Industry in Ivory Coast: Jean-Marie Ackah Presents the Sector

Interview with Jean-Marie Ackah, President of SIPRA (Société Ivoirienne de Productions Animales) and President of UGE (Union des Grandes Entreprises Industrielles de Côte d’Ivoire)

Can you give us an evaluation of Ivory Coast’s industrial sector? What are the strengths and the challenges of the sector at this time?

Ivory Coast’s industrial sector, in my opinion, is the most dynamic, the most diverse in the UEMOA, and I would say even in the ECOWAS area, Ivory Coast has a diversified and dynamic industry. But it is an industry that was mainly built in the 70s and 80s, which was brought about firstly by the fact that there was a stable political environment in Ivory Coast that enabled such investments to be implemented, it always takes time before you see any return on investment, and also the fact that Ivory Coast, compared to other countries in the sub-region, the region even, offers a level of an industry-compatible infrastructure, such as roads, electricity, energy, port efficiency, etc.

Many companies set up shop in Ivory Coast, first of all to benefit from the Ivorian market and the markets of neighbouring countries even. First of all, it was an agro-industrial industry, with the processing of agricultural products, coffee, cocoa, etc. It was also a consumer goods industry, substitution of goods imported by local production, various consumer goods etc. Ivory Coast has an industrial base.

Today, the world has evolved, we are in a world of openness, both in the sub-region and domestically; competition of Ivorian industry is global competition. It’s Asian products, products from all over the world, which the Ivorian industry is in competition with. That wasn’t quite the case 20 or 30 years ago. Some countries in these regions were not very interested in Africa, which seemed to them to be a distant land. But now everyone knows everything, and companies located in the heart of Asia, or South America, or Europe can export to all of these markets. We have the most open markets. So, the problem of the competitiveness of Ivorian industry for everything related to consumer goods arises. Therefore, we must work to ensure the competitiveness of Ivorian industry. Also globalisation is now a threat, but also an opportunity, so we need to accelerate the process of processing of our raw agricultural materials so that we too can export worldwide, with more added value, so we need to speed up this process, it’s the case with coffee and cocoa. We still have a relatively low processing rate for these raw materials, which we are the world’s leading producer of. It’s the same with cashew nuts, etc.

At the same time, Ivory Coast has the opportunity to strengthen its industrial base because it still has, even if it was reduced with the years of stagnation, crisis, etc, this relative advance because of its infrastructure, because of its devices, which mean that Ivory Coast has a head start on the UEMOA market, on the ECOWAS market, which is a market compromised of 300 million inhabitants. That’s the overall view of Ivoirian industry.

The only thing I can point out is that it is an industrial base in which Ivorian entrepreneurs are not very present in today. I think that Ivorian entrepreneurs should increasingly expand beyond the trade sector, services sector etc, they shouldn’t be scared to confront the industrial sector, because it is essentially industry, when it comes to processing agricultural products, we usually talk about the first process, which is an industry with affordable technology.

I think that Ivory Coast still has industrial potential that should be exploited, and I believe that it is a vision shared by the Government, as it is the vision of emergence that goes hand in hand with further industrialisation.

What can you do, you are facing global competition, everyone is trying to work in industrialisation. How will you be able to attract investors? Are you going to do that alone?

In my opinion we have to take action. The first thing we have to do, is create a framework that is consistent with this objective. When you want to encourage processing, when you want investors to come for that purpose, you create conditions in the fiscal framework, in relation to the cost-efficiency of production, so that domestic and foreign investors want to come here.

We need a framework that promotes the creation of added value. I think it’s a point where the Government must implement consistency between its actions and vision. We want to move industry from 30 to 40% of the GDP, this means that we need high level infrastructure in terms of service quality, electricity, roads, ports, etc. Many things are happening in this sector, but there are still things to do. We also have to use other initiatives such as tax initiatives and so on, to encourage processing. Because, if these conditions are not met, investors or operators in general, will be always attracted by faster ROIs, by trade, such as the trading of raw materials, etc., rather than processing. We think that infrastructural work needs to be carried out; we need industrial areas ready to receive industries.

