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Country Commercial Guides for FY 2000:
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CHAPTER V: LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
1. Best Prospects for Non-Agricultural Goods and Services
1.1 Machines/Mechanical Apparatus/Engines: Air Conditioning and
Refrigeration Equipment, Computer equipment and Peripherals and
Food Processing Equipment 1.2 Automobiles/Mining and Agricultural Equipment 1.3 Building and Construction Equipment and Materials 1.4 Energy/Oil and Gas Field Services 1.5 Pharmaceutical Products 1.6 Plastic Materials and Resins 1.7 Paper and Paper Board 1.8 Agricultural Chemicals 1.9 Cosmetics and Toiletries 1.10 Telecommunications Equipment 1.11 Professional Services 1.12 Used Clothing 1.13 FranchisingThe estimates below were derived from the Ivorian Ministry of Economy and Finance's Customs Office statistical data. Due to irregularities in these statistics, some markets could be increased as much as thirty percent in order to reflect the flow of goods more accurately. Also, the figures for U.S. imports do not accurately reflect the goods that are transshipped via European intermediaries, namely France, the Netherlands, and Belgium, with little or no value added. Affected sectors include agricultural equipment, pharmaceuticals, computers, and cosmetics. Customs statistical data are available through the first eleven months of 1998.
Due to the anomalies of the existing Customs reporting system, several best prospects were combined under the Ivorian categorization scheme. They are reported as such below. The customs statistics follow the Harmonized System. Statistics recorded by the U.S. Department of Commerce do not.
In 1998, total imports to Côte d'Ivoire were estimated at CFA/Franc 1,769 billion (USD 3 billion). U.S. exports were estimated at CFA/Franc 87 billion (USD 148 million), occupying the fourth place with 5 percent behind Germany with 5.2 percent. France was the major supplier with a 28 percent share and Nigeria was second with 11 percent, consisting almost entirely of crude oil. Principal U.S. exports included oil production equipment, agricultural commodities, plastic materials and resins, paper and paperboard. Since the devaluation of the CFA franc in January of 1994, many importers are taking a greater interest in sourcing from the United States, with Asian countries gaining ground in mass consumer goods. The exchange rate used for 1998 was one USD equals CFA franc 588.
Special note: In the following tables, some best prospects are grouped or combined with other sectors. The Ivorian statistical data does not provide accurate figures for some specific sectors. For imports of services, or other data that are not recorded by Customs, the amount shown is an estimate based on unscientific surveys of the Ivorian market. End note.
1.1 - Machines/Mechanical Apparatus/Engines: Air Conditioning Refrigeration Equipment Computer Equipment and Peripherals and Food Processing Equipment (CPT, ACR, FPP)
(USD Million)
1997
1998
1999E
D) Total Market Size
339
395
460
E) Total Local Production
0
0
0
F) Total Exports
12
0
0
G) Total Imports
351
395
460
H) Imports from the U.S.
20
22
25
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
The Ivorian computer market is very dynamic and the distribution channels are widely dominated by about hundred small and medium size distributors as well as few subsidiaries.
The market for computers and peripherals is estimated at USD 27 million annually, and features a wide range of brands. Major brands include American Dell, IBM, Compaq, HP, Apple, Packard Bell, Digital, Microsoft and Oracle. Other brands include French Bull and Italian Olivetti. Products from East Asia are entering the market with moderate prices.
The air-conditioning and refrigeration market has grown, especially with the boom in housing and construction as well as in the agro-industry and fishing sector for storage capacity. Vegetables and fruit are being processed more often locally despite the fact that there is still a need for food-processing equipment. Market share: France leads the market, followed by Hong Kong, South Korea, and the United States
Special note: In the above statistics, the market for used refrigeration and air-conditioning equipment is not taken into account. Used refrigeration and air-conditioning equipment is primarily imported from Europe and marketed at moderate price levels. No statistical data are available for these imports, although the market is expected to grow over the next two years.
1.2 - Automobile/Agricultural and Mining Equipment (AUT, AGM, MIN)
(USD Million)
1997
1998
1999E
D) Total Market Size
237
229
234
E) Total Local Production
0
0
1
F) Total Exports
17
13
0
G) Total Imports
254
228
233
H) Imports from the U.S.
10
11
12
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
Beginning three years ago, cars and light trucks (sport utility vehicles) manufactured in the United States by Chrysler, General Motors, and Ford have all been represented in the Ivorian market. Their local dealers have been able to penetrate the market and additional marketing efforts must be taken to increase their market shares. Three years ago, the liberalization of the market for used cars and trucks favored a significant increase this category of vehicles. In 1996, the number of imported cars reached 17,123 and grew to 19,138 in 1997. Car dealers and importers have pressed the Ivorian government to allow the importation of used cars of less than seven years. With an improved economy, the demand for new cars, agricultural tractors and mining equipment continues to keep the same pace of growth.
