- Algeria celebrated 50 years of independence in 2012 and has experienced a turbulent past but now enjoys relative stability and peace. - It has a robust economy fueled by oil and gas reserves and the government is working to diversify the economy and create jobs. - Algeria has close relations with the US, cooperating on security issues like counterterrorism and also pursuing economic partnerships beyond hydrocarbons. Both countries see potential to further strengthen their alliance.

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ALGERIA
Celebrating 50 Years of Independence
This supplement to USA TODAY was produced by United World Ltd., Suite 179, 34 Buckingham Palace Road, London SW1W 0RH – Tel: 44 20 7409 3106 – ourworld@unitedworld-usa.com – www.unitedworld-usa.com
Huge support saw
Abdelaziz Bouteflika,
President of Algeria since
1999, elected to a third
term in office in 2009
An oasis of stability and progress in North Africa
stable political sit- Algeria’s business framework Over the past five decades, nounced subsidies designed to President of Algeria in 1999, tion of women in the Algerian
A uation has con-
tributed to a robust
economic expan-
sion over the past
decade. Today, Algeria’s biggest
challenges include tackling un-
employment, addressing hous-
has evolved substantially in re-
cent years. Overhauled legisla-
tion and new investment
incentives are making their mark
on the nation’s financial envi-
ronment, adding weight to the
government’s affirmations that
Algeria has endured some tur-
bulent times, including a civil
war that dominated the 1990s.
It has since become an oasis of
relative peace and security in
what is viewed as a fairly volatile
region.
reduce prices by 41% for staples
such as sugar and cooking oil.
Further measures followed in
February last year, when
President Bouteflika promised
to rescind Algeria’s state-of-emer-
gency legislation, which had been
and was re-elected in 2004 for
a second five-year presidential
term. A change to Algeria’s con-
stitution, which removed the
previous limit of two presiden-
tial terms, enabled a third elec-
toral victory in 2009 when he
parliament increase from 7% to
31%. President Bouteflika be-
lieves the relatively high turnout
for May’s legislative polls, of
around 43% compared to 35% in
2007, should mark the rise of a
new generation.
ing shortages, abating the formerly socialist Algeria no The Arab Spring uprisings in in place since 1992, and pledged was reported to have won more Quelling the tide of Arab
corruption, and further devel- longer differentiates between large parts of North Africa and to open up access to audio-visual than 90% of the vote, carrying Spring revolt with ongoing pro-
oping the private sector. public and private enterprises the Middle East that toppled media, an area that had been a his leadership through to the gressive reforms and opening up
Increased economic diversifi- state monopoly up to that point. next presidential elections the electoral process to interna-
cation and foreign partnerships Responding to widespread con- scheduled for April 2014. tional supervision have helped
also head the government’s pri- “AFTER OVERCOMING THE HARDEST OF cern over unemployment in Peaceful parliamentary elec- burnish Algeria’s reputation with
ority shortlist. TRIALS, OUR COUNTRY IS NOW HEADED ON Algeria, the President also vowed tions in May 2012 produced an- Western allies who rely on the
Algeria is the largest country A PATH OF DYNAMIC PROGRESS, TAKING to promote job creation, partic- other win for the ruling National North African nation’s supplies
in Africa and the 10th largest in INTO ACCOUNT THE REALITIES AND ularly for the country’s massive Liberation Front (Front de of natural gas and contributions
the world. More than 80% of its ASPIRATIONS OF OUR YOUTH, TO youth population, to further as- Liberation Nationale, FLN) par- to tackling terrorism. The elec-
territory is covered by the Sahara STRENGTHEN THE FOUNDATIONS, EXPAND suage discontent. ty. Past elections have been tions, which dashed Islamist op-
Desert. Consequently, over 90% THE SCOPE, AND ENSURE THE CONTINUITY Reforms continued through- marred by accusations of fraud, position hopes of gaining power,
of its 37 million people live along OF PEACE, INDEPENDENCE AND UNITY OF out 2011. In mid-April, so at Algeria’s request these lat- garnered praise internationally,
the country’s fertile 620-mile THE NATION.” President Bouteflika promised est polls were held under inter- with U.S. Secretary of State
Mediterranean coastline. The to amend the constitution and national observation by the EU, Hillary Clinton calling them a
country is also one of the con- ABDELAZIZ BOUTEFLIKA, President of Algeria invited other political parties the African Union and the Arab “welcome step,” and a statement
tinent’s top five economies, fu- to submit proposals for League. EU observers reported from the EU referring to them as
elled by massive reserves of oil changes to a parliamentary on how the elections were han- a “step forward in the reform
and natural gas which have giv- or national and foreign entities. autocratic regimes to the east of committee. Proposed reforms dled in “generally satisfactory” process” that would consolidate
en it a hefty cushion of $205.2 In May 2010, President Algeria – in Tunisia, Egypt and to the laws governing political conditions, auguring well for democracy.
billion in foreign currency re- Abdelaziz Bouteflika an- Libya – did not ignite an parties, the electoral process, the continued development
serves, and a large hydrocarbon nounced Algeria’s $286 billion ‘Algerian Spring’ last year, thanks and nongovernmental organi- of Algeria’s political system
stabilization fund. investment plan for 2010-14, in no small part to a populace zations were announced in in the future.
Wary of over-reliance on fill- aimed not only at diversifying reluctant to return to times of August. The following month, Following the elec-
ing its coffers from hydrocar- Algeria’s economy away from conflict, as well as swift action after the annual meeting be- tions, new legislation and
bons, the government has been hydrocarbons revenue, but al- by President Bouteflika to ad- tween the government and the co-operation between
taking action to create a diver- so improving infrastructure, dress popular demands. For ex- trade union confederation, a Algerian authorities and
sified and competitive econo- increasing the overall skills ample, riots in January 2011 in $40 increase in the monthly UN Women regarding
my, with the ultimate aim of base in the country, and sup- reaction to escalating food prices minimum wage to $240 was female representation in
becoming the biggest industri- porting small and medium- subsided in less than two days also announced. the country’s political
al base in North Africa. As such, sized enterprises (SMEs). after the government an- Mr. Bouteflika became sphere saw the propor-
A turbulent past, a peaceful present and a bright future
Scarcely a century has gone by nization period, those who with the 350,000 to 1 million Salvation Front (FIS). When the Bouteflika’s main aims
over the last several millennia ruled in politics and business Algerian casualties in the war, FIS emerged victorious in the are to diversify the econ-
when Algeria wasn’t being in- were colonists (called pieds left the country’s society and first round of 1991 district elec- omy using the country’s
vaded, occupied or used as a noirs, or black feet, by the lo- economy in upheaval. tions, the government cancelled massive oil and gas
route of transit. The native in- cals). It wasn’t until the 1950s Independent Algeria’s first the second round of elections, wealth, and strength-
habitants, dubbed Berbers by that the Algerians organized president, Ahmed Ben Bella, resulting in demonstrations en its foreign rela-
the Romans, have withstood themselves into a formalized nationalized all agricultural, in- across the country. Things fi- tions, particularly
waves of Phoenicians, Romans, resistance group, called the dustrial and commercial busi- nally began settling in 1999 those with the
Vandals, Byzantines, Arabs, National Liberation Front nesses previously owned and when Abdelaziz Bouteflika U.S., U.K. and
Turks and finally, French visi- (FLN). Between 1957 and 1962 operated (and then left vacant) was elected president with Germany.
tors and invaders. the FLN’s army was successful by colonists. In 1979, the more 70% of the votes. In his en-
Modern history began in at hit-and-run guerrilla war- moderate President Colonel deavor to restore security and
the 16th century with the ar- fare tactics. A cease-fire was Bendjedid attempted to liber- stability, his administration
rival of the Ottoman Empire, signed in 1962 and in a refer- alize the economy, but his re- granted amnesty to thousands
which chose Algiers as the endum on independence held forms were met with a backlash of members of the banned
principal center of Ottoman in July of that year, 92% of and the riots of Black October. FIS. Having brought
power for the Maghreb. In Algerians voted in favor. A decade later, a new con- Algeria into the The Martyrs Memorial in
1830, France invaded the re- As the privileged pieds noirs stitution guaranteed freedoms modern world, Algiers commemorates the
gion in response to the now faced an uncertain future, of expression, association and President Algerian War of
Algerian Dey’s supposedly in- the vast majority fled the coun- meeting, thus giving way to the Independence
sulting of the French consul. try, leaving huge gaps in lead- creation of many new political
During the French colo- ership positions. This, coupled parties, including the Islamic
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Thursday, July 5, 2012 Distributed by USA TODAY
2
ALGERIA
Algeria and the U.S. forge a
healthy, supportive relationship
U.S. Secretary of State Hillary Clinton meets Algerian Foreign Minister Mourad Medelci at the White House, January 2012
High-level meetings between ner in diplomacy and defense, a thriving civil society and in- leaders will point out, there is its people in just a short amount international arenas, along
Algeria’s Foreign Minister as well as in trade. stitutions that give the still much to do. of time. As Algerian with our constructive and sta-
Mourad Medelci, U.S. President Obama has clear- Algerian people the future Minister Medelci also notes Ambassador to the United bilizing role regionally, has
President Obama and ly stated his support for the they so deserve.” that the path has not been States Abdallah Baali stresses, made our country a privileged
Secretary of State Clinton country. “The United States is Though separated by thou- without difficulties over the “In 50 years, thanks to free ed- partner of the United States.”
emphasize the importance committed to continuing our sands of miles and entirely dif- past half century, but that the ucation and healthcare for all, As close as the countries
the American administration co-operation with the govern- ferent in make-up, Algeria and struggles endured can help the sector of higher education have grown, the Foreign
places on maintaining good ment of Algeria as it works to the United States do have one Algerians move forward. “The increased from a mere 600 to Minister expresses his inter-
relations with Algeria represent and meet the needs bonding aspect in common: freedom, stability, progress and more than 2 million students, est in developing new hori-
of all Algerians.” they are both former colonies. democracy that we now enjoy and life expectancy has jumped zons since there is so much to
The United States has long In January Secretary of from 47 years to 76 years.” be taken advantage of: “We
counted on Algeria as an ally State Hillary Clinton wel- Algeria and the U.S. highly think there is a promising po-
in North Africa. In fact, their comed Algerian Foreign “NOT ONLY IS ALGERIA A KEY U.S. ALLY value each other as partners, tential to expand this rela-
relations can be traced as far Minister Mourad Medelci to AGAINST GLOBAL TERRORISM, BUT ALSO as witnessed by the many vis- tionship and grant it a more
back as 1783, when Algeria Washington D.C., and one AN UNDENIABLE ECONOMIC PARTNER.” its between high-ranking of- strategic dimension. This en-
recognized the independence month later Secretary ficials and business leaders. tails growing political collab-
MOURAD MEDELCI, Algeria’s Foreign Minister
of the young American re- Clinton accepted the invita- Mr. Medelci says that there oration among the high
public. A dozen years later, tion to visit Algiers. In the has been “significant progress representatives of both coun-
the two signed a Treaty of White House Treaty Room, John F. Kennedy, while still a in Algeria 50 years after its in- in our relations with the U.S. tries to increase consensus
Amity and Peace – one of the Mrs. Clinton observed that, senator, spoke passionately in dependence are the outcome for the last few years. Not on- and dialogue between our for-
Barbary Treaties – during the “Our two nations have support of Algeria’s indepen- of huge sacrifices and impor- ly is Algeria a key U.S. ally eign affairs ministries.
presidency of John Adams. worked closely on security dence while the country strug- tant efforts that we need to val- against global terrorism, but “Also, our economic part-
While the treaties ultimately and economic issues, partic- gled for freedom in the 1950s. ue today, in order to better also an undeniable economic nership, now almost entirely
fell through, and privateering ularly counter-terrorism, for While independence came to preserve them for the future,” partner – our country has re- confined to the hydrocarbon
once again disrupted U.S. more than a decade.” the North African state near- he says. cently become the second U.S. sector, should be extended and
shipping in the region lead- She added that the U.S. is ly 200 years after the U.S. sep- Algeria’s stability has under- trade partner in Africa and in diversified. It is very important
ing to war, modern-day “committed to working with arated from Great Britain, lined the success of its demo- the Arab world. Plus, the long to multiply our scientific and
Algeria has proved to be a Algeria to support an open, Algeria has already made great cratic government in standing action undertaken cultural exchanges to enhance
much more dependable part- free, democratic nation with gains – though as all Algerian improving living conditions for by Algeria on the regional and mutual understanding.”
