Market of the Month - Algeria
Algeria - Business Opportunities in the Great Unknown
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Best Prospects for U.S. Exporters One Company’s Success in Algeria |
Why Algeria?
Algeria is the second largest country in Africa, and with 35 million inhabitants, it is also the second largest populated country in the North Africa/Middle East region. As the heart of North Africa, the country’s large oil and natural gas resources, growing economy and demands for modern infrastructure pave the way for good prospects for American exporters. Indeed, these factors have generated interest from governments and companies around the world.
Traditionally a trade partner of Europe, Algeria is working to diversify its trading partners. High level Algerian government officials and businesses have outwardly expressed desire for greater U.S. business collaboration and involvement in the following sectors: water resources, environmental technologies, safety and security equipment, agriculture, petrochemicals, public works projects and medical equipment. Currently, U.S. firms dominate the hydrocarbon sector and Air Algerie is an almost all-Boeing fleet.
Since Algeria is a non-traditional market for many U.S. exporters, the U.S. Commercial Service can open doors in these and several new sectors such as health and nutrition, franchising, and home and house wares. With the addition of an American Commercial Counselor at the U.S. Embassy, there is increased interest in the business community towards American commerce. Watch a webinar where our commercial specialists in Algeria discuss business opportunities for U.S. firms.
U.S. companies can also take advantage of a U.S. Department of Commerce-led Executive Trade Mission to Libya and Algeria, November 4-8, 2009, to pursue business opportunities. Visit our site for more information and to apply by August 1, 2009.
Algeria’s economy is expected to grow at a healthy rate of 3-5% over the next several years based on steady oil and gas revenues and government spending plans. Algeria is a founding member of OPEC and is currently the world’s 10th largest oil producer at around 1.7 million barrels per day. Algeria is also a major exporter of natural gas and it benefits greatly from its proximity to rich European markets across the Mediterranean Sea. Algeria has accumulated $200 billion in sovereign reserves – more than any other country in the region including Saudi Arabia and the UAE – and it is embarking on an ambitious and multifaceted $165 billion infrastructure development program, which offers good opportunities for U.S. firms in a variety of sectors.
Best Prospects for U.S. Exporters
There are growing calls from the Algerian government for more U.S. company involvement in several major areas. Here are examples of specific needs:
Energy and Mines: electric power generation projects to meet the 9% average annual increase in electricity demand; renewable energy projects including wind and solar; and modernizing and expansion of mining operations. Algeria’s national electricity provider SONELGAZ will implement a $30 billion investment plan to expand power generation and distribution. The national oil company SONATRACH will implement a $45 billion investment plan over the next three years focused primarily on developing the petrochemicals industry.
Agribusiness: slaughterhouses; irrigation projects; and "cold chain technology" to keep dates’ freshness and color.
Water Resources: water treatment and reclamation projects; remote sensing and safety systems for 70 Algerian dams; water transfer projects and water lines/pipes; irrigation solutions; and sea water desalination projects.
Public Works: development of asphalt bitumen given government concern about dwindling bitumen supplies; and civil engineering techniques and technology for road construction in arid and desert climates (particularly for the upcoming high plateau East-West Highway project); railways; and public housing.
Healthcare: hospital construction expertise and modern medical devices, including diagnostics, for the 200 new hospitals and clinics the government is building throughout the country; and low-intensity cosmetic surgery solutions.
As in many international markets, it is important to identify a well-qualified and well-connected local partner who can learn about new opportunities before formal procurement announcements and who can expedite passage of goods through customs procedures. This is especially true in Algeria, since access to valuable information can be very difficult to obtain.
U.S. firms must enter the Algerian market with a heavy dose of patience because business deals take longer than average to materialize. Companies would be wise to make it a point to demonstrate that they are interested in Algeria for the long-term. Displaying consideration for the Algerian people and economy through technology transfer programs or other corporate stewardship activities can win important favor among Algerian government decision makers, and will lead to the success of U.S. firms in the long run.
One Company’s Success in Algeria
Mee Industries is a Los Angeles-based company that specializes in gas turbines fogging/cooling technologies to increase power generation efficiency in hot and humid environments. Rachid Sayouty, CS Los Angeles Director, recommended that Mee Industries utilize the Commerce Department's matchmaking service (Gold Key Service) to find a local Algerian partner. In October 2008, Kamel Achab, CS Algeria Commercial Specialist, arranged a full day of meetings for Mee Industries' representative with qualified prospective Algerian partners. Mee Industries had the opportunity to assess the market, identify potential strategies and tactics for successful introduction, and identify agents. Mee Industries selected one of the candidates and confirmed that the agency agreement was signed in December 2008.
Mee Industries added: "It was a very satisfactory experience using the Gold Key Service, notably due to your personal efforts and dedication in Algeria. All went very smoothly, from the expedited visa process to the fruitful meeting day in Algiers. We will consider the Gold Key Service again for future opportunities and will recommend it to others, too."
CS Algeria produces market research reports to help U.S. companies determine market potential, market size and potential competitors. Visit our site to access our reports.
Contact Us Today to Connect with a World of Opportunity!
Visit CS Algeria’s website
Key Contact: Douglas Wallace, Senior Commercial Officer
The U.S. Commercial Service
American Embassy
5, Chemin Cheikh Bachir El-Ibrahimi
El Biar 16000 Algiers, Algeria
Tel: +213 770-08-2035
Fax: +213 21-69-3132