Moroccan and Tunisian businesses have an extra opportunity to build their confidence and be more competitive. It’s thanks to the EBRD’s Enterprise Growth Programme (EGP) teams, which have now started the first projects to help local enterprises achieve ambitious business plans.
“We can say that small and medium-sized enterprises (SMEs) are the Tunisian economy: their contribution to the GDP is around 73 per cent and they employ around 3 million people,” explains Farouk Zouhir, the young deputy managing director of Sotupa. He represents the third generation of the company established by his grandfather and a pool of Tunisian pharmacists in 1970 to manufacture cotton hygiene products.
Now Sotupa, which is based in Tunis and Monastir, wants to strengthen its Neva brand of products. Mr Zouhir explains, “Our objective is to increase our standards in terms of management practices to compete with international companies outside Tunisia. We want to establish a long-term plan to become one of the leaders of the Maghreb region.
“The EGP will allow us to benefit from best practices advice from a senior professional. This is a unique opportunity to have an external evaluation of our company and its capabilities. We also hope to benefit from the vast network of the EBRD in the region to expand our business.”
Meanwhile in Morocco, the EGP team is working with Folly Fashion, a company operating in the women’s clothing sector which blends modern design and traditional inspiration under the brand Marwa. The firm wants to use the advice of an industry specialist to expand its business. It is particularly keen to overcome the bottlenecks that slow down production and shop replenishment.
“The challenge is to cope with the rapid growth of the number of stores in Morocco and abroad, streamlining processes and bringing management to the best international effectiveness standards,” says Pedro Almeida, EGP Team Coordinator for both Morocco and Tunisia. “This project will take the company to a totally new level of performance and market leadership.”
The aspirations for a stronger performance and more modern business-making have the potential to make a huge difference to these countries. More competitive businesses also have an impact on job creation, so important in countries where the frustration of unemployed people was one of the sparks of the Arab Spring. In Morocco and Tunisia, unemployment among university graduates reaches 40 and 44 per cent, respectively. In this context, Folly Fashion and Sotupa’s expansion plans can contribute to social stability by providing employment.
“The development of our company will certainly create many jobs directly but also indirectly,” says Khalid Chafiq, Folly Fashion’s deputy managing director, making a point in case. “Our production is mainly outsourced, which means the increased demand will allow our sub-contractors to significantly expand their business.”
This is just the beginning for the EGP in Morocco and Tunisia, whose programme in the southern and eastern Mediterranean (SEMED) is generously supported by the EU through the Neighbourhood Investment Facility (NIF). Since activities started in September, seven projects have been approved in Morocco and five in Tunisia, in sectors as diverse as confectionery, agribusiness and ICT.