ONE of the oldest and most famous brands in the European engineering industry finally set up shop in the Middle East last year. Sulzer Technology Corporation has grown from an iron foundry business opened by Johann Jakob and Saloman Sulzer in the Swiss town of Winterthur in the 1830s into a global business with a strong presence in the oil industry. The region that contains two-thirds of the world's oil reserves is an obvious target and the new regional marketing and sales office in Dubai will be working the Gulf market more aggressively.

'The new office is intended to be a platform for all Sulzer products, but obviously on the ground activity means that it is essentially for our compressor and pump division, Sulzer Roteq,' Fritz Fahrni, Sulzer Technology president and chief executive told MEED in an interview.

Much has changed at Sulzer over the past 10 years. Before a wide-ranging restructuring programme was launched in 1988, the group was active in about 23 product areas. Today, its operations are focused on just five divisions. The three largest are Sulzer Medica, a medical technology business, process and mechanical engineering division Sulzer Winterthur, and Sulzer Roteq, which concentrates on large-scale machines for the petroleum and chemicals sector.

By 1997, the restructuring appeared to be paying off. Since the late 1980s, turnover has doubled to an estimated SF 6,000 million ($4,000 million), while profits were up four-fold, reaching SF 214 million ($142.6 million) in 1997.

Sulzer's goal now is to raise its international sales and profile in selected markets. 'We want to be a leading company in each sector where we operate,' Fahrni says. 'We want to be technically excellent but not necessarily the cheapest. We want to grow relative to the market.'

Sulzer is well aware that its products are not cheap but the company believes the price is justified by the performance. Fahrni argues that while Sulzer products may initially cost more, the up-front expense is more than offset by their longer life and lower maintenance requirements.

'Take one of our weaving machines for example. It may be three times more expensive but it weaves four times faster... We have to convince people that over the lifetime of a product they get better value from us.'

The recent launch of a new Middle East office is part of a corporate strategy to get the message about costs across. Sulzer Roteq, which was set up three years ago, is already well known in the region, but has previously serviced its Middle East business out of its Swiss headquarters. In 1997, the Middle East and Africa market accounted for 11 per cent of total Roteq sales of SF 1,464 million ($976 million).

'Direct sales into the Gulf and Levant are currently running at about SF 50 million [$33.3 million] a year. However, if you take in the machines, which are sold to major international contractors for installation in the region, then the actual volume of business coming out of the area is probably three times higher,' Fahrni says.

In the past, nearly all the regional orders have been for high-pressure pumps used in pipelines, petrochemical plants and refineries. However, the product sales profile looks set to change with the new Dubai office placing increased emphasis on raising sales of its turbo and reciprocating compressors. If the strategy works Sulzer may well be tempted into a further expansion of its regional presence.

Says Fahrni: 'It is our intention to set up a service centre in the Middle East. The question is to find a suitable location. We are unlikely to invest in a full-blown Roteq workshop, as the investment would not justify the business in the first instance. Rather, we would probably establish smaller workshops scattered around the region.'