Exclusive interview: ABB's Giuseppe Di Marco
ABB's southern gulf chief says there exciting opportunities abound
Giuseppe Di Marco, CEO for ABB in UAE and Cluster Manager for ABB in Southern Gulf says there remains a vast array of exciting opportunities in the Middle East, and $2.5 billion in regional volumes is just the beginning
The Middle East is at an exciting juncture in its infrastructure development story. Waves of boom years have spread throughout the region, and whilst the investment peaks and troughs have come at different times to different countries, the overwhelming rapid development story remains the same.
For utility providers even the quieter years have provided no respite. Power demands, transmission and distribution challenges, and water and desalination requirements have continued to soar. The watchwords which surround that development are changing, however.
What was once a mantra of build, build, build, is morphing into one of efficiency, management and value.
Questions remain over how those goals will be attained, but growing adoption of renewable power generation, smarter energy management, and intelligent design are beginning to fill those gaps.
Giuseppe Di Marco, CEO for ABB in United Arab Emirates and Cluster Manager for ABB in Southern Gulf and Pakistan tells Utilities Middle East that new technology adoption and a drive towards efficiency are ideas which are swiftly gaining ground with the leadership of the region’s big utility providers.
“In the utilities field throughout the Middle East there is a huge opportunity in transmission and distribution, which is a growing necessity. Of course desalination and power generation are huge growth areas too,” says Di Marco.
Opportunities are ripe right across the contracting and supply spectrum, he adds. “In the Southern Gulf cluster there are exciting opportunities in everything from full scope EPC projects right down to instrumentation and automation, and through to small process packages. These are all areas we expect to grow dynamically.”
The regional shift, from playing catch-up with an ever growing power and water demand base towards a more measured approach to efficiency, has had an important impact on behavior and approach, says DiMarco.
“There is a thirst for technology and innovation here. All the customers we meet are ready to test, to trial, and keen to embrace new technology. In my former market, the Mediterranean region, people were more interested in maintaining plants and keeping them in operation as long as possible. That thirst for technology here has been a real motivating factor for me,” he enthuses.
For the region’s energy-rich economies, the years of contraction are already distant memories, if indeed they materialized with much force at all. Civil infrastructure projects which were built prior to, or during the leaner years, are entering a mature phase, which in itself poses business opportunities.
“The crisis period is well and truly over. Maintenance is a key issue for a great deal of the infrastructure put in place before and finished during the crisis. There hasn’t really been time for a maintenance culture to develop here, it’s been far more geared around a construct and build culture,” he says.
ABB has been present in the region in a big way for decades, and as such benefits from a vast installed base. “What we are very keen to develop is our service business. Already in Qatar we are doing very well when it comes to service, and we see a similar situation in Oman too,” reveals DiMarco. “In the UAE it is there, but there is certainly scope to expand the service and added-value elements of our portfolio.”
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Looking after installed infrastructure is all well and good, but the immense projects earmarked for the coming decade in the Middle East leave no room for complacency when it comes to the existing grid strengths. Di Marco is sure that CAPEX spending is set for a strong decade, and that industrialization will play a big part of that.
“There will be a steady pick up in big project spending again. Certain industry segments have been identified, such as heavy industry, process industries, factories and refining and petrochemical facilities.”
The region is already home to the world’s largest single site aluminium smelter in the UAE, where ABB technology plays a significant role. Emirates Aluminium (EMAL), a joint venture between Abu Dhabi’s Mubadala Development Company and Dubai Aluminium Company DUBAL, built a green field US$5b smelter at the Taweelah industrial zone close to Abu Dhabi.
The world’s first fully integrated power distribution system, which set new standards for green field smelter projects, was designed and installed by ABB.
“The region has a huge potential to become a process driven export hub,” he says. “In Europe today they aren’t really building these enormous plant projects anymore, so you can infer from that that they will have to buy in, and it makes sense to get a lot of that work done here.”
Di Marco says these heavy industry projects will most likely be government driven or backed. However, this stream of industrial projects will place further demands on the region’s electricity generation, transmission and distribution infrastructure, and part of meeting that growth will come from efficiency gains which are achievable, he says.
“Customers in the Middle East don’t find energy efficiency a big priority…yet. Once demand - and with it tariffs - start to climb, this will become a much more important area.”
In order to help customers reduce energy consumption, Di Marco says he is excited about the impending launch of a new web-based tool for local industry.
“We are bringing a new product to the UAE, called the ABB Energy Calculator App. It will enable small customers to get access to our website and conduct their own energy efficiency evaluation.” Di Marco says it’s a simple system to put in, and that ABB can help them improve their own energy efficiency.
“The biggest customers have had this capability for a while, but because small customers don’t have the time or resources to carry such analysis out, it will help them manage their costs a lot better.
