Foreign direct investment (FDI) in the MEDA region in 2003 · MEDA Group of 12 partner countries of the European Union: Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco,

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Foreign directinvestment (FDI)

in the MEDA regionin 2003

ANIMA study n°6 / February 2004

Israël Sztejnhorn / Bénédict de Saint-Laurent

I n v e s t i n F r a n c e A g e n c y

Direct Foreign Investment (FDI) in the MEDA region in 2003

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References The Invest in France Agency (AFII) has been asked by the Commission of the European Communities to develop a « EuroMediterranean Network of Investment Promotion Agencies » (« ANIMA »). The identification n° of the contract is : ME8/B7-4100/IB/99/0304Authors: § Israël Sztejnhorn (consultant) and Bénédict de Saint-Laurent (AFII)

for the writing of the report § Dioline Dorvil, Soizic de Rengerve, Delphine Bréant, Stéphane

Jaffrin (AFII) for the identification of projects and the management of MIPO

§ Contribution of the Moroccan, Lebanese and Maltese IPA to the list of projects

© AFII-ANIMA 2004. Publication prohibited without the written permission of the AFII. All rights reservedISBN: 2-915719-01-2


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AcronymsANIMA Euro-Mediterranean Network of Investment Promotion AgenciesIPA Investment Promotion AgencyFDI Foreign Direct Investment MEDA Group of 12 partner countries of the European Union:

Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Palestinian Authority, Syria, Tunisia, Turkey

MIPO Mediterranean Investment Project ObservatoryCEEC Central and Eastern European CountriesGDP Gross Domestic Product GNP Gross National ProductWIR World Investment Report


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Table of contents

Executive summary : the MEDA region has attracted 275 major foreign direct investment projects in 2003 . . . . . . . . . 7

Sharp turnaround in 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Considerable stakes for foreign investment . . . . . . . . . . . . . . . . . . . . . . . . . 8

1. The first detailed micro-economic appraisal of foreign investment in the MEDA region . . . . . . . . . . . . . . . . . . . . . .11

The approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11The stakes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2. A new start for investment in MEDA in 2003 ? . . . . . . . 13The MIPO base 2003 : a large number of investment announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The attractiveness of the MEDA region seems to be improving . . . 32Confidence rediscovered in the MEDA region? . . . . . . . . . . . . . . . . . 34Figures which seem to testify to a clear improvement in FDI . . . . . 35An indispensable tool for the promotion of investment in MEDA . 36

3. Detailed analysis of the MIPO results . . . . . . . . . . . . . . . 39The « average » project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Analysis by sub-region and country of destination . . . . . . . . . . . . . . 40Analysis by origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Intra-MEDA FDI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Analysis by sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Analysis by type of enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46MEDA « power house » for certain sectors . . . . . . . . . . . . . . . . . . . . . 49The relocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Fore-runner signs of increased investment . . . . . . . . . . . . . . . . . . . . . 52Quality of the FDI projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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4. Desirable improvements for future reports . . . . . . . . . . 55Interest of the MIPO observatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Conditions for the success of the MIPO observatory . . . . . . . . . . . . . 56Proposals for the appraisals to follow . . . . . . . . . . . . . . . . . . . . . . . . . 57

5. Appendix 1. Comparison with the macro-economic results of UNCTAD (WIR) . . . . . . . . . . . . . . . . . . . . . . . . . . 616. Appendix 2. Some significant « success stories » . . . . . 63

Renault produces the « Mégane » in Turkey . . . . . . . . . . . . . . . . . . . . 63Integrated circuits manufactured in Tunisia . . . . . . . . . . . . . . . . . . . . 63Relocation : SQLI installs an offshore hub in Morocco . . . . . . . . . . . 64Orascom projets in Algeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Moody’s in Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Malaysian car assembly line in Syria . . . . . . . . . . . . . . . . . . . . . . . . . . 67A macro- tourist complex in Morocco . . . . . . . . . . . . . . . . . . . . . . . . . 68Tesco sets up shop in Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Carrefour targets Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69Indian acrylic fibre plant in Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Technology transfer in Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

7. Appendix 3. Methodological approach . . . . . . . . . . . . . 75Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75Eventual complements from the MEDA IPAs . . . . . . . . . . . . . . . . . . . 76


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Composed of 12 partners States of the European Union in the South and the East of the Mediterranean, the MEDA region has until now been the poor relation of international investment. Deserted by large numbers of the most competent members of its workforce, little considered by its own elite groups and domestic investors, victim of a disrupted geopolitical context, MEDA has in recent years received 3 to 4 times less foreign direct investment (FDI) than other emerging regions of the world with equal economic fundamentals.

Sharp turnaround in 2003This situation would at last appear to be developing positively, if the results of the MIPO (Mediterranean Investment Project Observatory), created by the AFII in the context of the project ANIMA are to be believed. 275 investment projects were announced in 2003, involving an injection of capital of more than 10 billion Euros and the creation of more than 25,000 jobs –indeed these figures only cover projects where the amount of investment or the numbers of jobs have been published, with the real total being considerably higher. These investments come from international « blue chip » companies, the most often European or American – with more than 50 of them having shown confidence in MEDA in 2003.

Executive summary : the MEDA region has attracted 275 major foreign direct investment projects in 2003


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The MEDA market share, which despite 240 million inhabitants, receivd 3.5 times less FDI in 2002 than the eight countries of Central and Eastern Europe (CEEC) who are about to join the UE (Poland, Czech Republic, Hungary, etc., with 75 million inhabitants in all), would seem to have corrected itself in 2003: the difference with the CEEC countries may only be 1 to 2 times (data acquired in terms of the number of projects, but to be confirmed by the amount of FDI). What is probably more remarkable is the quality of the projects detected, increasingly often linked to the constitution of a MEDA power house – it is very obvious for the automotive industry, for example, – as well as the development of new sectors – such as information technology, call centres, the health industries, etc. The modernisation of the economic structures (a large number of large retail distribution projects), tourism and its corollaries (several projects involving new air liaisons), services to companies also accompany the more traditional sectors (textiles, agro-food, basic industries).

Considerable stakes for foreign investment

The information from MIPO (Mediterranean Investment Project Observatory), available on line at http://www.animaweb.org, reinforces the ANIMA network in its strategy of recovery for the MEDA region. -this strategy consists in helping countries to recover their whole attractiveness.The stakes are considerable. The difference in living standards (GDP per capita) is from 1 to 10 between the two shores of the Mediterranean (in 2001, respectively 2,195 and 21,682 US$ per capita). Such a difference exists nowhere else in the world (the Mexico-USA differential is only 1 to 7), and this is both the risk and challenge which concerns the two shores. Just how do the MEDA countries, most of which have limited budgetary


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means, often allocated in priority to their « infrastructure » in the widest sense, make up this leeway. For several of them, FDI represents the major part of the gross capital formation. It also thus assumes a vital strategic importance, both as a vector of the modernisation of the economic and social fabric, – foreign companies often being used as models – and as an indispensable financial injection in the productive sector.

Executive summary


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The approachSince 1st January 2003, the project ANIMA has been systematically cataloguing the announcements of investment projects in the MEDA1 region. The means used have been a combination of the indicators of the economic intelligence system of the AFII (Invest in France Agency) –based on the flow of main international economic and financial news-, information directly acquired by the ANIMA team, and the data transmitted by certain Investment Promotion Agencies (IPAs), partners of the ANIMA network.The base built in such a way, known as MIPO (Mediterranean Investment Project Observatory), provides the possibility of carrying out, for the first time, an annual appraisal of FDI (Foreign Direct Investment) flows in the MEDA region. This appraisal, which will hopefully be followed by numerous others, allows the characterisation of the investment market trends in the Mediterranean through a micro-economic approach, that of the projects identified (nature of the project, country of origin, of destination, sector concerned, type of investor) –while the only data available until now have been of a macro-economic nature (overall flows accounted for in the national accounts).

1.The first detailed micro-economic appraisal of foreign investment in the MEDA region

1 This region comprises 12 partners countries of the European Union: Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Palestinian Authority, Syria, Tunisia, Turkey.


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This report presents the main elements of the 2003 appraisal, compares the results with the macro-economic data and positions the performance of MEDA compared with other regions in direct competition, especially CEEC (the Central and Eastern European countries).

The stakesA fine understanding of the investment market in the MEDA region is especially necessary since the region undoubtedly suffers from an image deficit which puts off investors. Roughly speaking, when compared with the average of the emerging countries, MEDA receives 3 to 4 times less FDI than its economic fundamentals would appear to merit (population, market, GDP, income per capita, etc.). The political turbulence which undermines the region, the often negative perception held of Mediterraneans –judged to be better equipped for tourism or for trading than for industry-, the frequent confusion between Islam, Islamism and terrorism means that MEDA probably pays a heavy price: injections of capital that do not take place or which are postponed, missed development opportunities from the projects of foreign investors (which often represent a decisive part of gross capital formation).MIPO shows that this must and can change. In reality, many international corporations believe in MEDA or cannot allow themselves to ignore a market of 240 million inhabitants. For example, a Maghreban Valley, to bring to mind what is happening in Bangalore, is in the process of construction in the Maghreb in the domains of call centres, tele-computing, software development. The large European companies, conscious of the inexorable rise in costs in Eastern Europe, are starting to look in a Southerly direction.


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The MIPO base 2003 : a large number of investment announcements The MIPO data base contains 275 foreign investment projects announced, started, decided, or envisaged during the year 2003 for all the countries of the MEDA region. The table below (Figure 1) lists all these projects on several pages, classified by country, and providing the essence of the information useful for the reader. This task requires the following methodological precisions:§ The information supplied has been cross-referenced – often using several announcements-, checked – plausibility, coherence-, and would appear in most cases to be very reliable. Many vague or badly defined projects have been rejected. Only those projects for which a minimum of information is available, an identified investor, his country of origin, the destination, the type of project, the sector, have been taken into account. The great majority of projects are accompanied by a detailed description;§ The only data omitted from or simplified in the table are those which are subject to copyright (integral text of the press release announcing the project, date), which might upset the investor or the IPA concerned (there are a few cases where the name of the company is known to ANIMA, but not mentioned), or where the presentation of the « geography » is complicated (in the case of projects which involve several countries – only the first country mentioned is listed) ;

2. A new start for investment in MEDA in 2003 ?


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A new start for investment in MEDA in 2003 ?

§ In 66% of the cases, the information collected contains a quantitative element –either the amount of the investment or the number of jobs created – which reinforces credibility;§ The pre-projects (announcements made in the condtional tense for projects as yet not entirely confirmed) represent 28 recordings, that is 10 % of the total, and are mentioned in italics.

Despites the efforts made in the collection, this data base can obviously only be a default estimate of the investments announced or made in the MEDA region. In particular, many small and medium-sized projects probably slip through the « mesh of the net » which is rather on the large side (in MIPO, the average amount of FDI is around 100 million €2, which is considerable in a region where the GNP is on average one tenth of that of the EU).Despite these limits, the base obtained in this way, has even more interest since, to our knowledge, it is the first attempt at building a regional data base including clearly identified projects which are referenced in the international press, on internet and in the IPAs. The total number of investment announcements would appear to be relatively high, in a morose world economic context as signalled by world investment reports in recent years (WIR 2002 and WIR 2003). It is difficult to make comparisons between the figures in our study and those obtained by the more global methods of the WIR, but the two methods, which are complementary, should evolve in the same direction.

