Saudi? A tough business affected by ‚element of chance‘

Three years ago, Petr Drastich told me: soon the whole world will be flying to Saudi Arabia. At the time, it seemed unthinkable. It was a closed world with strict rules.

I met Petr Drastich by chance. In 2016, the Smart Living Association was holding a conference and I got to talk to a man who had a lot of experience in the world of electrical devices from ABB and had decided to live permanently in Riyadh, where he was then in his fifth year working for ABB. This is a combination of qualities that is a blessing for export companies like ELKO EP.

We spent a long time fine-tuning the shape of our cooperation together, until at the beginning of 2018 we decided to open our new branch in Saudi Arabia and test whether we could succeed in a country that on the one hand was impressed by petrodollars – and on the other was orthodox and didn’t want to let too many strangers in.

But Peter was already a bit of a local.

And no junior, he understood the business and the industry perfectly.

Still, the first steps and years weren’t easy. Lots and lots of meetings, new contacts, discussions about projects. A lot of work, but little results. Measured in European optics, when after setting up a branch you can set measurable plans quite easily.

In Saudi Arabia, you have to apply a completely different rules, Peter pointed out to me. There is no chance to succeed here with European trade rules. Let’s be patient. Let’s hold on.

Honestly, I’ve wondered several times if I can really hold out. Saudi Arabia struck me differently than other countries in the so-called GCC region, which also includes Bahrain, Oman, Kuwait, Qatar or the UAE.

Riyadh Bus Project

Beware of the ‚element of chance‘

It is huge compared to them.

Extremely large, about 25 times the size of the Czech Republic. Only Riyadh and its conurbation have as many people as our country. Culturally remote. Families stick really close together, and there is a constant element of chance in business.

And in this I have never been able to understand Peter. What element of chance is he talking about?

He tells me: In Europe, many things are planned and expected. You say to yourself, if I have fulfilled condition one, two and three, logically we must come to point four. But that’s not quite how it works in Saudi Arabia, and a person who wants to succeed here has to get used to it, but in a way it’s also exciting, because all projects involve that never-calculable element of chance, which can turn anything that’s agreed upon a hundred and eighty degrees at any time. Local investors are able to stop work from one day to the next, turn off the phone and not call you for a year and a half. The moment you accept that it’s probably not going to work anymore, suddenly the same person calls you and says – we’re moving on, come back, and ideally tomorrow.”

In this respect, times have not changed much even today.

On the other hand, we have achieved quite a lot in our six years in Saudi Arabia.

Riyadh Bus Project

Test of time

In electronic modular devices, we have turned the unknown brand ELKO EP into a respected player in the local market and enjoy a lot of trust with our customers. The Saudis understand that we don’t just sell a product, but care and service, that they can rely on us.

Gaining the trust of local customers is one of the prerequisites if you want to succeed in Saudi Arabia. There is no other way to gain that trust than the test of time. We have a proven track record of quality behind us today. Because whatever we implemented actually worked and delivered what users expected. It sounds like a given, but in Saudi Arabia it’s not exactly a given. There are actually a lot of hucksters around who are willing to offer nonsense and spoil the reputation of the whole market.

After a year they start to look at you in a completely different light, and after two years they are ready to do business with you. On the other hand, once you’ve earned their trust, they’re willing to refer you on.

Which in our case are not exactly small projects. For example, our products and solutions are appearing in large projects by Riyadh Municipality, Riyadh Metro or SEC (Saudi Electroctity Company).

We are completely different than we were six years ago.

But the same is true for the whole of Saudi Arabia.

I have been to this country about ten times, but it still manages to surprise me at least five times every day. Sometimes you drive on a main road that doesn’t even reach the quality of a dirt road. You only cross it by off-road. The transfer depot doesn’t look like a place you’d want to leave your products.

But at the same time, it’s a fast-growing megalopolis, where Neymar plays, big dance parties throng, giant conferences are held, holiday resorts are built.

And yet there is still a respect for the younger generation for the older generation. One of the aspects of life we can only envy the Saudis.