Bavaria is the second-oldest manufacturer of fire extinguishers in Germany, tracing its roots back to 1923. Bavaria was also ahead of its time when, in 1972, Bavaria Egypt was established as a German-Egyptian joint venture to provide the local Egyptian market with firefighting equipment and solutions. A pioneer in Egypt, the company set up branches around the country and later expanded throughout the region, becoming the leading firefighting solutions provider in the MENA region. Today, Bavaria Egypt, now part of the larger Bavaria Holding, developed into one of the top manufacturers of fire extinguishers, not only in Africa and the Middle East but also in Europe. Here, Dr Nader Riad, the company’s co-founder and CEO, talks about his well-proven business strategy and the “German connection”, as well as advice on how to do business in Egypt.
What has been the driving factor of Bavaria Egypt remaining a successful and relevant player since 1972?
We went through stages. When we started, there was no specific standard for the kind of product we were introducing to the market, so we took the then modern standards and actual standards in the West as inspiration. In many cases, industry resists and resents national standards and regulations. But if you take them as guidelines for improvement, you’ll always be ahead of others who resist following the new standards. I think the competitive advantage of our company now is the constant ability to deliver real value to the market. We consider ourselves the main consultant for the customers and treat them in a very supportive way. Through this method, we have built up the market for the product and established a good reputation. Quality is not only the quality of product, but also the quality of marketing, the quality of service, the quality of price setting and more.
In what ways would you say that innovation fits into Bavaria’s philosophy?
Development and innovation are common words in industry and business. There is a saying that either you develop or you die; either you improve and remain competitive or you are out of the market. So our perception is that this development is not only key to improving the product, but even more importantly the key to how we interact with the market, with the customer’s wishes, with the competition’s new explorations, and how we remain a relevant player in the game. R&D is not just about products, but services and our customers. Either you have a budget for that or you won’t be able to cope with the competition.
At the recent 22nd Arab-German Business Forum in Berlin, Bavaria signed a joint venture agreement with Ziegler Group, the biggest German manufacturer for fire trucks for municipal, airport, industrial, and special application/hazard use to establish an industrial plant in Egypt focused on the manufacturing of these kinds of vehicles. Could you tell me more about that agreement?
The main concept for the partnership is the realization that production or assembly in a developing country brings with it advantages. It allows the product to be available at a reasonable price and short delivery times. Especially if you start with three or four types of standard products, you can offer quality production with a price advantage. It took us quite some time to convince Ziegler to start common assembly and production in Egypt. We are now 47 years old, and Ziegler has a125 year-old history, so both of us are mature companies in the market. That gives us a common understanding about how to handle the market in a solid way and deliver real goods, quality and services at reasonable prices.
Do you foresee further joint ventures or partnerships of this kind?
For the moment, we have to work intensively and for an extended time to meet our objectives. It will take all of our efforts with our present and future team to realize and secure the right product at the right price.
What is your vision for the future of Bavaria Egypt?
We started as producers of fire extinguishers, but over the years we became, together with our German company, the number one manufacturer of car fire extinguishers. We produce more than 1.5 million per year. That will increase. Within the last five years, we’ve also had more activity with other types of extinguishers, as well as with automatic alarms and extinguishing devices. Now we are completing the package with firefighting rescue vehicles and ambulances. This would extend our services to railways, tunnels, industry, municipalities, sewage canalization and, most importantly, to airports, which require special rescue and firefighting solutions.
You were awarded the Officer’s Cross Order of Merit, First Class by former German President Johannes Rau for your key role in reinforcing German-Egyptian ties. Considering the fact that the two countries have been trying to enhance their relationship, what opportunity do you see for further bilateral cooperation?
I can only say that Egypt deserves more attention, cooperation and support from Europe. Egypt does a lot in the fight against terrorism, and is a first line of protection for Europe. Egypt is a serious and able country in a turbulent region. Despite the country’s limited resources, it is capable of amazing feats. These achievements could be a platform for building up more capacity, trust and confidence in Egypt’s future alongside Europe. I could imagine that Egypt is taken as a center of excellence, as a successful case study to be repeated and extended among neighboring countries once war and terrorism in the countries concerned come to an end.
In recent years, Egypt has experienced rapid economic growth and new macroeconomic stability. How do you view Egypt’s progress?
I can say that what has been achieved is good but not good enough. This is an expression of optimism. I’m sure that Egypt deserves more and is capable of doing much more than what it has already achieved. Economic advancement is just part of it. Egypt is building very solid and reliable infrastructure to help the country act in the future and develop more sustainably. This is not only roads and railways, but it’s also expansion in agriculture, fisheries and other economic sectors. There are now special channels to obtain low-cost commodities. Even the new health insurance system is about to cover all classes of society. Education is also subject to reform and will help Egypt to become more open to the international community.
What is your evaluation of the state of Egyptian industry?
Industry is expanding its reach. Construction is industrial construction; agriculture is industrial agriculture; even the media is becoming a built-up industry. So the term industry is prevailing over all fields of activity, demanding the need to follow rules, quality standards, time management and control costs. All aspects of our lives, including education, must follow industrial guidelines. I think we realize that putting things under strict and serious guidelines will be the key point to reinforcing our development and success. This is both in terms of international motives and local standards.
What advice would you give German companies considering entering the Egyptian market?
I would like to point out that the Egyptian market is not an easy one. It’s not as flourishing as expected from external eyes. But once you deal with its terms and gain an understanding of the nature of the customer, you will realize that Egypt’s market is one of the most rewarding. This is especially true when compared with Europe. The European market is very tough and a lot of companies have to leave the European market for competition reasons, not for quality reasons. The Egyptian market offers more opportunities for faster success. Young German entrepreneurs may find it easier to have a trusted Egyptian partner. Partnerships have as many characteristics as a marriage. It’s all about understanding and common language. That’s why finding the right partner is critical. Also, to the younger Europeans or Germans who intend to start projects in Egypt, I would advise them to bring new and decent machines and not fall into the trap of exporting your own junk machines to Egypt. That would be a very bad start. Also, even if the regulations are not as strict here as they are in Germany, stick to the stricter regulations because it will secure you future resilience. In my experience, a young entrepreneur who gets training achieves better results than an older more experienced foreman who has more skills but less respect for regulations. Start by educating, training and upgrading the young labor force.
You’ve had a very long career in which you’ve been an innovator, a successful businessman and a pioneer. What are the most important lessons you’ve learned along this path?
You have to be strict with yourself and take pride in what you do. Once the ownership or leadership of an industrial company has pride – technical pride, occupational pride – it will be transferred to the staff. Once the technical worker takes pride in his or her work, the company is secured for the present and is addressing the future with a very healthy advantage.