Over the last two years, the privatization program of agricultural public companies resulted in significant investments for capital expenditures and equipment. Two major agricultural state companies were privatized last year. The first was CIDT, the monopoly cotton processor which was spilt into two companies and which sold for a total of USD 89 million. The second was Sebovia, a former state dairy which sold for USD 170,000. In addition, companies like Cargill have invested in the agro-industry for cocoa processing (projected USD 60 million investment) due to the liberalization of the sector. Finally, there have been indications that a number of medium-sized producers are moving into production and processing (often using farming contracts to ensure supply). These companies are investing in a number of agro-processing sectors including milk and milk products, cashew and nut production/processing, and soap production to name a few. This is a move away from traditional banana, pineapple, and rubber plantations, from small landowner coffee and cocoa growers (and their cooperatives), and from large centralized monopolistic processors which have traditionally been the mainstay end-users in the farm equipment and food processing sector. Thus, sales for medium-sized food processing equipment is a newly growing sector, although its actual market size cannot be estimated at present.
Finally, most of the growth in the mining sector is currently in exploration rather than exploitation. Côte d'Ivoire is part of the Precambrian West African base (1.6 to 3.2 billion years old) which is famous for its wealth of useful mineral resources. As of 1996, initial explorations by the Government had found nearly 70 mineral deposits including but not limited to gold (0.8 to 3.54 million tons), diamonds, iron (50 to 700 million tons), lateritic nickel (2 to 250 million tons), magnesian nickel (100 million tons), copper and nickel (11 million tons), manganese (100 million tons), bauxite (1.35 to 650 million tons), and glass-making sand (240,000 and 638,000 tons). Other deposits of tungsten, cobalt, tin, rutile, ilmenite, precious stones, and ornamental stone also exist. The new mining code has favored more investments through a series of incentives and tax exemptions. In 1997, the "Financial Times" rated Côte d'Ivoire as a low political and security risk county for mining companies. Several foreign companies have made investments or are planning to invest in the country to exploit important mining resources with the gold and nickel sectors being the most active. The entire West African region is attracting an increasing share of the world's exploration budgets. The estimated total expenditure in mining exploration in West Africa has increased from USD 1 million in 1994 to USD 17 million in 1997.
Market share: France (30 percent) for cars and tractors, Japan (31 percent) for cars only, Germany (7 percent) for cars and tractors and the United States (10 percent) for tractors and automobiles. The number of foreign car dealers increased from 15 to 17 and brands marketed from 35 to 44 during the last two years.
1.3 - Building Construction Equipment and Materials (BCE)
(USD Million)
1997
1998
1999E
D) Total Market Size
212
239
267
E) Total Local Production
100
120
140
F) Total Exports
77
81
86
G) Total Imports
189
200
213
H) Imports from the U.S.
11
15
19
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
The building and construction industry has experienced a 25 percent growth during the last three years. Several infrastructure projects including the twelve major projects of the "Elephant of Africa" have been already awarded or are being implemented, with an estimated investment which could total USD 600 million over the next five years. Currently, several infrastructure projects are under the bidding process and could generate significant business opportunities for suppliers of heavy construction equipment. Since 1991, the Ivorian government has launched a privatization program of sixty public and parastatal companies. Following privatization, sectors such as telecommunications, air, road, railways, and maritime transport experienced increased private investment in infrastructure and equipment. With the liberalization of the telecommunications sector, private telecommunications companies (cellular, paging, and data transmission) have made significant investments. Airport of Abidjan managers are rehabilitating and modernizing the current airport facilities. In the energy sector, several oil companies working offshore have invested in oil, gas, and petroleum equipment.
1.4 - Energy/Oil and Gas Field Services (OGM)
(USD Million)
1997
1998
1999E
D) Total Market Size
N/A
N/A
N/A
E) Total Local Production
N/A
N/A
N/A
F) Total Exports
N/A
N/A
N/A
G) Total Imports
N/A
N/A
N/A
H) Imports from the U.S.