Education and scientific research
central to future relations
Algerian Ambassador Mr. Ensher knows there is
Abdallah Baali celebrates still much work to be done,
U.S.-Algeria relations and as the Algerian government’s
welcomes further policies are vital when it
strengthening in all areas comes to consolidating long-
lasting business relationships,
Since 2008, Abdallah Baali and some foreign investors
has been the Algerian have been unimpressed by
Ambassador to the U.S. and measures such as the 51/49
can vouch for the ever- rule in joint ventures.
strengthening relations be- He says: “That is why the
tween the two countries. major challenge for us and
“In the political field, over Algerians is to work togeth-
the last four years, we’ve been er to address the concerns
able to put into place a robust that caused the Algerian gov-
and comprehensive dialogue ernment to have this kind of
on most regional and interna- restriction and to work with
tional issues of common in- them to address those con-
terest,” he says. “In trade and cerns and eliminate the ob-
investment, the U.S. has been stacles.”
for several years our first trade But the Ambassador also
partner with a global volume believes the responsibility for
of exchange oscillating be- fortifying bonds does not lie
tween $17 and $21 billion, thus solely with governments:
making the U.S. Algeria’s first “The most important element
customer as well as one of the “I AM VERY OPTIMISTIC ABOUT of the relationship is not be-
top investors in the Algerian “THERE IS A GROWING INTEREST IN tween the governments, but
ALGERIA AND THE U.S. TO CREATE MORE CONTINUING GROWTH IN ECONOMIC
hydrocarbon sector.” TIES AND IN SCIENTIFIC, EDUCATION rather between societies, be-
He points out that in addi-
BRIDGES, EXCHANGES AND LINKS BETWEEN tween the peoples, and that is
UNIVERSITIES AND RESEARCH CENTERS AND CULTURAL CO-OPERATION.”
tion, agro-business, pharma- the solid base that we’re try-
IN BOTH COUNTRIES.”
ceuticals, alternative energies, HENRY S. ENSHER, ing to build now.”
construction and tourism are Ambassador of the United States of America to Algeria He says that the embassy
ABDALLAH BAALI,
sectors that hold great po- Ambassador of Algeria to the United States of America
is working towards this tar-
tential and that investors get and “when there is inter-
should be encouraged by action by Algerians going to
Algeria’s “unique political and progress we can make in the North Americans a peek in- that prospects for strength- Civilian Representative-South the U.S. or Americans com-
social stability,” which stand coming years in this particu- to modern-day Algeria. ening relations in all areas are in Afghanistan, Chairman of ing here, we always make sure
out nowadays in a region bat- lar area,” says Mr. Baali. Ambassador Baali invites excellent. He says, “I am very the Department of Near East they talk to the societies
tered by uprisings. The Algerian Embassy in “Americans from all walks of optimistic about continuing and North Africa Area rather than to the govern-
Algeria-U.S. relations go Washington is sharing its cel- life to come to Algeria and growth in economic ties and Studies at the Foreign Service ments, thus greater under-
beyond business, however, ebrations of the country’s 50th discover a country where in scientific, education and Institute, and Deputy Political standing will come and this
extending into cultural ar- anniversary of independence people have successfully cultural co-operation. Counselor in Baghdad, among is the basis for a long-term
eas, especially in terms of ed- with the American public blended ancestral values such Mr. Ensher is no stranger other positions. strong partnership.”
ucation. “There is a growing throughout 2012, with a series as hospitality into the re- to Middle Eastern and North
interest in Algeria and the of cultural programs and quirements of modern life.” African affairs: before his ap-
U.S. to create more bridges, events including Algerian film Mr. Baali’s counterpart, U.S. pointment to the Embassy in A UNITED WORLD SUPPLEMENT PRODUCED BY:
exchanges and links between festivals, concerts, fashion Ambassador to Algeria Henry Algiers in the summer of Christophe Laurent (Editorial Director);
universities and research cen- shows and art exhibitions, Ensher, also plays a key role 2011, he had served as a Paloma Garralda (Project Director);
ters in both countries and I held in the largest cities. in maintaining the two na- Senior Advisor in the Office Alain Caignard, Jose Ignacio Alegre and
am very optimistic about the These events will give tions’ healthy ties, believing of Afghanistan Affairs, Senior Brianne Bystedt (Project Co-ordinators)
Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

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Distributed by USA TODAY Thursday, July 5, 2012
ALGERIA 3
Unique challenges require unique solutions Opportunities
Algeria’s varied topography presents significant physical challenges for balanced land management and equitable economic development
The largest country on the Amongst others aims, it outlines moderate its energy consump- “We cannot have harmonious, ($4.86 billion) of public resources
online
African continent, covering an the need for wider access to ICT, tion and Hassi Messaoud is fo- balanced growth without good to be distributed via direct fund- Foreign investors and
area almost 3.5 times the size the creation of economic zones cused on renewable energies, human resource management,” ing and reduced bank loan in- local entrepreneurs can
of Texas , Algeria has a unique with appropriate infrastructure, while Algeria’s Sahara region is, says Mr. Rahmani. “That is why terest rates for SMEs to improve find the perfect match at
geographical diversity spanning modernizing transport net- naturally, based around the so- we are placing the citizen at the their access to finance. www.andi.dz
fertile lands, mountain peaks works, and the development of lar power industry. heart of our sustainable devel- “The Algerian market has a
and steppe plains buffering logistic platforms Last December, Algeria be- opment and land management.” size that is not found anywhere If ever there
desert spread. came the third country to sign The European Commission else on the continent,” says was a country
“We are facing some serious up to the Desertec Industrial made €45 million ($57 million) Abderrahmane Benkhalfa, with limitless
challenges in the next few Initiative – a German-led vision available in 2009 through its ME- President of the Banks and investment
decades,” says Cherif Rahmani, of a network of renewable ener- DA II program to help Algerian Financial Establishments opportuni-
the former Minister of Land gy plants across North Africa, SMEs sharpen their international Association, ABEF. “People talk ties, it is Algeria. The largest
Management and the harnessing both solar and wind edge. In 2010 the government of Nigeria, but it is not the same. country on the African con-
Environment. “First we have the sources and exporting electric- introduced an SME competi- Algeria holds something unique: tinent (since the recent divi-
demographic challenge of a new ity to Europe. By 2050, Desertec tiveness plan targeting the cre- there are few countries that can sion of Sudan) with a long
generation needing more jobs, aims to be supplying 15% of all ation of 20,000 SMEs with a present both great potential and coastline, thousands of hours
services and rights. Second is the the EU’s electricity demands budget of 380 billion dinars opportunities at the same time.” of sunshine, rich mineral and
economic challenge: we want to from projects in the Sahara. hydrocarbon deposits, well-
be open to globalization whilst In May, the National Council preserved Roman ruins and
avoiding its negative impact, of Investment (NCI) assigned a very young population,
turning it to our advantage. Third the National Agency of Algeria represents one of the
there is an ongoing depletion Intermediation and Land greatest untapped potentials
of natural resources, not only CHERIF RAHMANI, former Minister of Regulation (ANIREF) to set up in the world.
energy resources, but also soil Land Management and Environment 42 new industrial zones nation- Foreign investors have tra-
and water. Plus there is the wide that will be fully ready by ditionally shied away from
worldwide political challenge of The government has estab- 2017 and be to international stan- the northern African state
global warming.” lished various regional hubs that dards of infrastructure. whose public sector still dom-
In 2010, the government re- will focus on specific sectors. The creation of regional fo- inates the economy, thereby
leased the National Scheme for The new town of Sidi Abdallah cus points and industrial zones leaving the field wide open
Land Management (SNAT) to will concentrate on ICT, biotech, is also part of the government’s for today’s entrepreneurs.
confront those challenges with health, medicine and pharma- drive to encourage the creation Those who do enter do not
a policy framework for nation- ceuticals, as well as nanotech- of more small and medium-sized do so blindly – on the con-
wide sustainable development nologies, robotics and laser enterprises (SMEs) and spur trary, foreigners find a valu-
that is socially inclusive and en- development. Boughezoul, in widespread socioeconomic able ally in the National
vironmentally sensitive. the steppe, has been designed to growth for Algerians. Basic resources such as water and fertile soil are particularly precious in North Africa Agency of Investment
Development, or ANDI.
ANDI welcomes partner-
ships in both private and
Solid policies turn economy around public sectors, and boasts a
trilingual online meeting
platform where investors can
Substantial currency reserves and a large hydrocarbon stabilization fund have helped buffer Algeria against the latest global economic crises post their intention or offer.
Interested parties can con-
The positive turnaround in counting for around 60% of verse investments in different ing schools want to start a rise, helped by new branch- tact ANDI, which then puts
Algeria’s economic position budget revenues, 30% of GDP, currencies, ensuring liquidity small business, they need to es, banking education initia- the two parties into contact.
was evidenced earlier this year and more than 95% of export in the financial system to have immediate capital avail- tives and the modernization Currently, there are 175 of-
when the IMF asked the North earnings. The country’s exter- strengthen and raise Algerian able. These funds may be used of payment methods. fers of partnership listed in
African nation for $500 billion nal debt is also extremely low, banks’ capital levels and in- to create a multitude of small “We implemented an elec- its database.
in financial support to help the at about 2% of GDP. In 2011 the crease their capacity for com- entities with a quick turnover,” tronic mass payment system One of the advantages of
organization fund loans for Algerian economy grew by mitment, and also enforced says Mr. Djoudi. in a few areas of the territory this online system is that the
emerging markets and devel- 2.6% and inflation was 3.9%. limitations on the short-term In addition, the government a few years ago, but at the mo- foreign investor can do this
oping countries. The request borrowing of banks on the for- has set up a national invest- ment there is still a need to all remotely from his or her
highlights Algeria’s transition eign market. ment fund that is working on learn how to use this tech- home country. Recently, AN-
from an emerging to an upper- “Although it is not over, we various major projects and is nology. People have a strong DI also set up a one-stop shop
middle-income economy, can say we have navigated safe- involved in public-private attraction for cash money, but to further facilitate and ex-
turning the country from an ly through the reefs of this cri- partnerships. the mentality is gradually pedite investment, reducing
IMF borrower in the 1990s to sis and we have brought Bank penetration is on the evolving,” says Mr. Djoudi. the number of steps.
it now being a net lender. growth to the domestic mar- According to Abdelkrim
With currency reserves of ket. Through our strong do- Mansouri, ANDI’s General
around $205.2 billion, ac- mestic demand, in 2011 almost Manager, the agency not on-
cording to the latest IMF re- $46 billion were spent on im- ly promotes investment, it al-
port, Algeria has gone from ported goods,” says Mr. Djoudi. so assists investors in their
being a bankrupt country to “We have also created en- projects, putting them in
having enough in reserve to trepreneurs who, in my opin- touch with the relevant au-
cover its operating costs for ion, have the capacity to both thorities and raising aware-
five years. This is in stark con- meet domestic demand and ness about tax exemptions
trast to the 1984-94 period, also to position themselves in and other incentives.
when the country had to get KARIM DJOUDI, Minister of Finance external markets.” ANDI aims to help diver-
by with less than a month’s In banking, capital invest- sify Algeria’s economy away
emergency reserves in hand. According to the Minister ment has also seen a boom. from hydrocarbons, by grow-
Algeria has the 10th-largest of Finance Karim Djoudi, “We created 48 regional in- ing local industry and at-
stocks of natural gas in the Algeria has been relatively un- vestment funds that each have tracting foreign expertise.
world and is the sixth-largest scathed by the recent global an amount designated for “The Algerian authorities
gas exporter. Hydrocarbon rev- economic downturn due to the small businesses. Often, if seek technology transfer
enues have long formed the secure management of the young people from univer- Algeria now boasts a sophisticated economy, with low external debt, a lively stock through foreign investment,”
backbone of the economy, ac- country’s foreign reserves, di- sities or professional train- exchange, and enough currency reserves to cover its operating costs for five years says Mr. Mansouri. “They
look for activities that will re-
duce the import bill, that is to
Over two million new homes to be built by 2017 say to produce locally some-
thing we generally import. If
you look at our list of imports,
you’ll see we import things
A huge construction program is under way as the government attempts to improve the lives of thousands of families living in poor accommodation that we could easily make
here. Secondly, we want to
Despite living in one of the conduct seminars on new renovation and rehabilita- for example, we got to work izens. But there is also an eco- diversify our exports – we
wealthiest countries in Africa, housing techniques at vari- tion, we also have a substan- on virtually the entire city nomic dimension, because don’t want to export only hy-
affordable housing is still ous locations over the com- tial program to upgrade center. These are very large- when we see trucks all over drocarbons, which are sub-
beyond the reach of some ing year. sustainable infrastructure in scale programs that cost the the place, servicing the needs ject to changes in the
low-income and even middle- Noureddine Moussa, cities. This operation has cost state a lot of money.” of the housing market, this has international market.”
income earners in Algeria. It Minister of Housing and us something like $5 billion The Minister points out created a lot of synergy and Foreigners in Algeria need
is a pressing problem for the Town Planning, is confident over five years, and for the that in addition to improving stimulation in the economy. not worry about their in-
government, and one it is the current shortfall of 1.2 next phase of the program the lives of citizens, the gov- “Experts say that a housing vestments, says Mr.
seeking to address with a na- million housing units will be we are looking at something ernment’s home-building pro- unit creates an additional 1.5 Mansouri. Algeria has signed
tional housing program that like $4 billion.” grams have other benefits in to two jobs for every worker 48 bilateral agreements on
aims to build 2.4 million Demand for social and sub- terms of the creation of jobs directly employed during the mutual protection and has
homes by 2017. sidized housing in Algeria has and contribution to GDP. construction period. So if a agreements to avoid double
However, much progress risen with the size of the pop- “Housing has a social di- program is creating 2 million taxation. It has also ratified all
has been made: more than 2 ulation and an exodus from mension that has the potential homes the sector is employing international conventions on
million homes have been con- the rural areas to the cities. to improve the lives of our cit- a lot of people.” protection of foreign in-
structed during the past The public housing schemes vestors. Given Algeria’s
decade, and thousands of introduced since President healthy fiscal situation, for-
families have been relocated Abdelaziz Bouteflika came eign investors are encouraged
to better accommodation. to power in 1999 followed to finance their projects
Citizens whose monthly in- decades of under-investment. through local banks – Algeria
come is less than 24,000 di- “After 15 years with almost is more interested in know-
nars (about $320) are entitled no building activity there was how transfer and than for-
to free state-provided homes. a huge shortage to address,” eign funding.
The Ministry of Housing says Mr. Moussa. In addition While foreign investors are
will be represented at the NOUREDDINE MOUSSA, Minister of to building new homes the limited to owning a 49%
fair celebrating the nation’s Housing and Town Planning government is spending share in any company, the
50 th anniversary celebra- money on rehabilitating and government encourages them
tions, which runs from July met by 2014, with 674,000 renovating old buildings, par- to link up with more thanone
5-20 in Algiers. A special doc- homes of all types to be de- ticularly in Algiers. Algerian partner, thereby per-
umentary and magazine have livered this year, to be fol- “Some of the buildings are mitting the foreign party to
been produced describing lowed by a further 265,000 in a dismal state, and we have keep a larger stake in the com-
how the sector has moved for- units in each of the coming had to allocate a lot of mon- pany and allowing a more
ward during the past five two years. ey to their rehabilitation,” evenly-distributed share of
decades, and the Ministry will “Alongside construction, says the Minister. “In Oran, Vast sums are being spent to address overcrowding in Algiers the risk.
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4
ALGERIA
Business climate warms up
A fully open free market has yet to emerge, but private gan to take notice.
sector initiatives and organizations are clearing past hurdles Today, although the private
sector still faces many bureau-
It is often said that numbers do tration of former president Ben cratic challenges, it has no short-
not lie, but in the case of Algeria, Bella had opted for a socialist age of willpower. As Mr. Hamiani
numbers do not fully represent regime, “a kind of regime that puts it: “Algerian businesses are
the reality. For instance, the did not allow private initiative driven by dynamic, extremely
Heritage Foundation’s Index of to be realized. Because at that ambitious business leaders.”
