A few minutes with Dietmar Siersdorfer, and his affability could lead you to forget that you are with a CEO. He is, of course, dressed for the part in a dark suit and a tie, but there is an overall balance between comfort and discipline when you meet him.
Enter Siersdorfer’s office and a small note scribbled on the writable wall, addressing him as “my great CEO partner,” indicates that his camaraderie with his executive colleagues is equally relaxed. (The note was from Siemens Middle East’s ex-CFO Alia Al-Rifai who moved to take a position in global corporate finance team last year).
“Good leadership is when you bring together different cultures, where you not only have different views but different backgrounds,” says Siersdorfer, 56, who is currently leading some very strategic markets for the Munich-headquartered conglomerate that posted almost €83 billion ($91.2 billion) in revenues last year.
Leading 15 countries across the Middle East, Siersdorfer has, for his part, helped Siemens post about €42.7 billion ($46.9 billion) worth of revenues from its markets in Europe, CIS, the Middle East, and Africa. The overall figure drops to €31.05 billion ($33 billion) if Siemens’ home market of Germany is excluded. (The company does not disclose specific figures for the Middle East alone.) In the Middle East, Siersdorfer oversees a massive business that ranges from building power plants and electric grids, to manufacturing products and cloud-based software that power buildings, while digitalizing factories and industries.
But the landscape has become challenging, with order volumes showing just a 3% growth in Europe, CIS, the Middle East, and Africa. Regionally, lower oil prices have also impacted Siemens. Siersdorfer, who has spent the last 32 years with the company, seems to have a game plan to power up the company’s prospects in the region, and most of that seems to be emerging from the conflict-hit economies of the Middle East.
In September, Siemens—along with Egypt’s Orascom Construction—inked a $1.3 billion deal with Iraq’s government to rebuild two power plants in Baiji, 250 kilometers north of Baghdad. Restoring them would add 1.6 gigawatts (GW) of energy to the power-starved country and follow through on a much-coveted larger agreement that lays out a roadmap to electrify Iraq by adding 11GW of energy and boosting capacity generation by 50%. The agreement includes upgrading and reconstructing a number of gas turbines to restore power in Iraq—phase one saw contracts worth $763 million awarded to Siemens.
“Iraq has more than 40 million people living there, and they are in desperate need of power,” says Siersdorfer. Siemens has also committed to building a smart health clinic that could treat up to 10,000 patients a day and to donate about $60 million worth of software to Iraqi universities while training thousands of Iraqis for new job opportunities.
Both Siemens and its rival GE have been jockeying for key contracts in Iraq, which is embarking on a massive reconstruction of its utilities—much of which has been damaged during years of conflict. The country has also fast become an important market for both the conglomerates, which are hoping to prop up their underperforming energy divisions. The roadmap agreement itself has contracts worth $14 billion in total, making it much coveted as it fills up the giants’ order books.
“Siemens has been trying to develop a blueprint of sustainable power development and economic growth in its Middle Eastern operations that can be replicated,” says Maryam Salman, research analyst at Qamar Energy. “Iraq serves as an ideal opportunity in this regard, with high unmet demand, prime locations, and high potential to quickly and effectively enhance the productivity of existing power generation facilities.”
Iraq is not the only emerging market in Siemens’ sight. Earlier this year, the company won a deal to provide a component of a gas-fired plant in Afghanistan—the first in the country since the 1970s, which can power up to 200,000 homes. Meanwhile, in Egypt, the German giant has built the world’s biggest gas-fired combined-cycle power plant complex that has the capacity to provide power to around 15 million Egyptians. Now, Siersdorfer is looking towards countries such as Yemen, Syria, and Libya—all require massive upgrades in their utility sector.
“Building an infrastructure in many countries is a topic at the moment, especially electricity infrastructure,” explains the Mettlach native.
With reconstruction big business in developing countries in the Middle East, Siersdorfer is also pursuing energy conservation in other mainly-mature economies. For this, higher power and utility charges have played a key role in creating a need for energy savings, the CEO adds. “When I came to the Middle East 11 years ago, there was no price attached to energy and everyone was saying ‘it is there why should I care?’ Now, people see their energy bill and say ‘what can I do to reduce it?’”