N/A
N/A
N/A
RELIABLE STATISTICS UNAVAILBLE
See Best Prospects #2 - Extractive Equipment. In the past 5 years, several oil and gas projects have come into production favoring the importation of oil and gas field equipment and increasing the use of services to the oil and gas industry. Ocean Energy's Lion and Panther gas fields officially came into production in 1995 and the Apache/Bouygues (French) Foxtrot field (1.15 mn cubic meters/day building to 1.4 mn cubic meters/day in 2001) came on line in December 1998. A Straddle plant for the Lion gas field production came on line in late 1998 with the possibility of producing about 25,000 mt/year of LPG. The gas supplied by both companies currently goes mainly to power electrical generating plants in Côte d'Ivoire. These projects have favored the importation of oil and gas field equipment and services. In addition, a re-development of Ranger's Espoir field is currently in the works. In early 1999, a theoretical determination was made by the Council of Ministers to allow "open access." This decision essentially paves the way for gas sales to Ghana through a proposed gas pipeline from Côte d'Ivoire to Ghana. The construction of this pipeline may be tendered in late 1999, and the Ministry of Mining and Petroleum Resources recently engaged Penspen (British) to prepare a feasibility study for the project. The current estimated production life of these gas sales to Ghana is around 10 years. Proven gas reserves are currently thought to be around 1.3 trillion cubic feet, with probable reserves potentially adding twice that amount - although this will almost certainly change with additional exploration (see below). This pipeline is considered the first phase of a larger pipeline (the West African Gas Pipeline) which would run from Nigeria to Ghana and eventually reverse the flow of gas to Côte d'Ivoire with Nigeria ultimately supplying Côte d'Ivoire. Total growth in demand for sales of electricity (most gas is currently used for electrical generation) for the domestic market has been at least 9 percent for the last three years. Finally, there are several smaller distribution pipeline projects being proposed by various parties. However, beyond these projects there is currently a lull in proposed new oil and gas production projects.
The largest potential opportunities for gas and oil are currently in exploration; not production. The well-attended Offshore West Africa '99 conference and exposition held on March 23rd through 25th highlighted numerous significant opportunities in oil and gas licensing offshore throughout West Africa. Average reserves of stand-alone future deepwater prospects in all of West Africa are estimated at 500 mn bbls, compared with the world average of 150 mn bbls and Brazil with 400 mn bbls. A current estimate of West African deep-water reserves notes that these reserves represent the largest share (14 percent) of the world's total off-shore reserves awaiting development for 1999-2007 (Oil and Gas Journal, Jan 18, 1999). With the availability of additional speculative data and new analysis of off and on shore data, along with the changing technology which is making deep-water drilling economically viable, the deep-water shelf area of Côte d'Ivoire has shown some exciting potentials. Vanco Energy (along with smaller U.S. Xpronet) recently signed a production-sharing contract for exploration of two deep-water blocks (CI-109 and CI-112). Shell, in partnership with Ocean Energy, is drilling the first deep-water test well offshore in block CI-105 in mid-1999 and structures look promising. Offshore Côte d'Ivoire may have a licensing round later this year for several blocks (CI-206, CI-205, and CI-100), although blocks are also open for negotiation. Blocks CI-206 and 205 were originally one block (CI-204) which was split due to the return of survey data which has shown separate prospects in each area. Additional blocks in shallower water remain open with prospects. There are also a number of onshore blocks for which new seismic data are being shot by the Chinese in conjunction with Petroci. New data and reprocessed data on all these blocks are being developed and should be available very soon.
By the end of 1999, the only refinery company, Societe Ivoirienne de Raffinage (S.I.R), will be privatized. This well-managed company is currently extending and augmenting its refining capacity and has signed several agreements with various American firms for these refurbishments and extensions. The Government's ambition is to bring the national oil and gas refining capacity to 10 million tons per year by 2005.
1.5- Drug/Phamarceuticals including Generic Drugs (DRG)
(USD Million)
1997
1998
1999E
D) Total Market Size
104
107
113
E) Total Local Production
6.2
7
7.5
F) Total Exports
0.1
0.4
0.5
G) Total Imports
98
100
105
H) Imports from the U.S.
0.2
0.3
1
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
Conflicting information makes it difficult to determine the size of the drug market in Côte d'Ivoire. Data from import agencies and Government sources estimate the size of the market at around USD 104 million in 1997. Insider industry sources estimate that the market may be as large as USD 200 million. Total exports may be underestimated. Only one company (CIPHARM) produces pharmaceutical products in Côte d'Ivoire. A second producer went out of business in 1997. Approximately 80 percent of the market is private and 15 percent is public with another three percent going to the Army and 2 percent for various other groups such as vets. There are only three approved importers of drugs into Côte d'Ivoire. These are Laborex with about 75 percent of the private market, COPHARMED and GOMPCI (bankrupt). The rate of growth in the market is estimated by industry sources to be around 7.5 percent a year. The gradual familiarization and use of generic products is becoming popular and they are being sold by local pharmacists. Foreign pharmaceutical companies and laboratories export from Europe, mainly from France. A competitive tender process usually in December/January (over 100 companies bidding in 1999) fills the public sector needs for pharmaceuticals. Official statistics provided by the Ivorian Ministry of Health show that approximately 4,200 products are sold in the country, chiefly antibiotics, painkillers, and anti-parasitic drugs.
