4. Best Prospects: Industrial and Agricultural Sector Exports Industry Best Prospects - Ranked by market size. The best prospects listed below reflect the stagnation of the Ivorian market during the last two years and the effects of the January 1994 devaluation. Of particular note is the considerable variance (almost 50%) in total market size in terms of U.S. dollars for 1994. In fact, the total value in local currency has not varied. The figures for U.S. imports do not accurately reflect the actual flow of goods originated from U.S. manufacturers. A significant number of goods are transhipped with little or no value added through European intermediaries namely France, the Netherlands and Belgium. The market value of the transhipped goods is estimated to be half the size of the total market for some sectors. In addition, due to irregularities in the customs statistics used to derive the size of the markets must be increased by a minimum of thirty percent in order to reflect the actual flow of goods. Currently, the customs statistics are available through 1992. Figures for 1993 are provisinal. In 1994, the Ivorian Customs Department plans to implement the Harmonized System, consequently, prior year's statistics are based on the old system. In 1995, the statistics will be based on the new system. Finally, the average annual growth rates for the markets are estimated in relation to the local currency value. A) Rank: 1 B) Name of Sector: Paper and Paper Board C) Industry Sector Code: PAP (USD million) 1992 1993E 1994E D) Total Market size 44.0 38.0 20.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 44.0 38.0 20.0 H) Imports from the U.S. 19.5 15.5 7.0 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 5% Comments: Several industries remain active end-users of paper and paper board including the housing industry for cement bags, the food industry for food packaging, and the printing industry for newspapers and stationery. Other end-users include distributors of paper for photocopiers, fax machines, calculators, point of sale systems and producers of toilet paper. Over the last two years exports of pineapple and bananas has increased the need for packaging paper; likewise, the demand for newsprint for newspapers and magazines has grown due to an increase in the number of papers and magazines in the country. The U.S. is the leader (44%), followed by France 15%), and Finland (10%). A) Rank: 2 B) Name of Sector: Agricultural Chemicals C) Industry Sector Code: AGC (USD million) 1992 1993E 1994E D) Total Market size 31.0 30.0 15.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 31.0 30.0 15.0 H) Imports from the U.S. 5.3 6.0 4.0 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 5% Comments: Agriculture is still the dominant sector of the Ivorian economy. Farmers and companies involved in agro- industries are the main end-users. The need for high productivity and low-cost production drives the demand for agricultural chemicals. Suppliers include the U.S., the leading country in this market, followed by Russia, Germany, and Benelux countries, and Nigeria. A) Rank: 3 B) Name of Sector: Computers and Peripherals C) Industry Sector Code: CPT (USD million) 1992 1993E 1994E D) Total Market size 21.0 21.0 13.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 21.0 21.0 13.0 H) Imports from the U.S. 6.1 6.5 3.0 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 10% Comments: Driven by the increasing use of computers in many businesses and government parastatals, the computers and peripherals market continues to grow rapidly. Over the last ten years, public agencies and private companies have invested in information systems as a means of improving operating efficiency and accuracy. Leading brands are American, French, Italian and Japanese. Several foreign manufacturers have established offices or have agents or distributors to represent them. American computers have high brand recognition and are noted for their reliablity and leading edge technology. A) Rank 4 B) Name of Sector: Air Conditioning and Refrigeration Equipment C) Industry Sector Code: ACR (USD million) 1992 1993E 1994E D) Total Market size 15.0 15.0 5.