2 This average is known through excess. It is above all the large « physical » projects where the amount of the investment is announced in the media or on internet. It is rarely announced, for example, for those projects which consist in the opening of a representation office in one MEDA country or another. It is, however, probable that the research method adopted underestimates the investments made by the SME, which create more jobs


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Figure 1. Summary of the MIPO results 2003

Welcoming country

Company / Investor

Origin Project / News title in English Sector Jobs created

FDI (€m)

Algeria Castel France Building of a beer factory at Oued Tlelat

Agro-business

Algeria Scania Sweden Building of a new production plant for trucks

Car manufacturers or suppliers

Algeria Fiat Italy The company returns to Algeria with Ital Motor


Algeria Daewoo USA Increase of Valeo activities and investments in Algeria


Algeria MGE UPS Systems

France Leader in high availability power solutions consolidates its presence in Algeria by opening a subsidiary

Consulting and ser-vices to companies

Algeria Gide Loy-rette Nouel

France (Prospect) A French business lawyer firm considers opening an office in Algeria


Algeria Hikma Jordan Installation of a pharmaceutics plant and R&D unit

Drugs

Algeria Ceva Santé Animale

France A veterinary pharmaceutical leader opens a production center in Sidi Abdellah

Drugs 45 2,0

Algeria IBM USA Computer distribution in par-tnership with French company

Electric, electronic and medical hard-ware

Algeria CNPC China Building of a new petroleum refinery in Sahara

Energy 350

Algeria GE Oil & Gas

USA FE oil & Gas, GE PowerSystem subsidiary, has won a contract of €61 million

Energy 61

Algeria Autokraz Georgian Oil Co

Georgia Opening of a new commercial representation in 2003

Energy 3

Algeria FACT France An air conditioning company invests € 500,000 in Algeria

Furnishing and houseware

Algeria Vitra Sani-taire

Turkey The ceramics leader opens a commercial office in partnership with Samceram


Algeria Orascom Egypt Building of a cement factory at M’sila

Glass, wood, paper, minerals, ceramics

1200 173,9

Algeria Euro-crystal France Building of a factory in Annaba Glass, wood, paper, minerals, ceramics

20


16 17


Welcoming country

Company / Investor


FDI (€m)

Algeria Cimpor Portugal The Algerian government gives away 51% of the Meltah cement plant


40 23

Algeria Seram France Seram creates 3 branches in Barcelona, Algiers and Houston

Mechanics and machinery

Algeria Société Géné-rale

France Extension of the Sogal network in Algeria

Other commercial, financial, service activities

Algeria Diagram France E-Banking subsidiary company to develop a remote banking activity


Algeria Cetelec France New telecom customer after-sa-les centre in Algiers

Telecoms and inter-net operators

Algeria Orascom Egypt Orascom has invested USD1,1 bn in telecommunications in Algeria


956,5

Algeria Orascom Egypt Orascom Telecom Algeria beco-mes an internet provider


Algeria El Watania Kuweit 3rd cellphone license attributed to a Koweiti operator


366,1

Algeria Dagris France Creation of a joint-venture for the development of Algerian cotton

Textile, clothing, luxury

Algeria Aigle Azur France Aigle Azur opens in October 2003 new Paris-Tamanrasset and Paris- Djanet routes

Transport, storage, construction, public works, water & utilities

Algeria Wilh. Wil-helmsen ASA

Norway Opening in Algeria of a shipping line office


Algeria British Airways

UK (Prospect) Opening of a schedu-led line to Algiers in December 2003


Algeria Compagnie Nationale Algérienne de Navigation

Others (Prospect) Privatisation and opening of the capital to foreign investors


Algeria Ionics & Mitsui

USA Construction of a seawater desa-lination plant near Algiers under a build-own-operate contract


195,7


16 17


Welcoming country

Company / Investor


FDI (€m)

Algeria Black an Veatch Africa

USA Construction of a seawater desa-lination plant in Arzew through a US-Algerian JV


391,3

Cyprus GFI UK GFI, developer of security software, expands its operations in Cyprus

Data-processing, software and services

40

Cyprus Scancom Lebanon First private GSM license for the Lebanon-based Scancom group


Egypt Chipita Inter-national

Greece (Prospect) The Greek number 1 agrobusiness company will create joint ventures in Egypt

Agro-business 4,7

Egypt Kraft Foods USA Kraft Foods enters the Egyptian market

Agro-business 100,6

Egypt Egypt Int’al Tobacco & Cigarettes

Jordan Agreement with Eastern Com-pany to produce cigarettes

Agro-business

Egypt IMPCO USA Creation of a joint venture with AFG for automotive engines


Egypt GAZ Russie The Russian car manufacturer GAZ plans to open an assembly facility in Egypt in 2004


Egypt UAZ Russie Russian motor-vehicle producer to open plants in Poland, Egypt and Ethiopia


Egypt Kamaz Russie (Prospect) Installation of a car assembling plant


Egypt BMW Germany Opening of an assembly plant Car manufacturers or suppliers

50,9

Egypt Hydro Agri Chili Creation of a joint venture, Misr Speciality Fertilizer Company, to produce liquid fertilizers

Chemistry, plas-turgy

Egypt Siemens Germany Control systems for a drug and petrochemical factory at Qena


250

Egypt Zuari-Cham-bal

Inde Creation of a fertilizer factory Chemistry, plas-turgy

Egypt Moody’s USA Moody’s rating agency creates a JV with Finance and Banking Consultants International


4

Egypt Carrefour France Opening of a supermarket Distribution Egypt Diamons SA Switzerl-

andOpening of a site for production of telecom cables



18 19


Welcoming country

Company / Investor


FDI (€m)

Egypt BG Group UK British Gas will double its pro-duction capacity in Egypt

Energy

Egypt Jaako Poyry Group

Finland The company invests €2 m in a paper mill


2

Egypt Lafarge France Opening of gypsum wall panel factory


Egypt Lafarge France Lafarge and Titan enlarge their co-operation in Egypt


Egypt Nugul Group

Jordan Paper fabric plant in Egypt Glass, wood, paper, minerals, ceramics

2

Egypt Birla Group Saudi Arabia

A new Saudi acrylic fiber factory in Egypt


1000 73,4

Egypt Pridesa Spain Construction of a seawater desalination plant in Egypt


Israel Alstom France (Prospect) French companies enter in the Tel Aviv subway tender

Aeronautical, naval and railway equi-pment

1500

Israel Nestle Switzer-land

A new factory for frozen baked products

Agro-business

Israel Vilmorin Clause

France The tomato seed specialist takes control of Hazera Genetics

Biotechnologies 22,2

Israel Lundbeck Denmark Opening of a commercial repre-sentation

Biotechnologies

Israel Walt Disney Holding Cies

USA Shamrock Capital, the in-vestment arm of Walt Disney Holding, purchases20% of CMT Medical Technologies

Biotechnologies

Israel BioDelivery Sci-ences Int’al Inc (BDSI)

USA (Prospect) Creation of Biorazyme Ltd to develop formulations for left hand disease

Biotechnologies

Israel Procter & Gamble

USA (Prospect) Procter & Gamble will problably invest in Israel


Israel Ravago Belgium Ravago invests 12 million euros in the building of a fire retardant plant


100 12,5

Israel HP USA Opening of an ink factory at Kiryat Gat


Israel Blue Pum-pin’s

USA Opening of a customer service office in Israel for a workforce optimisation company



18 19


Welcoming country

Company / Investor


FDI (€m)

Israel Veritas Software

USA The company completes the acquisition of Precise Software for 535 m euros


0 535

Israel Marvell Technology Group

USA Marvell Technology Group com-pletes the acquisition of Radlan Communications Group


44

Israel Carrefour France (Prospect) The hypermarket group will enter the Israeli market

Distribution

Israel Motorola USA Motorola Inc. chooses Israel to develop its new radar-based warning fence


Israel IBM USA Establishment of a new design centre in Israel that will employ an additional 40 engineers


40

Israel Juniper Networks

USA Creation of a subsidiary of the optic fiber company

Electronic compo-nents

Israel Nokia Finland Investment in Israeli Ezchip company


3,6

Israel Intel USA Extension of a processor plant to create new generation of chips (0,09 micron)


500

Israel Samsung South Korea

The Korean communications giant sets up a new development centre in Herzliya

Electronic ware

Israel Herley Industries

USA A Pennsylvania-based producer of microwave will extend its facilities in UK and Israel


Israel General Electric

USA General Electric increases its investment in GE Medical Sys-tems Israel for increasing its R&D capabilities


Israel Mul-T-Lock Sweden Mul-T-Lock will invest NIS 50 million in expanding its factories and its R&D division

Metals, work and recycling of metals

10

Israel Advent International

USA Advent International injects $30 million into Gemini Fund to cooperate on technology JVs


26

Israel Cosmopo-litan

USA The monthly Cosmopolitan launches an Israeli edition


Israel Translink Switzer-land

Joint venture with Cukierman to create a bank of businesses



20 21


Welcoming country

Company / Investor


FDI (€m)

Israel D link Taiwan New office Telecoms and inter-net operators

15

Israel ITXC Corp USA The telecom operator opens a commercial office


5

Israel Exel UK Creation of MPL, a joint venture between Zim Israel Navigation and Zeevi Holding


Jordan Seabird Aviation

Australia Creation of a joint venture to pro-duce non-military surveillance aircraft


Jordan Safmarine South Africa

Opening a commercial office in Amman


10

Jordan Philip Morris USA New Malboro cigarette produc-tion plant

Agro-business

Jordan Land Rover UK Opening of an assembly plant in the strategic exportation area in Ma’an


Jordan Shell Nether-lands

Construction of two new polyol blending facilities in Dubai and Aqaba (Jordan)


Jordan Hikma USA (Prospect) The private branch of the World Bank grants a loan of USD15 m to the pharmaceutical group, Hikma

Drugs 15

Jordan Alcatel France The broadband leader wins a contract for ADSL platforms and commutators


Jordan Jordan Bromine Company

USA Jordan Bromine Company builds a new membrane chlorine plant


Jordan Zag Plastics Israel Opening of a hydraulic engine factory


Jordan Visa USA Visa International opens a regio-nal representation in Amman


10

Jordan Minnesota Middle East Trading

USA Taking advantage of the free trade zone agreements with the US, the company opens a repre-sentation in Amman


Jordan Cerebrus UK New UK insurance HQ in Amman



20 21


Welcoming country

Company / Investor


FDI (€m)

Jordan Morganti Group & Ondeo Degremont

USA Water pipeline, pumping stations and desalination plant to supply Amman via a BOT


108,7

Lebanon Pinturas Monto

Spain Creation of a paint production factory


Lebanon Computer Associates M.East

USA Opening of a software develop-ment agency in Beirut


10

Lebanon Metaforms Canada A Canadian firm locates its design & marketing activities in Beirut


Lebanon Tejari Others Launch in Lebanon of an e-pro-curement business for Middle-East companies


Lebanon Copeland Corp

USA The fridge & air conditioner company will hire 360 new staffs by 2005


360

Lebanon France Cellis France (Prospect) Privatisation of the Telecom operator envisaged in 2004


Lebanon Fratelli Rossetti

Italy Opening of a shoe store in Beirut Textile, clothing, luxury

Lebanon Metropolitan City Center sal

United Arab Emirates

Opening of a resort Tourism, catering 250 74

Lebanon Sharikat Ikarat wa Abniah

Iraq Opening of a Hilton resort in Beirut

Tourism, catering 200 37

Lebanon Leisure Hill sal

Iraq Investment in Sinbad’s World (hotel and leisure park)


Lebanon Al Kharafi Kuweit Opening of a Sheraton 4 points resort

Tourism, catering

Lebanon Star Airlines France Star Airlines, subsidiary of Look Voyages, plans the opening of a new route to Beirut in Dec. 2003


Malta AC Motors USA R&D automotive centre created in Malta


Malta Hotset Heizpatr. & Zubehoer

Germany Opening of an electric equipment factory for industrial use


Malta Toly Pro-ducts

Germany Opening of a packaging factory for luxury products


1,21


22 23


Welcoming country

Company / Investor


FDI (€m)