1.6 - Plastic Materials/Resins (PMR)
(USD Million)
1997
1998
1999E
D) Total Market Size
105
116
118
E) Total Local Production
70
85
90
F) Total Exports
80
90
95
G) Total Imports
115
121
123
H) Imports from the U.S.
21
19
22
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
Imports consist primarily of PVC, polyethylene, hard density polyethylene, polyethylene and resins. These products are used by local manufacturers to make plastic consumer products, plastic bags, plastic glassware and containers for the food processing industry. See Best Prospect #1. Market share: France leads the market with 30 percent, followed by the United States at 16 percent, and Belgium with 10 percent. There is little transshipment in this sector.
1.7 - Paper and Paper Board (PAP)
(USD Million)
1997
1998
1999E
D) Total Market Size
148
152
160
E) Total Local Production
70
70
75
F) Total Exports
49
47
48
G) Total Imports
78
82
85
H) Imports from the U.S.
11
12
12
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
There are no paper mills which produce raw paper material in Côte d'Ivoire. Thus, the total local production mentioned above consists of transformed imported raw paper material made into toilet paper, notebooks, boxes, packages and other consumer items. Over the last two years, exports from Côte d'Ivoire of major agricultural commodities and agro-industrial products has increased and consequently favored the increase in the import market for raw paper and paperboard. Total imports for 1998 included cement bags, kraft paper for bananas and pineapple packaging, photographic paper, and printing paper for newspapers, magazines, and books. Distributors of paper for photocopiers, fax machines, calculators, and point of sale systems and companies which transform raw paper into paper products. Market share: France 30 percent, followed by U.S. 15 percent, and Finland 12 percent.
1.8 - Agricultural Chemicals (AGC)
(USD Million)
1997
1998
1999E
D) Total Market Size
69
80
86
E) Total Local Production
50
60
65
F) Total Exports
54
59
62
G) Total Imports
61
74.5
81.5
H) Imports from the U.S.
15
20
26
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
See Best Prospect #2 - Agricultural Equipment.
The importation of agricultural chemicals has increased in each of the past four years. From 1997 to 1998, imports increased 22 percent. Recent changes in the ownership of many parastatal companies and increasing private sector investment in the modernization of the agricultural sector have increased the use of agricultural chemicals and modern farm equipment. Ivorian farmers grouped in cooperatives and professional associations, and large companies involved in agro-industries are the main end-users. Best sales prospects range from fertilizers, to fungicides, to orthophosphates. The market for agricultural chemicals is supplied by various countries.
In 1998 and 1997, Russia and the United States essentially tied as the leaders in the fertilizer market. In 1997, Russia and the United States each supplied about 25 percent of the market, and in 1998 the United States and Russia each supplied about 27 percent of the market. Other nations supplying fertilizer in 1998 included Senegal with 15, and the Netherlands with 9.5 percent. In 1998, France's share of the market fell behind Germany and Venezuela. Of the imports into Côte d'Ivoire, the United States leads in fertilizers of animal origin, sodium nitrate, superphosphates, hydrogen-ortho-phospates, and other mineral fertilizers. In 1998, a large percentage of the total market for fertilizers was exported to (in order) Mali (USD 30 million), Burkina Faso (USD 20 million), Cameroon (USD 1.2 million) and Guinea (USD 1.1 million).
1.9 - Cosmetics and Toiletries
(USD Million)
1997
1998
1999E
D) Total Market Size
64
74
84
E) Total Local Production
88
105
120
F) Total Exports
47
65
80
G) Total Imports
25
34
44
H) Imports from the U.S.
1
1
2
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
U.S. cosmetic and toiletry products have good potential for exports to West Africa. The Ivorian market is diverse, with an active local industry which exports a portion of its production to neighboring countries. Key imported products for use by local manufacturers include essences and perfumes. Finished imported products include hair-care products, powders, perfumes, skin lotions, pomades, creams and oils. Although the rural population largely uses inexpensive, low-quality, locally-made pomades, numerous beauty salons and professional schools are symbols of modern, state-of-the-art body care services. Many African retailers import container loads of U.S. cosmetics from multi-line distributors in the United States, often at lower prices than those available from local distributors or from manufacturers in the United States. Few U.S. firms have established a coherent agent/distributor network in West Africa, preferring instead to market through their European subsidiaries or distributors. Local distributors or importers are generally well managed, and their sales forces and staff know the local market constraints very well. French L'Oreal has a subsidiary in Côte d'Ivoire that manufactures, packages and distributes cosmetic products. Marketers of cosmetic and beauty products in Côte d'Ivoire can be divided into four principal groups: Several high-end specialty retailers/salons which compete based on price and service for the portion of the population seeking expensive, brand-name cosmetics; Supermarkets/Department Stores which carry a limited range of high-quality brands, both domestic and imported; Pharmacies with nationwide and regional coverage, but which limit the number of brands available and are often not the first place to which urban consumers turn when seeking beauty products; and small neighborhood stands/salons selling (informally) imported or low-quality, locally made product.
