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Pentair to boost investment in Sharjah, eyes $1b revenue

DUBAI — Diversified global industrial conglomerate Pentair, which recently completed the $400 million takeover of Sharjah-based KEF Holdings’ manufacturing facility, is set for further investment in the emirate to boost its turnover from $400 million to $1 billion in five years.

Randall Hogan, chairman and chief executive officer of Pentair, said the world leader in water and fluid solutions would invest $50 million over the next three years in setting up production facilities for engineered valves and pumps to complement its existing hi-tech plant for manufacturing industrial valves in Sharjah.

In March this year, Pentair started the process of combining its operations with Tyco International’s flow control business in a deal worth about $4.53 billion to create Pentair Ltd — a global leader in water and fluid solutions, valves and controls, equipment protection and thermal management products. Consequently, KEF Holdings, in which Tyco took 75 per cent stake in 2011 for $300 million, came under its fold. In October this year, Pentair acquired the remaining 25 per cent for $100 million to complete the takeover.

Speaking to Khaleej Times at KEF Holdings’ facility at the Hamriya Free Zone in the presence of KEF Holdings founder Faizal Kottikollon, Hogan said Pentair would begin pilot production of pumps in the first phase before going to full swing manufacturing.

Also in Pentair’s radar is the setting up of valve manufacturing plant in Saudi Arabia, which accounts for a major share of flow control market in the region, he said.

“We have already invested more than $400 million in the region and we see more investments to expand our operation in the UAE. With the right investment and focus, we can double our presence in the region in the next five years,” said Hogan.

He said Pentair is evaluating opportunities to localise its products, not only pumps but also other engineered valves that are manufactured in other parts of the world. “We see room to potentially assemble booster pumps at our facility in Sharjah. We have space, skilled workers and machinery to do it today.”

Hogan said the company is in the process of formalising its product localisation strategy that would enable it to see which products to suit the regional market.

He said Pentair still has room to grow in the UAE, a major market for valves and control products. “The market size in the UAE for valve business is more than $1 billion and in the region, it is nearly $4 billion,” he said.

“The Middle East is a high-growth market for our type of business. The GCC accounts for $151 billion of oil projects and $74 billion of gas projects that are currently active or in bidding process. The UAE accounts for $37.7 billion in oil projects and $23 billion in gas projects while Saudi Arabia leads with $62 billion and $23 billion respectively. We are well-equipped to excel in this region,” he said.

Hogan said Pentair wanted to leverage its manufacturing footprint in Sharjah to further localise its products to cater to local customers. “If we need to grow at double digits in the region, we need talent to help us grow. Job creation and employment for skilled talent in the UAE is a key portion of the value add Pentair has for the nation.”

He said the addition of Tyco’s business had boosted Pentair’s global reach and gave it greater access to developed and fast growth regions, while also allowing it to capitalize on growth trends in the energy, infrastructure and industrial sectors. Globally, Pentair would be targeting to grow its business from the current $billion to $10 billion in five years, said Hogan.

The merged entity, Pentair Ltd is based in Switzerland, with its main US offices in Minnesota, where Pentair is based. It has about 30,000 employees worldwide, with about half coming from each company.

— issacjohn@khaleejtimes.com