Morocco Marcopolo Brazil (Prospect) Setting-up of a truck manufacturing plant


Morocco Thales et Sagem

France (Prospect) Tender for mili-tary electronics industrialists to modernize the Morrocan «Mirages F1»


200

Morocco Souriau France Assembly of connectors intended for the manufacture of Airbus aircraft


90 14,0

Morocco Altadis France (Prospect) Altadis to make an offer to take the control of the Spanish tobacco company

Agro-business

Morocco Cobega Spain Cobega spends USD 73 million for its 3rd bottling plant in Morocco

Agro-business 63,5

Morocco Gill Gomez Spain The food preservation company just opened a new production plant

Agro-business

Morocco Penas Spain The Penas cannery enters North African market

Agro-business

Morocco Savola Saudi Arabia

Opening of a vegetable oil factory

Agro-business 10,7

Morocco Murgaca Spain New sheep slaughter-house in Casablanca

Agro-business 22

Morocco Indumix Spain Creation of a nutrition expertise office for milk cow farmers, then installation of a plant

Agro-business

Morocco Mediterra-nean Fruit Company

Italy European commercial office in Morocco for fruit produces

Agro-business

Morocco Unknown (Food Co)

Saudi Arabia

(Prospect) Manufacturing unit of aerated beverages, dairy pro-ducts and oils

Agro-business 360 23,9

Morocco Renault France Renault buys Somaca to produce a cheap car by the beginning of 2005


Morocco Prevent Slovakia A car seat manufacturer will open a new factory in Casablanca by the end 2003


13

Morocco Valeo France Opening of a new plant for auto-motive spare parts in Bouznika


1500

Morocco EMDEP Morocco

Spain Manufacturing unit of automo-bile beams of cables in Tangier


25 4,7


22 23


Welcoming country

Company / Investor


FDI (€m)

Morocco Sunviauto France Manufacture of caps for automo-bile seats


200 41,0

Morocco EC2M France Manufacturing unit of automo-bile components in Tangier


30 10,2

Morocco Plasticos Ferro

Spain Building of a water line factory in Casablanca


7,2

Morocco Cegos France Creation of a subsidiary of the training company


Morocco AFT-Iftim France AFT-Iftim opens a training centre in Morocco


Morocco Gide Loy-rette Nouel

France New offices in Morocco and Algeria


10

Morocco Young & Rubicam

USA Opening of a new advertising agency


5

Morocco Presse+ France Opening of a branch in Casa-blanca


Morocco SQLI France SQLI installs a development platform in Morocco


50

Morocco Tech Access / Sun

USA Opening of a regional office in partnership with Sun Micro-systems


Morocco Hyperburo France Hyperburo opens its first foreign franchise in Casablanca

Distribution

Morocco Metro Germany New supermarket opening in Marrakech

Distribution 13,9

Morocco Financière de la Motte

France Creation of a distribution branch in Morocco

Distribution

Morocco Mr Bricolage France Joint-venture with Brico Invest Sa to open 5 salepoints in 5 years, the 1st in 2004 in Casablanca

Distribution 600 22,9

Morocco Mega-Mall Sofia


Project «trade and leisure» in Rabat


Morocco Vinci France Project of trade and distribution in Casablanca


Morocco Eurinvest Luxemburg (Prospect) Do-it-yourself, decora-tion and gardening shops


Morocco CSMD Switzer-land

(Prospect) Shops in the principal cities of Morocco



24 25


Welcoming country

Company / Investor


FDI (€m)

Morocco Hoffman Switzer-land

Opening of a factory in Casa-blanca

Drugs

Morocco Sanofi-Syn-thelabo

France Sanofi invests in the production of drugs in Casablanca

Drugs 21,2

Morocco Ceva Santé Animale

France A veterinary pharmaceutical leader opens a dispatch center in Casablanca and production plant in Rabat

Drugs

Morocco Maralec France Unit of sheet-iron works and integration of electronic sets in Casablanca


40 4,4

Morocco China Moroccan Meters

France Manufacture of electronic meters in Casablanca


161 44,3

Morocco STMicro-electronics

Italy New design and software deve-lopment in Rabat


500 100,0

Morocco PSI Electro-nics

France Research and development in electronics in Rabat


250

Morocco Lear USA Production of cable harnesses Electronic compo-nents

1 500 200,0

Morocco Apex-BP Solar

France Apex-BP Solar installs for ONE 4,000 photovoltaic systems in Morocco

Energy

Morocco Energie Electrique de Tahaddart

Germany Production of electricity in the combined cycle power station of Tahaddart in Tangier

Energy 237,2

Morocco Cimpor Portugal Increase in the output of the cement factory Asment Temara


40 27,6

Morocco Holcim Maroc

France Production of cement in Fes, Oujda, Nador


23 164,8

Morocco MT Plastic Nether-lands

Investment in waste recycling in Kenitra


14 1,2

Morocco Impact Publishing

UK Superbrands company launches a branding promotion office


Morocco Access Télé-services

France New call center in Rabat Telecoms and inter-net operators

100

Morocco Vivendi Universal

France Vivendi takes control of Morocco Telecom


0

Morocco Le Terrain France Creation of a call center in Rabat Telecoms and inter-net operators

60

Morocco Cofimag France IT project Deltacall in Casablanca Telecoms and inter-net operators

120


24 25


Welcoming country

Company / Investor


FDI (€m)

Morocco Unknown (PC manu-facturer)

USA (Prospect) Call center for a pro-ducer of micro-computers


800 0,0

Morocco Alexon UK Building of a new factory Textile, clothing, luxury

Morocco Dewhirst UK Opening of a fourth textile factory


Morocco Bulgari Italy Creation of a jewellery shop in Casablanca


10

Morocco Clayeux France Creation of a franchise in Morocco


Morocco Staro Bulgaria (Prospect) Leather production unit in Tunisia or Morocco


Morocco Solano Atlantic

Spain Manufacturing unit of safety and sport shoes, climbing boots


311 28,6

Morocco Capdevila Spain Garment industry in Tangier Textile, clothing, luxury

100 9,2

Morocco Moham-me-dia Shoes

Spain Manufacture of shoe stems and integration of a chain of shoe production in Mohammedia


80 7,4

Morocco Aksal Group Zara

Spain A Spanish-Canadian JV invests in apparel industry


200 20,1

Morocco Casport France Garment industry for sport, work and military uniforms


23 2,1

Morocco Caulliez Maroc

France Cotton-spinning unit in Fes Textile, clothing, luxury

45 4,1

Morocco Blue Star Apparel

Hong-Kong

Hong-kong investment in the garment industry in Casablanca


284 26,1

Morocco Classical & Casual Clothing

France Manufacturing unit of garments in Tangier


40 3,7

Morocco Thirteen AMP Mo-rocco

UK Unit of clothes industry in Sale Textile, clothing, luxury

550 50,6

Morocco Vayani UK Women apparel unit in Moham-media


70 6,4

Morocco TUI Germany (Prospect) TUI- Nouvelles Frontieres considers investing in Morocco

Tourism, catering 0

Morocco FADESA Spain Creation of a tourist mega-resort with 8 hotels


Morocco Ghantoute United Arab Emirates

A company from UAE invests in tourism in Marrakech

Tourism, catering 150 20,2


26 27


Welcoming country

Company / Investor


FDI (€m)

Morocco Britannic Hotels Company

UK Millenium Palace Hotel in Agadir


Morocco CDG France Creation of a holiday resort in Marrakech

Tourism, catering

Morocco AGA Founty Invest

Germany Project Thomas Cook In Agadir Tourism, catering 275 25,8

Morocco ABS Hôtel Properties Ltd


Project of hotel in Marrakech by ABS Hotel Properties Limited Morocco


Morocco Hercules Int’al Sports Tanger


Project HIST In Tangier Tourism, catering 100 18,7

Morocco Banque Populaire du Val de France

France The French Banque Populaire invests in Marrakech Country Club


Morocco Accor France (Prospect) The Accor group launches the restoration of the Jamai Palace in Fes

Tourism, catering

Morocco Fram France The tour operator Fram invests in hotels in Ouarzazate and Zagora


Morocco Lucien Barrière

France The group Lucien Barrière in-vests in the seraglio of Marrakech


Morocco Groupe Tikida

France Tourist project of Tikida Beach, Garden Dunes

Tourism, catering 1 010 81,0

Morocco Ettore Bianchi

Italy Project of Luna Rossa hotel in Nador


Morocco Liwa Int’al Kuweit Extension of the Sheraton hotels in Marrakech and Fes

Tourism, catering 18,4

Morocco Consortium Maroco- Koweïtien de Développt.

Kuweit (Prospect) Creation of hotel units in Casablanca, Rabat, Marrakech, Safi, Khouribga


Morocco Soipa Italy Building of a new yachting harbour in Asilah


49,5

Morocco Corsair France (Prospect) Corsair, plans the opening of new routes from Paris to Marrakech and Fes



26 27


Welcoming country

Company / Investor


FDI (€m)

Morocco Bouygues France Bouygues wins a contract for the building of the Tanger-Méditer-ranée harbour


Morocco Fundi-ciones Caetano

Spain Opening of a joint venture in Tangiers


9

Morocco Matebat France Opening of a subsidiary for hiring of cranes in Casablanca


Others Alpan Turkey (Prospect) Market expansion for the profiled aluminium producer


Palestine Authority

Pita USA Launch of an IT nursery Data-processing, software and services

2,4

Palestine Authority

Plaza Shop-ping Center

USA Construction of a 2000 sq. m. commercial mall (Plaza Shop-ping Center)

Distribution 8

Syria Usine d’huile d’olive

Saudi Arabia

Building of an olive oil factory Agro-business

Syria Proton Malaysia Malaysian automaker Proton plans to assemble cars in Syria


Syria Fujiaire Malaysia The air-conditioner maker from Thailand enters the Syrian, Egyp-tian and Iraquian markets*


Syria Four Seasons Hotel

Lebanon Opening of a Four Seasons Hotel in Damascus

Tourism, catering 100

Tunisia ProMetic Canada Minority equity investment and transfer of technology in a new Tunisian company

Biotechnologies 38,6

Tunisia Roullier France Building of a phosphate factory in Gabes


Tunisia Plasti-valoire France Plastivaloire creates a joint-venture for houseware plastics in Sousse


Tunisia Sogec France Opening of an office of marke-ting consulting and promotion actions


4

Tunisia Apem France The electronics group Apem relocates from France to Tunisie



28 29


Welcoming country

Company / Investor


FDI (€m)

Tunisia Ferraz Shaw-mut

France Tunisia hosts the electrical components production after relocation from Europe


Tunisia STMicroelec-tronics

Italy Creation of a Tunisian center of micro-electronic components


500

Tunisia Bouyer France A French sound system company relocates in Tunisia

Electronic ware

Tunisia BG Group UK BG group obtains the authority agreement to build the Barca electric plant in Sfax

Energy

Tunisia Société mixte Tunisie-Lybie

Libya Creation of a company to trans-port petroleum products

Energy

Tunisia Calgary Centurion

Canada Centurion and Petro-Canada sign agreement to explore Mellita permit in Tunisia

Energy 11,7

Tunisia Caterpillar Power & Calgary Centurion

USA Start of operations for a 27-MW power generation plant in Zarzis

Energy

Tunisia Secil Portugal Secil will invest 28 m Euros to extend its factory to increase cement production by one mil-lion tons


28,0

Tunisia Apsys France The commercial zone specialist enters Tunisia


Tunisia NOOS France (Prospect) Teleperformance tries to convince Noos and Orange to open two new call centres


