Global firms expand service propositions in ME

 By: ZainabMansoor

 With Saudi Arabia at the helm of economic and commercial progress, a lot of multinational corporations and industries are establishing their local presence to better gauge the region's potential and consumer mindsets. Mitsubishi Heavy Industries Compressor Corp. (MCO) is no different. Assessing the potential of Saudi Arabia and its adjoining markets, Mitsubishi Heavy Industries Compressor Corp., a subsidiary of Mitsubishi Heavy Industries will establish MCO Saudi Arabia, LLC (MCOSA) to target and manage the after-sales service operations in the Middle East region.
This subsidiary will not only manage the after-sales activities of the region, enhancing the company's servicing infrastructure in the country, but will also act as marketing and service base to serve the entire Middle East region.
MCO Saudi Arabia L.L.C will be launched as a joint venture between MCO and Mitsubishi Corp. (MC), capitalised about SR 1 million (US$266,620) or YEN 24 million (US$297,164). MCO will own 81 percent shareholding, while Mitsubishi Corp. will own the residual 18 percent. MCO was established in April 2010, targeting business related to compressors provided by Mitsubishi Heavy Industries. Earlier this year, MCO licensed its compressor technology to Hangzhou Steam Turbine & Power Group Co. Ltd of China and Hyundai Heavy Industries Co. Ltd of Korea.
Due to the paucity of extensive manufacturing, the metalworking industry has largely depended on catering to servicing/repair (includes machinery or process equipment).

Local facility
"Mitsubishi has a sizeable installed base of compressors/ turbines in the KSA and other Gulf regions. The company's move to establish a local service facility, MCO in Saudi Arabia will facilitate service/ repairs locally. This will translate to greater business for the metalworking industry in the region," said Niju Vijayan, Deputy Director, Industrial Automation and Electronics Practice, South Asia, Middle East and North Africa.
Commencing operations from 1st July with ten staff members, the company will be located in the eastern city of Al Khobar and will remain in close proximity to Saudi Aramco, the national oil company. MCOSA will not only provide its services to clients located within Saudi Arabia but with also spread its servicing network across the entire Middle East region.
The company has to date supplied 500 compressor/turbine units to the Middle East and is keen on focusing on the region's business activities given its enormous energy resources. This base will not only localise the company's services to perform after-sales services but will also economise its operations, strengthen its local market base and offer timely services.
"Given the significant number of in-house third party service providers (TSP) and original equipment manufacturer (OEM) workshops, only a minimal amount of metalworking (involved in the repair/ other servicing aspects, especially in the compressors) is outsourced to various global servicing/repair facilities of OEMs. Although, the quantum of outsourced work is higher in the case of turbines, the regional facilities are able to satisfy a majority of the servicing requirements," said Vijayan.
He further added, "The recent move by MCO is indicative of a trend by major OEMs to establish local presence in the MENA region. Furthermore, as the state's impetus (end-user facilities are state owned, to a major extent) is towards ensuring end-users' efforts on production alone, an increasing percentage of the maintenance or service-related activities are expected to gradually be outsourced (to OEMs or TSPs). This will further incentivise OEMs or TSPs to initiateNIKE SB