Economic Freedom has ranked time, this was a third world coun- The best reform, he says,
the country 14th among the 17 try and the people thought that would be one that would spur
countries in the Middle East the engine of development and the growth of private-sector
and North African region, and growth was not to be carried by small and medium-sized enter-
140th globally. Similarly, the the private sector… In my opin- prises and industries (SMEs and
World Bank’s Doing Business ion it was a mistake,” he says. SMIs), which he considers to be
survey puts Algeria at 148th place “The state was chief, regulator, key engines of growth, creators
out of 183 countries. While sponsor and protector, and there- of employment, and enablers of
these figures present a bleak fore although the private sector economic diversification.
“IN LESS THAN 30 “OF THE VALUE WE “ALGERIAN
outlook on Algeria’s business was tolerated, it was in fact mar- A clear example of how the
YEARS, ALGERIA CREATE, 59% GOES BUSINESSES ARE
climate, what they do not do is ginalized. Banks didn’t lend mon- DRIVEN BY private sector can benefit the
take into consideration the ey to the private sector. It was CAN BECOME A TO THE STATE country is the Cevital Group.
PIVOTAL, WEALTHY BUDGET, 40% IS DYNAMIC,
country’s recent history, hur- very difficult to obtain land.” EXTREMELY The second largest company in
dles and developments. This system lasted for nearly COUNTRY, WHICH REINVESTED AND the country and the first in the
COULD MAYBE JOIN WE DISTRIBUTE 1% AMBITIOUS
Ahmed Tibaoui, General 30 years, which is in Mr. BUSINESS private sector, Cevital is active
Manager of the World Trade Hamiani’s words, “why it is dif- THE BRICS IN THE TO THE ALGERIAN in electronics, household ap-
NEXT 20 YEARS.” PEOPLE.” LEADERS.”
Center Algeria, is blunt yet op- ficult to turn 180 degrees now.” pliances, construction, super-
timistic: “I think that [the rat- In addition, once the econo- REDA HAMIANI, markets, agriculture, shipping,
ings are] a bit exaggerated. We my was opened up in the late AHMED TIBAOUI, ISSAD REBRAB, logistics, real estate, automo-
General Manager of the World President of the President of the Business
should be classed better than 1990s, a series of unfortunate Leaders Forum (FCE) biles and glass among others.
Trade Center, Algeria Cevital Group
that, because we are coming events overshadowed this vital According to its President
back from far behind: our move and posed ever more chal- Issad Rebrab, Cevital is a huge
economy was an administered lenges. The civil war (1991-2002) local production was com- market. Public companies then the employees and eventually to contributor to state coffers as
economy, managed by the gov- was detrimental not only to the pounded by new regulation. accumulated huge stocks of mer- investors. Foreigners were not well as to Algeria’s overall de-
ernment until the end of the economy, but to the country’s “Due to the agreement we had chandise that they could not sell.” yet interested, given the recent velopment. He says, “We have
1980s. It started to open up in reputation as well. Algeria’s di- with the IMF, we opened our In the mid to late 1990s, pri- turbulence; however, as more done the math regarding the
1998 with new laws and access nar began to devalue and, be- foreign trade, which had been vate enterprises that had reputable local investors – such value that we create: 59% goes
to the private sector and mar- cause almost all raw materials under the governance of the state launched projects struggled to as SIM and the Cevital Group – to the state budget, 40% is rein-
ket economy.” used in local factories were im- in the past. We were obliged to pay their loans to the banks. bought shares of public compa- vested and we distribute 1% to
Reda Hamiani, President of ported, production became open up, and foreign producers By 1998, the government ini- nies, a growing sign of confi- the Algerian people. And this
the Business Leaders Forum more expensive. with cheaper products of very tiated a privatization plan and dence was being sent out and is after having paid our em-
(FCE), recalls how the adminis- Mr. Tibaoui says that a lag in good quality started to enter the began selling its companies to eventually foreign investors be- ployees and all our costs.”
New opportunities on a plate
Private-sector entrepreneurism is reflected in Algeria’s leading producer of foodstuffs that is also looking to enter its hotel and tourism sectors while boosting opportunities for Algerians
Earlier this year, a trade delega- Improvement Network, the African one, which also comes
tion from the U.S. that February meeting helped to from Algeria and Tunisia.”
included seven wheat produc- open discussions on “serious Beyond agriculture, the
ers visited El Fedjoudj prospects for Algerian- company has also invested in
Commune in Guelma Province. American relations in the area Algeria’s real estate business
Its mission was to exchange ideas of wheat production and mar- and is representative of
and experiences with Algerian keting for the great benefit of Algeria’s private-sector entre-
producers and seek out oppor- such an important sector of preneurism that is beginning
tunities for partnerships be- food production in Algeria.” to gain a higher profile.
tween the two countries. The Benamor Group was Mr. Benamor is one of sev-
During the visit, the U.S. founded in 1984 and is a lead- eral prominent Algerian busi-
wheat growers delegation held ing producer of a variety of nessmen increasing their
talks with representatives of the foodstuffs, such as tomato paste, involvement in the country’s
Benamor Group, a leader in jams and preserves, durum long-overlooked hotel and
Algerian agro-industry and part wheat pastas and couscous. It tourism sectors. With a view to
of an association that is driving is also involved in food canning. diversifying the company’s in-
forward improvements in wheat It has an annual turnover ap- terests, he is on the lookout for
quality. The visit came just a few proaching 20 billion dinar ($260 specialists in the construction,
interior design and hotel fur-
nishing trades to help him de-
“WE WANT TO HELP CITIZENS. THE FIRST STEP velop a 2,000-bed resort near El
IS TO CREATE EMPLOYMENT; WE FOCUS ON Tarf on the Tunisian border.
THIS ABOVE DOUBLING OUR REVENUE. IT IS The Benamor Group also re-
OUR PRIORITY. BY DOUBLING EMPLOYMENT LAID BENAMOR, flects an increasing trend in
A new mill currently under construction will enable the
WE ARE AT THE SAME TIME TRYING TO General Manager of the Benamor Group Algeria’s private sector to im-
Benamor Group to triple production and enter new markets
MAINTAIN A SOLID PURCHASING POWER.” prove corporate social respon-
couscous, due to the astro- different from what you can ple, Algerian and North sibility. “We have a lot of projects
nomical storage capacity com- find on the market. The only African migrants are the fore- and want to help citizens. The
months after U.S. Ambassador million) and employs more than pared to what we have now. sector we have not yet explored most couscous consumers. first step is to create more and
to Algeria Henry Ensher had al- 1,000 people. “Still sticking to the agri-food is livestock agriculture.” Today, and since we started ex- more employment; we focus
so visited the Benamor Group “We have a project to build sector, we want to expand into In Europe and the U.S., the porting two years ago, they are on this above doubling our rev-
at the same location. a large mill that will allow us to new areas like producing bis- company’s products are ex- proud to have high quality enue. It is our priority,” says Mr.
According to Laid Benamor, triple what we presently pro- cuits – which is something we tremely popular with the Algerian products. Although Benamor. “By doubling em-
General Manager of the duce,” says Mr. Benamor. have never done before. We will Diaspora looking for a taste of people always believe that ployment we are at the same
Benamor Group and President “Likewise, we will be expand- try to keep the same line, home. Mr. Benamor says, “In couscous is a Moroccan prod- time trying to maintain a solid
of the Wheat Quality ing our production of pasta and process and product quality, the case of France, for exam- uct, it is actually a North purchasing power.”
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5. ARGELIA USAT pp4-5.qxd 22/6/12 14:46 Page 5
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ALGERIA 5
Algeria has some of the largest
oil and gas reserves in Africa,
and new oil fields are expected
to begin production soon, further
boosting output capacities
A massive energy sector with
potential for further growth
Energy-rich Algeria wants “New oil fields are expected in the Berkine basin that have Investors will pay close at- $71.5 billion. The company, Mr. Zerguine has been re-
to secure the future of its oil to enter into production by the led to a significant rise in pro- tention to amendments to the which, accounts for 60% of ported as saying that produc-
and gas industry, and end of 2012 and early 2013 that duction levels since 2003, but hydrocarbons law, which Mr. Algeria’s oil output, posted a tion of shale gas – a vast
needs greater foreign will enable Algeria to increase analysts say that without fur- Yousfi says will be introduced net profit of DZD 767 billion untapped resource – could
investment to boost the its output capacities,” says ther new discoveries, reserves before the end of the year. ($10.3 billion), compared with start within three years.
exploration and exploitation Youcef Yousfi, Minister of could peak this decade. According to the BMI: “The DZD 706 billion in 2010. According to Mr. Yousfi,
of its vast untapped Energy and Mines. Concerned about ensuring next version of the national Sonatrach recently revealed Algeria’s shale gas potential
unconventional resources He emphasizes the impor- the long-term security of en- hydrocarbons law is expected plans to invest $68.2 billion over equals that of the United
tance of planning for the fu- ergy supply, the Algerian au- to improve the regulatory en- the next four years. Abdelhamid States, with possibly up to
Located beneath the Sahara ture. “When we think about thorities are considering how vironment across the oil and Zerguine, Sonatrach’s Chief 1,000 trillion cubic feet of nat-
Desert in the eastern part of the energy we must always think best to woo new internation- gas sector.” Executive Officer, says most ural gas trapped more than
country, Algeria’s proven oil about the very long term – 30, al partners and give a boost to The new law could include of the money will be invested 1,000 meters (3,280ft) below
reserves are the third largest 40, 50 years ahead. The gold- upstream activity. changes to the way taxes are in hydrocarbons exploration the surface.
in Africa – an estimated 12 bil- en rule for the oil or the gas in- In addition to discovering levied on energy projects, with and production. He acknowledges that help
lion-plus barrels of exception- dustry is to discover reserves new fields, they are also inter- foreign companies paying tax According to him, Algeria’s from foreign companies will
ally high quality crude. that are equivalent to those be- ested in offshore production on profits rather than turnover, hydrocarbons reserves are be needed to extract the gas, a
Algeria is among the world’s ing depleted. We are intensi- and in exploiting unconven- although this would only ap- evaluated at 4 billion tons of process requiring the high
top 10 oil producers, with the fying exploration efforts.” tional oil and gas reserves, such ply to new, high-risk projects. oil equivalent (toe). The pro- pressure injection of water,
United States and Europe its The country’s two major as shale gas, for which Algeria One of the world’s largest oil visional exploration plan sand and chemicals into the
biggest customers. It is also one fields are in the Hassi needs the help of companies companies, Sonatrach last year “should provide the primary sedimentary rock.
of the world’s largest produc- Messaoud and Berkine basins. equipped with the latest tech- increased the value of its ex- production of oil up to 234 The Minister says, “We have
ers and exporters of natural Discoveries have been made nological know-how. ports of oil and gas by 27% to million toe in 2016.” considerable unconventional
gas – mainly to Europe – and resources of hydrocarbons,
a major exporter of crude and and we are working on evalu-
liquefied natural gas (LNG). ating them. If the project is
Oil and gas production is technically and economically
“WHEN WE
vital to the Algerian econo- workable, we will start pro-
THINK ABOUT
my, accounting for 97% of for- ducing conventional and un-
ENERGY WE
eign exchange earnings, 60% conventional hydrocarbons. I
MUST ALWAYS
of government revenues and THINK ABOUT am calling for the use of all
30% of GDP. It provides the THE VERY LONG available energy sources in a
country with a reliable and TERM. rational way.”
long-term source of energy, THE GOLDEN As for offshore production,
and contributes towards its RULE FOR THE it is geologically more chal-
industrialization and eco- OIL OR THE GAS lenging in Algeria than in neigh-
nomic diversification. INDUSTRY IS TO boring Tunisia or Libya. The
According to Business DISCOVER Minister adds: “We are evalu-
Monitor International (BMI), RESERVES THAT ating the potential now, but here
Algeria’s output of crude ARE EQUIVALENT it is different from what is hap-
should rise from approximately TO THOSE BEING pening in Tunisia and Libya.
2,083,000 barrels per day (b/d) DEPLETED. We are up against deepwater
in 2011 to 2,654,000 in 2021. WE ARE conditions because our conti-
In its Q2 report on the sector, INTENSIFYING nental shelf is very narrow and
BMI also forecasts gas pro- EXPLORATION it immerses immediately.”
duction will increase from 85 EFFORTS.” In terms of infrastructure,
billion cubic meters (bcm) in Mr. Yousfi recently announced
2011 to 142.4 bcm by 2021. YOUCEF YOUSFI a $10 billion investment in five
Production will be boosted Minister of Energy and Mines new refineries. On completion,
by new projects coming on they will raise Algeria’s current
stream, and by increased out- annual oil refining capacity
put and enhanced recovery from around 26 million tons to
rates at existing fields. 30 million tons.
Sonelgaz at the heart of renewables strategy
A deal with a German-led consortium reinforces Algeria’s campaign to develop to help us further develop this
renewable energy sources concept,” he says.