Tunisia Futur Tele-com

France (Prospect) Futur Télécom wants to expand overseas


Tunisia Orascom Egypt The mobile phone service has reached more than 100 000 per-sons after one month


Tunisia Rouleau-Guichard

France The underpants manufacturer relocates its factories in Tunisia and Romania


500

Tunisia Elvstrom Sails

Denmark A new site in Bizerte for the series’s veils


Tunisia Benetton Italy Creation of textile factory in Monastir


13,5

Tunisia Van de Velde Belgium A Belgian garment company invests € 2.5m in its Tunisian branch


400 2,5


28 29


Welcoming country

Company / Investor


FDI (€m)

Tunisia Accor France Building of a 250 bedroom hotel Tourism, catering

Tunisia Compass UK The n°1 catering company wins the contract to modernize Tuni-sian airport restaurants

Tourism, catering

Tunisia Esdi France Esdi European Line opens an office in Tunisia


5

Tunisia ZI off-shore Italy (Prospect) Creation of an off-shore industrial zone in Tunisia


Tunisia Frans Maas Nether-lands

Establishment of a transport agency in Tunisia


Turkey Hamburg Sud Turkey

Germany Opening of 3 offices in Istanbul, Izmir, Mersin to manage marke-ting and ship logistics


Turkey Unknown/ Inconnu

Others (Prospect) Privatisation of the Turkish tobacco company Tekel

Agro-business

Turkey Amcor White Cap

Australia Building of a new factory at Dudullu to take place of the Istanbul one

Agro-business

Turkey Haribo Germany Construction of a new sweet factory

Agro-business

Turkey Kornet Russia Establishment of a production factory for champagne and wines in Kilis

Agro-business

Turkey Imperial Tobacco

UK The 4th world producer of to-bacco is close to opening a new manufacturing unit

Agro-business

Turkey Mayr-Meln-hof Graphia

Germany Creation of a cigarette packaging plant in Izmir

Agro-business

Turkey Toyota Japan Increase in capacity for the production of some new Toyota Corolla models


Turkey Bosch Germany Bosch will invest 182 m Euros in Turkey


182

Turkey Hyundai South Korea

Opening of a new center of pro-duction for Hyundai Accent


Turkey Man Germany Man is on the verge of investing 19,6 m Euros to build a bus production line


19,6


30 31


Welcoming country

Company / Investor


FDI (€m)

Turkey Renault France Renault launches its new Megane production in Turkey


200

Turkey Denso Japan Building of a new factory in Istanbul


Turkey Innova-tive Systems Europe

Germany Construction of a new factory in Aksaray


Turkey Federal Mogul & Teikoku Piston King

Others Joint venture for an automotive spare parts plant


Turkey Mercedes Germany New investment in the Turkish factory for truck production


50

Turkey Bayer Switzer-land

Investment of US$2m in a center of storage and distribution of chemicals for agricultural sector


1,7

Turkey Direct Parcel Distribution

France DPD starts a new postage center Consulting and servi-ces to companies

Turkey John Sey-mour Asso-ciates

UK The training company opens a new office


5

Turkey TUKA group USA The TUKAgroup announces the opening of offices in Turkey


Turkey Geopost France Creation of an international parcel shipping company


Turkey Gemplus France Partnership Gemplus/Tecknoloji Holding Group to offer banks EMV card personalisation solution


1

Turkey Intralot Greece Creation of a new game compa-ny through alternative networks (mobile phones, internet…)


Turkey Tesco UK The first UK food distributor buys a chain of Turkish hyper-markets

Distribution

Turkey Starbucks Coffee Int’al

USA Opening of a 4th café store Distribution 5

Turkey Tibbett & Britten

UK Joint venture for Tibbett & Britten in Turkey

Distribution

Turkey (Unknown) Pharma-ceutics

Greece Relocation of pharmaceutics production in Turkey

Drugs


30 31


Welcoming country

Company / Investor


FDI (€m)

Turkey Novartis Switzer-land

Installation of a pharmaceutics plant inTurkey

Drugs 64,3

Turkey Merloni TermoSanitari

Italy (Prospect) Merloni TermoSanitari plans to start heater production in Turkey within 2 years


Turkey Aquaria Spain Aquaria, firm specialized in water pool production and distribution, is opening a factory in Turkey


Turkey Fagor Spain New plant producing freezers for catering and hotel sectors


75 7

Turkey Copreci Spain Copreci, Spanish maufacturer of components for houseware equipment invests € 2,5 million in Turkey


Turkey Iranian Gas Company

Iran Creation of a subsidiary com-pany and signature of a 25 year agreement

Energy

Turkey Bakou-Cehyan Pipeline

Others Construction of the Bakou-Ce-hyan pipeline by aconsortium

Energy 25,5

Turkey Simon Spain (Prospect) Opening within the 2 next years of a manufacturing plant of small electronic ap-pliances


24

Turkey Colorificio Spain The enamel producer for the ceramic industry enters new emerging markets


41

Turkey Lunan Paper China Construction of a paper mill (€84,6m)


Turkey Arcelor France Arcelor and Erdemir open a new packaging plant and create a common holding


Turkey Lufthansa Germany Establishment of a call centre in Istanbul


Turkey VF Corp USA The American firm launches its clothes factory in the west of Turkey


400 15

Turkey Hugo Boss Germany Hugo Boss builds a new factory in Turkey


Turkey Adria UK Installation of a new textile plant Textile, clothing, luxury


32 33


Welcoming country

Company / Investor


FDI (€m)

Turkey EasyLink USA EasyLink opens a sales office in Istanbul, Turkey

Transport, storage, construction, public works, water & utilitiesAverage value 339 103Total 26 792 10 610

The attractiveness of the MEDA region seems to be improving

With the help of the European observatory developed by AFII – which covers thirty or so countries-, it is possible to make a comparison of performances with a region in direct competition –the countries of Central and Eastern Europe (CEEC) and especially with the 8 countries joining the EU in May 2004.

Figure 2. Comparison of the numbers of FDI projects for MEDA, the EU and the CEECin 2003(Sources : AFII, European Observatory & MIPO)

EU-15 Projects CEEC-8 Proj. Other Eur. Proj. MEDA-12 Projects

UK 282 Hungary 130 Romania 78 Morocco 89

France 292 Czech Rep. 130 Switzer-land 66 Turkey 43

Germany 185 Poland 79 Bulgaria 48 Algeria 31

Spain 266 Slovakia 32 Europe 42 Israel 28

Belgium 73 Estonia 19 Norway 9 Tunisia 26

Netherlands 70 Lithuania 17 Iceland 3 Egypt 21

Italy 72 Lavtia 9 Croatia 1 Jordan 13

Ireland 86 Slovenia 4 Ukrain 1 Lebanon 12

Sweden 56 Syria 4

Portugal 32 Malta 3

Denmark 32 Palestinian A. 2

Austria 16 Cyprus 2

Greece 6 Other MEDA 1


32 33


Finland 21

Luxemburg 10

Total UE-15 1499 Total CEEC 420 Other Eur. 248 Total MEDA 275

Despite strong variations in the amounts of FDI in the emerging countries, it would seem (Figure 3) that the MEDA share of the market, which had fallen to a low level in 2002, has increased considerably in 2003. This should be confirmed in September 2004 on the macro-economic level by the UNCTAD (WIR 2004) world investment report.

Figure 3. An increase in the relative share of MEDA ? Comparison MIPO /WIR between 2002 and 2003Central and Eastern Europe MEDA-12 MEDA Share

Number of FDI projects 2003 451 Number of FDI projects 2003 275 38%

Number of FDI projects 2002 420 Number of FDI projects 2002 (1) 60 13%

Average amount per project detected (€m)

51 Average amount per project detected (€m)

103 -

FDI flows in 2002, US$mof which:

21 604 FDI flows in 2002, US$mof which:

6147 22%

Czech Republic 9 319 Algeria 1065Estonia 307 Cyprus 297Hungary 854 Egypt 647Latvia 396 Israel 1648Lithuania 732 Jordan 56Poland 4 119 Lebanon 257Slovakia 4 012 Malta -375Slovenia 1 865 Morocco 428

(1) estimate based on the average FDI amount 2003

Palestinian A. 41Syria 225Tunisia 821Turkey 1037


34 35


In terms of number of 2003 projects, as observed by a common tool (MIPO and the AFII pan-European AFII observatory), the MEDA region represents, more or less, one third of the CEEC region (eight continental countries about to join the EU). The figure of 38% is in fact slightly « inflated » by the presence of around forty projects contributed directly by Morocco (see below). This part of the market (one third) is greater than that provided by the MEDA in FDI in 2002 (22%, according to the WIR/UNCTAD report). It also very largely exceeds that given by a very (fragile) extrapolation in terms of numbers of projects in 2002 (where MIPO did not yet exist), that is 13%. All these figures remain to be confirmed, in the knowledge that it is difficult to compare market share in numbers of projects, amounts and numbers of jobs created – which is the hope for the appraisal from 2004 onwards-. A comparison of WIR/MIPO results is provided in Appendix 1.

Confidence rediscovered in the MEDA region? Despite the defavourable economic situation for investments at world level, the MIPO data base, without pretending to be overly complete, did enable the listing of a large number of foreign investment projects, which are remarkable for their variety and their origins.An examination of the investments made in 2003 helps to highlight several encouraging signs:§ some very large multinational companies (MNCs) participate in the investment effort in the region, in the context of their long term strategies: several automotive firms of various nationalities, several agro-food, chemical, pharmaceutical and new technology companies;§ these investments are made after in-depth market surveys and profitability studies; implemented within the


34 35


context of strategies defined well in advance, and these projects have a effect of encouraging other international businesses and even local companies;§ the reasons for which the large companies locate here are both for the potential outlets (expanding markets) and the existence of comparative advantages (low labour costs as a priority, as well as the physical proximity of the European market) ;§ the phenomenon of the relocation of European industries would seem to be accelerating to the benefit of the MEDA countries, which compete in this domain with the Asian countries; the detailed description of the investment projects shows the important part taken by the relocation of labour-intensive industries (automobile constructors and equipment manaufacturers, call centres, textiles, as well as computing or pharmacy);§ the spill-over effects of investments signalled (in terms of sub-contracting, the propagation of know-how, of training needs to be satisfied) are especially important in a region globally under-industrialised;§ an examination of the list of projects shows a great diversity of investments on the sectoral level: the traditional sectors are also present and well-placed (agro-food, textiles, automobiles), as well as the cutting edge sectors (telecommunications, computing, biotechnologies...).

A series of meaningful « success stories» is to be found in Appendix 2.

Figures which seem to testify to a clear improvement in FDIIt would therefore seem that after the low ebb of 2002, where foreign investment was weak throughout the world, and


36 37


catastrophic in MEDA (6.15 billion US$, against twelve or so in 2001), the region may have started to come out of its decline. This rise in interest has been obvious throughout 2003, with a good number of announcements at the end of the year.Although the amount of the investment is only given in 37 % of cases, the sum in absolute value of FDI identified in MIPO 2003 exceeds 10 billion Euros (exactly 10.610 million €, that is 12.201 million US$ -a figure analoguous to that for the whole of the FDI in 2001). This total should be taken carefully: (i) it is possible that certain projects present in the base correspond to the existing « stock », and not to the 2003 flow; (ii) the figures indicated in the agency releases for the same project are quite variable and may incorporate a part of supplies (and not « pure FDI ») ; (iii) no extrapolation has been attempted, for the amounts known probably correspond to the largest projects.In employment terms, more than 26,000 jobs would have been created in absolute terms by the FDI of 2003 where the personnel content is known (29% of cases). After extrapolation, this would give more than 100,000 jobs created in 2003, but an extrapolation of this sort is also difficult to sustain (the figures for jobs created are probably accentuated especially in the case of the largest projects).

