Interview with Fabrice Desgardin, Chief Executive Officer of CFAO Automotive

Nowadays, uncertainties have slowed down the commercial environment. In your opinion, what are the major problems that Côte d'Ivoire faces?

Confidence is slowly building but uncertainty has not been eliminated. To improve the business environment several problems must be solved. The problems include giving priority to security, efficiently running the state (governmental and administrative), and national reconciliation and territorial unity, which is not sufficiently established throughout the country.

The second biggest challenge is putting the entire governmental team and administration back to work. The transparent organization of legislative elections could serve as the beginning to resolve the third and final obstacle - national reconciliation between different parties - which should allow for less risky reorganization within the country.

Unfortunately, security in the country has not been fully resolved yet and remains an obstacle for a lot of investors, who are not convinced that the new period in Côte d'Ivoire's history has started. This is a problem that I try to explain to potential foreign visitors. We often hear promises for help with medium and long-term projects whereas urgent problems have to be solved.

Now Côte d'Ivoire needs short term financing to start-up the reconstruction of the country and launch new projects that will encourage investors. Security cannot be established without adequate equipment, restoring security forces implies giving them the financial resources to do the work.

To do this, it is necessary to prioritize the direct short-term urgent aid, a tool that is not in favor of the lenders despite its potential economic benefits. As a proof, one can look to the noticeable excitement in the business world when France decided to provide a budgetary aid to the country shortly after the crisis.

What advice can you give to those who would like to invest in the African market and, more specifically, in Côte d'Ivoire?

Considering that Africa is the continent with the highest demographic and double-digit economic growth, it is clear that it has a bright future. Côte d'Ivoire, compared to all other countries in the sub-region, must reconstruct the country and counterbalance a decade with a lack of investments and degradation of the infrastructure. Côte d'Ivoire needs to invest in a plethora of projects starting with bridges, power plants, dams, highways and information technologies, fiber optics, etc. There are too many infrastructure needs and projects that the country cannot wait any longer to launch. The country can expect an investment peak in the next years. Also, the finalization of the PPTE process, which would allow the cancellation of the debt, would contribute to a speedy recovery and development. That's why my only message to investors is: ''Do not hesitate''.

In this context, what kind of use can the CFAO Automotive Côte d'Ivoire be?

The CFAO Automotive Côte d'Ivoire is present in almost 28 African countries as well as in all overseas French territories and in Vietnam. The group is present in four areas: the automotive sector, which represents more than 50% of the activities within the group, distribution of pharmaceuticals, which accounts for 25 to 30%, CFAO technologies with 15% share, and finally, the remaining percentage is divided between industrial activities such as breweries in Congo and industries specialized in plastics.

CFAO Automotive Côte d'Ivoire illustrates the image of the group very well because the company finds itself in all the business activities mentioned above, roughly with similar proportions to the group. The company holds seven subsidiaries (four in the automotive industry, one in the distribution of pharmaceutical products, one in IT, and one in the plastic manufacturing sector). These subsidiaries represent the biggest manufacturers in the automotive sector: TOYOTA, MITSUBISHI, ISUZU, FUSO, DAF, YAMAHA, PEUGEOT, CITRÖEN and BRIDGESTONE, technological companies such as OTIS, IBM and CISCO as well as BIC products, razors and pens, made under industrial license. Other sectors are under study at the moment, but it is too early to discuss them here.

What is the mid-term strategy for CFAO Automotive Côte d'Ivoire?

Regarding the automotive sector, it is important that all the country’s subsidiaries adopt and implement the international standards so that they may become modern sites equal to their European counterparts. In a market focused on low-price products that are often made in China, our differentiation derives from an excellent quality of service and country-wide service network. It is imperative for CFAO Automotive Côte d'Ivoire to always aim for the highest quality in services and to expand our network in the interior of the country in order to maintain our market share.

In the IT sector, we are always on the edge of progress and constant improvement. CFAO Automotive Côte d'Ivoire is involved in high-tech communication and IT projects. We have major clients with whom we create innovation. We have big projects in this area and therefore do not foresee change in the short-term strategy.

What are the projects that have been put in place?

In the area of communication, CFAO Côte d'Ivoire has installed an integrated solution for all those who want to transmit voice (Voice over Internet Protocol - VoIP) as well as data. For example, the company has been an important player (subcontractor) during the collection of electoral results. The company’s work varies from the development of an amphitheater with instantaneous translation to the creation of a radio system that covers a wide range of clients.

