Lego to build up presence in Mideast with Dubai office

Lego sees growth potential in the Middle East. (AP)
Updated 07 March 2018
0

Lego to build up presence in Mideast with Dubai office

LONDON: The Danish toy company Lego is planning to ramp up growth in the Middle East with the opening of an office in Dubai toward the end of this year, according to the company’s CEO Niels Christiansen. 
“The market there is already big, it is already growing … We believe we can accelerate that by now putting people on the ground in Dubai who can develop the region further,” he said at a press conference on March 6.
His comments come as the toy brick-maker announced that its 2017 profits were down compared to the previous year, with full-year net profit dropping to 7.8 billion Danish kroner ($1.3 billion) compared to 9.4 billion kroner in 2016. 
Revenues decreased by 8 percent to 35 billion kroner in 2017 compared to 37.9 billion kroner last year.
The reduced revenues were partly blamed on too much inventory already sitting in shops and warehouses that needed to be sold off. Global consumer sales were flat in 2017, moving upward in the final months of the year benefiting from the Christmas season. 
“2017 was a challenging year and overall we are not satisfied with the financial results,” Christiansen said. 
“However, we ended the year in a better position. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. In 2018, we will stabilize the business and invest to build sustainable growth in the longer term,” he said. 
He said there was “no quick-fix” to the company’s fortunes. “It will take some time to achieve longer-term growth,” he said. 
While revenues declined in the company’s established markets of North America and Europe, Lego saw “significant” revenue growth in China. 
The company is planning to further expand in the country, and last year signed a partnership deal with one of the country’s largest Internet companies, Tencent, to work together to develop online games for Chinese children.


Volvo quits Iran as US sanctions pressure mounts

Updated 25 September 2018
0

Volvo quits Iran as US sanctions pressure mounts

  • Volvo cannot get paid in Iran due to US sanctions
  • Plans were for at least 5,000 trucks to be assembled in Iran Saipa Diesel says zero Volvo trucks assembled since May

STOCKHOLM, Sweden: Swedish truck maker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.
The sanctions against Iran, reimposed on Aug. 6 by US President Donald Trump after his decision to pull out of a nuclear deal with Tehran, have forced companies across Europe to reconsider their investments there.
Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran in another blow to the country’s car industry, which unlike the energy and banking sectors, had managed to sign contracts with top European firms.
“With all these sanctions and everything that the United States put (in place) ... the bank system doesn’t work in Iran. We can’t get paid ... So for now we don’t have any business (in Iran),” Ivarsson told Reuters by telephone.
Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Gulf region and North Africa markets.
The European Union has implemented a law to shield its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.
Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.
Ivarsson said Volvo had no active orders in Iran as of Monday.
A commercial department manager at Saipa Diesel confirmed that sanctions had prompted Volvo Trucks to terminate their partnership agreement.
“They have decided that due to the sanction on Iran, from (May) they couldn’t cooperate with us. We had some renovation planned in Iran for a new plant but they refused to work with us,” said the manager, who declined to be identified.
More than 3,500 Volvo trucks had been assembled by Saipa Diesel in the year to May, but none had been assembled in this financial year although the original deal was for at least 5,000 trucks, the manager told Reuters.
Swedish truckmaker Scania, which is owned by Volkswagen , said it had canceled all orders that it could not deliver by mid-August due to sanctions, while French carmaker PSA Group began to suspend its joint venture activities in Iran in June.
Germany’s Daimler has said it is closely monitoring any further developments, while carmaker Volkswagen has rejected a report that suggested it had decided against doing business in Iran.