Sunday, Jun 23, 2024
Update At 14:00    USD/EUR 0,92  ↑+0.0002        USD/JPY 151,69  ↑+0.174        USD/KRW 1.347,35  ↑+6.1        EUR/JPY 164,16  ↑+0.143        Crude Oil 85,49  ↓-0.76        Asia Dow 3.838,83  ↑+1.8        TSE 1.833,50  ↑+4.5        Japan: Nikkei 225 40.846,59  ↑+448.56        S. Korea: KOSPI 2.756,23  ↓-0.86        China: Shanghai Composite 3.015,74  ↓-15.745        Hong Kong: Hang Seng 16.512,92  ↓-105.4        Singapore: Straits Times 3,27  ↑+0.018        DJIA 22,58  ↓-0.23        Nasdaq Composite 16.315,70  ↓-68.769        S&P 500 5.203,58  ↓-14.61        Russell 2000 2.070,16  ↓-4.0003        Stoxx Euro 50 5.064,18  ↑+19.99        Stoxx Europe 600 511,09  ↑+1.23        Germany: DAX 18.384,35  ↑+123.04        UK: FTSE 100 7.930,96  ↑+13.39        Spain: IBEX 35 10.991,50  ↑+39.3        France: CAC 40 8.184,75  ↑+33.15        

Producing more, importing less

Article - June 27, 2012
Joint ventures proliferating in both public and private sectors are making major contributions to building a better future for Algeria, as evidenced by the ongoing pursuit of strategic partnerships by SGP EQUIPAG

A state-owned holding company specialised in agricultural, industrial and construction equipment, SGP EQUIPAG’s portfolio comprises around 30 companies and subsidiaries that are centred around three key sectors: agricultural machinery, industrial supplies, and public works vehicles and equipment.

Agricultural machinery represents almost 40 per cent of the company’s business and includes producing equipment such as combine harvesters and tractors, and the construction and repair of fishing boats, as well as seeding, fertilisation and tillage equipment.

“The government wants to reach a certain level of food security for Algeria and to develop the nation’s infrastructure,” says Bachir Dehimi, President of SGP EQUIPAG. “That is why there are some massive cash injections into expanding mechanisation, modernisation and lands available for agriculture. This in turn enables us to increase our production and launch new products to supply the growing demand, as well as open new areas. Tapping into new markets represents an important incentive for potential foreign partners, such as Liebherr, with whom we have recently been completing an important deal for public works vehicles.”

In this era of diversification, production from the mechanical sector can contribute significantly to bringing down our imports bill.

Bachir Dehimi,
President of SGP EQUIPAG

EQUIPAG’s turnover has now reached $375 million (£241 million) per year and as the company is seeking further expansion it has implemented a $250 million investment programme, spread over four years, in order to modernise and upgrade its tools and equipment. “We say to our partners that we bring the assets; we provide the investment necessary to modernise the production equipment in order to begin our partnership with the greatest efficiency. For our partners it is a guarantee of success and it all works out very well,” says Mr Dehimi. “We are not just talking about forklifts and elevators, but also all handling facilities found in ports.”

Reducing imports

By aiming to boost domestic production of much-needed industrial equipment, EQUIPAG is also looking to help the reduction of the nation’s import bill, with a long-term view of even managing to raise exports of surplus stocks.

“In this era of diversification, production from the mechanical sector can contribute significantly to bringing down our imports bill – all the tractors we build in Algeria represent tractors we do not need to import,” says Mr Dehimi. “Every single combine harvester we build means one less import. EQUIPAG produces public works vehicles, bolts, fastenings, pumps, etc. 

“All our homegrown production reduces imports. The more we can produce, the less we will import.”

Indeed, the companies in EQUIPAG’s industrial section (EIH) satisfy 60 per cent of demand in the domestic market: engines made by EQUIPAG’s subsidiary EMO, taps, cutlery and bolts by BCR, pumps and valves by POVAL, and machine tools by PMO all contribute toward keeping the country’s import costs down.

Diversity and synergy

The diversity of EQUIPAG’s activities – a reflection of the national push for a wider manufacturing and industrial base making a greater contribution to the country’s economy – also makes it quite an emblematic Algerian corporation.

Its company EMO builds diesel engines and equips the vehicles and machines produced by the group’s other subsidiaries such as the ETRAG 2311 farm tractors, the CMA SAMPO 500 combine harvesters, the public works vehicles manufactured by ENMTP, and the pumps made by POVAL.

The smooth interaction between the various companies within the groups is a good illustration of the synergy that runs throughout the entire corporation.

Boosting exports

EQUIPAG is already an established exporter through its subsidiary BCR, which is highly renowned for its superior quality products overseas. However not all Algerian labels are so well marketed abroad. Consequently, the company is relying on partnerships to help in this regard.

“If I export my product with a partner, I have a guarantee of quality and cost, and the reassurance of their name,” says Mr Dehimi. “Our products are done in accordance with the highest international standards and sold under our renowned partners’ names – this is the first step towards building up an export market and this is what South Korea has done successfully. Taking the next step, we may well be able to launch our own brand.”

EQUIPAG has been in business since 1974 and over the years has built an enviable reputation at home for its quality and service that would stamp a seal of quality onto any product produced with a new partner for local use or export. Mr Dehimi concludes: “Partnership is for me a way to invest in the future; the transfer of know-how holds our future success.”