Interview: Philippe Monestes
How has the agri-business market developed, and what improvements still need to be made?
PHILIPPE MONESTES: Currently, the Algerian market is the most important in Maghreb and is experiencing the highest growth in the region. However, there is still potential to increase quality and develop more attractive offerings. Algeria still depends significantly on food imports and some key segments remain uncovered by local production. Quantity and quality capacities should expand in the next years, as well as distribution and operation processes.
The role of players in the agri-business sector is to invest locally to optimise integration rates every time it makes sense economically, ecologically and consumption-wise. Additionally, the medium- to long-term objective is to develop a network of domestic industrial subcontractors to provide the industry with the required services and goods. In the food processing segment there is already a noticeable increase in the number of subcontractors.
While large machinery is not yet made in Algeria, there are many high-quality accessories being produced and services being offered locally. To build upon this trend, we should look at strategies that have worked in the past, such as forming strong working relationships between private sector companies, universities and research centres.
The measures taken by the government to limit importation of agricultural products make sense in the long term, and they will establish local investment as an essential condition for foreign companies that are looking to carry out business in Algeria.
What kind of an impact have government policies had on the export potential of Algerian products?
MONESTES: Despite the incentives that have been put in place by the government, exporting food products from Algeria remains very complex, due in part to high competition within the market, both in terms of pricing and quality. Opportunities for exports will increase when the markets surrounding Algeria are less restricted by policy. For example, the Green Corridor project, put in place by the Customs Agency, has had a positive impact on the ability of local agro-industrial businesses to obtain and export raw materials. Before the project, companies were waiting between 60 and 90 days at times to import raw materials, and exporting would sometimes take five to 10 days, making it very difficult for some firms to satisfy the needs of their foreign customers. Things have since changed marginally, and now it is possible to import or export goods within a few business days.
Improvements have also been made in the banking sector for local companies wishing to export. In the past, a firm undertaking exports had to repatriate payment for a transaction within 90 days. This has now been extended to 360 days, which makes exportation considerably more appealing to local producers.
Looking forward, on which areas should the agribusiness market be setting its focus?
MONESTES: With foreign companies increasing investment in local production units and national companies working on increasing both their capacity and brand image, the future looks promising for the Algerian agro-industrial sector. The focus should now be on increasing standards and adding value. Some methods and processes could be greatly improved through better synergy between market players and from the expertise of international firms.
As the local market is starting to upsize, there will be an increased need for human resources. Most foreign firms develop ambitious recruiting programmes in order to meet their needs on a short-term basis, but better communication between training centres, specialised schools, universities and the business community would greatly benefit the sector in the long run. Quality people is what makes the best companies.
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