Energy needs to be updated; we need permanently available electricity, to provide manufacturers with access to fuel to run industries. I think that if the work is done to this level, there is no reason why we cannot attract investors and even generate local investors for these sectors. In those areas of specialised technology, that we don’t have a master’s degree in, foreign companies are looking to set up shop to produce locally, or looking for partnerships with local operators in order to develop industries locally.

We have a head start in terms of industrial infrastructure; we have everything to gain, to operate quickly to take advantage of our economic union within ECOWAS, to talk about a market of 80 million people, 300 million in ECOWAS, to support all this industrial development in Ivory Coast.

Let’s talk about SIPRA, which is involved in the agro-industry. What was it that made you succeed in industrialising the sector?

I think you need a long term vision. In this regard, we are in a very capital-intensive sector. Whenever we decide, or the market leads us to increase production, we systematically need additional investment to increase the capacity of the entire sector, from upstream to downstream. You have to think long-term. You have to develop a corporate culture; we know that when we embark on an industrial project, we do not expect a return on investment in one year, two years or whenever. We know that we have to think long-term.

You need good financial support.

Yes, and for that we must develop total credibility. I think that it develops with a certain level of technical business expertise, you have to learn the job, not just to be an investor who invests in a production unit, but knowing the trade in the industrial sense of the word. You have to know the profession inside and out. I think it is important to develop this credibility.

And then you have to manage these companies according to international standards. Managing an industrial company, here or elsewhere in the world, demands a mastery of return costs, knowing these costs demands a certain kind of analytical accounting. You must meet these industrial management conditions. I think many people have the technical level to acquire this professional knowledge, or technically have the level of training needed to implement production management that meets international standards. It is essentially a culture issue that we have to keep working on. We are a young nation, there is no industrial culture, there is no industrial model that has been built on for generations. This is something that must be developed.

I think that we have the potential and also should focus on the training of teams of employees, because in industry, technical skills are needed, you have to accept that you need competent workers, there needs to be a basic training system that is effective, we have had one on Ivory Coast for a long time, a very good level of professional and technical education, qualified workers from vocational schools right through to engineering schools. We have a very good level of technical and professional training, allowing industries to find qualified employees in all trades, mechanical, electrical, electromechanical, etc. It is an important pillar of industrial development, which we unfortunately lost a little of with the years of crisis, but that we have to strengthen nationally. We have to implement consistency with the industrial vision and politics of Ivory Coast, and really strengthen our technical and professional training base.

It’s up to entrepreneurs who want to carry out industrial activities to engage in terms of continuing education, in training their staff to maintain the business know-how that is essential to carry out industrial activity.

What do you predict for the next 2 to 3 years? What do you want to achieve?

We believe that we are in an overall promising sector, because of, and this also characterises our country, a significant population increase. This is strong development, people live increasingly in cities, this leads to significant changes in dietary habits, food needs, so we think that we are in a promising sector.

When you want to encourage processing, when you want investors to come for that purpose, you create conditions in the fiscal framework, in relation to the cost-efficiency of production, so that domestic and foreign investors want to come here.

If we are able to keep pace, we should be able to double the size of the company every 4 years. But beyond the size, we know that now, in terms of productivity we are not yet at international standards. We are in the process of improving and in 5 years time we should be closer to the international standards of leading countries in our sector. It requires a heavy investment programme, because that’s how it is in agribusiness today, in the livestock sector, investments, to upgrade, to upgrade infrastructure at the level of what is done in the United States or other major countries, financial backing from the top banks in the country is also needed to conduct this type of development program in the agro-industrial sector.

Are you looking for partners? Are you open to partners who could come in the mid-term or bring in capital?

We’ve already taken that step. We have partners who believe in our vision to support us, we have leading partners in financial terms, in terms of openness to the world. Because we also seek partners that allow us to be in contact with the world, and to permanently challenge the world. Our partners are, the World Bank Group with the IFC, which participates in the development of the SIPRA.

We have understood for more than a decade that the objective is to not grow alone. We have not hesitated about open capital, about external partners, by always taking care to identify what the partnership could bring us, and ensuring that it is consistent with our expectations.