In a further example of
Gas and electricity supplier a more substantial opening of MENA’s first hybrid solar and Sonelgaz’s commitment to co-
Sonelgaz is at the forefront of the European electricity mar- gas power plant at Hassi R’Mel, operation with other coun-
Algeria’s drive to promote and ket and technology transfer. combining a 25 MW solar tries on energy, the company
develop energy from renew- “The development of re- thermal array with a 130 MW chairs the newly formed
able sources. newable energy is a key strat- combined cycle plant. The Association of the
“The challenge is how to egy for Algeria”, says Mr. plant aims to export 6,000 Mediterranean Electricity
get out of hydrocarbons,” says Bouterfa. “If the right condi- MW of solar energy to Europe Transmission System
Noureddine Bouterfa, CEO tions are met we are convinced by 2020. Operators (Med-TSO).
of Sonelgaz. “It will not be that we can export 10 GW of Further solar plants are Launched by the European
easy but every contribution solar power to Europe a year.” planned, but Mr. Bouterfa em- Commission in Rome in May,
is valuable and can have a rip- The state-owned Sonelgaz phasizes that the approach to the association aims to bring
ple effect.” Group is made up of 36 com- incorporating renewables has about the integration of a re-
The company has joined panies operating primarily in to be pragmatic. He com- gional electricity market in a
forces with Desertec Industrial the areas of production, trans- ments, “We have to decide long term by coordinating the
Initiative (Dii), a German-led portation and distribution of what technology to follow, and development plans and the
consortium with 56 partners gas and electricity. The group we have to balance this need operation of the grids in
from 15 countries, to harness sees the promotion and de- for an energy mix with build- member nations.
solar and other sources of re- velopment of renewable en- ing local industries.” Mr. Bouterfa insists that
newable energy in the Middle ergies through its subsidiary He says the first plants will Sonelgaz remains dedicated
East and Northern Africa companies as one of its main be 25% solar and 75% gas, and to transparency and good gov-
(MENA) region. tasks, in addition to research, it will be 2016 before solar ernance. Presenting the
A memorandum of under- engineering, manufacturing, plants with storage capacity group’s annual report and ac-
standing was signed with Dii and the maintenance and cre- are built. counts for 2011 recently, he
in December and a project to ation of industrial plants. A “We need storage to reach said the group had complet-
produce 1,000 MW of renew- number of agreements have the target of 40% of the na- ed the first steps towards fi-
able electricity in Algeria has been signed with Algerian uni- tion’s electricity coming from “THE CHALLENGE IS HOW TO GET OUT OF nancial restructuring,
been announced. According versities and institutes, focus- renewables,” he adds. HYDROCARBONS. IT WILL NOT BE EASY BUT necessitated by the pile of debt
to Mr. Bouterfa, 90% of the ing on issues of scientific There are also plans to build EVERY CONTRIBUTION IS VALUABLE AND the group had incurred
electricity produced will be research and innovation. a plant in Rouiba to manu- CAN HAVE A RIPPLE EFFECT.” through heavy investment.
destined for export to Europe, Sonelgaz is already a pio- facture photovoltaic panels Justifying the spending, he
with the remaining 10% to be neer in solar/gas hybrid pow- that convert sunlight directly NOUREDDINE BOUTERFA, CEO of Sonelgaz says: “Power cuts are no longer
consumed locally. er in the MENA region. As into electricity. allowed and that requires stan-
Algeria aims to generate 40% part of Algeria’s commitment According to Mr. Bouterfa, dards of implementation and
of its electricity from renew- to invest more than $20 bil- capacity of 100 MW per year where a photovoltaic plant is port networks will be built to- network design that are much
able sources by 2030. In talks lion in renewable electricity will be installed in the south needed to meet high demand. wards 2015-16. more stringent than in the
with Dii, it has emphasized over the next 20 years, of the country, where there are He adds that major power “We are counting on the past. More stringent means
the need for shared funding, Sonelgaz inaugurated the no interconnections and plants interconnected to trans- Desertec Industrial Initiative more investment.”
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6
ALGERIA
The biggest and the best
With 100 companies and subsidiaries, 160,000 workers
and responsibility for 30% of Algeria’s GDP, Sonatrach
is not just the biggest group in Algeria, but the biggest “WE WISH TO
in Africa, and the 14th largest oil and gas producer in INTENSIFY OUR
the world EXPLORATION
POLICY, IN ORDER
The National Company for sions in Libya, Mauritania, TO SECURE OUR
Hydrocarbons Research, Peru, Yemen and Venezuela, OIL AND GAS
Production, Processing, and operates in the U.S. and RESERVES, TO
Transport and Trade, Europe (with subsidiaries and LEVERAGE THE
Sonatrach, is the government- distribution offices in the U.K., COUNTRY’S
owned company created to ex- Italy and Spain). The group, NATURAL
ploit Algeria’s hydrocarbon which can justifiably claim to RESOURCES BY
resources. It is engaged in all be the mainstay of the Algerian UPDATING AND
aspects of the oil and gas in- economy, has diversified into DEVELOPING THE
dustry, from exploration and the petrochemical industry, as DOMESTIC PETRO-
extraction to refining, trans- well as renewable energy and CHEMICAL
port and trading. saltwater desalination. INDUSTRY.”
Its export revenues reached Mr. Zerguine explains the
$56.1 billion in 2010, con- company’s current priorities:
tributing hugely to Algeria’s “We wish to intensify our ex- “OUR
position as the fourth largest ploration policy in order to EXPLORATION
exporter of LNG worldwide, secure our oil and gas re- PORTFOLIO HAS
the third largest exporter of serves, to leverage the coun- INCREASED FROM
LPG, and the fifth largest ex- try’s natural resources by 30 EXPLORATION
porter of natural gas. updating and developing the CONCESSIONS IN
“The results speak for them- domestic petrochemical in- 2011 TO 57 IN
selves and demonstrate dustry, which is a good way 2012, INCLUDING
ABDELHAMID ZERGUINE, CEO of Sonatrach
Sonatrach’s good health: the to reduce our import bill and 15 NEW
turnover for the 2011 finan- promote the development of PROSPECTING
cial year reached $72 billion, an our SME sector. Our ambi- AREAS.”
increase of 29% compared with tion is also to strengthen the Sonatrach plans to spend a so as to assure Algeria’s do- intensification of our explo-
2010,” says Sonatrach’s CEO management of our compa- massive $68 billion, 82% of mestic supply and also ration efforts, and to develop
Abdelhamid Zerguine. nies (in the areas of human which is for its upstream op- Sonatrach’s position in the production from our existing “WE ALSO HAVE
Present in 15 countries resources, audits and ethics) erations. The group’s worldwide energy market. fields. Our exploration port- TEAMS IN WEST
around the world, Sonatrach and work toward a successful priority is to de- “Upstream, our main folio has increased from 30 ex- AFRICA WHO ARE
ships its products as far as integrated energy policy us- velop its ex- objectives are to re- ploration concessions in 2011 STUDYING AND
Brazil, Japan and Korea. ing our own capabilities.” ploration new our oil and gas to 57 in 2012, including 15 new EVALUATING
It also holds conces- Between 2012 and 2016, activities reserves through an prospecting areas. In 2014, we EXPLORATION
plan to be exploring on a total AND
of 79 concessions. This ambi- PRODUCTION
Internationally, Sonatrach and its SIPEX tious program should permit OPPORTUNITIES
subsidiary are active in Libya, Niger, us to go from 210 million TEP THERE.”
Mali, Mauritania, Tunisia and Peru (tons of equivalent petrol) in
2012 to 234 million TEP in ABDELHAMID ZERGUINE,
2016, an increase of 11%,” says CEO of Sonatrach
Mr. Zerguine.
Specifically, 160 new wells
per year should be drilled, and
new partnerships are welcomed.
In 2009, the Government
signed exploration contracts
with four companies: ENI
(Italy), British Gas (U.K.), ploring and operating beyond
EON-Ruhrgas (Germany) Algeria, and its subsidiary
and Gazprom (Russia). SIPEX, working in associa-
Following 16 discoveries, sev- tion with the National Oil
en were implemented Corporation in Libya, has re-
through partnerships, and the cently discovered two new oil
following year saw a further fields 143 miles south of
29 hydrocarbon discoveries. Tripoli. SIPEX additionally
“We have 1.5 million square operates in Niger, Mali,
kilometers of sedimentary de- Mauritania and Tunisia.
posits, which are potentially In South America, Sona-
rich in hydrocarbons, and the trach is present in Peru via the
majority has not been explored, Camisea field consortium,
so we plan to intensify the re- where the group has brought
search in the Hassi Messaoud its expertise and owns a 10%
and Illizi fields. We are al- stake in upstream operations,
so working to evaluate and a 21.8% stake in the
our considerable non- pipeline and transport divi-
conventional hydrocar- sion. “We also have teams in
bons resources,” says West Africa who are studying
Youcef Yousfi, Minister and evaluating exploration and
of Energy and Mines. production opportunities
Sonatrach is also ex- there,” says Mr. Zerguine.
Committed to renewables and History of
a new petrochemical industry an empire
With an eye to the future, Sonatrach moves into new sectors From first steps in the 19th In December 1979, a con-
century to a worldwide oil ference on petroleum ex-
Algeria expects to gain an ad- are operating in Arzew. petrochemicals complex is 878,000 tpa, with new capac- consortium ploitation recommended
ditional 30 million tons of re- “The development plan completed in 2014, albeit two ity also expected in the pro- allowing increased partici-
fining capacity from its plans aims to supply the Algerian years behind schedule due to duction of other derivatives. The first steps in oil explo- pation by foreign companies
to build five new oil refiner- national market with petro- the global economic downturn. Sonatrach is also investing ration in Algeria were made and countries in Algerian
ies. However, the lion’s share chemical products to reduce Algeria’s ethylene and poly- in renewable energy, often act- in 1877. Those initial dis- exploration.
of the budget provided by the our import bill and promote ethylene capacities are fore- ing more as a provider of fi- coveries were followed by From 1986 onwards, it be-
2009-2013 Investment Plan is the development of the SME cast to remain static until 2014, nance than directly engaged in many more, such as Hassi came possible for foreign oil
aimed at developing the petro- sector,” adds Abdelhamid after which they will increase the core activity. Messaoud’s giant oil deposit and gas companies to do
chemical industry in order to Zerguine, Sonatrach’s CEO. with the addition of new ca- “Renewable energy or in 1956, and Algeria soon be- business in Algeria within a
add further value to Algeria’s Energy analysts are fore- pacity. By 2014, ethylene ca- mixed energy projects are came a major player in the partnership with Sonatrach,
primary resources. casting a massive step-up in pacity should be at 1.23 million Sonelgaz’s responsibility, be- energy industry. The creation a process which was then
“We are entering a new era: petrochemicals production in tons per annum (tpa) and poly- cause it is mandated to supply of Sonatrach on December simplified in 1991.
we wish to implement a solid the country once the Arzew ethylene capacity totaling electricity. In Hassi R’mel, we 31, 1963 was a key moment The Sonatrach-Gaz de
basis for the petrochemical launched a new hybrid gas/so- for the country: at the time, France accord, signed on
industry, and also to upgrade lar power station in 2011, the however, the Algerian January 12, 1989, allowed
it in order to become a play- first one of its type, and Government held only 4.5% the state to set a compro-
er in the international mar- Sonatrach was a provider of fi- of the licensed exploration mise price of approximate-
ket. This is really our new nancing,” says Yamina Hamdi, acreage, while French inter- ly $2.30 per million BTUs. A
challenge,” says Youcef Yousfi, Vice-President of Commercial ests held as much as 67.5%. total of 9.5 billion cubic me-
Minister of Energy and Mines. Activity at Sonatrach. After the Arab-Israeli War ters of natural gas were de-
“We also plan to become a big Two other hybrid power sta- of 1967, Algeria nationalized livered annually until 1990,
producer and exporter of fer- tions will be built on the same Mobil and Esso’s refining and and Sonatrach recovered
tilizer, by bringing together principle in 2013: Maghaïr in distribution activities, and 850 million francs in arrears,
our mining, oil and gas in- El Oued wilaya (East Algeria) Sonatrach signed an agree- since the accord applied
dustries: we have important and Naama in El Bayad wilaya ment with Getty Oil on retroactively beginning in
phosphate deposits which (West Algeria); and a further October 19, 1968, by which November 1, 1987.
should be exploited.” four 300MW hybrid power it acquired a 51% interest in In March 2005, the
For 2015, Sonatrach plans stations are planned for 2016- Getty Oil. Algerian parliament adopted
to develop sectors such as plas- 2020. These power stations Later, in February 1971, the hydrocarbon reform bill,
tics (polyethylene, polypropy- combine parabolic mirrors, Algeria’s President Houari encouraging International Oil
lene, resins and polymers); covering an area of 180,000m2 Boumedienne began to na- Company (IOC) investment
rubber textile fibers (nylon six), and producing 30MW of so- tionalize all French oil and in the hydrocarbon sector,
which can also supply the lar power, with a 120MW gas holdings in the country. which Sonatrach had previ-
Algerian textile industry; agri- SGT800 Siemens gas turbine As a result Sonatrach gained ously dominated. However,
cultural fertilizers; and pro- station. This combination en- control over the entire petro- 2006 amendments to the hy-
duction subsidiaries such as ables a significant reduction chemical sector in Algeria. drocarbon bill created a
helium and aluminum. in CO2 emissions and is con- The old concession sys- windfall tax on IOC profits
Partnerships already exist sistent with Sonatrach’s 2009- tem was replaced by the ex- when oil prices topped $30
to help expand the business, 2013 investment plan, which propriation of a 51% share in per barrel. This tax reached
with Egypt’s Orascom includes safety and environ- all French petroleum com- up to 50% on some contracts.
Construction Industries mental considerations. Thus panies operating in the In addition, the amendments
(OCI) and Oman’s Suhail the group, already renowned country. Only Total agreed gave Sonatrach rights to a
Bahwan Group Holding for its technological and fi- to continue its activities, 51% or higher participation
(SBGH), and two factories to nancial prowess, is develop- while other companies left option on each newly dis-
produce ammonia and urea Year-round sunshine makes Algeria an ideal site for solar energy development ing its green credentials. the country. covered project.
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7. ARGELIA USAT pp6-9.qxd 25/6/12 14:15 Page 3
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ALGERIA 7
A worldwide operation
Reliable transport networks and strategic partnerships provide keys to Sonatrach’s export success
A well-developed transport and Four main pipeline routes fa- ners Enel, Edison and the Hera petrochemical factory in
distribution system of gas cilitate the efficient transporta- Group, is soon to be opened. In Tarragona, and storage facili-
pipelines, a substantial shipping tion of gas to Europe, including addition, Sonatrach is planning ties for crude oil in Korea.”
fleet, and a range of interna- the Enrico Mattei gas line, the Trans-Sahara Gas Pipeline, In order to reach destina-
tional partnerships are essential which is also known as the which will link Nigeria to the tions beyond the reach of
to Sonatrach’s success, allow- Trans-Mediterranean pipeline. Mediterranean coast. pipelines, Sonatrach needs flex-
ing Africa’s largest oil and gas Operated in partnership with “Now we are diversifying our ible and reliable shipping. Its
company to control both up- Italian multinational ENI since routes: Italy was supplied by one subsidiary Hyproc maintains a
stream and downstream oper- 1982, it runs from the Hassi route, now we have two fleet that is mostly 100%-owned
ations in Algeria. R’mel field in Algeria to main- pipelines, and the same goes for by Sonatrach, with the remain-
Allaoua Saidani, Sonatrach’s land Italy via Tunisia and Sicily. Spain. This diversification as- der shared in a 50/50 venture
Vice-President for Pipeline
Transport, says, “We have an
11,806-mile transport network
that criss-crosses the country.