1.10 - Telecommunications (TEL)
(USD Million)
1997
1998
1999
D) Total Market Size
15
41
56
E) Total Local Production
0
0
0
F) Total Exports
9
10
14
G) Total Imports
24
51
70
H) Imports from the U.S.
5
6
8
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
The Ivorian telecommunications market, estimated at USD 56 million, is dominated by European companies. After the privatization of the national telecommunications company, CI-Telcom, in January 1997 (awarded to France Telecom), the telecommunications market has shown its potential for growth for the next five years. CI-Telcom has already invested about USD 50 million in the renovation and extension of the existing telecommunications network. The market is growing at a fast pace, mainly in the information technology sector, as well as several value-added services including cellular phone, paging, data transmission, satellite telephony, and a dozen Internet service providers now actively operating in this sector. If U.S exports through European-based operations are included, U.S. equipment and services exports to Côte d'Ivoire total approximately USD 7 million. Basic networking equipment, such as central office switches, customer premises equipment, microwave bay stations, and data communications equipment, have been and still are provided by French and German companies which have regional sales and service offices in Côte d'Ivoire. Commercially sold equipment includes telephone sets, switching equipment and external line plants; most of which is European, although there is one small local manufacturer of telephone sets. Most of the equipment bought by the government is financed by international institutions such as the World Bank, the African Development Bank, the French aid agencies, or the Ivorian government itself.
The obsolescence of equipment used by public television and radio agencies could be overcome by the upcoming privatization of public television stations and the liberalization of this sector, scheduled for this year. There are a dozen private broadcast radio stations, and satellite dish owners receive international television programs.
1.11 - Professional Services - Advertising, Engineering, and Consulting/Financial Services
(USD Million)
1997
1998
1999E
D) Total Market Size
40
44
48
E) Total Local Production
28
30
33
F) Total Exports
0
0
0
G) Total Imports
12
14
15
H) Imports from the U.S.
1
1
2
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
With the increased modernization of the Ivorian economy, managers need expert advice for everything from financial reporting to marketing to project management. All of the "Big 5" accounting firms are present in Abidjan, as are most of the major U.S. advertising firms. Additionally, there are local accounting, advertising and law firms that have become increasingly sophisticated and competitive with the correspondent and branch offices of the global giants. The need for technical expertise for large, complex projects (e.g., infrastructure, energy, environmental) continues, and many U.S.-based engineers and consultants are hired as subcontractors to design and implement project work. The increased use of BOT arrangements for large projects has led to the need for feasibility studies and attention to design and implementation to ensure success of the projects. U.S. consulting firms have proven competitive in this sector, and can increase their market share if they monitor developments in new public/private projects, build relationships with firms already operating in Côte d'Ivoire who may need their expertise, contact U.S. firms operating in Côte d'Ivoire, establish contact with other decision makers in Côte d'Ivoire, and/or establish their own operations in Abidjan.
1.12 - Used Clothing (CLT)
(USD Million)
1997
1998
1999E
D) Total Market Size
2.0
2.5
3.0
E) Total Local Production
0.0
0.0
0.0
F) Total Exports
0.0
0.0
0.0
G) Total Imports
2.0
2.5
3.0
H) Imports from the U.S.
0.7
1.0
1.5
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
After many years of being prohibited, the importation of used clothing was completely legalized in 1993. In addition, import quotas fixed by the Ivorian Government were suppressed in 1997 favoring the liberalization of used clothing market as well as the importation with no restriction. However, importers need a fumigation certificate from the exporter prior to the importation of the merchandise is required. Ivorian consumers are interested in trousers, sport symbol T-shirts, jeans, and pants. Large, open-air markets specialized in selling used clothing are found throughout the country. The majority of buyers are from low-income groups and are looking for affordably priced items. The total market size of used clothing appears to be under-estimated given the undocumented importation of goods and apparent fraud. Local re-sellers import used clothing from the United States (40 percent), Canada (12 percent), and Italy (12 percent). There are more than twenty major importers active in the sector. Most of the used clothing (and footwear) business is still conducted by the informal sector and by foreign residents in Côte d'Ivoire.
