Siemens AG (IW 1000/34) Chief Executive Officer Joe Kaeser said he expects revenue from Saudi Arabia to reach $5 billion by 2020 as Europe’s biggest engineering company focuses on energy projects and emerging markets.
The first orders from Saudi Arabia are expected in the 2017 fiscal year, bolstered by spending on alternative energy sources like wind farms, Kaeser said in an interview with Bloomberg TV in Riyadh. Revenue from the kingdom was about 2 billion euros (US$2.1 billion) in the latest financial year.
“2017 could be a decent year to start with wind,” the CEO said. “They have very good spots here for onshore wind,” he said, adding that there could be potential for 300 megawatts in capacity over 2017 and 2018.
With a market value of 92 billion euros ($99 billion) and a sprawling portfolio ranging from health-care scanners to power-generating equipment like turbines, Siemens is focusing on emerging markets to counter weaker orders in Europe. In the past year, Kaeser has looked at projects from Iran to South Africa.
Low oil prices have made markets like Saudi Arabia more enticing, Kaeser said, as Siemens can help countries shift to renewable energy like wind and solar, while also benefiting from investments in infrastructure.
Against the backdrop of Donald Trump’s election last week and the U.K. vote in June to leave the European Union, Kaeser has said political uncertainty has the potential to disrupt orders and investment needed by global companies like Siemens. Siemens this week announced it plans to acquire U.S. software company Mentor Graphics Corp. for $4.5 billion.
By Oliver Sachgau and Erik Schatzker