suppliers of solar cells for the last six years.

We are committed to bringing in new products that consume less energy yet at the same time we are promoting the creation of energy with solar power.

How significant are green products to Sharp's overall sales?

All new Sharp products are basically green: either consuming less energy or more easily recyclable or creating energy by itself. This is our global strategy and we are applying this in the Middle East.

Who are your main Middle East competitors and how have you tried to outwit them?

For projectors we see Epsom, Panasonic and Hitachi. For home entertainment it is Sony, LG and Panasonic. And for domestic appliances, Samsung and Panasonic. We want our customers to recognise Sharp as a more environment and health conscious company. Yet still offering unique features and advanced technology such as LCD.

PROFILE: Tomio Isogai, Middle East MD for Sharp

After spending over 25 years at several key positions at Sharp Corporation's offices across the globe, Tomio Isogai, who took over as Managing Director of Sharp Middle East in 2006, has undertaken a major strategic re-alignment in the region. The move is set to more than double the Japanese electronics giant's sales volumes in the next three years. His first posting in the region was in Saudi Arabia, where he spent five years between 1984 and 1989.