1.13 - Franchising (FRA)
(USD Million)
1997
1998
1999E
D) Total Market Size
N/A
N/A
N/A
E) Total Local Production
N/A
N/A
N/A
F) Total Exports
N/A
N/A
N/A
G) Total Imports
N/A
N/A
N/A
H) Imports from the U.S.
N/A
N/A
N/A
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES
Franchising is not commonly practiced, except for car rental agencies and a few non-name brand fast food restaurants. Generally, the lack of financing available to the Ivorian commercial market and the limited understanding of the concept of franchising, has stymied sales in this market. Nevertheless, among Ivorian consumers, there is a strong interest in well-known American brands many of which are maintained through franchises. As Ivorian sellers seek to supply consumer demand for U.S. or U.S.-like product, the potential for franchising arrangements is a growing rapidly. Concerning business to business franchises, the Ivorian economy, in many sectors, is organized with a few large manufacturing or trading businesses and many very small businesses poorly capitalized providing poor quality products and services. According to the largest Ivorian industrial association, the Federation Nationale des Industries de Côte d'Ivoire, there is a lack of medium size companies providing quality services to these larger businesses. In general, these larger companies are looking for other medium/small enterprises to enter the market and provide reliable and quality assured sub-contracting and business services allowing the largest companies to focus on their core business. Many U.S. franchise operations which provide services to other businesses could find this an active market after some initial education is undertaken.
However, serious attention to the economics of each venture is still important as the targeted markets for many consumer service and product franchises are small. A recent example of franchising occurred with the opening of a Tati store, a French store specialized in low-priced clothing and garments, in Treichville. This store closed after approximately 2 years of operation partly due to its limited target audience, poor quality merchandise, competition with better quality, reasonably priced used clothing, and financial factors associated with its parent company.
2. Best Prospects for Agricultural Products
2.1 Rice 2.2 Wheat 2.3 Corn 2.4 Whole Milk Powder 2.5 Alcoholic Beverages 2.6 Varietal Meats 2.7 Canned and Dry Goods for Groceries
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
Rice is the main staple food in Côte d'Ivoire. The import market was fully liberalized in January 1997. The U.S. is especially competitive in brown (decorticated) rice, medium quality (10-20 percent broken) milled rice, and consumer-pack deluxe rice. The main competitors are India, Vietnam, and Thailand, although all, except Thailand, mainly sell into the low quality, ordinary rice market. White rice, polished from U.S. brown rice, has a well-established reputation.
2.2 - Wheat
PS&D Commodity Heading
Wheat
0410000
1997/98
1998/99
1999/00
A) Total Market Size
260 TMT
280 TMT
300 TMT
B) Local Production
0
0
0
C) Total Exports
0
0
0
D) Total Imports
291 TMT
300 TMT
310 TMT
E) Imports from U.S.
20 TMT
25 TMT
30 TMT
2.1 - Rice
PS&D Commodity Heading
Rice, Milled
(0422110)
1997/98
1998/99
1999/00
A) Total Market Size
860 TMT
880 TMT
900 TMT
B) Local Production
390 TMT
370 TMT
420 TMT
C) Total Exports
0
0
0
D) Total Imports
560 TMT
540 TMT
520 TMT
E) Imports from U.S.
33 TMT
15 TMT
20 TMT
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
Wheat and flour imports were liberalized in May 1995, ending a monopoly by the local flour mill. Continuing the liberalization process, import duties on wheat flour were reduced from 30 percent to 20 percent in December 1997, but maintained at 5 percent for wheat. The decreased duty make imported flour competitive with flour produced by the local mill. This flour mill is owned by a Monaco-based company with several mills in West Africa and close ties to the French wheat industry. High protein U.S. or German wheat is imported for blending with low protein French soft wheat. The percentage of U.S. or other high protein wheat varies from 10 to 25 percent depending on the relative costs. In 1999, the flour mill started producing a high-protein flour for baking of Fanti bread, which uses 40 percent U.S. Dark Northern Spring wheat. This change should increase annual demand for U.S. wheat by 5,000 MT.
2.3 - Corn
PS&D Commodity Heading
Corn
0440000
1997/98
1998/99
1999/00
A) Total Market Size
640 TMT
660 TMT
680 TMT
B) Local Production
665 TMT
670 TMT
700 TMT
C) Total Exports
23 TMT
10 TMT
15 TMT
D) Total Imports
1 TMT
1 TMT
1 TMT
E) Imports from U.S.
