Speaking before the Nielsen's annual Consumer 360 Conference yesterday, Jan Zijderveld, Chairman of Unilever Middle East and North Africa, noted that MENA's GDP, or the sum of products and services produced in an economy in a given period, touched $1.3 trillion in 2006, comparable to those of the BRIC countries. Goldman Sachs created the BRIC concept in 2003.
He said that Brazil, whose population is 188 million, had a GDP of $800 billion, Russia's was $765 billion with seven per cent growth, India's was $785 billion with an eight per cent growth, and China's was $2.2 trillion with a 10 per cent growth. China and India are the world's most populous nations, with 1.2 billion people and one billion people, respectively.
Zijderveld said MENA's GDP growth is between five per cent to 10 per cent and whose oil product, which costs from $50 to $60 per barrel, is driving investment in infrastructure, real estate and tourism. He added that the region has a population of some 300 million, 35 million of which are in the Gulf states of Saudi Arabia, Bahrain, Oman, Kuwait, Qatar and the UAE. He said the MENA region is like a growing trade bloc that has a relatively homogeneous culture and language cluster, and whose inter-regional trade and investment is growing rapidly. He also mentioned the business-friendly atmosphere in Dubai that is gradually replicated in other Arab countries.
Zijderveld stressed, however, that tremendous growth is not without risks. He said, for instance, that as the "Middle East becomes more attractive, it also becomes more difficult" to penetrate because consumers are becoming more demanding and exposed to a lot of choices in products and services.
Thus, he said companies must study the market well and constantly improve their products and services through innovation and sound management. Also yesterday, Lennart Bengtsson, president of Nielsen for Eastern Europe, Middle East and Africa, said companies should monitor closely their returns on investment to gauge future growth. "Future challenges will be centred on margins as they are likely to decline due to increasing cost pressures from raw materials, labour, real estate and fuel," he said. "Currently, with high growth rates, companies are able to maintain and grow their margins due to economies of scale."
Bengtsson said, however, that businesses should be wary of market slowdown and increased costs. "When that occurs, there should be an active involvement of the board members to look at ROI on every investment made in the company. This is an area in which actionable consumer insights have a major role to play."
Country's PMI reaches 57 in November
The project also features, at a height of 263 metres, the highest solar energy tower on the planet