An indispensable tool for the promotion of investment in MEDAThe MIPO data base presented here represents an initial and hopefully convincing attempt, to « situate » the attractiveness of the MEDA region, as a whole, vis à vis the international « business » community. It is already accepted that this task will be repeated each year within the


36 37


framework of the ANIMA network and its eventual follow-ups, with reinforced means. The data concerning MIPO may be consulted on line (in simplified form) for the year 2004 at http://www.animaweb.org.Thus the tool that has been developed, should enable the IPAs of the partner countries to improve their procedures and increase their efficiency:§ an objective evaluation of the overall performance of the region is possible, this will enable the necessary corrections and complements in terms of investment promotion to be made;§ this « benchmarking » is even to be envisaged between countries when the base has been sufficiently enlarged and stabilised, particularly with a homogeneous contribution from the different IPAs concerned;§ cooperation between IPAs of the MEDA region will be encouraged by the availability of common information;§ MIPO facilitates the promotion of certain particularly representative projects, or those which the IPAs wish to highlight (« success stories ») ;§ Increasingly reliable and operational statistical information will be available for use in specific studies and analyses which are likely to interest a particular IPA or a given sector.

Several private or institutional partners have already presented themselves to propose their cooperation with MIPO (data exchange, access to detailed data, publication). For the moment, the ANIMA network has followed up no proposal, preferring to await the initial evaluation of the 2003 base by the IPAs concerned – which will doubtless criticise certain insufficiencies, especially for the less well represented countries…


38 39

In Appendix 3, a note on the methodological questions posed by the observatory is to be found.


38 39

The « average » project In the actual state of knowledge, the « average project » listed in MIPO 2003 is an investment coming from Western Europe (France, Spain, Great Britain, Germany) or from the United States. The countries which found favour with the investors in 2003 are Morocco and Turkey, followed by Algeria, Israel, Tunisia and Egypt. Morocco is over-represented due to around forty projects which were provided by the corresponding IPA (Direction des Investissements), but which were not covered by international press releases; but this country was in the lead even before the introduction of these projects.The beneficiary sectors are fairly diversified: in the lead and almost equal come textiles, automobile construction, tourism and agro-food.The average amount of the investment (known in 37% of the cases) is 103 million € (ranging between 1 million and 1.5 billion €).The average number of jobs created (known in 29% of the cases) is around 340 (maximum: 8,000 jobs for the Saidia tourist complex in Morocco). The figures quoted in this domain are often rather unreliable, with estimates at times going from simple to double for the same project depending on the source.

3. Detailed analysis of the MIPO results


40 41

Detailed analysis of the MIPO results

Analysis by sub-region and country of destinationThe countries of the MEDA region present common features (cultural, climatic, demographic, geopolitical). They also present a strong diversity in terms of economic and technological development. The assets and the handicaps of the MEDA countries are also at the same time similar and highly diversified. These a priori contradictory aspects can be explained by the fact that the MEDA countries are at the same time « competitors » and « partners » within sub-regional groupings.An analysis of investments by sub-region of destination shows the predominance of the Maghreb in 2003:§ Maghreb (Algeria, Tunisia, Morocco) : 146 projects (53 %) ;§ Machrek (Egypt, Jordan, Palestine, Syria, Lebanon) : 52 projects (19 %) ;§ Other MEDA countries (Cyprus, Israel, Malta, Turkey) : 77 projects (28 %).

Figure 4. Sub-region of destination of FDI projects in 2003 (MIPO)


40 41


This predominance exists even when the investment projects identified by the Investment Directorate of Morocco (DI) are not taken into account – the latter having directly provided 43 projects chosen out of 89- (cf. Figure 5). However, the relative under-representation of the Machrek is perhaps due to the gradual rise in efficiency of the observatory which initially gave greater advantage to the information available in English, French and in German to the detriment of the Arab media. The importance of the category « others » can be explained by the large number of projects for Turkey and Israel, two countries which traditionally constitute the destination of a large part of regional FDI, according to the World Investment Report (WIR, UNCTAD).

Figure 5. Country of destination of 2003 FDI projects (MIPO)


42 43


Analysis by origin

The spread of investments per country of origin is heavily concentrated (Figures 6 and 7) :§ 5 countries (France, the United States, Spain, the United Kingdom and Germany, in this order) were at the origin of 177 projects, that is 64 % of the FDI towards the MEDA region in 2003;§ 162 projects (59 %) came from the European Union, and 44 projects (16 %) originated in the United States; § the MEDA countries participate at a level of more than 4 % (12 projects) in the investment, which testifies to the beginning of regional integration –it will be interesting to follow the evolution of this percentage in the future;§ For their part, the non MEDA Islamic countries (Saudi Arabia, the Emirates, Kuwait, Iraq, Iran, Malaysia…) contributed 19 projects (7 %) as much in the tourism domain as in the agro-food or automotive industry;§ the Asian countries were at the origin of 10 investment projects (4 % of the total) ;§ finally, 28 projects (around 10 %) came from various countries: Switzerland, Russia, Australia, Canada, Brazil, Chile, etc.

This geographical spread probably under-estimates the small projects of regional origin, hence the contribution of intra-regional trade, as well as investments from Islamic countries. This was confirmed by more complete information received from Morocco and Lebanon. It can be hoped that this methodological distortion, linked to the way in which the data were collected, may be attenuated with time.


42 43


Figure 6. Large regions of origin of the 2003 FDI projects (MIPO)

Figure 7. Countries of origin of 2003 FDI projects (MIPO). In bold : EU ; in italics : MEDA

Origin country Nb. projects Origin country Nb. projects

France 78 Greece 3USA 44 Netherlands 3Spain 20 Canada 3UK 19 Sweden 2Others 19 Belgium 2Germany 17 Denmark 2Italy 11 Japan 2Gulf States 9 Malaysia 2Switzerland 7 South Korea 2Russia 4 Australia 2Egypt 4 Turkey 2Saudi Arabia 4 Lebanon 2China, HK,Taiwan 4 Israel 1Jordan 3 Libya 1

Portugal 3 Total MEDA-12 275


44 45


The presence of countries as different as Australia, Japan, Russia or China, while quantitatively insufficient, is a very encouraging sign, for it is clear that the enterprises of these large countries have a long term strategy and have uncovered in the MEDA region the presence of profitable production potential, or the existence of interesting outlets.

Intra-MEDA FDI There are 12 projects deriving from intra-MEDA trade (4,4 % of the total). This still modest situation should be tempered by the under-representation of the SMEs in MIPO. The corresponding investments come from Egypt (4 projects), Jordan (3), Turkey and Lebanon (2 each), Israel (1). Egypt, by its role in the heart of the Machrek, and the existence of cooperation agreements with the Maghreb, is well placed to act as the gate of entry to the MEDA. Analoguous reasons may be invoked for Turkey, another regional power, and possible intermediary between the countries of the MEDA region and the European Union.

Analysis by sector The sectoral spread is relatively well-balanced (4 sectors with more than 20 projects, 9 sectors with 10 to 20 projects, 9 others sectors with 5 to 9 projects, cf. Figure 8).


44 45


Figure 8. Sectors of activity of 2003 FDI projects (MIPO)

§ The well-represented sectors (more than 20 projects) are textiles, automobile construction and equipment manufacturers, tourism and agro-food;§ The intermediate sectors (10 to 20 projects) concern respectively the following activities: transport, storage, Public Works; telecoms operators and internet access providers; consulting, engineering and operational services for enterprises; distribution ; glass, wood, paper, publishing, minerals, ceramics (a sector which includes cement works); chemicals, plastics ; energy ; software and computer services; electronic components;§ The poorly represented sectors (5 to 10 projects) associate both the leading edge technologies (medicines;


46 47


biotechnologies; aerospace equipment) and « traditional » activities (other service activities, commercial or financial ; metals ; machines ; electrical, electronic, computing, and medical equipment; furnishing and household equipment).

The projects which create the most employment opportunities are to be found in tourism, retail distribution, as well as the new technologies and call centres: tourism in Morocco and Lebanon; electronic components in Tunisia and Israel; textiles in Turkey, in Tunisia and Morocco.

The « innovating » sectors (linked to design, research, compared with the sectors of production, often relocated, or distribution) are well represented: 66 projects, that is 24 % of the total, in activities such as telecoms & internet, consulting, engineering & operational services for business, software & computer services, medicines and biotechnologies.

Analysis by type of enterprise

The search for investments from announcements that appeared in the international press and via internet favours the large projects and multinational corporations at the expense of SMEs.

Figure 9 below supplies an (incomplete) list of the world class enterprises to be found in the MIPO 2003 appraisal. This list includes more than 50 names, which is both remarkable and very encouraging for the future: a phenomenon of emulation is not to be excluded, the installation of a production site often leading to the study of a site for a similar unit by a competitor who has his eyes on the same market.


46 47


Figure 9. Major enterprises which have invested in MEDA in 2003 or who have declared their interest in doing so. In italics, pre-projects

ß Accor ß Advent International ß Alcatel ß Alstom

ß Bayer ß Benetton ß Birla Group ß BMW

ß Bosch ß Bouygues ß British Airways ß Carrefour

ß Cetelec ß FADESA ß Fiat ß Gemplus

ß General Electric ß Haribo ß Hoffman ß HP

ß Hugo Boss ß Hydro Agri ß Hyundai ß IBM

ß Imperial Tobacco ß Intel ß Jaako Poyry Group ß Kraft Foods

ß Lafarge ß Land Rover ß Lufthansa ß Mercedes

ß Merloni TermoSanitari ß Metro ß Moody’s ß Motorola

ß Nestle ß Nokia ß Novartis ß Orascom

ß Philip Morris ß Procter & Gamble ß Renault ß Sagem

ß Samsung ß Scania ß Shell ß Siemens

ß Société Générale ß Starbucks Coffee International

ß STMicroelectronics ß Thales

ß Toyota ß Valeo ß Vivendi Universal ß Walt Disney Holding Companies

Most often, a large enterprise locates in a country in the region and from this base hopes to supply the other countries of the region. This phenomenon is to be found in the agro-food industry or automobile construction. An examination of the projects announced shows that joint-ventures with a local partner concern 49 projects (18% of the sample).The enterprises with a veritable MEDA strategy –characterised by a presence in several countries of the MEDA region or in several sectors – are becoming significant in number. The following may be quoted as examples:§ Orascom (Egypt), present in Algeria in the cement field, the mobile telephone sector and Internet access, and in Tunisia in the mobile telephone domain;


48 49


§ Vitra-Sanitaire (Turkey), present in Turkey, Algeria and Morocco;§ Dagris (France), present in Algeria and Morocco;§ Renault (France), which has started both the production of a top-of-the-range car (the Mégane) in Turkey and the adaptation of an inexpensive car (the Rumanian Dacia at a little more than 6 000€) in Morocco ;§ Valéo (France), which has relocated the production of automotive equipment in Turkey and Morocco by closing its factory in Catalonia;§ Two Portuguese cement manufacturers, Cimpor, which has invested in cement works in Algeria and Morocco, and Secil, which has invested in the extension of its cement works in Tunisia, and is also interested in the privatisation of a cement works in Algeria ;§ Bin Laden Group (Saudi Arabia) present in Syria in the tourist sector and also in the production of olive oil ;§ Accor (France), which has invested in several countries of the region and continues to do so;§ Carrefour (France), which has entered the Egyptian market (after Tunisia) and envisages a project in Israel;§ Mediterranean Fruit Company (Italy) – agro-food/training-, which has opened an office in Morocco after those existing in Egypt and Turkey;§ ST-Microelectronics (Italy-France), which invested in 2003 in both the production of micro-chips in Tunisia and in design and R&D centre in Morocco, the company is also already present in Malta.