The Maghreb-Europe Gas
Pipeline, or Pedro Duran Farell
pipeline, was built in partner-
ship with Endesa, Cepsa and
sures greater security and flex-
ibility,” says Mr. Saidani.
Mrs. Hamdi adds, “We have
developed trade and distribu-
with Itoshu and Fergusson. Nine
liquefied natural gas (LNG)
tankers, with a combined ca-
pacity of 1 million cubic meters
Always learning
Our international and trans- GDF, and has been operational tion subsidiaries abroad, in of LNG, service the needs of both In a sector where technology develops very rapidly, it is
Mediterranean pipelines are a since 1996. It runs through Italy, Spain (Sonatrach Gas long-term clients and occasion- crucial to keep staff updated. Sonatrach’s solution lies in
source of pride for Algeria. Our Benisaf and then under the Comercializadora) and the al customers buying on the spot a policy of continuing education and specialist training
first pipeline, which runs be- Mediterranean for 130 miles at United Kingdom, with SPC, our market. “Having this fleet has
tween Hassi Messaoud and a depth of 7,054 feet – a real biggest subsidiary abroad, based enabled Sonatrach to launch a Sonatrach relies on its pro- order to train the technicians
Arzew and known as Loseta, technological challenge – to in London. It has been operat- powerful and effective sales prietary training centers to and engineers needed to ex-
was ready to operate in June Andalusia, Spain. ing since 1988 and trading oil strategy. We have 10 LPG trans- fulfill its employees’ needs for ploit our huge mining poten-
1965, just a year after the creation The network is constantly be- and liquefied petroleum gas porters, with capacities rang- knowledge, know-how, en- tial, which is currently totally
of Sonatrach, and now we have ing upgraded with new export (LPG) around the world, which ing from 6,000m3 to 82,000m3, terprise, culture and vision, under-exploited.”
another 1,056 miles under con- lines, such as the Medgaz nat- is a good way to be more pre- and Sonatrach exports almost according to Abdelkader In addition to providing em-
struction, following new dis- ural gas line between Algeria sent in the downstream sector 8 million tons of LPG per year. Benchouia, Vice-President of ployment and quality train-
coveries such as in Reggane, or and Almeria, Spain, which was within our industry. We also This enables us to retain the loy- Downstream Operations. ing, Sonatrach acts as a
in response to new demand.” inaugurated last year. Also, the have a share in the regasification alty of clients in our local mar- “A budget of 7 billion dinars responsible corporate citizen,
Algeria is already the third Algeria-Sardinia-Italy Galsi line, terminal at Reganosa, Spain, a kets, while helping to develop ($89.4 million) has been allo- helping needy people and pro-
largest exporter of gas to the constructed with Italian part- 49% stake in the Propanchem sales in more remote areas.” cated to upgrade our system moting scientific, cultural and
European Union, after Norway of education to international sporting activities. The group
and Russia, and accounts for al- standards,” he says. “An ambi- also contributes to preserving
most 20% of the EU’s supplies. tious program has been ad- nature and safeguarding tan-
However, its relative proximity opted, which aims to develop gible and intangible elements
means it has the potential to be- specialization in finance, of the country’s cultural and
come Europe’s number one sup- management and engineer- historical heritage.
plier of gas and electricity. ing, in order to attract bril- Following various sus-
Sonatrach takes pride not only liant university students and tainable development prin-
in the amount of gas exported, to raise the education stan- ciples, Sonatrach reconciles
but in the reliability with which dard of our employees. economic growth with its
it is delivered. Another goal is to teach and commitment to the safety of
“Nowadays, we are export- promote the culture of health people and property. It is al-
ing 30 billion cubic meters of and safety in the group.” so committed to reducing
gas per year, and Sonatrach is Sonatrach has three train- the impact of its activities
renowned for its service quali- ing tools at its disposal: the on the health of employees
ty and reliability. Our clients Algerian Petroleum Institute and neighboring popula-
know the high standard of our (IAP), the State Holding tions and facilities. Since
product and we have consis- Council (CPE), and Naftogaz 2001, it has had its own cen-
tently delivered via pipelines for Petroleum Institute. “IAP has tral office dealing with
40 years without any interrup- entered into a co-operation health and safety concerns.
tions or hitches, unlike Ukraine’s agreement with the IFP Several actions have been
crisis in 2009 and the problems (French Petroleum Institute), taken to reduce or eliminate
experienced with Russian gas. which has provided teach- the impact of the oil and gas
Even during the ‘Black Decade’ ing staff and materials, so the industries’ activities on the
we continued to offer a re- standard of education is ex- environment, particularly in
markable continuity of supply,” cellent. I studied there until reducing emissions of green-
says Mr. Saidani. 1977,” says Vice-President of house gases and other pollu-
Yamina Hamdi, Vice-President Pipe Transport Allaoua tants into the atmosphere.
of Commercial Activity, adds: Saidani, providing an exam- Significant investments have
“Listening to our client’s needs ple as to how Algerian com- been made to reduce gas flar-
and then adapting ourselves panies acquire high levels of ing: although the volume of
according to demand is a leit- capability and experience. flared gas has quadrupled in
motif for Sonatrach. The com- The effort to educate and 30 years, the ratio of associ-
pany really is a reliable and train is ongoing, not just at ated flared gas to produced
“SONATRACH IS RENOWNED FOR ITS SERVICE QUALITY AND
flexible supplier: earlier this RELIABILITY. WE HAVE CONSISTENTLY DELIVERED VIA PIPELINES FOR Sonatrach, but on a national gas has been reduced from
year for instance, with the very 40 YEARS WITHOUT ANY INTERRUPTIONS OR HITCHES.” basis, as Youcef Yousfi, 80% in 1970 to 7% in 2007,
cold winter, we have been re- Minister of Energy explains: and Sonatrach is aiming to
sponding to a higher demand, ALLAOUA SAIDANI, Sonatrach Vice-President for Pipeline Transport “We have recently created the further reduce both gas flar-
especially in Europe.” Algerian Institute of Mines in ing and CO2 emissions.
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10
ALGERIA
Unearthing Algeria’s mineral wealth
Rich in resources other mated into a new state con-
than oil and gas, Algeria glomerate, Manadjim El
has launched a new drive Djazair (Manal), established
to interest foreign last year with a capital of 5 bil-
operators in helping to lion dinars. Manal is responsi-
develop its mining sector ble for stepping up research,
exploration and exploitation
While Algeria’s oil and gas in- of the country’s mineral re-
dustry is a world player, the vast sources, creating jobs and pro-
non-fuel mineral resources ly- moting non-oil exports.
ing beneath the country’s sur- Farid Benhadji, Manal’s CEO,
face remain largely unexploited. says: “We have some great de-
As Youcef Yousfi, Minister of posits, the full economic po-
Energy and Mines, puts it: “We tential of which has yet to be
are a mining country with a demonstrated. We can guide
huge but under-developed min- and accompany companies to
eral potential.” potential sites; there are po-
Much of Africa’s largest coun- tential reserves that we can look
try is yet to be explored, but it for together.”
is known to contain deposits
of prized commodities such as Foreign partnerships
iron, zinc, lead, uranium, cop- Major mining operations cur-
per, gold and phosphates. rently under way in Algeria in-
Diamonds and other precious clude ENOR, a joint venture
and semi-precious stones have to develop the Tirek and
also been found. Amesmessa gold deposits that
The mining sector has been combines the expertise of the
open since 2001, and the gov- U.K.-based GMA Resources,
ernment is keen to give it a the state-owned energy com-
fresh impetus by getting more pany Sonatrach, and Gold
international operators in- Mines of Algeria. Also,
volved. A new development Terramin Australia has teamed
strategy is aimed at intensify- with Algerian company ENOF
ing efforts to attract foreign in- and the Office National de
vestment and expertise, and Recherche Geologique et
build up the industry. Miniere (ORGM) to develop
A more active and produc- the zinc and lead deposits at
tive minerals sector would di- Oued Amizour.
versify Algeria’s economy and Rising commodity prices
help meet rising domestic de- have prompted foreign compa-
mand for construction and in- nies to look to Africa for new
dustrial materials, in addition to sources of raw materials. In
cutting the import bill and Algeria, this interest has come “WE HAVE SOME GREAT DEPOSITS, THE FULL ECONOMIC POTENTIAL partners,” says Mr. Benhadji. “The
boosting export revenues. mainly from Australian and OF WHICH HAS YET TO BE DEMONSTRATED. WE CAN GUIDE AND original plan is to establish three
“The mining potential of Chinese companies. ACCOMPANY COMPANIES TO POTENTIAL SITES.” phosphoric acid units, and then
Algeria is significant but re- “In Algeria, we have not yet see if we can expand the project
mains unknown, and despite experienced the involvement FARID BENHADJI, CEO of Manal together. We are ready to dis-
the important efforts made by of European or American com- cuss it, and even adjust the size
the state, the development of panies who might benefit from of the project if necessary. Our
this potential has been very coming here,” says Mr. Benhadji. Many of Algeria’s mineral vestors, allows for the separation ly exploited. Algeria is current- closest competitors are Morocco
limited, while the national ge- “To attract these companies, deposits are located in remote of surface and underground ly a minor supplier of phosphates, and Tunisia, but we have gas and
ological map has not been es- we need to prove that we have areas lacking in transport in- mine ownership, and enshrines but its reserves are currently es- lower production costs.”
tablished,” says Mr. Yousfi. world-scale deposits. People frastructure. the right of appeal to interna- timated at around 2 billion tons. A mining institute has been
“We have phosphates, iron, will not come here just to make tional arbitration in the event of The government wants ex- established to train the tech-
gold and other rare metals – $1 million per year. If they do Competitive advantages dispute. There are incentives ports of phosphates to rise from nicians and the engineers the
diamonds, too – and we are not make a turnover of $20 or On the plus side is proximity to for investors importing equip- single figures to 30 million tons country needs.
now in the process of examin- $30 million, they will not come.” Europe, the country’s main cus- ment, as well as advantages con- a year by 2020. This would make “We are aware that we need
ing potential sources. We have He acknowledges that devel- tomer for minerals, as well as low cerning transfer of invested Algeria the third largest phos- to send people abroad to im-
other minerals such as man- opment of the sector will take labor costs and the government’s revenues, exemption from cus- phate producer in the world, af- prove their skills and abilities,”
ganese, lead and zinc that we in- time. “The mining world moves readiness to support companies tom tax and royalties, amorti- ter the United States and China. says Mr. Benhadji. “We want
tend to exploit in a rational way.” very slowly. We must build rela- willing to invest. zation, and rebates on royalties. The authorities estimate sales to help rebuild the sector.
All state-owned mining tionships based on trust, other- Algeria’s mining law guaran- Phosphates are a good exam- could generate $7-8 billion a year. There is great potential, but it
companies have been amalga- wise it will never work,” he says. tees equal treatment for all in- ple of the potential yet to be ful- “We are currently looking for requires knowledge.”
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11. ARGELIA USAT pp10-11.qxd 22/6/12 16:05 Page 3
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ALGERIA 11
An industrial leader in the making
Already one of Africa’s top five economies, Algeria
aims to become a major manufacturing partner for
“ONLY THOSE
leading European brands
COMPANIES THAT
INNOVATE TO
IMPROVE THEIR
While Algeria has previously ex- move dependence on high en- COMPETITIVENESS
perienced tough times – with ergy prices. MANAGE TO
the 1986 oil price collapse, IMF Nowadays, Algeria has virtu- SURVIVE.”
intervention in 1994, and the ally no external debt, little or no
‘Black Decade’ of social distress public deficit, and an inflation
and political crises – on the oc- rate among the lowest in the MOHAMED BENMERADI,
casion of its 50th anniversary of Middle East North Africa Minister of Industry, SMEs and
independence the country can (MENA) region. It successfully Investment Promotion
celebrate impressive economic resisted the various financial
development and renew its de- crises that have so affected the of sub-contractor networks
termination to consolidate and global economy: while many within industrial development
improve upon its position as one countries still suffer the effects of zones. “We have a $4 billion pro-
of Africa’s top five economies. prolonged recession, Algeria en- gram for the upgrade of 20,000
Mohamed Benmeradi, joys a steady 4-5% annual growth. SMEs,” says Mr. Benmeradi.