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 15.0 15.0 5.0 H) Imports from the U.S. 1.5 1.5 0.9 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 8% Comments: France leads the market (49%), followed by Italy (19%) and the U.S. (9%). However, the figures for U.S. exports in this sector do not accurately reflect the actual volume as some equipment is transhipped via France and other European countries. Over the last two years, new housing starts have increased, and the need for refrigeration and air-conditioning has increased as well. The fishing industry and agro-industries also have been major end users of cold storage facilities and air-conditioning equipment. A) Rank 5 B) Name of Sector: Mining Industry Equipment C) Industry Sector Code: MIN (USD million) 1992 1993E 1994E D) Total Market size 10.0 10.0 5.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 10.0 10.0 5.0 H) Imports from the U.S. 1.2 1.2 0.7 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 5% Comments: The two current mining projects (AFEMA with OPIC as a partner, and Mines d'Or d'Ity with a French partner) and the discovery of oil reserves by an American petroleum firm, United Meridian Incorporated (UMIC), are positive signs of the Ivorian Government's willingness to undertake partnership agreements with foreign investors. The government is also revising the mining code to favor investment and tax incentives for potential foreign investors. The country has other metals and minerals in abundance as well, which have not been exploited. Results of studies, for example, have confirmed the richest nickel laterite deposits in the world. The market is led by France with 40 percent followed by Brazil with 24 percent, and the U.S. with 12 percent. A) Rank 6 B) Name of Sector: Agricultural Equipment and Machinery C) Industry Sector Code: AGM (USD million) 1992 1993E 1994E D) Total Market size 10.0 10.0 5.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 10.0 10.0 5.0 H) Imports from the U.S. 1.0 1.0 0.5 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 5% Comments: The predominant economic activity in C te d'Ivoire is agriculture. For many years the Ivorian Government has attempted to diversify into other agri-business activities besides coffee and cocoa, the main export commodities. Privatization plans for this sector include parastatals which may in turn increase the demand for agricultural equipment. The market for agricultural machinery and equipment is led by the U.K. (33%) followed by France with (23%), and the U.S. (8%). As with air conditioning and refrigeration equipment, the figures for U.S. exports do not accurately reflect the volume of imports of U.S. -made equipment. Some equipment imported from France and other European countries except the U.K. may have originated from the U.S. A) Rank 7 B) Name of Sector: Oil and Gas Field Machinery and Services C) Industry Sector Code: OGM (USD million) 1992 1993E 1994E D) Total Market size 9.0 9.0 5.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 9.0 9.0 5.0 H) Imports from the U.S. 1.0 1.0 0.5 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 10% Comments: The recent discovery of oil reserves (capable of producing 25,000 barrels per day) has increased the market for oil and gas equipment and supplies. Other exploration activities in the same area as the strike are contributing to market development. The market is led by France (33%) followed by Italy (8%) and by the U.S. (7%). A) Rank: 8 B) Name of Sector: Telecommunications Equipment C) Industry Sector Code: TEL (USD million) 1992 1993E 1994E D) Total Market size 7.0 7.0 5.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 7.0 7.0 5.0 H) Imports from the U.S. 0.5 0.5 1.0 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 7% Comments: Recent developments in the Ivorian telecommunications sector reflect a gradual change in the Ivorian government's views about privatization and the revival of dormant telecommunications projects in the country. The market for telecommunications in C te d'Ivoire, one of the most efficient and equipped in West and Central Africa, is dominated by the French. Recently, new, non- French technologies have begun to appear despite French influence in major purchasing decisions. U.S. companies have introduced their technologies during the last three years in the areas of customer premise equipment and long distance services. The potentially lucrative cellular franchise is being actively pursued by several companies including one U.S. firm. A) Rank: 9 B) Name of Sector: Food Processing Equipment C) Industry Sector Code: FPP (USD million) 1992 1993E 1994E D) Total Market size 3.0 3.0 2.0 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 3.0 3.0 2.0 H) Imports