Industry: Tunisia accelerates
16 October 2009
Read by 1501 persons
No more low-cost factories. Make way for brainpower. This is the country's ambitious challenge, hoping to increase its industrial exports tenfold and create 200,000 jobs by 2016.
"Tunisia must not rest on its laurels," is the new motto of the Minister of Industry, Energy and SMEs, Afif Chelbi. At 56, this engineer from the École Centrale de Paris is launching the battle for the new Tunisian industry to conquer the Euro-Mediterranean space: a market of 800 million consumers in 2009 and 1 billion in 2016. With the label "The Euromed Valley for Industry and Technology," Afif Chelbi fears nothing. "We have all the assets to succeed in this new challenge: proximity to Europe, brainpower, adequate macroeconomic policy and a pleasant lifestyle," he summarized. He will be in Paris on October 8th for the launch of the promotional campaign for the Tunisian industrial strategy up to 2016. He will explain to the French Minister of Industry, Christian Estrosi, and the President of the Paris Chamber of Commerce and Industry (CCIP), Pierre Simon, in front of an audience of about a hundred French and Tunisian industrialists, the "new industrial dynamic" that will encompass all sectors of activity (textiles and clothing, agri-food, mechanics, electronics, aeronautics, etc.) as well as advanced services (financial back-office, accounting, marketing). His argument is based on a strategic study carried out at his request by Ernst & Young and SB Conseil France in association with the Center for Industrial Studies and Prospective.
It marks a new stage for young Tunisian industry, almost non-existent in 1956 after independence. Its exports were limited to agricultural products (citrus fruits, olive oil, alfa, wine) and raw minerals (phosphates, lead, iron). In the 1960s, industrial projects mainly focused on labor-intensive units (such as plastics, mechanics, automobile assembly, textiles, etc.) and some heavy units (steel, chemicals, and refining). In 1969, industrial exports did not exceed 2 million dinars (DT, the equivalent of 4 million dollars), or 2% of the country's total sales, including 1.7 million DT for textiles and 74,000 DT for hardware!
The 1970s marked the first major turning point with the association agreement with the European Union (former EEC), the adoption of liberalism, and the launch of offshore companies. Result: textile exports reached 509 million DT in 1987 (300 times more than in 1969), while those of mechanical and electrical industries climbed to 67 million DT (900 times more).
Establishing a presence in Europe
The second turning point, negotiated in the 1990s, allowed Tunisia to further diversify its sectors of activity and anchor them more firmly in the European market. Well before its competitors in the Mediterranean Basin, Tunisia signed a new partnership agreement with the EU in 1995 with an industrial free trade area. It came into force on January 1, 2008, allowing time for the "upgrade" of Tunisian industries. A successful operation, as demonstrated by the 2016 strategic study. Half of the 6,000 industrial companies (with at least 10 employees) work 100% for export. They employ nearly 300,000 managers and workers, or 60% of industrial employment. Manufacturing – excluding energy and mining – now accounts for one-fifth of gross domestic product and four-fifths of national exports. According to Eurostat, Tunisia is the leading industrial supplier from North Africa to the EU, with €7 billion in sales in 2007, far ahead of Morocco (€5.3 billion), Egypt (€3.2 billion), and Algeria (€0.4 billion).
Competition is a threat
But, faced with competition from emerging countries in Eastern Europe and Asia, Tunisia is threatened. It risks losing market share due to competitiveness based mainly on low costs (labor, taxation). It focuses more on volume than on technicality. Example: with its 2,400 companies (40% of the industrial fabric), the textile sector accounts for 25% of industrial exports. But it contributes only 4% of GDP. It is now less of a growth driver than the mechanical, electrical, and electronic industries (IMEE). With only 900 companies, IMEE accounts for 26% of exports and 5% of GDP.
In the coming years, IMEE is expected to grow at a rate of 13.2% per year, three times faster than textiles. They will be the new vectors of the third industrial turning point currently under development. Tunisia wants to triple annual industrial investments (€1.5 billion in 2016, compared to €0.5 billion in 2007). And double the value of its industrial exports to reach €16 billion per year in 2016. No more jeans and t-shirts, phosphate ore, or bulk olive oil. Now it's time for high-tech products, such as embedded electronic equipment (cars, aircraft, engines), technical textiles (fire-resistant, antibacterial, etc.), and biotechnology… The guiding principle will be unique: a knowledge economy, not a rentier economy; integrated industrial clusters, not subcontracting. Like the aeronautical park currently under construction, around the Aérolia project, 40 km south of Tunis: planned on 30 hectares, this park will house several other factories that will also work for Aérolia (precision mechanics). A total investment of €60 million and 1,500 high-level jobs are planned.
Other clusters will spread throughout the country. These new federating and specialized hubs will be built in Bizerte in the north, Sousse, Enfidha, and Monastir in the center, and Sfax and Gabès in the south. More than 1,000 hectares of land will be developed by the state. Companies will have everything within easy reach, infrastructure, but also engineering training institutes, research centers, incubators, business centers, etc. As a leading sector, IMEE will have to invest €2 billion for a target of €45 billion generated in exports over the period 2007-2016 (45,000 new jobs), followed by textiles and leather (€1 billion for €30 billion in exports and the creation of 40,000 jobs), and agri-food (€2 billion for €10 billion in exports, 34,000 jobs). If everything works perfectly, Tunisia will have to invest a total of around ten billion euros and export ten times more! That's around a hundred billion euros earned internationally. The challenge: create 200,000 new jobs, or 25% of additional job demands. For Minister Afif Chelbi, the main challenge of the ongoing promotional campaign (until December) is to get the following message across: "Tunisia is not only a tourist destination, it is also an industrial destination."
