Interview: Sami Mainich
What is your view on the potential of chemical manufacturing in Algeria?
SAMI MAINICH: The opportunities for chemical manufacturing in Algeria are limitless. The country imports almost all of the chemicals it uses across a wide spectrum of industries and has an abundant supply of feedstock, most of which is exported. The government and Sonatrach have also expressed interest in – and support for – developing domestic chemical manufacturing capabilities. Nonetheless, there are challenges for chemical manufacturing in Algeria, including logistical hurdles, particularly in terms of import regulations and port capacity, which can slow down engineering, construction and procurement projects and disrupt supply chains.
How can Algeria reduce imports of oil derivatives and encourage greater processing locally?
MAINICH: The local production of petrochemicals will have a higher multiplier effect on jobs and GDP than exports of raw materials. If we take natural gas production and exports and compare them to what other countries in the Middle East are doing, it is clear that there is great potential for a domestic petrochemicals industry. For example, recent figures show that Algeria imports around 280 kilotonnes of polyethylene, and around 104 kilotonnes of polypropylene, both of which could be manufactured domestically. Algeria could serve other regional markets that have no local petrochemicals production.
What is the outlook with respect to the development of the downstream sector?
MAINICH: The decline in oil revenues has created a new sense of urgency about diversifying the hydrocarbons portfolio. Historically, oil revenues were high enough to give Algeria a lot of fiscal manoeuvrability. Now, however, with oil prices to stay low for the foreseeable future, Algeria has realised that it needs to find alternatives to crude in order to maintain the kind of fiscal freedom it has enjoyed over the last decade. One strong alternative would be to develop oil derivatives with higher margins. The leadership in Algeria’s energy sector understands that downstream development will not only diversify revenue away from crude oil and natural gas but also provide a greater range of employment opportunities.
What is the biggest challenge for investors in Algerian industry to consider?
MAINICH: There is no question that the biggest challenge for industrial investors in Algeria is adapting a private sector pace of operations to the constraints under which our Algerian partners work. State-owned enterprises are committed to adhering to protocol and established procedures, and this can slow the pace of engagement and can work at cross purposes with private sector innovation and initiative. The result is that private sector representatives need to be flexible, creative and engaged in order to understand the challenges that their partners are dealing with inside their own organisations.
What strategy would ensure the needed balance between academic and vocational training?
MAINICH: Dow remains deeply committed to Algeria’s national projects and to developing the capacity of its university graduates. While some corporations are discouraged from coming to Algeria because of challenges with young employees, Dow sees an opportunity to cultivate relationships that have a direct impact on the educational level of Algerians, on the sector and on our company. This is especially true in science, technology, engineering and mathematics, where we need to ensure that recent recruits have the technical skills necessary. We value the human element, and are convinced that the growth of any economy occurs through an educated workforce.
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