Mahindra Gesco set to enter the UAE’s real estate market

Mahindra Gesco set to enter the UAE’s real estate market

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By  Conrad Egbert Published  March 26, 2005

Mahindra Gesco set to enter the UAE’s real estate market|~|Anand-Mahindra-2.jpg|~|Anand Mahindra|~|Anand Mahindra, vice-chairman and managing director of the Indian company Mahindra & Mahindra (M&M) was in Dubai last month. Mahindra Intertrade Ltd. (MIL), a predominantly steel trading subsidiary of the Mahindra Group, has set up its Mahindra Middle East Electrical Steel Service Centre at the Sharjah Airport International Free (SAIF) Zone. The Harvard graduate took time out to speak exclusively to Construction Week about the company’s property susidiaries Gesco Ltd. and Mahindra Developers Ltd. that seem to be on the cards.

Can you elaborate on MIL and the new steel centre in Sharjah?

Mahindra Intertrade Limited is a 100% subsidiary of Mahindra & Mahindra and is a US $115 million company. It’s growing at a rapid pace and has already set up a permanent office in Uganda, East Africa, in order to increase business in that region. Now we’ve opened a steel service centre in the UAE in SAIF Zone, known as Mahindra
Middle East. MIL also has one of its first steel service centres in India, in Kahne, Pune. It started out with processing materials for auto and auto ancillary,
but expanded to processing electrical steel.

Mahindra is usually better known for its vehicles. Have you sold many worldwide?

We’re selling our vehicles pretty well, actually. We’re India’s largest maker of utility vehicles, and will begin exporting our Scorpio utility vehicle to France and Malaysia very soon. We have orders for about 200-250 Scorpio units from Malaysia, and about 150 from France.

Is there a particular reason why you decided to tap into the UAE market?

It’s the first of many market opportunities that have come our way. This is a very small investment that we have made and is definitely not the last. I think one should view this as a precursor to many more investments. This venture is another initiative to expand the group’s presence in the international market; the Mahindra Middle East Steel Service Centre will be the new manufacturing activity of the group in the Middle East.
Sharjah is becoming a logistics hub and I’m glad I came here to see things for myself. I’m highly impressed by everything that
I’ve been shown and have seen, and it’s awakened my interests to such a level that I think I’m going to have to go back, sit quietly and understand this whole area very carefully. I see a lot of potential here for us.

Why did you choose to open the steel centre in the SAIF Zone?

I think the SAIF Zone is the perfect area for any international company to operate out of. It’s a logistic hub. Another great aspect of the SAIF Zone is its human touch. We got such a good feeling here, not only in terms of being a good business move, but on the whole, and I think that is their selling point.

What is the connection with Nippon Steel?

Nippon Steel has been partnered with us for a very long time now. MIL has however, formed a joint venture with Nippon Steel Corporation (NSC) to set up the steel service centre for processing electrical steel here.
NSC, which is an equity partner in this venture, will supply the necessary raw material for the new company. The service centre over here has been set up in a record time and has already made its first commercial dispatch to ABB (Riyadh).

Where do you think you will go from here?

We’re looking at a vast area of the Middle East at the moment. Everything is under speculation.
A lot of thought is being put into this entire region due to its potential, but I think we’re focusing mainly on the Gulf, as well as the Egyptian and African markets.

Do you think that since there are so many international companies here, Mahindra might get a little lost?

All our companies have been structured on being global right from the start, so we don’t shy away from competition; in fact it only makes us better. Our brands are equipped with all it takes and so they travel well anywhere. Our brand is a symbol of trust and co-operation because of our brand equity, and we’ve worked very hard to establish that.

It’s rumoured that Mahindra Gesco Developers Ltd. (MGDL) might be setting up shop in the UAE?

I won’t say it’s not an option. We have two listed companies here already.
The real estate market is looking up, and with a large amount of foreign investment coming in, the whole property sector is booming even further.
Real estate is a sunrise area right now. I’m watching it carefully with keen interest and we’re poised to explore everything here, and that includes property and real estate. I hope that within the next five years we’ll make our presence felt in the real estate sector. ||**||

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