Published October 12, 2009
Posted online October 16, 2009
Jeuneafrique
"Tunisia must not rest on its laurels," is the new motto of the Minister of Industry, Energy and SMEs, Afif Chelbi. At 56, this engineer from the École Centrale de Paris is launching the battle for the new Tunisian industry to conquer the Euro-Mediterranean space: a market of 800 million consumers in 2009 and 1 billion in 2016. With the label "The Euromed Valley for Industry and Technology," Afif Chelbi fears nothing. "We have all the assets to succeed in this new challenge: proximity to Europe, brainpower, adequate macroeconomic policy and a pleasant lifestyle," he summarized. He will be in Paris on October 8th for the launch of the promotional campaign for the Tunisian industrial strategy up to 2016. He will explain to the French Minister of Industry, Christian Estrosi, and the President of the Paris Chamber of Commerce and Industry (CCIP), Pierre Simon, in front of an audience of about a hundred French and Tunisian industrialists, the "new industrial dynamic" that will encompass all sectors of activity (textiles and clothing, agri-food, mechanics, electronics, aeronautics, etc.) as well as advanced services (financial back-office, accounting, marketing). His argument is based on a strategic study carried out at his request by Ernst & Young and SB Conseil France in association with the Center for Industrial Studies and Prospective.
It marks a new stage for young Tunisian industry, almost non-existent in 1956 after independence. Its exports were limited to agricultural products (citrus fruits, olive oil, alfa, wine) and raw minerals (phosphates, lead, iron). In the 1960s, industrial projects mainly focused on labor-intensive units (such as plastics, mechanics, automobile assembly, textiles, etc.) and some heavy units (steel, chemicals, and refining). In 1969, industrial exports did not exceed 2 million dinars (DT, the equivalent of 4 million dollars), or 2% of the country's total sales, including 1.7 million DT for textiles and 74,000 DT for hardware!
The 1970s marked the first major turning point with the association agreement with the European Union (former EEC), the adoption of liberalism, and the launch of offshore companies. Result: textile exports reached 509 million DT in 1987 (300 times more than in 1969), while those of mechanical and electrical industries climbed to 67 million DT (900 times more).
Establishing a presence in Europe
The second turning point, negotiated in the 1990s, allowed Tunisia to further diversify its sectors of activity and anchor them more firmly in the European market. Well before its competitors in the Mediterranean Basin, Tunisia signed a new partnership agreement with the EU in 1995 with an industrial free trade area. It came into force on January 1, 2008, allowing time for the "upgrade" of Tunisian industries. A successful operation, as demonstrated by the 2016 strategic study. Half of the 6,000 industrial companies (with at least 10 employees) work 100% for export. They employ nearly 300,000 managers and workers, or 60% of industrial employment. Manufacturing – excluding energy and mining – now accounts for one-fifth of gross domestic product and four-fifths of national exports. According to Eurostat, Tunisia is the leading industrial supplier from North Africa to the EU, with €7 billion in sales in 2007, far ahead of Morocco (€5.3 billion), Egypt (€3.2 billion), and Algeria (€0.4 billion).
Competition is a threat
But, faced with competition from emerging countries in Eastern Europe and Asia, Tunisia is threatened. It risks losing market share due to competitiveness based mainly on low costs (labor, taxation). It focuses more on volume than on technicality. Example: with its 2,400 companies (40% of the industrial fabric), the textile sector accounts for 25% of industrial exports. But it contributes only 4% of GDP. It is now less of a growth driver than the mechanical, electrical, and electronic industries (IMEE). With only 900 companies, IMEE accounts for 26% of exports and 5% of GDP.
In the coming years, IMEE is expected to grow at a rate of 13.2% per year, three times faster than textiles. They will be the new vectors of the third industrial turning point currently under development. Tunisia wants to triple annual industrial investments (€1.5 billion in 2016, compared to €0.5 billion in 2007). And double the value of its industrial exports to reach €16 billion per year in 2016. No more jeans and t-shirts, phosphate ore, or bulk olive oil. Now it's time for high-tech products, such as embedded electronic equipment (cars, aircraft, engines), technical textiles (fire-resistant, antibacterial, etc.), and biotechnology… The guiding principle will be unique: a knowledge economy, not a rentier economy; integrated industrial clusters, not subcontracting. Like the aeronautical park currently under construction, around the Aérolia project, 40 km south of Tunis: planned on 30 hectares, this park will house several other factories that will also work for Aérolia (precision mechanics). A total investment of €60 million and 1,500 high-level jobs are planned.
Other clusters will spread throughout the country. These new federating and specialized hubs will be built in Bizerte in the north, Sousse, Enfidha, and Monastir in the center, and Sfax and Gabès in the south. More than 1,000 hectares of land will be developed by the state. Companies will have everything within easy reach, infrastructure, but also engineering training institutes, research centers, incubators, business centers, etc. As a leading sector, IMEE will have to invest €2 billion for a target of €45 billion generated in exports over the period 2007-2016 (45,000 new jobs), followed by textiles and leather (€1 billion for €30 billion in exports and the creation of 40,000 jobs), and agri-food (€2 billion for €10 billion in exports, 34,000 jobs). If everything works perfectly, Tunisia will have to invest a total of around ten billion euros and export ten times more! That's around a hundred billion euros earned internationally. The challenge: create 200,000 new jobs, or 25% of additional job demands. For Minister Afif Chelbi, the main challenge of the ongoing promotional campaign (until December) is to get the following message across: "Tunisia is not only a tourist destination, it is also an industrial destination."
Published October 12, 2009
Posted online October 16, 2009
Jeuneafrique