0
0
0
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
Rapid expansion in modern egg and poultry production has boosted compound feed production, rising to 115 TMT in 1997 from 72 TMT in 1995. Local corn supplies, which are mostly used for direct human consumption, are not adequate to meet a year round demand for feed grains. High moisture content and poor quality make local corn difficult to store. While feed millers prefer to purchase locally, they have had to import during the lean season, from April to June. The main import sources are the United States and South Africa. In late 1999 a new corn meal/corn grits mill will come on line. Since it will be producing commercial products for human consumption, corn will have to be imported. This should boost annual imports of yellow corn by 15-20 TMT.
2.4 - Whole Milk Powder
PS&D Commodity Heading
Dairy, Dry Milk
0224400
1997/98
1998/99
1999/00
A) Total Market Size
12 TMT
12 TMT
12 TMT
B) Local Production
0
0
0
C) Total Exports
2 TMT
2 TMT
2 TMT
D) Total Imports
13 TMT
14 TMT
15 TMT
E) Imports from U.S.
0
0
0
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
The Dairy Export Incentive Program provides a much-needed boost to U.S. milk powder exports. Using European Union subsidies, France and the Netherlands dominate the market. Whole milk powder is consumed directly and used in the manufacture of UHT milk, condensed milk, ice cream, and yogurt. Packaging and labeling are vital to success. The U.S. is most competitive in bulk shipments, i.e., 25 kg. kraft paper bags with plastic linings. Dairy products must have the expiration date printed on the packages. Consumer ready products are also popular imports, including concentrated and UHT milk, butter, cheese, ice cream, whole milk powder, and yogurt.
2.5 - Alcoholic Beverages
Name of Sector
PS&D Commodity Heading
Wine and Spirits
(No regular Reporting)
1998
1999
2000
A) Total Market Size
235,000 HL
240,000 HL
250,000 HL
B) Local Production
0
0
0
C) Total Exports
60 HL
40 HL
50 HL
D) Total Imports
235,400 HL
240,500 HL
250,500 HL
E) Imports from U.S.
10 HL
10 HL
10 HL
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
Wine accounts for over 90 percent of spirits imports. Bulk wine from Spain makes up the majority, but there are significant imports of medium and high quality wine from France. As a former colony, the French wine tradition is firmly rooted in Côte d'Ivoire. There are opportunities for U.S. exporters in medium quality wines with ex-winery prices of USD 40 to USD 50 per case. The data above do not include beer which is dominated by local production of around 2 million hectoliters (HL). One market niche which is open for exploitation is light and non-alcoholic beer, as the middle and upper class becomes more weight conscious.
2.6 - Varietal Meats
PS&D Commodity Heading
N/A
1998
1999
2000
A) Total Market Size
14 TMT
15 TMT
16 TMT
B) Local Production
9 TMT
9 TMT
10 TMT
C) Total Exports
0
0
0
D) Total Imports
6 TMT
7 TMT
7 TMT
E) Imports from U.S.
4 TMT
5 TMT
6 TMT
THE ABOVE STATISTICS ARE UNOFFICIAL ESTIMATES.
The U.S. currently has two-thirds of the import market for beef/pig offals and is far and away the largest supplier. Post forecasts slow but steady growth in this market and expects U.S. suppliers to capture an even larger percentage of imports. Offals are sold for further processing and directly to consumers.
2.7 - Canned and Dry Goods for Groceries
PS&D Commodity Heading: N/A
Côte d'Ivoire has the most sophisticated consumer and supermarket infrastructure in West Africa. As Côte d'Ivoire's economy continues to grow, so too will the urban population and the middle class. A niche market is growing for American-style snack foods, breakfast cereals and other consumer products. Supermarkets are growing in importance, particularly in Abidjan. Also, hotel/restaurant and other food service are potential growth areas for these products. Break bulk liner shipping between U.S. Gulf and East Coast, and West Africa started in 1998 making container shipping cheaper and more timely. At present, most of these products come from the EU or South Africa.
3. Significant Investment Opportunities
Over the last four years, three major governmental agencies have been instrumental in promoting foreign investment in the country. These are the Privatization Committee, in charge of privatization projects, the Centre de Promotion des Investissements en Côte d'Ivoire (CEPICI), the Ivorian investment promotion center, and the Bureau National d'Etudes techniques de Developpement (BNETD), the major public implementation agency.