The regional strategy of this latter enterprise (Figure 10) is very interesting, since contrary to what might be imagined, ST Micro designs a large part of its electronic components in the MEDA countries – taking advantage of the attractive


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salaries of the engineers- and produces them in the EU countries, for example at Rousset, near Aix-en-Provence.

Figure 10. The EuroMediterranean strategy of ST-Microelectronics (source : STM)

MEDA « power house » for certain sectorsIn textiles, of course, but also in tourism or the automotive industry, the MEDA region appears as an economic power and an weighty partner. The list of projects from the automobile sector (Figure 11) is impressive. It shows that the large constructors and equipment manufacturers are just as interested in the local market (heavy goods vehicles, basic and inexpensive private vehicles, assembly lines etc.) as the production at competitive cost for the world market (the case of Bosch, for example).


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Figure 11. List of projects in the automobile sector (MIPO 2003)

Investor Project DestinationAC Motors R&D automotive centre created in Malta MaltaBMW Opening of an assembling factory EgyptBosch Bosch will invest 182 m Euros in Turkey TurkeyDaewoo Increase of Valeo activities and investments in Algeria AlgeriaDenso Building of a new factory in Istanbul TurkeyEC2M Manufacturing unit of automobile components in Tangier MoroccoEMDEP Morocco

Manufacturing unit of automobile cable harnesses in Tangier Morocco

Federal Mogul & TPK

Joint venture for an automotive spare parts plant Turkey

Fiat The company returns to Algeria with Ital Motor AlgeriaGAZ The Russian car manufacturer GAZ plans to open an assembly plant in

Egypt in 2004Egypt

Hyundai Opening of a new center of production for Hyundai Accent TurkeyIMPCO Creation of a joint venture with AFG for automotive engines EgyptInnova-tive Systems Europe

Construction of a new factory in Aksaray Turkey

Kamaz (Prospect) Installation of a car assembly plant EgyptLand Rover Opening of an assembly plant in the strategic exportation area in Ma’an JordanMan Man is on the verge of investing 19,6 m Euros to build a bus production

line Turkey

Mercedes New investment in the Turkish factory for truck production TurkeyPrevent A car seat manufacturer will open a new factory in Casablanca by the

end 2003Morocco

Proton Malaysian automaker Proton plans to assemble cars in Syria SyriaRenault Renault buys Somaca to produce a cheap car by the beginning of 2005 MoroccoRenault Renault launches its new Megane production in Turkey TurkeyScania Building of a new production plant for trucks AlgeriaSunviauto Manufacture of caps for automobile seats MoroccoToyota Increase in capacity for the production of some new Toyota Corolla

modelsTurkey

UAZ Russian motor-vehicle producer to open plants in Poland, Egypt and Ethiopia

Egypt

Valeo Opening of a new plant for automotive spare parts in Bouznika Morocco


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In 2003, the ANIMA project (though a co-operation between AFII and Université Dauphine) initiated a study on the automobile electronics and the textiles-clothing sectors (including a EuroMediterranean panorama). These will be available soon.

The relocations

The relocation projects – more or less announced as such in the body of the press releases- would seem to concern a very small minority of investments in MEDA (less than 10 projects, cf. Figure 12). It often concerns French or Spanish SMEs who are already aware of the industrial fabric of the host countries and consider it impossible to continue producing profitably in Europe.

Figure 12. List of relocation projects (MIPO 2003)

Sector Company Project DestinationDrugs Pharmaceutics

CoRelocation of pharmaceutics produc-tion in Turkey

Turkey

Electronic components Apem The electronics group Apem relocates from France to Tunisie

Tunisia

Electronic components Ferraz Shawmut Tunisia hosts the electrical components production after relocation from Europe

Tunisia

Electronic ware Bouyer A French sound system company relocates in Tunisia

Tunisia

Furnishing and houseware Simon (Prospect) Opening within the 2 next years of a manufacturing plant of small electronic appliances

Turkey

Textile, clothing, luxury Rouleau-Gui-chard

The underpants manufacturer reloca-tes its factories in Tunisia and Romania

Tunisia

Textile, clothing, luxury Adria Installation of a new textile plant TurkeyTransport, storage, cons-truction, public works, water & utilities

Fundiciones Caetano

Opening of a joint venture in Tangiers Morocco


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In 2003, the ANIMA project initiated, with Pr Michalet (Université Dauphine), a study on the spin-offs of the relocations in the MEDA (an attempt at an overall economic appraisal, including in particular all the costs and advantages from the point of view of Europe). Another ANIMA study concerns a sector which has been subject to a large number of relocations (call centres).

Fore-runner signs of increased investmentThe number of projects devoted to business services, consulting, financial, media, publicity or logistics activities bears witness to renewed interest for investment in the region. It is for that reason that:§ The banks and financial organisations are returning (Société Générale and Diagram E-Banking EDI, Algeria, Visa, Jordan, Cukierman Investment House, Israel etc.);§ The rating company Moody’s is setting up in Egypt targeting the Near East, whilst business law firms such as Gide Loyrette Nouel are opening offices in Morocco and Algeria;§ The media (Presse+, Morocco, Cosmopolitan, Israel), advertising agencies (Superbrands and Young & Rubicam, Morocco), consulting firms like Cegos (Morocco), training organisations (John Seymour, Turkey, AFT-Iftim, Morocco) are setting up branches,§ Courier companies such as DPD (La Poste), DPWorld Net (Deutsche Post), TPG (Netherlands Postal Service) are in a struggle for the Turkish market; in the same way, 5 investments linked to the opening of regular air lines to the region have been detected.

Quality of the FDI projectsThe investment promotion agencies (IPA) are today, rightly


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increasingly attentive to the quality of the FDI projects, and not exclusively to the volume of the flows that they attract. The aim is to seek in priority sustainable projects, with their multiplier effects for the economy (spin-offs, subcontracting, creation of « clusters »), as many positive externalities as possible (for example, energy savings) and as few negative externalities as possible (for example, degradation of the environment).From this point of view, the following observations may be taken from the MIPO 2003 base:§ As regards those projects with negative externalities, there are no fewer than 5 cigarette manufacturing projects in Turkey (2), Egypt, Jordan and Morocco; tobacco producers encountering increasing numbers of constraints in Europe, are turning towards the MEDA countries, which represent for them an appreciable reservoir of customers; in the same line of thought, but doubtless less questionable for public health, several projects concern the production of candies (Turkey), sweet soda drinks (Morocco) and alcohol (Turkey, Algeria); elsewhere, at least one weaponry project (adaptation of French Mirages in Morocco) is to be found in the list –with certain local spin-offs;§ Several projects concern aspects sensitive from an environmental point of view; chemical plants (the production of polyols, fertilisers, etc.), often in Turkey or in Egypt; there are also large public works or tourist projects such as Tanger-Méditerranée and more or less pharaonic tourist resorts envisaged here and there;§ The projects which correspond to the prime needs of the populations (household goods, agro-food, distribution, clothing, automobiles, etc.), to the development of the infrastructure (construction, ports, air transport, etc.), or the installation of base industries (cement, paint, hydraulics, etc.


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) are very numerous, and this is a cause for rejoicing, for they are preparing the way for the MEDA region to take off; § It is the same for the projects which gamble on the comparative advantages of MEDA, and especially for the products for export (olive oil, sea foods, fruit, textiles, automobile parts, electronics) and tourism, which is often still far from realising its full potential (MEDA receives half as many tourists as France each year) ;§ Finally, technologically advanced projects are beginning to appear and bring benefits to certain countries: in the realm of information technology, a dozen or so projects concern R&D (3 in the Maghreb) or the design of electronic components, 5 software development projects, 2 e-shopping and e-banking projects; 5 « biotech » projects have been identified, concentrated on Israel (4 projects) and Tunisia; two other R&D projecst have been detected: a pharmaceutical research centre in Algeria, an automobile research centre on Malta; in aerospace, Morocco has joined Tunisia as an equipment supplier for the Airbus programme.


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Interest of the MIPO observatoryThe data base created by ANIMA should enable the different agencies of the partner countries (Investment Promotion Agencies –or IPAs) to have available a common « objective » reference and an increasingly reliable data base of real projects effectively located within the MEDA region. The data available will be even more reliable since it is an annual appraisal and intended to be undertaken each year. The gradual development of a series sustainable in time will enable the data to be processed statistically and thus enrich the base, as well as the relevance of the information which may be deduced from it.The MIPO (Mediterranean Investment Project Observatory) data base also has the objective of building an immediately operational tool for the IPAs of the partner countries. The information which is contained in it should be directly used for « promotional » ends, to monitor their performances, and for the enhancement of particularly representative or exemplary cases, the « success stories ».The lack of equality in the information received from the different IPAs introduces a strong bias in the analysis of the results and highlights the stake of a greater cooperation between ANIMA and the IPA partners.

4. Desirable improvements for future reports


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Desirable improvements for future reports

Conditions for the success of the MIPO observatory The interest and essential originality of the MIPO appraisal is that it presents foreign investments in the form of real projects (operational or announced) and based on an analytical approach. This data base will in time gain supplementary value, with the possibility of being able to study the evolution of the main indicators, by building sufficiently long time series and on the condition of being able to guarantee a certain methodological stability.The following proposals for improvement are suggested:§ The first improvement could come from a stricter definition of the criteria for inclusion in the assessment: separate treatment of the pre-projects (knowledge of which is strategically important for the IPAs) or projects which do not involve the creation of job opportunities. In this way, the purchase of capital equipment will be systematically set aside when there is no question of the creation or the extension of a foreign enterprise, despite it being an investment from the the company point of view. On the contrary the purchase of holdings by foreign enterprises would be maintained; § The collection of information from the « economic intelligence» unit could be improved by widening the field of exploration towards documents specific to the region studied and by completing the results with a « manual » research using a limited documentary base but one directly adapted to the theme and the geographical area studied. Information available in Arabic would be very useful; § The active participation of the MEDA IPAs before the annual publication of the MIPO is fundamental and should be systematic. The contribution of the IPAs linked


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Desirable improvements for future reports

to their knowledge of the field: exchange of information, rectification of obvious errors, contribution of information on projects which have not been the subject of international press advertising, « dead » projects perhaps still promoted by one intermediary or another… During the preparation of the MIPO 2003 appraisal, it was observed that the active participation of certain IPAs (Morocco, Lebanon) has enabled practically the doubling of the number of projects included in the appraisal for these countries. It has also been noticed that this participation, characterised by a knowledge of local reality is irreplaceable and is even reflected in the nature of the projects listed, which could not have been found by ANIMA. This partnership between ANIMA and the IPAs could be developed in the future insofar as, it is to be hoped, the IPAs are to be equipped with supplementary means and where exchanges between the IPAs and ANIMA may intensify;§ There is no point here of questioning the confidentiality of certain projects. Only those projects which have been subject of a public announcement may be « shared » at regional level. These are both numerous and also reveal the attractiveness of the country even if a time shift exists with the projects still under negotiation;§ As regards the frequency of information available concerning employment and the amount of the investment, the result obtained (around 2/3 for one or the other of these items of information) is very satisfying for a first try. This aspect should be improved in the future, with the help of the IPAs or by research on Internet. Employment should be subjected to special attention and where necessary, a systematic search for information coming from the investor, or an estimate.