Minister of Industry, SMEs and
Investment Promotion, recalls A market economy emerges A range of opportunities
the challenging years: “We had The adjustments advised by the While Algeria has advanced its
to close thousands of compa- IMF led Algeria to open up to food processing, construction
nies, and cut hundreds of thou- privatization, foreign investment materials and pharmaceutical
sands of jobs, especially in the and competitiveness – a huge industries, the auto and elec-
industrial area. In 2000, when step for a country which had tronics industries figure among
the situation calmed down, the been largely socialist since its the list of sectors in need of de-
economy was totally fragment- formation. “The state had been velopment. Steel represents an-
ed: the companies created in present everywhere: as em- With the renewed trust of the Germany in 2010, after Angela Shaping a new industrial other opportunity, as Mr.
the 70s were functioning, but ployer, regulator, sponsor and citizenry (the FNL party won Merkel visited Algeria in July landscape: The 2010-2014 Benmeradi explains: “Each year
at 50% of their capacity, and they protector,” comments Reda the elections in May), President 2008. Last February, it was the Development Plan we import $5 billion of steel
needed to be reorganized, up- Hamiani, President of the Abdelaziz Bouteflika has a man- U.S. Secretary of State Hillary The challenges facing Algeria products. We have the natural
graded and stimulated.” Business Leaders Forum (FCE). date to press on with the transi- Clinton’s turn to visit the coun- can be read between the lines of resources, but we have only one
Paradoxically, this crisis was Algeria started a process of tion of the Algerian economy try. The U.S., along with the its advantages: the need to di- complex which produces less
the starting point of the country’s industrial transformation and towards the free market. The bid international community, ac- versify its economy away from than a million tons per year.”
economic stabilization, and transition towards a market to reduce $50 billion-worth of knowledges Algeria’s role in the oil and gas revenue, the necessi- The modernization of infra-
eventually its growth. “The coun- economy, with major state en- imports, to provide jobs for a fight against terrorism, and the ty to upgrade the manufacturing structure is another Algerian
try was obliged to reschedule its terprises reformed and opened fast-growing population, and to country is now classed as a strate- base and skills, the call for bet- priority, reflected in the admin-
debt and to adopt a series of mea- up to the private sector and for- modernize the economy have gic partner – the second largest ter infrastructure, and the need istration’s plan for $632 million
sures to restructure its econo- eign capital. persuaded the government and of its kind in the Arab world. to develop small and medium- of public works. The need for di-
my. As a result of these steps, by “We told the public enter- people of the need to both pri- With its political and eco- sized enterprises (SMEs)and re- versification opens opportuni-
1997-98 all the country’s macro- prises: we accept your consoli- vatize, and open up to the world. nomic situation now stabilized, duce its reliance on imports. ties in the services and tourism
economic indicators were pos- dation plans, we will review your the country offers attractive op- These challenges are precise- sectors worth $1.3 billion and
itive,” explains Ahmed Tibaoui, financial situation, we will give Involved with the world portunities for foreign investors, ly those addressed by the ambi- $382 million respectively, while
President of the World Trade you the benefits of an investment After many years of international and enjoys excellent diplomatic tious $286 billion 2010-2014 the Minister has also identified
Center Algeria in Algiers. plan – but we will do so on the isolation, Algeria has redefined and commercial relationships Development Plan, a concerted cement, engineering and pa-
The oil price collapse in 1986 condition that you find an in- its position and become a key with Europe, particularly the effort to put Algeria on the map per as fields which require for-
also illustrated the need to di- ternational technology partner,” regional player. President United Kingdom, Spain and of industrial players. eign investment.
versify the economy, and to re- explains Mr. Benmeradi. Bouteflika was invited to Germany. Various co-operation “We have implemented very Thus, Algeria offers many op-
agreements covering trade and large projects – an estimated in- portunities for international
culture provide a reassuring vestment of $500 billion over companies wishing to gain ac-
framework for foreign investors. the past 12 years by the state. cess to a market of 37 million
$150 million investment Direct German investments
reached €350 million ($442 mil-
lion) in 2010, including joint ven-
tures for industrial gas
This is the equivalent of three or
four times the GDP of Algeria,”
says Mr. Benmeradi.
While energy-related ven-
people, a large and educated
workforce, and a selection of
large-scale projects, while the
range of fiscal and legal incen-
plan puts SNVI on the production and railway electri-
fication. More than 200 German
companies including Mercedes,
Daimler and MAN Ferrostaal
tures figure prominently in the
investment plan, industrial pro-
jects worth $6 billion also fea-
ture. Not all the money is
tives, private and public funds,
and support from government
agencies clearly demonstrates
the sincerity of Algeria’s wish to
road to success have operations in Algeria, and
Siemens have just built the coun-
try’s first metro in Algiers.
destined for large companies,
the majority being reserved for
SMEs through the development
build mutually profitable long-
term partnerships with capable
foreign investors.
Algeria’s national producer of industrial vehicles has plans to expand its capacity
and grow its network of local subcontractors
Few things can be as frustrating vehicles from 6.6 tons to 26 tons. sary to have many more sub-
for a company as being unable “To fully meet national demand contractors and above all, to
to keep up with demand for the it is necessary to have a varied bring them up to par so they ar-
products it manufactures. range,” says Mr. Tazerouti. rive at the level of quality re-
This is the position Algeria’s He is frustrated that Algeria quired by SNVI and by any
National Industrial Vehicle is importing vehicles that it possible partner of SNVI.”
Company (SNVI) finds itself in. could build itself. “Today we im- Human resources play a key
The company’s order book is port about 60% of our trucks’ part in this, he says: “One can eas-
filled for the next three years, but parts from abroad. Our objec- ily buy a modern tool, but you
it knows it could sell many more tive is to replace these with parts also have to have the person to
vehicles if it had the capacity to manufactured locally by an in- make it work. By not having in-
make them. dustrial base of subcontractors vested in human resources, that
And it’s not just a matter of lost – to substitute national pro- is where local subcontractors
potential business. SNVI’s vehi- duction for imports.” have been lacking.”
cles make an important SNVI is currently en-
contribution to the day- gaged in two partner-
to-day running of the na- ships with foreign
tional economy and the companies. One is a joint
company is also the main venture with the German
supplier of military vehi- automotive supplier
cles for the armed forces. group ZF for the con-
The employer of struction of gearboxes,
5,000 workers, SNVI which is on SNVI’s site in
manufactures trucks, Rouiba in eastern Algiers.
buses, trailers and spe- The other is a partner-
cialized vehicles. It also ship with the French car
produces spare parts, body manufacturer Behn
and provides repair and Titan Kaiser (BTK),
maintenance services. which is located in the
To keep up with de- industrial area of Ain
mand for its vehicles the Bouchekif, 185 miles
company needs to be able southwest of Algiers.
to up its output. Mr. Tazerouti says
Fortunately, with the sup- SNVI has several pro-
port of the Algerian gov- jects currently taking
ernment the prospects for shape – a special vehi-
doing so are looking good. cles project and a joint
SNVI’s debt, a major problem venture with a major manufac-
until recently, has been erased by “WE EXPECT TO turer in the vehicle industry.
the Algerian authorities, who are INCREASE OUR According to the CEO, what
also investing 12 billion dinars PRODUCTION SNVI hopes to gain from a part-
($153 million) in the company, GRADUALLY YEAR nership is new methods of man-
as part of a national drive to ex- BY YEAR. THE agement and quality control, and
pand industrial activity, partic- MARKET IS THERE, human resources management.
ularly in mechanics. THERE IS KEEN “We know industrial vehicles
“We will use this investment DEMAND FOR OUR – we have been fabricating them
to increase our production ca- PRODUCTS AND IT for 30 years. There may be new
pacity, bring our infrastructure CAN ONLY products, but one can say that
up to par, upgrade our indus- INTENSIFY.” we have mastered technology
trial tools, and gain greater in general” he says. “In contrast,
market share,” says Hamoud HAMOUD TAZEROUTI, it is the new methods of man-
Tazerouti, CEO of SNVI. “We CEO of SNVI agement, new management of
expect to increase our pro- human resources, and the for-
duction gradually year by year. SNVI has been building up a mation of investment projects
The market is there, there is network of local subcontractors that we are missing. To know
keen demand for our products for a decade. “The goal is to group how to drive forward an invest-
and it can only intensify.” a number of small to medium- ment project – for that there is
This year, SNVI plans to make sized industries and small to a need to reach and maintain a
3,642 vehicles, generating busi- medium-sized enterprises level of excellence.”
ness worth 27 billion dinars. around the SNVI to create wealth, Algeria’s goal in partnerships
Through partnership with oth- employment, and gain the know- is to promote local production,
er manufacturers, the company how,” says Mr. Tazerouti. acquire know-how, create jobs
aims eventually to increase its He acknowledges there is and reduce imports. “The re-
production capacities to 15,000 some way to go before SNVI can quirement is 30% to 40% local
to 20,000 vehicles per annum. source all its requirements lo- integration over five years,” says
The market demands at least cally. “An industrial base is form- Mr. Tazerouti . “Today one can-
five types of vehicles of varying ing around us, but it is not yet not speak about partnership if
weights. SNVI manufactures sufficient,” he says. “It is neces- there is no local integration.”
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12
ALGERIA
SGP CABELEQ and the power
of partnerships
It is time to take advantage of public-sector synergies
boosting competitiveness, increasing flexibility and AZIZA BOUKAOULA, President of SGP CABELEQ
reducing imports through local subcontracting
Major multinational organiza- Aziza Boukaoula, President
tions – particularly those whose of CABELEQ, says, “We are all
growth has been achieved in contact: we have companies
through strategic acquisitions producing, others installing,
and purchases – strive to ensure and others in charge of main-
that each new addition ideally tenance, so we can participate
adds value to the rest of the in tenders by bringing togeth-
group, so that ultimately the par- er a number of our firms. We
ent company remains greater can get REELEC to produce and
than the sum of its parts. install generating equipment,
Dynamic teamwork, stream- working in collaboration with
lined interactions and produc- Electro-Industries and SOR-
tive synergies underpin the ELEC. These companies have
proliferation of some of the years of experience working
world’s largest conglomerates. closely together.”
However, the desire to attain Combining efforts is also es-
strength through synergies does sential to other divisions of CA-
not solely lie within the domain BELEQ, including INATEL and
of the private sector, as securing RETELEM. Operating in the vi-
efficiency and optimum results tal information and communi-
through teamwork also perme- cation technology (ICT) sector,
ates the holding entities in charge these companies provide cru-
of Algeria’s public institutions. cial telecom services ranging
One such proponent of inter- from the manufacture and in-
relating collaborations is the stallation of switchboards and
state-owned group SGP CA- telecom exchange systems, to
BELEQ. As the overall owner of the development of telecom and Despite these arrangements, International standards nical joint venture with the
electrical components market IT networks, as well as electronic and the group’s market-leading Algerian companies are com- “ENPEC IS ALREADY Swedish telecom firm Ericsson,
leaders such as Electro-Industries surveillance systems. The ad- positions in many sectors, it is mitted to delivering quality, a THE LEADER IN THE which owns 35% of the com-
and ENPEC, CABELEQ is a key vantages of collaboration have keen to attract foreign partners. fact acknowledged by both cor- AUTOMOBILE pany, for the manufacture and
participant in some of the most been evidenced by the resulting Interested parties will be pleased porate customers and private in- BATTERY SECTOR, BUT installation of new telephone
strategic areas within Algerian in- further synergies with other to note that the procedure for dividuals. While a free market WE ARE NOT ABLE exchanges for Algerie-
dustry. ENPEC specializes in bat- branches of the parent group, forming partnerships has been brings competition, Algerian TO SUPPLY THE Telecom, the national public
teries for the automobile industry, such as SITEL and INFRATELE, simplified: SGPs can now enter buyers, having been tempted by WHOLE ALGERIAN telephone company.
while Electro-Industries pro- which provide nationwide and directly into contact with po- the lower prices of foreign goods, MARKET, WHICH IS As a result of its work, the
duces electric motors, alterna- urban telephone networks. tential partners without a ten- have returned to the quality of- WHY WE HAVE landline network has increased
tors, transformers and der, and have the full freedom to fered by their native brands. BEGUN TO LOOK to more than 3 million lines.
generators. In addition, CA- Leaders in collaboration negotiate, before sending the ENPEC batteries, for exam- FOR A PARTNERSHIP.” The group aims to modernize
BELEQ also controls business- In the Algerian industrial sector, project off for final approval. ple, are often sold out – though and adopt new technologies,
es in related sectors, such as the the strategy of subcontracting “ENPEC is already the leader the company itself makes no ef- AZIZA BOUKAOULA, such as optical fiber, in order
provision of electrification ser- and cooperation is encouraged in the automobile battery sec- fort to promote sales through President of SGP CABELEQ to recapture the domestic mar-
vices through its subsidiaries RE- by the government and exists tor, but we are not able to sup- advertising: customer satisfac- ket, which has largely been
ELEC and ALRELEC. even between different state- ply the whole market for the tion and word of mouth is overtaken by competition from
owned enterprises (referred to automobile industry,” says Mrs. enough to maintain the compa- changes and tweaks. We have imported products.
A united group in Algeria as SGPs). For exam- Boukaoula. “There are 1.5 mil- ny’s reputation and ensure high entered an agreement with the The company also exports
As a conglomerate whose com- ple, Sonelgaz has officially ap- lion cars manufactured in Algeria demand. Its products meet the University of Setif to carry out re- its know-how and acts as an
ponents complement and feed proved Electro-Industries’ annually, and 250,000 import- highest international standards, search and develop our solar en- engineering consultant in
one another, CABELEQ is power transformers (and have ed, so there is additional market allowing them to compete in ex- ergies further.” Africa, Middle East and
therefore able to develop pro- also expressed an interest in in- share to aim for – which is why port markets and ENPEC already China for the Ericsson group.
ductive alliances among its dif- vesting in the manufacturer), we have begun to look for a part- exports its batteries to Libya. Foreign experience It has maintained a leading
ferent divisions, and thereby while white-goods manufacturer nership in order to be able to Striking new collaborations position – almost a monop-
enhance business opportuni- INDELEC uses CABELEQ ca- supply 100% of the market, us- ENPEC eyes solar potential with international partners oly – in Algeria.
ties for each unit. bles in all its projects. ing ENPEC products.” One new market the company would not be new to CA- SITEL’s CEO Amin Baghli
has its eye on is the renewable BELEQ. The group already has advises potential investors to
energy sector and it is looking for many years of experience look at Ericsson’s example and
international partners to join it working with foreign compa- says, “If you really commit
in the new venture. nies, and has been part of SI- yourself, you will succeed in
“We want to move into the so- TEL since the 1990s – one of Algeria; don’t think only pure
lar battery sector,” says Mrs the first major partnerships business, but come also to gen-
Boukaoula. “ENPEC has already formed outside of the oil and erate employment – that has
made a start, as vehicle batteries gas sector in Algeria. been Ericsson’s philosophy and
and solar batteries share a simi- SITEL was established in that is why have they have suc-
lar configuration, but with a few 1990 as a financial and tech- ceeded so well.”
