Leader General Industry: Paints And Plastics West Africa

Interview with Mohamed Bourgi, Managing Director of Leader General Industry

In your opinion, what are the main challenges for Côte d’Ivoire in terms of security or employment opportunities?

After the post-electoral crisis, the security situation in Côte d’Ivoire was disastrous. There were a lot of burglaries and assaults and people were just trying to survive. In the next month or two, the situation should settle down and then the economy will take off.

What should international investors expect when relocating to Côte d’Ivoire? Do you have any tips you would like to share?

Côte d’Ivoire is situated in the center of West Africa. It is the industrial and commercial centre of West Africa. Investing in Côte d’Ivoire is a smart move given that the country has recently been experiencing an economic revival. Côte d’Ivoire will rise from the ashes, the economy and the sub-region along with commerce, industrial production, etc. will all benefit from this development. Côte d’Ivoire will be the leader for businesses in Africa.

In general, what challenges have you encountered while investing in Côte d’Ivoire?

In general, all the tools necessary to succeed can be found in Côte d’Ivoire. However, starting investments have led to some difficulties.

One of the main issues in Côte d’Ivoire is the communication factor. Sometimes the language barrier and cultural differences make it difficult to communicate with employees.

Furthermore, the lack of industrial space does not allow the business to expand. Leader General Industry is planning to expand, however, there is no land available in Côte d’Ivoire for such expansion. To expand, we would have to move further away from Abidjan and if we do get the land in the end, we do not have the security of tenure. This obstacle once again interferes with the functionality of our business.

Moreover, there were no roads and telephones when Leader General Industry invested in Côte d’Ivoire. Today, Côte d’Ivoire does not have electricity. All these issues affect the business, but as mentioned, everything should be back in place in the next two months. A war comes with costs and consequences, but the we believes that Leader General Industry can still overcome these setbacks.

Also, it is almost impossible to get an approval from a bank regarding credit. Another challenge the business faced in investing in Côte d’Ivoire was the ability to receive all the proper documentation on time.

Additionally, the African market differs from the European market. Financial resources are not available to the mass population and so the average person tends to buy cheap products. Thus the product quality also drops in order to accommodate the market.

Another issue worth mentioning is that the borders are not protected. The war has affected the security of the borders and therefore the market is not restricted either. Anything can enter the country without governmental control.

Finally, the African climate also causes problems. The business must adapt their material to the African climate. If they keep on fixing without adapting their material to the African climate, they are wasting resources.

Could you present Leader Industry General in more detail?

Leader General Industry is a company specializing in SEMCO, PVC pipes, plastics, paints, and its derivatives.

What is your strategic plan? Are you more focused on exportation or importation of your products?

Leader General Industry is always trying to export its products to their African neighbors, and we are always in search of new clients to improve the industry. By improving our industry, we have access to more resources – as a result, Leader General Industry is making its business the most competitive in West Africa.

What makes your industry more competitive than the other similar industries?

Although we specialize in the same products as our competitors, Leader General Industry focuses more on high-end products. For example, our competitors are producers of SEMCO and paint products but Leader General Industry also produces marble and granite.

Leader General Industry products are probably more expensive but some of our clients are bigger corporations. We provide for architectural sites and large enterprises. Also, we deal with French businessmen who invest in the country. Therefore, even though Leader General Industry has the same products as its competitors, Leader General Industry is more industrially focused.

Leader General Industry only works with the best raw materials in the market and always maintains a good quality/price ratio. For these reasons, the business always sells what it manufactures.

In other words, do you claim that your main goal is to expand your industry?

Leader General Industry is enlarging the production capacity of the factory. We have already asked for a bigger space but no spaces were available then and none are available now. However, not long ago, the minister announced on television that he succeeded in obtaining more land for industrial purposes.

Unfortunately, infrastructure planning is very expensive, yet we are hopeful that our good quality and value/price ratio will continue to benefit the company. Our products are used in construction zones. Since the war, the construction market has been on the rise and it is therefore of the highest priority to expand so that the Leader General Industry can accommodate all the needs of its clients.

What are your means of financing?

Leader General Industry has never dealt with banks in West Africa. We invest our own money into the company. As mentioned earlier, it is difficult to get an approval for credit from West African banks. Also, the banks in the country do not specialize in loans but in deposits.

Moreover, the interest rate on a loan in this part of Africa is ridiculously high. For example in Lebanon, the interest rate for financing industrial business is only 7% in 5 years, whereas in Africa it is as high as 12% annually. It is not profitable for Leader General Industry to borrow money from African banks.

What is your commercial strategy? How do you communicate with your clients and how do you promote your product?

In four months, Leader General Industry is planning to install new machines so that we can provide complete service to clients. We also have representatives who visit clients to take their orders and promote products. These representatives also analyze the market and note any changes; this strategy allows our business to stay up to date with the market’s demand.

Are you looking for investors who would invest into your company and what are your objectives – in terms of profitability and development – for the next 3 years?

Leader General Industry wants to triple its production capacity and install a new production unit that will allow the business to manufacture at least twice more than it currently produces in the field of plastics and paint.

Regarding investors, right now Leader General Industry does not have any plans for partnerships. If we ever decide to create a new project, there is the possibility that we would look for new associations. Nevertheless, the Leader General Industry will remain a family-owned enterprise.

Finally, for the future, are you planning on exporting further into Europe and the United States or is your main focus the African continent?

Unfortunately, there is always a persistent problem in Africa. Although there are a lot of items produced in Africa (e.g. cacao), international forecasts remain hesitant towards the African market. The companies need to work on promoting the country and its products. There are international French companies that have started investing in Africa, whether in the media or in the advertising world. This reality is very beneficial because it opens up the door to the outside worlds of Europe, the United States, and Asia. Leader General Industry has a bonus: all of our products respect the French (European) norms. As a result, it will eventually be easier for the Leader General Industry to export elsewhere.