Grand opening

Syscom Emirates has opened its groundbreaking telecommunications plant in the United Arab Emirates. The factory will produce phones and later network security kit for the GCC market.

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By  Simon Duddy Published  May 2, 2005

Syscom Emirates has blazed a trail for manufacturing in the United Arab Emirates (UAE), with the opening of its telecommunications plant. The ribbon was cut on the venture today by local partners Sheikh Khalid Bin Kalban, managing director and CEO of Dubai Investments and Anis Al Jallaf, managing director and CEO of Emirates Bank cutting the ribbon. Syscom, which is a subsidiary of Raiffeisenbank, will initially produce telephones and plans to roll out its Datus branded network security devices and third party licensed designs in the second phase beginning next year. The plant has 57 staff and an initial production capacity of 50,000 units per year, when utilising one shift. “The IT technology market has become much more competitive and we are rising to the challenge with this manufacturing initiative,” says Hartmut Muller, CEO of IT at Raiffeisenbank. “A lot of people said this joint venture was unrealistic but the opportunities are great. We see willingness to learn as key to success as there is always the potential for misunderstanding,” he adds. Syscom’s target customers are the police and military in the GCC, as well as existing Etisalat customers. The vendor is looking to leverage what it sees as three key advantages to win business in the GCC. The first of these is tax exemption. Syscom can ship the products it manufactures in the plant to anywhere in the GCC without customs charges. A second advantage is that the proximity of the plant to the local market will allow interested companies to work closely with Syscom in customising products and solutions. The vendor is also looking to leverage the political advantages of being a trusted telecommunications partner in the region. “Infrastructure is key for a country’s growth and we are looking to help the UAE and the GCC grow their communications. If you look historically at other countries they have often had a key telecommunications partner that has provided for their needs and grown with them,” says Bernhard Isemann, managing director of Syscom. The opening of the plant was delayed for two months because of challenges posed by the UAE climate, with extra measures taken to ensure that dust does not affect the sensitive equipment used at the factory. The vendor needed the manufacturing process to meet high quality standards to both impress customers and third party manufacturers that may be interested in licensing technology to Syscom. “The opening was delayed by two months because it was important to ensure that the factory is a high quality environment suitable for the manufacture of sensitive circuitry,” says Isemann. “With the dusty atmosphere of the Emirates this presented a considerable challenge and it took us a few months longer than expected to get this right. We decided that building this solid foundation was more important than delaying the opening,” he explains. The vendor will invite third party vendors that are interested in the GCC market to use Syscom’s plant to manufacture their designs. Isemann sees great business potential here, for this with the vendor hoping to attract electronic meter manufacturers and other niche electronic and telecommunications players. Isemann says this approach will allow foreign manufacturers to target local utilities while reaping the benefits of manufacturing in the Emirates, such as customs breaks. Raiffeisenbank sealed the joint venture with Dubai Investments one year ago. The agreement is part of an Austrian trade initiative, which has resulted in 68 joint ventures between Austrian and Emirati firms. Syscom is 60% owned by Dubai Investments, a UAE government investment group, which is in turn part owned by Sheikh Maktoum and Emirates Bank. The remaining 40% of Syscom belongs to the Raiffeisenbank financial institution, where Syscom started life as the bank’s IT and telephony department.

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