Groupe SIFCA - Cosmivoire

The agro-industrial group SIFCA produces three different sub-products:rubber, sugar and oil products (particularly palm-oil). Some of the most important buyers of its rubber for are, among others, groups such as Firestone and Michelin. While rubber production is destined to the world market, sugar and oil are targeting the West African Economic and Monetary Union but the company is also looking for ways to access all the whole ECOWAS market. For sugar the demand is growing slowly while for soap and palm oil, its global presence still pales in comparison to Asian companies. The company has suffered directly from instability in West Africa in general and Liberia in particular. The company at the end of 2008 is also looking for regional and international partners.

Regarding the activities of one of CIFCA’s subsidiaries, Cosmivoire, the company’s CEO, complains about the malpractices of some competitor palm oil exporters in Nigeria. These exporters first import palm oil from Asia or Brazil, then they alter it slightly by mixing it with locally-produced oil or additives. Doing so is cheap and automatically renders the palm oil as a “local product” and from there on entitled to the benefits of being exported from a zone franque to Europe. This process of “trade laundering” is extremely negative for companies which are in fact comprehensively producing and manufacturing a product from start to finish and contributing to the real growth of Cote d’Ivoire’s economy.

Ivoiral – Groupe TIGA

The big challenge for the West African region remains the perspectives for the export of its goods. Strikingly it takes longer for goods to be transported from the hinterland of West Africa to Abidjan (for example, from north Nigeria, Cameroon or Mali), than from Europe and Asia to a company operating in Abidjan. This makes it very hard for a company such as Ivoiral to buy products form Cameroon for example. In addition, logistics, customs bureaucracy and transportation of goods from ports such as those of Luanda and Pointe Noire are often troublesome and detrimental to business. In addition, energy and electricity are extremely expensive in Cote d’Ivoire. This is particularly concerning for the production and manufacturing of aluminum products which consume large amounts of energy.

The company has had problems in Nigeria, and went through a merger in 2005. Nigeria is a competitor. European companies like Arcellor have the know-how. The company in turn makes use of local labor but also takes advantage of cheaper primary goods. The company is now seeking for a greater integration of the regional market in order for economies of scale to be possible. In Africa, Ivoiral needs to adapt the market segment of its sales to lower incomes but is trying at the same time to comply to European standards in order not to lose out in export opportunities. Some problems faced within Côte d’Ivoire are the infrastructure, namely the route system as well as the complexity and bureaucratic nature of the tariff system. In fact, smaller companies competing with Ivoiral are often able to avoid tariff and bureaucratic barriers of trade very easily by informal and often illegal methods but for larger companies such as Ivoiral, such would never be an option given not only its modus operandi but its exposure and cheer size. The company’s year turnover is of 30 billion CFA.