Electrification sparks
new opportunities
The charge for national electrification has created huge demand for Electro-Industries’ cables
The 1976 National Plan intro- reservoirs and other facilities are market, they have not yet de-
duced the target of nationwide being built across Algeria. veloped their range of the largest
domestic electrification, with “These public procurement transformers: manufacturing
many of the large state-run or- programs have both stimulat- such products is a lengthy and
ganizations, such as Sonelgaz, ed domestic demand and have complex process.
playing important roles. The helped to meet expectations Electro-Industries’ aim is to
implementation of this huge in- for a level of public services in create a joint venture, on a 51/49
frastructure program contin- the areas of housing, health, basis to expand the company.
ues to this day, and the road and rail transport and ed- “We are planning to manufacture
differences in levels of electrifi- ucation, which until [the cur- more high-power transformers
cation that previously existed rent National Development (up to 2000 kVA capacity), and
have been eliminated. Program] had been lacking in we are looking for a partner with
Coverage has risen from 33% Algeria,” says Minister of a worldwide reputation who can
of the national territory Finance Karim Djoudi. bring us technical skills. Money
(excluding sparsely populated All these programs require ca- is not our concern; we are look-
bles and other products ing for the transfer of techno-
logical, management and
training know-how. We pro-
duce a maximum of two
areas) when indepen- high-power trans-
dence was won in formers per year, and
1962, to 96% in 2001. the remainder has to
Between 2001 and be imported. There
2010, 62,137 miles of is already demand
low and medium- from companies
voltage electric lines, such as Sonelgaz,” ex-
along with 3.5 million plains Mrs. Boukaoula,
electricity meters, were who is also looking for
installed – with all ca- partnerships to help pro-
bles supplied by the govern- duce large-capacity motors.
ment-owned SGP CABELEQ. Electro-Industries’ ambi-
Demand for CABELEQ’s tions are not limited to the
products will remain high, with Algerian market. Several re-
newly industrialized zones, rur- that CABELEQ’s subsidiary gional opportunities have been
al areas, telecoms, and highway Electro-Industries manufac- identified and are awaiting as-
and rail electrification schemes tures, and whose quality is sistance from a partner so that
representing an assured market renowned. Moreover, the con- they can be addressed.
for at least the next 15 years. tinuing electrification of the “We have developed a class
Investment in infrastructure country on its own promises the of businesses today which, in
had practically stopped during group 15 to 20 years of business. my opinion, are capable of both
the 10 years of civil unrest dur- As part of a national project responding to domestic de-
ing the 90s. Now that stability has to double Algeria’s electricity mand and also competing on
been restored, the Algerian gov- production in the coming years, international markets,” says Mr.
ernment is seeking to catch up. Electro-Industries will supply Djoudi. “Furthermore, we have
Through its 2010-2014 National an increasing number of pow- used our public procurement
Development Program, the gov- er transformers. Already a leader program as a tool for encour-
ernment is making huge efforts in the manufacture of small and aging economic moderniza-
to improve the material well be- medium-sized power trans- tion and also as a means of
ing of its people. Housing, roads, formers, with almost 60% of the reducing the tax burden.”
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ALGERIA 13
Always looking for the win-win situation
Companies such as SGP INDELEC are determined to ance sheet and is well posi- Furthermore, there is an op-
remain leaders in Algeria by improving their tioned to invest in expanding portunity for Algeria to create
competitiveness through strategic international partnerships its activities. strong links with its neighbor-
ing countries as they have the
Algeria has a long tradition of of Industry, SMEs, and Attractive incentives for workforce but not necessarily
manufacturing products to a Investment Promotion. “But foreign partners the other resources that Algeria
high standard. Indeed, many today, our industrial basis has The strategy now for many am- has. Establishing good trade re-
Algerians will buy products la- been dismembered and we im- bitious Algerian firms is to lationships with these coun-
beled ‘made in Algeria’ in pref- port a lot of consumer goods.” leverage their existing strengths tries would position Algeria
erence to imported goods, as and at the same time to strike and the Maghreb as a strong
local manufacture is seen as a Partner with quality strategic partnerships with in- economic force on the world
seal of quality, durability and au- Some Algerian industrial ternational companies. IND- map. There are already ex-
thenticity. It is also a hallmark companies are the exception ELEC for one enjoys several changes in place, between
that is in demand overseas. and still produce high quali- advantages when it comes to at- Tunisia and Algeria, with more
According to the National ty consumer goods, such as tracting global partners. It ben- likely to follow.
Agency for Investment SGP INDELEC, which is mak- efits from a well-developed
Development, the total value of ing every effort to remain a production capacity, spread Made in Algeria – a new
Algerian exports rose from leader in Algeria by improv- throughout the country. Also, hallmark of quality
$19.1 billion in 2001 to just over ing its competitiveness all required manufacturing fa- Algerians are accustomed to
$57 billion in 2010. Domestic through strategic interna- cilities are in place, and al- buying robust and long-last-
demand for goods and services, tional win-win partnerships. though in need of some ing products, in contrast to the
however, far outstrips home- A state-owned group en- modernizing, are ready to op- trend towards a higher con-
grown supply, and total im- gaged in the manufacture and erate immediately. sumption of more short-lived,
ports over the same period also sale of electrical goods, IND- INDELEC also has a strong disposable products, as is in-
rocketed from $9.9 billion to ELEC was originally founded in nationwide distribution net- creasingly seen in many
almost $40.5 billion in 2010. 1970 in partnership with work and after-sales capabili- European and Asian countries.
European countries, such as General Electric. At the time, ty. The management of the “It has to be said that the
France, Italy and Spain, are tra- GE was seeking to establish group merged a number of its Algerian consumer has a ten-
ditional suppliers to Algeria in manufacturing facilities in activities, such as sales and dis- dency to buy Algerian goods
a wide range of sectors, with Algeria. However, in the years tribution, under ENIEM and manufactured by the public
Chinese and Turkish firms ex- following the group’s creation, ENIE, in order to benefit from sector. It reassures him. The
panding their presence. For ex- it became clear that it was not both companies’ market consumer always has this feel-
ample, Algeria imported $460 possible to achieve the sales knowledge, visibility and cred- ing that [public enterprises]
million of information tech- volumes required to justify a “IT HAS TO BE SAID THAT THE ALGERIAN ibility. This measure enables do not cheat. Here, the
nology (IT) alone in 2010, 54% full-blown local manufactur- CONSUMER HAS A TENDENCY TO BUY both companies’ showrooms longevity of a product is some-
of which came from China. ing operation: consequently, a ALGERIAN GOODS MANUFACTURED BY THE and sales forces to be com- thing very important for the
It is small wonder therefore number of production facili- PUBLIC SECTOR. IT REASSURES HIM.” bined, creating a unified brand consumer,” says Ahmed
that Algerian companies are ties were shut down over time. with strong commercial ap- Fettouhi, President of the state-
increasingly interested in joint Today however, INDELEC AHMED FETTOUHI, President of SGP INDELEC peal for customers. owned INDELEC.
venture opportunities. U.S. operates a number of success-
partners who can modernize ful subsidiaries covering a wide
Developing an industrial base
their factories or license tech- range of activities in the elec-
nology are in great demand. In tronics and electrical domestic
turn, despite the international appliance sectors, many of
financial crisis, U.S. firms con- which are market leaders. Its
sider Algeria’s emerging export companies include ENIEM and Located in Tizi Ouzou, ENIEM benefits from a Algerian market evolves, there part of ENIEM’s growth strat-
market will carry on growing ENIE, which manufacture ENIEM is one of the jewels of great reputation for quality is a need for new products, egy which enables the compa-
and, with domestic demand al- white goods and consumer Algeria’s INDELEC group. products that are considered new designs and new product ny, and ultimately the whole
so rising, are increasingly eye- electronics respectively, such Specialized in household elec- robust and long lasting. The ranges. So ENIEM, in order country, to reduce its import
ing potential partnerships with as refrigerators and TVs, hi-fis trical goods or ‘white goods’, brand has a leading position not to miss out on growth op- bill and to rebuild the
Algerian enterprises. Already and home cinema systems. such as refrigerators, cooking in the white goods market portunities, needs to build Algerian industrial base.
many internationally branded Other subsidiaries include equipment, washing ma- and is particularly well strong partnerships ties. INDELEC as a group has al-
products and services are man- EIMS, which produces bath- chines, ENIEM has two sub- known for its refrigerators. According to Ahmed ready made significant savings
ufactured, bottled, assembled room products; FILOP manu- sidiaries: EIMS, producing Such assets could almost be- Fettouhi, President of IND- of 120 million dinars through
or provided in Algeria. factures electric lamps; sanitary metallic products, come a restraint on an inter- ELEC, the group will also aim sub-contracting initiatives by
“Historically, at the time of in- Alphatron makes PCs; and such as bathtubs and shower national scale, considering to ensure that all of its pro- companies in its portfolio,
dependence [in 1962], Algeria ENASK produces elevators. heads, and FILAMP, an enter- that high-quality products in duction facilities operate at such as ENIEM, ENIE (the ref-
was exporting everything from Its two best-known brands, prise making lamps. ENIEM this highly competitive mar- full capacity, and will seek to erence in TV) or SONARIC.
mechanical goods to wine – ENIEM and ENIE, together is in good shape economically, ket are expensive to produce take advantage of any subcon- The goal is to develop an in-
such as 8 million hectoliters to account for the vast majority generating approximately 5 and harder to sell with a prof- tracting opportunities that dustry, as already exists in
France,” comments Mohamed of INDELEC’s annual turnover. billion dinars ($63.8 million) itable return on investment. arise, as subcontracting is Turkey, producing quality
Benmeradi, Algerian Minister The group has a strong bal- turnover per year. Nevertheless, as the considered a very important goods at low cost.
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14
ALGERIA
Producing more, importing less
Joint ventures proliferating in both public and private sectors are making major contributions to building a better future for Algeria, as evidenced by the ongoing
pursuit of strategic partnerships by SGP EQUIPAG
A state-owned holding compa- ing demand, as well as open years, in order to modernize and sidiary EMO, taps, cutlery and
ny specialized in agricultural, new areas. Tapping into new upgrade its tools and equipment. bolts by BCR, pumps and
industrial and construction markets represents an impor- valves by POVAL, and machine
equipment, SGP EQUIPAG’s tant incentive for potential for- Reducing imports tools by PMO all contribute to-
portfolio comprises around 30 eign partners, such as Liebherr, By aiming to boost domestic ward keeping the country’s im-
companies and subsidiaries that with whom we have recently production of much-needed in- port costs down.
are centered around three key been completing an important dustrial equipment, EQUIPAG
sectors: agricultural machinery, deal for public works vehicles.” is also looking to help the re- Public works materials
industrial supplies, and public EQUIPAG’s turnover has now duction of the nation’s import Created in January 1983, the
works vehicles and equipment. reached $375 million per year bill, with a long-term view of National Enterprise for Public
Agricultural machinery rep- and as the company is seeking even managing to raise exports Works Materials (ENMTP) is
resents almost 40% of the com- further expansion it has imple- of surplus stocks. EQUIPAG’s subsidiary that
pany’s business and includes mented a $250 million invest- “In this era of diversification, manufactures a wide range of
producing equipment such as ment program, spread over four production from the mechani- strategic equipment that is vi-
combine harvesters, tractors cal sector can contribute signif- tal for a country in transition,
and the construction and re- icantly to bringing down our such as excavators, hydraulic
pair of fishing boats, as well as imports bill – all the tractors we cranes, loaders, bulldozers,
seeding, fertilization and build in Algeria represent trac- compactors, compressors and
tillage equipment. “IN THIS ERA OF tors we do not need to import,” concrete mixers. It manages a
“The government wants to DIVERSIFICATION, says Mr. Dehimi. “Every single sizeable workforce of 2,230 of
reach a certain level of food PRODUCTION FROM combine harvester we build people who last year generat-
security for Algeria and to de- THE MECHANICAL means one less import. ed a turnover of $105 million.
velop the nation’s infrastruc- SECTOR CAN EQUIPAG produces public ENMTP’s four main sales of-
ture,” says Bachir Dehimi, CONTRIBUTE works vehicles, bolts, fastenings, fices are located in Algiers, Oran,
President of EQUIPAG. “That SIGNIFICANTLY TO pumps… All our homegrown Annaba and Constantine. In ad-
is why there are some massive BRINGING DOWN production reduces imports. dition, it has a network of au-
cash injections into expand- OUR IMPORTS BILL.” The more we can produce, the thorised sales agents across the
ing mechanization, modern- less we will import.” whole national territory
ization, and lands available for Indeed, the companies in The Constantine-based com-
agriculture. This in turn en- BACHIR DEHIMI, EQUIPAG’s industrial section pany has a total of six manu-
ables us to increase our pro- PRESIDENT of SGP EQUIPAG (EIH) satisfy 60% of demand facturing subsidiaries, four of
duction and launch new in the domestic market; en- which – SOMATEL, SO-
products to supply the grow- gines made by EQUIPAG’s sub- FAME, SOFARE and SOFA-
CO – are in the industrial area
of Ain Smara. It also has FAFE-
CO producing cranes and com-
pactors in the port city of Bejaia,
and SOMABE, which focuses
on concrete materials in Algiers.
Managing the company’s in-
dustrial activities is its subsidiary
EGEZIA in Ain Smara, where
it also has a maintenance and
renovation unit as well as a cen-
tral spare parts depot. BACHIR DEHIMI, President of SGP EQUIPAG
International alliances world. It produces excava- in partnership with Europactor
A restructuring strategy at EN- tors and hydraulic cranes in of Spain.
MTP has led it to striking up partnership with Germany’s ENMTP also subcontracts to
partnerships with both Liebherr and compressors with Algerian companies in fields
Algerian and foreign opera- Ingersoll Rand of the USA. such as machining, metallic con-
tors, enabling it to boost its The alliances have helped struction and thermal treat-
technological know how, de- see some new products roll off ment, adding another layer to its
velop competitive and up-to- the company’s production line, contribution to rebuilding the
the-minute products, and including a L566-type loader, nation’s industrial landscape.
expand its distribution chan- done in collaboration with Mr. Dehimi concludes:
nels, most notably abroad. Liebherr and proven to be par- “Partnership is for me a way to
ENMTP has set up joint ticularly useful in mines and invest in the future; the trans-
ventures with some of the most quarries, and a new 12-ton fer of know-how holds our fu-
EQUIPAG has a turnover of $375 million per year, with agricultural machinery representing almost 40% of the company’s business renowned companies in the compactor that was developed ture success.”