We expect that existing plants with legacy or ageing equipment will see a big benefit from this. Owners may have a fairly simple solution to making their plant considerably more efficient, but just haven’t identified it yet,” he says.
Despite the region being synonymous with enormous oil and gas deposits deep underground, the Middle East’s most obvious and abundant energy resource is rarely out of sight.
Indeed, it’s hard to fathom quite why solar hasn’t had a speedier take-up in this part of the world. Grand projects such as Masdar grab the headlines, but a real and significant regional adoption hasn’t exploded in quite the way many thought it would.
Di Marco says that in the immediate future that is unlikely to change and that gas will be the big winner in the regional energy fuel mix. “Gas growth is going to be a key driver in the southern gulf. In the UAE there isn’t that much available gas, but I think they can further connect with international suppliers.” However, there are several factors which suggest the future is still quite bright for the solar brigade.
“The prevailing thought at the moment certainly seems to be that solar developments will be in addition to, not substitutes of gas-fired power generation. That said, the barriers to more wide-scale adoption are low here.
It’s actually easier to insert solar additions to the grid here than it would be in Europe where the bureaucracy and red tape is phenomenal because there are fewer, or in many cases one master provider, its easier to get the OK for that sort of project,” explains Di Marco.
ABB has significant strengths in renewables and energy efficiency, and a great deal of scope where it can help utilities implement new technology, says Di marco.
“We have something to offer in the market that’s crosses the whole business spectrum. ABB needs to be seen as a complete solution provider rather than only a product or small system provider. We can go from the switch to the power plant and that’s where the real value-add is,” he enthuses.
DiMarco says an area where ABB has particular, and often untapped strengths with regards to the Middle East’s energy networks is in pre-project planning.
“We can leverage our strength in system design to help customers and evaluate needs before they go out o tender. Customers in this region have not utilized this much to date.
But we can help them make better and more cost effective decisions in terms of equipment, not just in the field of reducing initial costs but also assisting in ensuring that the life-cycle cost is kept to a minimum. Life cycle services can not only improve the operations but extend the life of plants and plant equipment
too,” he says.
The vibrant utilities outlook in the Middle East, Di Marco says, is showing shows no signs of abating just yet. Indeed, one of the principal pull-factors behind his move to Abu Dhabi was the abundance of opportunities which a rapidly developing market presents.
“From a business perspective, right across the Southern Gulf, the horizon is always changing. It’s a dynamic and exciting environment to be involved in, and one where ABB has a great deal to offer.”
Middle Eastern sales volumes for the company have regularly hit the $2.5 billion per year mark.
“That figure represents the Gulf and neighbouring countries as a whole, but I think I have the scope to double my volumes here, and there aren’t many places in the world which can offer as tantalizing an opportunity as that right now,” concludes Di Marco.
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ABB NEWS FROM IRAQ
ABB won a number of major contracts in Iraq in March. Early in the month ABB won a $60 million contract from Shell Gas Iraq to build a new power plant in southern Iraq. The power plant will be operated by the Basrah Gas Company.
The project includes the rehabilitation of the existing facilities and addition of new facilities. The Khor Al Zubair project is part of an EPC contract to build a power plant with a total capacity of 50MW, which will feed electricity to the facilities of the Basrah Gas Company.
Just as Utilities Middle East was going to press, ABB announced an order from the Ministry of Electricity (MOE) in Iraq to provide another distribution management system. ABB will upgrade the existing control centre. ABB will also supply the communications equipment and RTUs to control and monitor power supplies in this densely populated area of the country.
“The issue in Iraq is not actually that it’s a difficult environment to do business, its more the issue of security,” explains Di Marco.
“That’s what increases the cost of doing business there significantly. For the big EPC projects we team up with local partners, which means the majority of the installation is done locally by our local partners. In that way we are developing local content, training Iraqi’s and that is the key to success there,” he adds.
The driving segment in Iraq at the moment is gas and oil, in that order, says Di Marco. “There is a lot going on in power generation too, but this is principally on and around the upstream project sites. The ambitious growth plans the oil ministry means you need local partners and that is a strategy which is working well for us so far.”
Giuseppe Di Marco
Role: CEO for ABB in United Arab Emirates and Cluster Manager for ABB in Southern Gulf and Pakistan
Experience: An Italian citizen, Di Marco has been with ABB for almost the past 30 years. Di Marco started his career at ABB in Iraq and since then has held various high-profile positions across the company, including region manager in Tanzania, Mozambique and Botswana, Power Systems Manager in Brazil, Switzerland and Italy.
Most recently he was regional division manager for Process Automation for ABB in Mediterranean region. Since March 1, 2012 Di Marco is CEO for ABB in United Arab Emirates and cluster manager for ABB in Southern Gulf and Pakistan.