Building technologies and smart infrastructure are both transforming into sizeable businesses in the region. Investing further into this sector, Siemens acquired three companies recently that are developing smart building technologies. These are giving buildings the ability to pick up on the habits of their occupants and adjust automatically. “[The building] knows when you come into the room if you want 18 degrees or 35 degrees,” says Siersdorfer.
Next year, Siemens will showcase one of the largest installations of building technology at Dubai’s Expo 2020 site by connecting 137 buildings. The sensors installed into these structures will help monitor and control energy usage. “It’s a blueprint for a smart city, it’s a contained environment, and it is where everyone can see how it will go,” Siersdorfer reveals.
For the executive, Expo 2020 also marks a special milestone. Coincidentally, the date when the U.A.E. was awarded the Expo in 2013 was also the day he found out he was being promoted to CEO of Siemens Middle East—a position he accepted after leading various divisions for the company across the world.
An electrical engineer by profession, Siersdorfer became interested in Siemens while working at his first job, where he collaborated with the industrial giant. He joined the company’s industry business in 1987 and soon rose up the ranks, taking up positions in Germany and later in Kuala Lumpur in 1997—just when the Asian financial crisis began. There, Siersdorfer was tasked to build the company’s digitization business within the industry division, but the operating environment was tough. “Back then, I thought to myself what am I doing here, I’ve come here and there is this economic downturn. But we made it, we built some businesses that we still have today,” he says.
Change beckoned the executive again a few years later when Siersdorfer was singled out
by one of his bosses to work on a completely different industry: power generation. While he
did not know much about the sector, he decided to take the leap and trust his boss. “It was cool
to see because I was changing inside Siemens, but it was like changing from one company to
another,” he smiles. There, he gradually became an expert and went on to head the company’s
global fossil division, eventually becoming the CEO of the Middle East’s energy division before
accepting his current role.
At Siemens U.A.E, Siersdorfer, unsurprisingly, earned a reputation for being a likable leader. Ex-CFO Al-Rifai, who has spent years alongside him, says: “He’s inclusive and seeks the opinions of others, challenges the status quo and encourages the team to see things from a different perspective, to think outside the box. And all that while having fun at work!”
Siersdorfer’s role in Siemens’ regional business, especially within its energy division, will come in handy when the company spins off its lucrative gas and power division next year. Meanwhile, in the Middle East, the company faces a market that is grappling with lower hydrocarbon prices as a new normal. The region has also been experimenting with renewables, as Gulf countries pivot towards clean energy. The U.A.E.’s Energy Strategy 2050 aims to increase the country’s share of clean energy from 25% to 50% by 2050, while Saudi Arabia is targeting about 58.7GW of renewable energy by 2030 into its mix.
One way that Siemens is tapping into the region’s clean energy ambitions is by developing e-fuels using hydrogen, which can be derived from sunlight in a gaseous form. This can be transformed into liquid fuels that can be used in normal combustion engines, which in turn can reduce carbon footprints in an increasingly eco-conscious world. “The possibility to run this technology in the future is so big, and today they are exporting oil and gas; maybe in the future (they will export) e-fuels,” says Siersdorfer.
Siemens is already working on a pilot project with the Dubai Electricity and Water Authority to establish the region’s first solar-driven hydrogen electrolysis facility at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. The plant will be designed to produce hydrogen using renewable energy from solar photovoltaic cells. But Siersdorfer opines that while renewables’ share of the market will rise, they will not price out fossils.
In fact, the CEO is banking on growing investments in downstream to fill up Siemens’ order
books. In the Middle East, Siemens has ongoing deals with oil giant ADNOC and has investments in Saudi Arabia, Iraq, and Pakistan. In addition to that, Siersdorfer is also eying up Egypt. “You need to be at a place where growth is happening,” he says.
With markets ranging from Iraq to Pakistan under his command (most of which operate in tough conditions), Siersdorfer is an understandably busy man. But he has an optimistic view: “We believe that when you are there in bad times, people will remember you in good times.”