The Kurdish Globe
Among a flood of cheap Chinese products, German companies try convincing the Kurdish market that their products are superior.
An international trade show in Erbil on April 16-17 was attended by 30 German companies showcasing their products in construction, asphalt, roads and bridges, civil defense, communication and automotive industries.
Although the prices of German products were quite higher than the rest of the products showcased at the fair, the quality attracted local businessmen and Kurdistan Regional Government officials.
Kawa Ahmed, the owner of a local Kurdish trading company that specializes in electrical products, believes that the demand for good quality products is on a gradual increase in the region. "Five years ago, we were selling five containers of Chinese products till a container of Japanese products was sold," explained Ahmed as he walked through the exhibitor booths in the fair. "But now demand on good quality products is much higher."
Ahmed argues that expensive products cost less compared to cheap products because they can be used 10 times longer than low-quality products, which in turns means that one pays less.
"This is true for projects as well," added Ahmed. "A project is implemented and completed. A few months later it will be renovated and a year later another new project for the same project is implemented once again. The government allocated a few budgets for the same project instead of one budget."
Tahir Abdulla, Deputy Governor of Erbil, admits this reality and says that most of the time projects fail due to their inferior quality. "Companies competed for government tenders based on price, and the cheapest proposal is accepted," Abdulla told the Globe at the trade fair. "This has prevented the use of good quality material in the projects."
Abdulla says that since the gate of European countries is now open to the region, they should turn their back on cheap Chinese products, which--besides the durability--cost less than low-quality products.
Despite his position, Abdulla argues that seeking better material is a decision for higher-ranking officials in the government. "The decision should be directed from top to bottom of government institutions, and when preparing the project design at the government offices they should consider both price and quality of material and products used--and they should allow tenderers to use good material in the project."
Although at the fair the German exhibitors only showcased their products, Volker Wilner, head of the German trade relations, argues that some German companies are willing to invest their own capital in the region and "in the near future we will develop a German village in Kurdistan with German products and material."
Izabel Knauf, member of the board of directors of Knauf Construction Company with 24,000 employees worldwide, says that although Kurdistan Region is only a quarter of Iraq, half of the construction work of Iraq is done there, "something that has attracted the attention of German companies."
According to Wilner, although the West still sees Kurdistan as part of unstable Iraq, those companies that have understood the reality are planning to invest in health care, power and recycling in the region.
The German Exhibition was organized by the German AGEF organization inside their building in Erbil. The German Consulate was opened in February 2009. Before that, the German Iraqi Chamber of Commerce was established in 2005. Now another German trade and business center is opened in Kurdistan. The KRG Board of Investment has licensed $80,228,712 in investment by German companies.