There is also "internet banking", which is gaining momentum as bank subsidiaries spread all over the country. If a client or a company wants to develop an internal communication network with headquarters, then the company proposes solutions for transmitting VoIP or transfers data within the company.

What about the pharmaceutical branch?

The company is planning to construct a new building to fit its needs. Our expectations are to improve delivery delays to more than 800 pharmacies in the country. We are developing both alternative pharmacy and generics.

The plastic industry has been subject to some difficulties. We had to re-centralize our range of products by abandoning those that needed new equipment which was too costly in comparison to their profitability.

The company remains in constant search for development projects that might arise. On this subject, the group follows a simple rule of common sense: projects in new sectors must not hinder those in existing activities.

We talked about uncertainties being a major factor. What are the challenges for CFAO Automotive Côte d'Ivoire?

The company offers high-end products (demand is very elastic) and it is normal that, due to uncertainty, clients think twice before making a decision. For example, up until a few days ago, insurance companies did not cover theft. Everyone hesitates in buying expensive cars until the security is completely and perfectly re-established.

As soon as this becomes reality and traveling across the country is both easy and safe, CFAO Automotive Côte d'Ivoire will re-open in Bouaké. This way the company’s presence can grow in the Center and in the North, particularly in the mining and agricultural sectors.

The company is also planning on re-launching the search for agents who can represent the company in big cities. In order to succeed in this project, it is necessary to have a free exchange of people and goods. In other words, security is essential.

What makes a client choose you instead of one of your competitors? What is your strength? What can you offer more?

As it has been present in Africa for more than 120 years, CFAO Côte d'Ivoire has become a real brand. Take the automobile as an example. The company’s first representation dates back to 1914 in Abidjan. It will soon be a century since the company has been in this sector and the country. CFAO Automotive Côte d'Ivoire has survived each and every crisis without ever having to stop.

CFAO is seen as a solid group with experienced staff. Clients know that they can expect quality, a wide range of services and reliable support to listen to their concerns and problems. Generally, the company’s services are more expensive than those of its competitors but we also offer an excellent quality and service.

Nowadays, the Ivorian clientele has the same demands and expectations as the European clientele. Therefore, CFAO works towards the constant improvement of its sites as well as the standardization of technical equipment. In the same way, the staff of CFAO is being permanently trained in technical skills and management in order to always follow the company’s methods.

This human and material investment creates trust with manufacturers who chose CFAO to represent them and legitimize the company with their clientele.

Do you have a national network?

Unfortunately, the present network is limited to Abidjan. The national network was damaged during the crisis and the deterioration of the country forced the company to close some agencies in the interior of the country that could not be supplied and maintained.

As discussed earlier, it is a challenge that CFAO Automotive Côte d'Ivoire hopes to overcome by 2012. Proximity is a component of the services given to clients and as service is the company’s best asset, it must not wait; CFAO Automotive Côte d'Ivoire intends to reopen its offices in Bouaké during the first semester of 2012.

What is your last message and your vision for the CFAO Automotive Côte d'Ivoire?

The vision for the future of CFAO is inspired by its past. The group has always been attentive to the issues of its time and has been able to spin off its activities several times in the past.

Set up a century ago, the group has passed from mass distribution (loincloths and basic merchandise) to more sophisticated fields, either because the product itself was evolving, such as automotive and offices, or because the mode of distribution needed specific know-how, for example, pharmaceutical distribution and computer sciences.

CFAO has always studied which sectors to abandon and in which ones to enter. Everything evolves rapidly and the company must analyze this perpetual movement, listen to its clientele, be aware of the client’s needs as well as the continent's needs in order to adapt the nature and form of its activities to remain an important asset.

There is no doubt that some projects, which are not possible to discuss at the moment, are constantly under study. Projects are outside of the usual activities of the group. Based in the head office, this "analytical" department ensures a technological and economical surveillance and stays aware of new opportunities. Everyone knows that in the jungle, it is not the biggest animal that eats the smallest one; rather, it is the fastest one who gets its prey.

The centralized organization does not stop at the borders. When strategic choices are carried out, they are applied in the majority of the countries to ensure a maximum effect of synergy. Each collaborator can therefore be confident that the future is bright. As it is often said, a happy collaborator makes for happy customers!