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ALGERIA 15
0
Major investment in new factories
to put an end to cement shortages
Algeria’s state-owned of Algeria’s 14 cement factories. be available for export in the
building materials giant is The plan, according to for- next five years,” says GICA’s
spending $4 billion on mer Industr y and chief. “That is just the public
upgrading and expanding Investment Promotion sector. Taking into account
its facilities to meet the Minister Hamid Temmar, the production of the private
nation’s voracious appetite was for the new group to be- sector, Algeria will have an
for cement come “a national leader for excess of around 10 million
the cement industry and oth- tons available for export.”
In a country as busily engaged er building materials.” He says negotiations have
in large-scale development Previously, the French pri- already started with potential
projects as Algeria, demand vate company Lafarge had foreign partners who have the
for cement is increasing faster dominated the domestic mar- necessary experience and ex-
than it can be produced and ket, since acquiring Orascom pertise in exporting cement.
in recent years it has been Cement in 2008; Lafarge pro- “Cement is a product that is
necessary to import it to duces around 7 million tons difficult to export. It is easily
maintain the pace of con- of cement per year. perishable; just a little hu-
struction. GICA’s aim was to increase midity is enough to make it
Algeria currently produces the state’s share of the do- deteriorate,” he says. “We need
around 18 million tons of ce- mestic market from around to find partners that are used
ment per year. However, do- 67% to 75-80%, and later to to selling cement interna-
mestic demand is around 21 expand its activities abroad. tionally. In my opinion, we can
million tons, resulting in an Under the investment plan, do this kind of operation on- “THE DEMAND FOR CEMENT IS URGENT AND IS INCREASING,
annual cement deficit of ap- cement-producing capacity ly with foreign partners who AND WE HAVE TO SETTLE THE DEFICIT AS SOON AS POSSIBLE.”
proximately 3 million tons. will be raised by moderniz- are used to such operations.” YAHIA BACHIR, CEO of Groupe GICA
Demand for cement is par- ing GICA’s existing plants and
ticularly high in the dry sea- building new plants. Factories
son between March and are planned in the northern
August, which is the most fa-
vorable time for construction.
“We import to fill the
deficit, but it is not a solu-
province of Relizane and the
southern provinces of Bechar,
Adrar and Tamanrasset.
Discussions are also under
Ready-mixed ready to go
tion,” says Yahia Bachir, CEO way with foreign partners for Mineral-rich Algeria has no than people realize.” satisfy their demands even a partner with whom both
of the Algeria Cements cement plants in Djelfa in shortage of natural re- Feasibility studies are car- with a deficit of 3 million sides can win, why not?”
Industry Group (GICA), the north central Algeria and sources for producing ried out by the group’s tech- tons,” says Mr. Bachir. Complementing these
state-owned cement pro- Sigus in the east. building materials. nical center, which Three of the GICA group’s activities, the group has in-
ducer. “Importing great “The process has already “Our wealth is our soil and specializes in construction subsidiaries produce aggre- dustrial maintenance com-
quantities is sometimes im- started,” says Mr. Bachir. “The subsoil,” says Yahir Bachir, material technologies. “The gate: one in the east of panies, marketing
possible, because there is no demand for cement is urgent Groupe GICA’s CEO. “These technical center does geo- Algeria, one in the center of companies and distribu-
availability even on the in- and is increasing, and we have are our assets and we are logical studies to determine the country and one in the tion companies.
ternational market. The an- to settle the deficit as soon working to make the best where the best raw materials west. Current production is GICA has three distribu-
swer is to produce the as possible. use of them.” are located, which allows us 4.5 tons per year, but it is be- tion subsidiaries, two in
cement ourselves.” For that reason we have While GICA’s cement fac- to produce the best finished ing increased. the center of the country
Groupe GICA has a $4 bil- opted for the turnkey method tories carry out its core ac- product,” says Mr. Bachir. The target of 7 million and one in the west, while
lion investment program of execution making a foreign tivity, the group also has “During the whole process tons is expected to be the cement factories in the
spanning the next eight years partner responsible for real- subsidiaries producing ag- of fabrication, from the ex- reached at the beginning of east have their own distrib-
that will boost its production izing these projects. Not do- gregates and is in the process traction of the raw material 2013. As part of its five-year ution network.
of cement from 11.5 million ing so would risk delay.” of developing a ready-mix to the finished product, we plan, GICA is also launching “When you are part of
tons a year to 29 million tons The development program concrete business. have quality control.” its planned ready-mixed the public sector, you have
by 2020. is expected to create 2,400 GICA produces three When demand for cement concrete business this year. a responsibility to make
Created three years ago, jobs. And as an additional types of cement: CPJ 42.5, exceeds supply, priority is “We are installing 14 construction materials
Groupe GICA replaced the bonus, cement produced in CPJ 32.5 and CRS 400, a sul- given to businesses involved ready-mix concrete stations, available to all of the re-
holding company SGP-GICA excess of demand can then fate-resistant product. in development projects of which seven will be ready gions of Algeria,” says Mr.
when Algeria decided to con- be exported. “We pay great attention to such as public works or the by the end of the year,” says Bachir. “We have a net-
solidate its state-owned ce- “We will certainly have ex- producing good quality ce- construction of dams. Mr. Bachir. “We are also in work that goes from
ment companies and cess once we achieve all our ment,” says Mr. Bachir. “The “These companies ac- discussions with a foreign Algiers in the north to the
subsidiaries into a single giant development programs; we cement manufacturing count for 55% of our cus- partner. We could move for- borders of Mali and Niger
industrial group controlling 12 estimate 4-5 million tons will process is more complex tomers and we can still ward alone but if we can find deep in the south.”
Text splendor qui cumque est acer adi lurida praeterea splendida porro oculi fugitant vitantque tueri sol
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16
ALGERIA
Algerian pharma and biotechnology
attract international interest
Foreign and private investors are a key factor in the made technical visits to labo-
growth of Algeria’s pharmaceutical market ratories and universities and
conducted meetings with lead-
Although perhaps best known pany Sanofi Aventis and ing decision makers from in-
for its oil industry, in recent American multinational Pfizer. ternational pharmaceutical
years Algeria has considerably Another strategy imple- companies, public institutions
expanded its pharmaceutical mented by the Algerian gov- and regulatory agencies.
sector, by opening doors to for- ernment includes its shift During the tour, Algeria’s
eign investors and attracting toward nationally produced Health Minister met with
multinational companies. drugs. “It is estimated that do- his American counterpart,
“The market has increased mestic production accounts Kathleen Sebelius, in what
six-fold in value in just one for between 32 and 35% of the was the first meeting of its
decade,” explains Boumediene Algerian market,” says Mr. kind between an active
Derkaoui, CEO of leading Derkaoui. “The objective of Minister of Health and a U.S.
Algerian pharmaceutical com- the public authorities is to Secretary of Health and
pany SAIDAL. “It certainly double that and reach at least Human Services.
gives you an idea of its huge po- 70% national production by Algeria’s most recent public
tential for growth.” 2014-2015.” incursion into the biotechnol-
He adds that it is important Since 2005 the government ogy field was at the BIO
to note that amongst the began allowing international International Convention, held
African nations, the Algerian companies to set up manufac- in Boston this past June 18-21.
pharmaceutical industry is turing facilities within Algeria At the invitation of James
the second largest, totaling to help reach this goal. As a re- Greenwood, President and
more than $2.5 billion and es- sult, two Middle Eastern phar- CEO of Biotechnology
timated to be worth $8 bil- maceutical companies, Saudi Industry Organization (BIO),
lion by 2015. Arabia’s Julphar and Kuwait’s Algeria participated as a guest
This sudden growth is main- KIPCO Asset Management Algeria’s pharmaceutical sector has expanded six-fold over the past decade and is now the second largest in Africa of honor, a role that enabled it
ly due to the liberalization Company (KAMCO), have to promote investment in the
process that started in the ear- already decided to build man- Algerian government to move others, attended the meetings ture collaborations. North African nation to an in-
ly 1990s, which allowed inter- ufacturing plants. its pharmaceutical and med- to discuss the pharmaceutical The second event to take ternational audience.
national and private Algerian Saudi Arabia will work with ical industry forward was ev- sector and biotechnology in place, and further consolidate This has been the first time
companies to enter the market. Algeria’s Ministry of Health in- ident by a two events that took Algeria, while the latest tech- the biotech sector’s buoyant Algeria participated in the
A company such as SAIDAL, vesting $28 million to create an place in 2011. nology in the pharmaceutical growth in Algeria, was a two- convention and to commem-
for example, used to be com- intravenous fluid facility while First, Algeria hosted in June medical field was on exhibi- day “Innovative Pharmaceu- orate the event, it officially
pletely government owned, but KAMCO will invest $380 mil- the first USA-Algeria Health tion. Medical equipment sup- tical Study Tour” of Boston and launched the Algeria 2020 ini-
in the late 1990s was opened lion toward drugs aimed at Forum & Expo in Algiers on re- pliers even provided attendees Washington DC, organized by tiative – an investment and
up to private investors. Now treating cancer. search and development in the with hands-on experience. the U.S.-Algeria Business development program fo-
corporate and individual in- This interest in the Algerian field of pharmaceutical Under this forum, a memo- Council (USABC). cused on the health sector, de-
vestors own 20% of the com- pharmaceutical sector has al- biotechnology. Prominent randum of understanding was The 30-strong delegation veloped by the Minister of
pany. SAIDAL also has so spread to the United States. companies such as Pfizer, signed between the two na- from Algeria, led by Health Heath with a team of inter-
partnerships with French com- The willingness of the Merck and Zeneca, among tions, paving the way for fu- Minister Djamel Ould Abbes, national experts.
SAIDAL’s success highlights potential
of Algerian pharma sector
Based in Algiers, Groupe SAIDAL is the largest pharmaceuticals group in the country and ranks among the biggest in Africa
Over the past decade or so, since lot of its effort into the healthcare program through to 2025 that amount of pharmaceuticals pro-
the end of the civil war and the sector. Showing its commitment includes, among many other duced in the country.
beginnings of more peaceful to the improvement of the pop- things, raising the number of This healthcare plan will pro-
times for the country, the ulation’s health, the government hospital beds and physicians in vide substantial opportunities
Algerian government has put a has outlined a comprehensive Algeria and increasing the to foreign investors, most of
whom operate in the country
through imports or local part-
nerships. At present the Algerian
pharmaceutical industry is wide
open to potential investors.
Pharmaceuticals currently ac-
count for 0.008% of all exports
but 4.5% of all imports. Algeria's
import substitution legislation
means drugs that can be man-
ufactured in the country can-
not be imported, and the local
industry's generic focus means
it has immense potential to in-
crease these exports.
Algeria’s pharmaceutical ex-
penditure increased greatly in
previous years, from DZD159
billion ($2.35bn) in 2008 to an
estimated DZD209 billion in
2013, growing at a compound
annual growth rate (CAGR) of
5.62% in local currency terms.
Long-term predictions suggest “YOU CANNOT GO TO ANY LABORATORY OR
this strong growth will contin- PLANT BELONGING TO A MULTINATIONAL OR
ue, with the market potential- A NATIONAL PRIVATE COMPANY WITHOUT
ly reaching DZD407.14 billion FINDING MANAGERS WHO LEARNED THEIR
by 2019. CRAFT WITH SAIDAL.”
Created in April 1982 fol-
lowing the restructuring of the BOUMEDIENE DERKAOUI, CEO of SAIDAL
Algerian Central Pharmacy
(PCA), SAIDAL became a pub-
lic company in 1989 following tiatives set up by the Algerian Investment Fund loan, which
the implementation of eco- government. “This increase is allocated €180 million to the
nomic reforms. primarily due to the simplifica- SAIDAL Group’s five-year
The CEO of the African phar- tions made by our public au- development plan. At the
maceutical giant, Boumediene thorities in relation to access to same time, Pfizer-SAIDAL
Derkaoui, recently explained the drugs and pharmaceuticals for Manufacturing, a collabora-
reasons behind the country’s the Algerian public. Our sys- tion between American phar-
rapidly growing healthcare sec- tem is one of the most improved maceutical giant Pfizer’s local
tor and especially its pharma- and advanced in the world – it’s subsidiary Pfizer Pharm
ceuticals industry, stating “it free. You are 100% reimbursed Algeria and SAIDAL, an-
should be noted that the Algerian for any and all medications re- nounced that it is to begin the
market is the second-largest mar- gardless of whether you have production of an unspecified
ket in Africa in terms of both social insurance or not.” major anti-inflammatory treat-
value and volume. Our market In October 2010, the Algerian ment. The anti-inflammatory
is just behind South Africa and government signed a letter of in- medication is currently one of
ahead of Egypt despite the vast tent with a number of U.S. firms approximately 20 products im-
differences in the population of aimed at bringing investment ported by the company, which
each of our three nations. to the country’s pharmaceutical also manufactures about 18
“Algeria has a market that and healthcare sector in areas products at its Algiers plant.
totals more than $2.5 billion such as technology transfer, re- While Algeria’s pharmaceu-
and our per capita consump- search and development, and ticals industry continues to
tion of medication has been direct investments. At this time grow and improve exponen-
growing steadily for years. SAIDAL announced that it was tially each year, Mr. Derkaoui
Today, we are not far from to start work on a moderniza- can boast of how SAIDAL has
reaching a spending of $80 per tion program worth €1.4mil- contributed heavily towards
capita per year. The market in lion aimed at increasing the country’s improved health-
1999 was between €240-250 production capacity at eight of care sector: “Throughout the
million. Today it is over €1.7 bil- its manufacturing facilities last decade in particular we
lion. That is an incredible six- based in Algiers, Cherchell, and have played a major role as
fold increase in market value Medea. The improvements will breadwinner for the industry.
in just over a decade and it increase SAIDAL’s drug pro- We also became a training cen-
gives you some idea of the po- duction capabilities from 135 ter, almost, because you can-
tential the pharmaceuticals million to 298 million sales units, not go to any laboratory or
market has for growth.” as well as raise the firm’s stan- plant belonging to a multina-
The CEO went on to say that dards of quality to that of tional or a national private
the growth in the market value European levels. company, without finding
has been thanks to some for- The improvements are be- managers who learned their
ward thinking healthcare ini- ing financed by a National craft with SAIDAL.”
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