Proposals for the appraisals to follow

The first role of the MIPO is to build a practical tool to dialogue


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and exchange information between the IPAs of the MEDA area.The active participation of the IPAs in the creation of the MIPO enables the data base to be enriched both in quantity (number of projects) and in quality (description, figures for employment and the amount of the investment).With the gradual creation of a longer time series, MIPO may become a source of specific finer studies (sectoral, regional, national…)According to the last report of the FEMISE 2003, the strong demographic growth and in consequence the priority given to investments which creates jobs will be absolutely imperative for all the countries of the region in the medium and long term. With this prospect in mind, it would be useful to allocate a major role in MIPO to the variable « employment ». Beyond the most precise description possible and the location of the project, it would be useful to indicate for each investment whether it is a creation, an extension or a takeover.Comparisons between the MIPO series and the WIR figures could be the subject for a study of the evolution of the main global indicators (groups of countries) and an examination of coherence. As regards the systematic bias defavourable to SMEs, it is to be hoped that this phenomenon will in future be corrected by an improvement and an enlargement in the documentary base, and especially by the active participation of the IPAs of partner countries, who close to the ground, are in a position to report on the investments really made in their respective countries.


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Appendixes


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The comparison between MIPO 2003 data and the WIR (World Investment Report, UNCTAD) 2003 data should be made with the utmost reservation and precaution.The MIPO data base contains productive physical investments or short term investment announcements. It is therefore a micro-economic type analytical approach. A time lag often exists between real projects (known by the enterprises) and projects announced in the media. Given the availability of information with figures, it is only possible to provide accounts of amounts invested or jobs created by numbers of projects and groups of countries. Consideration should also be given to the fact that this is a first attempt at a task intended to be renewed annually. The WIR approach is, however, based upon a long series and annual amounts expressed in US dollars. The figures are built from macro-economic data (balance of payments, national accountancy). The field of activity taken into account is wider (profits reinvested, intra-company loans, sub-contracting, project management contracts, turnkey agreements, franchises, patents …). Finally, the WIR 2003 report in fact covers 2002 data.The table below (Figure 13) gives, for each group of countries (Maghreb, Machrek, and other countries), the percentage of investments (FDI) listed in WIR during the five previous years and the percentage of the projects listed in MIPO 2003 (with and without data directly supplied by the Moroccan ID) :

5. Appendix 1. Comparison with the macro-economic results of UNCTAD (WIR)


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Figure 13. Representativity of MIPOWIR 98/02 MIPO 2003 MIPO except DI (1)

Maghreb 26 % 53 % 44 %

Machrek 18 % 19 % 23 %

Others 56 % 28 % 33 %

(1) excluding 43 projects provided directly by the Moroccan DI

It would appear that the « youth » of MIPO and the existence of a bias linked to the heterogeneity of the information collected makes any attempt at a comparison or an examination of coherence between the WIR data and MIPO difficult. Two long series of figures need to be available (a minimum of 3 years) to be able to make a real comparison of trends between the two sets of data.


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Renault produces the « Mégane » in TurkeyThe production of the Mégane has been launched in Turkey. Renault has started production of the new four-door Mégane at its Bursa plant, in North-Western Turkey. The car will be manufactured here for the whole world. It should be on the market during September in Turkey and in Europe, then in th rest of the world between now and the end of the year. The Bursa factory will supply 84 countries. With this car, the French constructor intends to consolidate its position as leader of the private car market in Turkey where at the end of July 2003, it held a 19.2 % market share. It also intends to pursue the development of its sales outside Western Europe. The four-door Mégane in fact targets the Southern and Eastern European countries as well as those situated outside Western Europe whose develeopment is the most recent. Some 40,000 Méganes should be produced this year and once crusing speed is reached 108,000 units should leave the plant each year. Renault has been been in Turkey since 1969 in partnership with the group Oyak. The joint company has invested 200 million euros in the Bursa plant to produce this model. The choice of Turkey to produce the Mégane consolidates the presence of Renault in the country, despite the serious economic crisis which reigns since 2001 and has seriously affected the automobile market. Source : La Tribune Desfossés 3 September 2003. © 2003 La Tribune – Desfossés

Integrated circuits manufactured in TunisiaNew subsidiary in Tunisia of the multinational STMicroelectronics. Yesterday afternoon, at the El Ghazala Science Park, M. Mohamed

6. Appendix 2. Some significant « success stories »


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Appendix 2. Some significant « success stories »

Nouri Jouini, Minister of Development and International Cooperation, inaugurated the Tunisian Centre for the Design of Micro-Electronic Components, a subsidiary of the company STMicroelectronics, which specialises in the manufacture of integrated circuits. The activities of the Tunis centre which employs 100 Tunisian engineers are centred on the production of integrated circuits, general public software applications and microcontrollers. Furthermore, M. Philippe Geyers, Vice-Chairman and Managing Director of the General Public and Microcontroller Groups of STMicroelectronics pointed out that the strategy of STM Tunisia involved an increase in staff from 100 to 250 engineers in 2004 to 500 in a later phase. Site http://www.st.com

Relocation : SQLI installs an offshore hub in MoroccoSSII is developing in Morocco so as to anticipate its clients’ demand. « We are convinced that the movement to offshore is inescapable, says Yaya El Mir, Chairman of the Board of the group SQLI. We must therefore anticipate so as not to be overtaken. » It is with this perspective that the service company has opened a development centre in Morocco, which came on stream in the month of October. « We chose Rabat for the quality of its education and the recruitment perspectives it offers, as well as its geographical and cultural proximity with France », explains Yaya El Mir, who does not hide the fact that his Moroccan origins were something of an advantage. Important recruitment campaigns. The group is to develop this centre as an extra branch. « We have been committed to a quality approach since 2002, the CMM-I approach. It is necessary to control the whole of the chain and therefore possess in-house resources », specifies Yaya El Mir. A dozen or so people will need to be recruited initially, then a further twenty between now and the end of 2004.The SQLI objective for 2006 is to employ more than 200 people in this centre, which will concentrate its competence in the J2EE, NET and OpenSource architectures. The group estimates


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that it will achieve a drop in costs of 20 to 30 % in its fixed price projects, which represent 50 % of its total activity. In «lettre les Pôles Med de production de contenu» Marseille Innovation December 2003SQLI in line with the industrialisation of services. The SQLI Group, specialist in Consulting and Integration in Information Systems and e-Business, has opened a development centre in Morocco. With an already powerful network of 11 sites in France and 2 branches in Switzerland, SQLI is pursuing its development and opening an “offshore” hub. To succeed in this venture and thus reconcile quality and competitiveness, SQLI is relying on CMM-I (Capability Maturity Model Integration), a comprehensive approach to quality undertaken by the Group in 2002, and a sine qua non condition for the success of offshore / nearshore projects. The choice of the SQLI Group finally went to Morocco, firstly for its geographical and cultural proximity (no time difference nor translation problems) and secondly for its wealth in human resources, with a high level of qualification. This structure, operational since October 2003, will gradually realise its potential in relation to the projects undertaken and according to an internal growth model which guarantees a single company culture. It will enable the SQLI Group to undertake projects involving several thousand man days, based on the technical mastery of the teams and a high level of quality. Source : Armelle Siccat. 26 September 2003. Les Actualités de 01Net. All rights reserved (c) 2003 Groupe Tests, 01net.

Air-con manufacturing facility in Lebanon Copeland Corp. to remodel plant, add 360 jobs in Lebanon LEBANON Copeland Corp. plans to expand into a new facility and bring 360 more jobs to Lebanon by 2005, Mayor Bud Allen announced Tuesday. Allen said Copeland Corp., which makes refrigerator and air conditioner compressors, plans to move into the former VF Jeanswear Lebcut plant. Allen said Copeland would lease the building from the city beginning Friday. The Sidney, Ohio-based subsidiary of St. Louis’ Emerson Electric Co. was already Lebanon’s largest employer, with more than


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800 workers. The plant’s three production lines produce about 2 million compressors annually for use in home and business air-conditioning systems. Lebanon lost 750 jobs when VF Corp. closed its jeans plant in January. ``Hopefully, we will get as much as half the jobs back that we lost,” Allen said. Allen said Copeland would pay to retrofit the 170,000-square-foot building, creating 21 jobs immediately. Copeland Plant Manager Scott Evans said his company plans to move some distribution services into the building from its current plant, which is about two miles northeast of the old VF plant. Evans said the new plant would handle the company’s service compressor line and direct inventory and compressors to specific customers. ``That’s not to say that three years from now, what’s over there couldn’t be something different,” Evans said. ``But having that square footage places us in position where we have a lot of flexibility, and we think that will be a win-win for us and the community as well.” Evans said the company is looking to add a fourth production line with two new products, including a fifth-generation scroll compressor still being developed. The city did not offer any additional incentives to Copeland, but will seek state and federal grants to improve streets and services around the plant, Allen said. Allen said the city would have loved to regain all the jobs it lost when VF closed its plant, but 360 jobs was a good amount in the short term. The plant will also help the city with other revenues it lost in January. ``It was a big loss to us, both in electricity, water and sewer,” Allen said. ̀ `We hope to get some of that back.” Source: Associated Press

Orascom projets in Algeria

ALGIERS, 24 September. Orascom Telecom Algerie (OTA), subsidiary of the Egyptian group Orascom and holder of the 2nd operating licence for GSM mobile telephones in Algeria, has invested the sum of 1.1 billion dollars in the telecommunications


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sector in this country, the Chairman and Managing Director of the group Nadjib Sawaris announced in Algiers on Wednesday. During a press conference held to celebrate the occasion of its one millionth subscriber, M. Sawaris indicated that his group had also invested 250 million dollars in the construction in a cement works at M’sila (North West Algeria), which has been operational for the past two weeks. The Chairman was equally proud of the profits made in Algeria this year, which he qualified as « excellent » and « unexpected », especially in the mobile telephone sector, since any investment normally takes two or three years to show a profit. When questioned on the investment environment in Algeria, he said that the environment was “reasonable” and that the yields on investment are “positive”. It should not be forgotten that the Orascom group had obtained the 2nd operating licence for GSM mobile telephones in July 2001 and it today controls 87.5% of the market, with the remainder held by the public operator Algerie Telecom. Source http://www.algeria-interface.com

Moody’s in Egypt

Moody’s the rating agency, announced yesterday that it had signed an agreement with the company Finance and Banking Consultants International (Finbi), based in Cairo, to create a joint-venture to provide ratings and financial studies in Egypt and the Near East. This new company will be called Middle East Rating & Investor Services (Meris). Source : La Synthese des Marchés August 6, 2003

Malaysian car assembly line in Syria

Proton Plans To Assemble Cars In Syria. Malaysian automaker Perusahaan Otomobil Nasional Bhd. (P.PON), or Proton, plans to assemble cars in Syria, the New Straits Times newspaper reports. Proton has signed a memorandum of understanding with Syria Modern Technology Trading Co., the newspaper says. “We are trying to look at a total alliance with MTT, with the help of the


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Malaysian and Syrian governments, to develop their small-medium industries through the automotive industry,” the paper quotes Proton Chief Executive Officer Mahaleel Arif as saying. Proton and MTT will study the viability of the project over the next three months. Currently, MTT imports the Proton Waja and Wira cars. Last year, about 650 Proton cars were sold in Syria, representing approximately 5% of the country’s car market. Source: Malaysia Press. Newspaper web site: http://www.emedia.com.my

A macro- tourist complex in MoroccoThe property company of Galician origin, FADESA, has just decided on a sizeable investment in Morocco. The operation, called Complexe Mediterrania Saidïa-Maroc, plans the creation of a macro tourist resort with 16,000 beds (spread over 8 four and five star hotels) as well as 3,000 tourist residences, three 18 hole golf courses, several service and shopping centres... In total the investment represents the creation of 8,000 direct jobs and around 40,000 indirect for a total sum of 1.5 billion euros. The company FADESA was in competition on this project with 13 development companies. Source www.fadesa.maFirst investment of 18.9 million euros and 180 jobs only in 2003. Source : Morocco DI (31/12/2003)

Tesco sets up shop in Turkey The leading cross-channel food retailer is about to purchase a chain of Turkish hypermarkets, thus completing its international development. Tesco supermarkets, which occupy the top place in the British market, announced yesterday that they have signed an agreement to purchase part of the capital of Kipa, a Turkish supermarket chain. The agreement concerns 84.3 % of the « A » shares of this company and could be finalised later in the year, subject to all the suspensive conditions being satisfied. The transaction evaluates the complete capital of Kipa at 75 million pounds (108 million euros).


