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Supplies for Local Projects through Equity Joint Ventures

Supplies for Local Projects through Equity Joint Ventures. Successful Examples of Two German Companies in the GCC. BACKGROUND. Two Medium Sized German Companies – Railway Suppliers Technology and Market Leaders Catenary System Poles and Concrete Sleepers

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Supplies for Local Projects through Equity Joint Ventures

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  1. Supplies for Local Projects through Equity Joint Ventures Successful Examples of Two German Companies in the GCC

  2. BACKGROUND • Two Medium Sized German Companies – Railway Suppliers • Technology and Market Leaders • Catenary System Poles and Concrete Sleepers • Western European Markets are High Margin Markets but relatively saturated • Increasingly Global Role of German Infrastructure Companies

  3. VISION • Local Energy and Raw Material Supplies • Success through Local Partnership • Choice of Partner • Long-Term Strategy • Genuine Specialization • Think Regional • The Path to Partnership • Business Plan and Joint Venture • Secondment and Training

  4. Reasons • Reasonsformoveto GCC • Cost Efficiency, EnergyandRaw Materials • Hub intotheEntire GCC Market • EmplyomentCost • Tender/Customs Advantages • In onecase: JV with System Supplier • ReasonsForPartnership • LocalKnowledge Counts • Local Resources • Local Administration • CostsandControl

  5. APPROACH • Identificationof Market and Project Potential • ApproachedbyLocal Partner • Development andPlanning • Partner andProduct Due Dilience • Detailed Market Study • Business Plan • SharedCost • DefineStrategy • Secure Initial Supplies • DefineMilestones

  6. Challenges • Transparency and Market Data • Local Investment Laws • Oman • Saudi Arabia • Incorporation – One-Stop-Shop • National Industrial License and Customs • Human Resources • Saudization • Omanization

  7. Challenges II • Contributions in Kind - Licenses • Technology Transfer and Protection • Investment Protection • Dispute Resolution • Codification of Law • Enforcement • Oman • Saudi Arabia

  8. Structure and Conclusion • Flexible Distribution Structure • Regional Vehicle • Exclusivity • Suitable Level of Detail but Keep it simple • “Management Mix“ • FlexibilityandCost • LocalKnowledge vs. Foreign Managers • Key Issues • Personal Element • Focus on theFeasible (e.g. technology, trademarkissues)

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