Since 1990, the Ivorian government has privatized 54 of 60 companies scheduled for privatization. The Government continues to sell its parastatal companies and divest from private companies in which it holds a substantial amount of shares. The telecommunications sector was privatized in January 1997. Several privatizations have taken place in the agro-industry sector; the sale of two parastatals specializing in rubber production and processing and the Compagnie Ivoirienne de developpement des Textiles, (CIDT), a cotton ginning company. Other projects awarded include the extension and modernization of the Abidjan airport (USD 35 million), the third Azito thermal power plant (USD 275 million), the Riviera-Marcory toll bridge (USD 167 million), the Abidjan-Yamoussoukro highway for (USD 100 million), the Abidjan-Bassam expressway for (USD 17 million) and the Abidjan slaughterhouse (USD 20 million). In addition, the liberalization of the Coffee and Cocoa sector has contributed greatly to new investment opportunities. Cargill recently took advantage of this opening in the sector to site a USD 68 million dollar cocoa processing plant in Abidjan.
The Government plans to sell the following remaining companies by 2001:
- Societe Ivoirienne de Raffinage (SIR), the partly state-owned oil refinery and the largest company in terms of total sales in the country -- the government will sell its majority stake at the end of 1999;
- The local airline, Air Ivoire, which operates with a wet lease plane and crew, is being offered again to bidders--(there were none in the first tender offer);
- GESTOCI, a company specialized in the storage of petroleum products;
- GAZ de Côte d'Ivoire, a company marketing domestic gas;
- SICOGI, a state company involved in housing projects.
Future projects may include: waste water collection networks in several regional cities, connection of the Mali-Côte d'Ivoire and the Guinea-Côte d'Ivoire electrical grids, an Abidjan-Ghana expressway, collection and processing of solid waste in regional capital cities, and other projects. Many of these will be done on a BOT (Build-Own-Transfer) basis. In addition, the tender of a long-term management contract for the Golf Hotel, a 306 bed property with six function rooms, was just let out to bid as this document when to press (June '99). A current list of planned privatizations can be found at BNETD, the Ivorian Investment Promotion Center (CEPICI), or at the Commercial Service in Abidjan. See contact list in Appendix E. Although there are a number of excellent privatization and investment opportunities coming up, be aware that many state-owned enterprises are being restructured in response to their spotty financial record among other problems. Therefore, prior to making a commitment, investors are advised to visit Côte d'Ivoire to gain firsthand knowledge of the country, the company in question, and to work closely with an Ivorian partner and a local attorney.
In Côte d'Ivoire, three types of privatization methods have been utilized. The first is to grant management concessions for large infrastructure operations with no responsibility for overhaul and upkeep (electricity and water). The second type is to liquidate government shares via the local stock market, the Bourse de Valeurs d'Abidjan (petroleum, manufacturing operations). Most recently, the Ivorian government has favored consortium bids with a single or multiple Ivorian investors and one or several foreign partners (rubber plantations, and railway).
According to CEPICI's statistics, 1996 investments estimated at USD 215 million doubled in 1997 and reached USD 443 million, a positive sign of the gradual improvement in the business climate. Along with BNETD and CEPICI's increasing role, Ivorian government officials also implemented a series of structural economic and social reforms. They have encouraged foreign investment through a new investment code with new incentives, and designed a series of major infrastructure projects.
CEPICI and BNETD have made available a series of publications and documents in English, including the new code of investment, the telecommunication code, the mining and petroleum codes, labor costs, and databases, Internet websites, and audio-visual materials. CEPICI has organized two international forums on investment in 1995 and 1997, attracting more than 3,000 participants from all over the world, and will be arranging a trade mission to the United States in the second half of 1999. Although U.S. companies are active in the petroleum and gas sectors and are involved in privatization bids, Ivorian government officials would like to see them involved in agricultural processing, the health sector, and petrochemical industry as well. THE GOVERNMENT OF THE UNITED STATES ACKNOWLEDGES THE CONTRIBUTION THAT OUTWARD FOREIGN DIRECT INVESTMENT (FDI) MAKES TO THE U.S. ECONOMY. U.S. FDI IS INCREASINGLY VIEWED AS A COMPLEMENT OR EVEN A NECESSARY COMPONENT OF TRADE. FOR EXAMPLE, ROUGHLY 60 PERCENT OF U.S. EXPORTS ARE SOLD BY AMERICAN FIRMS THAT HAVE OPERATIONS ABROAD. RECOGNIZING THE BENEFITS THAT U.S. OUTWARD INVESTMENT BRINGS TO THE U.S. ECONOMY, THE GOVERNMENT OF THE UNITED STATES UNDERTAKES INITIATIVES, SUCH AS OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) PROGRAMS, INVESTMENT TREATY NEGOTIATIONS AND BUSINESS FACILITATION PROGRAMS, THAT SUPPORT U.S. INVESTORS.
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[end of document] Note* International Copyright, United States Government, 1999 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
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