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Tesco is thus getting its foot in the door of the Turkish market and crossing a new threshold in its international development. The distributor is in fact present in Eastern Europe (Hungary, Poland, Czech Republic and Slovakia) and in Asia (Thailand, Taiwan, Malaysia and South Korea). The group currently has 45 % of its selling surface outside the United Kingdom and 75,000 staff members abroad, out of a total of 296,000. In 2002, Tesco had a turnover of 5.2 billion pounds (7.5 billion euros) abroud, that is an increase of 31 %. But that represents, however, a mere 18.2 % of its activities. Upcoming store openings. The retailer plans to open 16 hypermarkets in Asia and 18 in Europe this year and continues to examine the possibility of a presence in China and Japan. This does not prevent the group from developing in the United Kingdom, where it intends to open 25 stores during the course of the year (« Les Echos » of the 9 avril). The international development of Tesco represents one of the aspects of its development plan, introduced six years ago, and which includes development in the non-food sectors, such as textiles, furnishings, or the sales of services to the general public, such as financial services. News of the agreement with Kipa was well received by the London market where the stock was up by 5 pence at mid-session. Source : Les Echos, n° 1889118 April 2003, p. 17 ; Tesco va s’implanter en Turquie by MARIE-LAURE CITTANOVA

Carrefour targets IsraelExclusive: French retail giant Carrefour eyes Israeli market. Carrefour has been testing the Israeli market for several months, preparing its market penetration. Sources inform “Globes” that French retail chain Carrefour, the world’s second largest after Wal-Mart Stores (NYSE: WMT), has been testing the Israeli market for several months, preparing its market penetration. In the past, Super Sol (NYSE; TASE:SAE) and Blue Square Israel (NYSE: BSI) negotiated a partnership with Carrefour, but no agreement was achieved. Carrefour may choose to establish an independent platform, rather


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than work through an existing framework. Carrefour adopted this policy for countries such as Egypt, where it began operating six months ago. Three years ago, French chain E Leclerc planned to enter the Israeli market, and even hired Israeli company POC to accompany its penetration. E Leclerc eventually suspended its plans, after the security situation deteriorated. Carrefour operates in 30 countries, and has 383,000 employees in over 9,000 outlets. The company made a €1.37 billion profit on sales of €78 billion. Source: Globes [online] - www.globes.co.il - on June 29, 2003

Indian acrylic fibre plant in EgyptAn acrylic fibre plant, with 500 million Egyptian pounds ($82.4 mln/73.4 mln euro) invested in the initial stage, will be built in Egypt, under an agreement between Saudi-Egyptian Industrial Investment Company, India-based Birla Group, Arab Oil Investments Company (as given by the source) and the Egyptian Ministry of Oil, it was reported on September 18, 2003.The plant will be built in the Al-Amiriyah industrial zone in Northern Egypt and will create some 1,000 jobs. The plant is scheduled to begin production in December 2004. In the initial stage, it will have a production capacity of 18,000 tonnes annually, to be raised to 36,000 tonnes in the second stage. The plant will meet the domestic demand for acrylic fibre, which is currently imported. In the third stage of the project, some140,000 tonnes of the plant’s output are to be exported. Acrylic fibre is used in the manufacture of textiles, bed covers, linings and carpeting. Source: www.mistnews.com, 18 September 2003

Technology transfer in TunisiaThis afternoon in Tunis, ProMetic Sciences de la Vie, from Montreal, should announce an agreement with a Tunisian firm which will bring it 30 million dollars between now and the end of 2006 as well as long term royalties varying between 5 % and 8 % on the annual sales of four medecines produced by genetic engineering.


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According to the information obtained by the La Presse, the Tunisian partner of ProMetic is a private biopharmaceutical firm which has been created at the initiative of La Pharmacie Centrale de Tunisie (PCT), a Tunisian State company. The new company in Tunisia will construct a biopharmaceutic plant costing 60 million $ CAN and will exporter to Africa, the Middle East and Eastern Europe generic medicines such as alpha-interferons. These human proteins which act against certain cancers or chronic hepatite B are rare in the natural state, but may be produced in large quantities thanks to genetic manipulation techniques (…). Apart from the income, ProMetic will obtain a minority stake in the new firm, in return for its technologies for the extraction and purification of biopharmaceutic medicines.

(…) The President of ProMetic, Pierre Laurin, confirmed the imminence of an announcement and stressed that ProMetic was only investing its know-how in the enterprise: “We have done this kind of contract work several times with pharmaceutical multinationals (especially Aventis and Bayer), concerning on each occasion the extraction and the purification of a single innovatory medicine, he said. In the case here, it is the same development work, but concerning generic medecines, to the benefit of a co-enterprise in which we shall be minority shareholders”. According to M. Laurin, the Tunisian project is important for ProMetic because it is the first concrete example of a business strategy the aim of which is to export ProMetic technologies under licence. “For certain regions of the world, exporting generic medicines manufactured in North America or Western Europe is prohibitive. It is much more sensible to sell them the technologies which enable them to manufacture their medicines with their own cost and price structures, and their own statutory framework. (…)

M. Laurin added that one of the most important criteria in PromMetic’s decision to participate in the shareholding of the new firm is that it directly involves the Pasteur Institute of Tunis, a research centre of world renown (…). “Its participation gives the co-enterprise cutting edge local expertise, as well as a portfolio of


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potentially very interesting medicines which could be produced by the co-enterprise. “For example, the Institute has developed various products for regional use (vaccines against types of rabies in the Maghreb and antidotes against poison from desert scorpions and snakes) which henceforth have a natural commercial outlet. “These cutting edge products, taken individually, each have much too small a market to ever be of interest to a multinational. But taken together, and manufactured by a regional firm, they represent an appreciable market.” Source: La Presse Affaires, 15 October 2003, Arcand, Denis (c) 2003 La Presse.

Chlorine plant in JordanJordan Bromine Company builds new membrane chlorine plant. The Jordan Bromine Company (JBC) has awarded the key contracts to design and construct a new 25,000 metric ton-per-year membrane chlorine production facility at its Safi plant on the Dead Sea in Jordan. The chlorine from this facility will be used to support the growing demand on the bromine facilities started up in October 2002. This new production unit is expected to be complete and operational in January 2005. Annual capacity is just less than 40,000 metric tons of potassium hydroxide (KOH), including a 15,000 metric-ton flake production facility. All products from the new facility will be marketed worldwide, though primarily to Europe and the Asia Pacific region, by Albemarle Marketing Company, a wholly owned subsidiary of Albemarle Corporation. “This potassium production in Jordan will be an important addition to our existing production of KOH and carbonate products in Thann, France,” said Global Business Director for potassium and chlorine products, Alex Smit. “With two plants in different geographical areas and a complete product line, Albemarle will reinforce its global market position and will be better able to serve customers in Europe and other world markets.” Source: menareport.com


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German industrial heating systems on MaltaA German company has invested E600,000 by opening a new branch in Malta. The company - Hotset Heizpatronen und Zubehoer GmbH - produces electrical heating elements for industrial applications. There are 16 Maltese people employed with the company, but the figure will increase as Hotset expands. The company first set its eyes on Malta a year ago, and through the help of the corporation commenced production in November. Economic Services Minister Josef Bonnici described the new factory as another “German quality investment”. He said the new investment complemented the existing operation of companies in other locations. “Experience showed that the additional production capacity in Malta provides new flexibility and gives an additional competitive edge to these companies. This allows them to expand their product range and target new markets,” he said. The minister spoke about the short time in which the company managed to establish itself in Malta and described this fact as the best guarantee that it would expand in the near future. He said the company would also be an effective advert to attract other foreign direct investment. Prof Bonnici said Malta’s potential to attract foreign investment would be significantly enhanced through imminent European Union membership. Source: www.hotset.de


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The MIPO data base for the year N is built from projects effectively implemented during the year N or which have been the subject of a short term investment announcement. The largest part of the information obtained was collected by the watch team of the AFII (Invest in France Agency), which works essentially on the preparation of the France appraisal and the Europe appraisal of foreign investments. A part has come from certain countries (IPAs), another part has been detected by the ANIMA team based in Marseille.

SourcesThe economic intelligence techniques used by the AFII include the acquisition of the following documentary sources: § Subscription to Reuters economic news flows (more than 10,000 news items per day in French, English and German);§ Subscription to the Lexis Nexis data base;§ Use of accessible « open » bases: for example in France, www.kompass.fr, www.societes.com, www.lexpansion.com;§ Use of subscription data bases: the “World Base” of Dun&Bradstreet (useful for nationality, turnover, registered office, activity, management, etc. https://www.dnb.com (including a part – Who Owns Whom” alias e-WOW)§ Use of complementary bases which can be very useful in their open parts for information about activity, size, main executives, such as www.hoovers.com;§ Systematic or ad hoc search on the web, to collect data to be

7. Appendix 3. Methodological approach


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Appendix 3. Methodological approach

found on the open sites of enterprises which are interested in the Euro-Med region, or to check incomplete data collected about a project (via Google, as a starter).Specialist software to analyse international data bases using key words such as the country name and expressions linked to the investment business in several languages.The results obtained in this way are transmitted to the ANIMA team, who alone decide if the information should be included in the MIPO observatory. Each project is thus examined individually. Any doubling up within the report of a given year or between successive reports is systematically eliminated.For each investment project, the following information is mentioned in the MIPO table wherever possible:§ the country of destination;§ the name and nationality of the main investor;§ a brief description of the project;§ the sector of activity;§ the number of jobs created (if the information is known);§ the amount of the investment in euros (if the information is known);§ the provisional annual turnover (if the information is known);§ the whole text of the information to provide description and verification.

Eventual complements from the MEDA IPAs The MIPO Excel table which is gradually built up in this way, is available in a simplified version (title of project, date, country of origin, of destination, sector) on the ANIMA internet site. This enables the MEDA IPAs eventually to react and make their comments known to the ANIMA team. At the end of the year, extracts of the Excel table concerning a MEDA area country of are transmitted to the corresponding national agencies (IPAs) for information purposes, observations


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Appendix 3. Methodological approach

and eventual complements. This last phase is essential: it enables the data to be « validated », while making MIPO a tool for interchange, information and dialogue. Only three countries had reacted by the end of 2003: Morocco (60 projects mentioned by DI, including 43 added to MIPO), Lebanon (with essentially tourist projects, but also an excellent regional economic watch unit) and Malta (with a list which cannot be exploited, since the names of the companies were not supplied). Tunisia, as do other countries, possesses a quality statistical tool of the projects, but it has not been possible to access it. Only one country has rejected a priori to provide information on FDI (Cyprus), given the refusal of its Central Bank.The tables are built on an annual basis. Under a « stable regime», the table of a given year (N), including the start ups of year N and the announcements of future short term investments, is a good indicator of investment for the year N, providing that the announcements made in this same year N are not included in the tables the following years.The information concerning the amount of the investment and the direct employment created have been supplied respectively at levels of 37 % and 29 %, which is satisfactory for a first attempt. It can nevertheless be hoped that in the future this type of essential information will be available more and more often and that especially information on employment generated will be systematically available. The amounts of the investments, often given in US dollars, have been converted into Euros for 2003 at the average annual rate of 1€=1.15 US$ (that is 1 US$=0,8696€).

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Documents

Foreign direct investment (FDI) in the MEDA region in 2003 · MEDA Group of 12 partner countries of the European Union: Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco,