OGB talks to Amor Habes, Owner and General Manager, Faderco

Interview: Amor Habes

What are the most important obstacles to greenfield investment projects in Algeria?

AMOR HABES: While there were many obstacles a decade or so ago, industry has benefitted from a revival thanks to the initiatives undertaken by public authorities since the adoption of new legislation in 2009. There remain, however, specific areas for improvement. The different sector stakeholders – the industrial land regulator, those responsible for infrastructure and energy providers – need to go at the same speed to boost development. Human capital must also be improved to meet the specific needs of industry. Algeria needs to continue producing engineers and technicians, but these areas have not yet fully adapted to market demands. To address this, the Ministry of Vocational Training and Employment has put in place specialised educational programmes. As a private actor, we have strengthened our ties with vocational training institutions to develop training programmes in areas such as paper-making, electro-mechanical engineering and automation.

To what extent can the private sector help to improve the state of industrial productivity?

HABES : Any increase in the rate of productivity will be as a result of the development of Algeria’s human capital. Through key partnerships, industrial actors have invested heavily in equipment and production processes that are of very high quality. What remains now will be to bring human capital up to the same level, and the contribution of the private sector may prove to be a determining factor with regards to this.

What specific measures could encourage the development of industrial value added?

HABES : Algeria has targeted the development of industrial actors in areas with high levels of added value, such as biotechnology. To ensure the growth of value-added industry, we need to put in place the infrastructure demanded by investors. With respect to land for industrial development, there were obstacles several years ago, but today things have greatly advanced thanks to the will of public authorities. Industrial sites have now been dedicated to projects that will focus on value-added products. New legislation on concessions has provided better regulation to access industrial land and placed priority on profitable industries.

How would you assess the state of the supply chain?

HABES : The East-West Highway is a major factor behind the success of the supply chain in Algeria. This 1200-km stretch of highway has facilitated the management of logistical flows, while also allowing for the creation of industrial and commercial zones. However, one cannot understate the importance of telecommunications.

The ability to transfer information in real time is a crucial aspect of an efficient supply chain. Currently, companies such as Faderco must manage their own logistics given the lack of logistics platforms. This is one of the factors contributing to higher distribution costs. Adding to this is a model of distribution that is dominated by traditional distribution channels due to the insufficient development of large-scale distribution, the likes of which is just developing with the emergence of supermarkets and hypermarkets. Currently, around 85% of consumers make their purchases in small and medium-sized grocers. The development of central purchasing bodies will further help lower the costs of distribution and improve the supply chain.

How can Algeria assert itself within the region?

HABES : Relatively affordable energy and Algeria’s geographically significant position mean that our exports enjoy a competitive advantage compared to industries in neighbouring countries. With regards to our company, the paper-making industry consumes considerable amounts of gas and electricity. Algeria now aspires to advance beyond commercial partnerships and move towards more industrial partnerships in order to diversify its economy, since thus far, the country’s economy has largely depended on the export of hydrocarbons.