from the U.S. < 0 < 0 0.5 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 10% Comments: The potential within the food processing and packaging industry has yet to be totally exploited. For example, fruit and vegetables are beginning to be processed locally. On the other hand, products such as dried bananas, dried peanuts, and ginger juice or syrups are processed and marketed locally on a traditional, small scale basis. Barriers to modern processing equipment are: price, quality, local consumption potential of the end product, and competitive export opportunities. The potential for this sector should improve over the next five years as the general economic conditions improve. A) Rank: 10 B) Name of Sector: Security and Safety Equipment C) Industry Sector Code: SEC (USD million 1992 1993E 1994E except where noted) D) Total Market size 3.0 3.0 1.5 E) Total Local Prod'tion 0.0 0.0 0.0 F) Total Exports 0.0 0.0 0.0 G) Total Imports 3.0 3.0 1.5 H) Imports from the U.S. 0.5 0.5 0.1 I) Exchange Rates 265 282 570 J) Estimated AAGR 1993-1995 10% Comments: Although crime rate has been reduced over the last two years, the market for industrial safety equipment in C te d'Ivoire shows promising growth over the next three years. Government initiates to crack down on law-breaking and to strengthen the police and other security agencies should help spur spending. Private expenditures for security should also increase, as banks, businesses, and private citizens act to protect themselves in the face of deteriorating public safety. Best sales prospects range from sophisticated X-ray and TV equipment for buildings to simple security items carried by guards. American sales to C te d'Ivoire account for nine percent of total imports, behind the French, with a third of the total import market. An American firm has one of the largest security guard services in C te d'Ivoire. Agricultural Best Prospects A) Rank: 1 B) Name of Sector: Rice C) PS&D Commodity Heading: Rice, Milled (0422110) 1992/93 1993/94 1994/95 D) Total Market Size 770 TMT 790 TMT 800 TMT E) Local Production 442 TMT 460 TMT 480 TMT F) Total Exports 0 0 0 G) Total Imports 312 TMT 330 TMT 320 TMT H) Imports from U.S. 45 TMT 90 TMT 90 TMT Comments: Rice is the urban staple in C te d'Ivoire and thus its supply and price are extremely important to the government. The importation of ordinary white rice is controlled by a state monopoly while decorticated rice and deluxe rice (4% broken, -5 kg pkg.) are regulated with a system of import licenses. The retail price for rice is established by the government. GOCI policies which subsidize urban rice consumers will tend to maintain high levels of consumption and imports. The U.S. has had success in this market with decorticated rice imported by private rice millers for processing and then sale on the local market. The U.S. also holds a large percentage of the extremely small deluxe rice market. U.S. white rice is only competitive as part of the PL480 program. A) Rank: 2 B) Name of Sector: Wheat C) PS&D Commodity Heading: Wheat (0410000) 1992/93 1993/94 1994/95 D) Total Market Size 210 TMT 210 TMT 200 TMT E) Local Production 0 0 0 F) Total Exports 0 0 0 G) Total Imports 196 TMT 210 TMT 200 TMT H) Imports from U.S. 13 TMT 15 TMT 20 TMT Comments: Wheat imports and the price of flour and bread are controlled by the government. Wheat flour imports are essentially banned. The flour mill is run by a multinational company based in Europe with mills throughout west Africa. U.S. wheat is imported for blending because of its higher protein content. The percentage of U.S. wheat used varies from 10 to 25 percent depending on the relative costs. The high costs of protein content have hurt imports of U.S. wheat in the past two years. The devaluation should lead to a decrease in imported wheat, however, government price controls have so far kept it competitive with local alternatives. A) Rank: 3 B) Name of Sector: Dairy Products C) PS&D Commodity Heading Milk & Milk Powder (No Regular Reporting) 1993 1994 1995 D) Total M'kt Size(fl. eqv.) 240 TMT 245 TMT 250 TMT E) Local Production(fl. eqv.) 18 TMT 20 TMT 22 TMT F) Total Exports 0 0 0 G) Total Imports (fluid eqv.) 222 TMT 225 TMT 228 TMT H) Imports from U.S. Condensed Milk 492 MT 500 MT 500 MT Whole Fat Milk Powder 1,200 MT 2,300 MT 3,500 MT Comments: Imports of whole fat milk powder from the U.S. were made in 1993 as a result of the GSM-102 and DEIP programs. The prospect for milk powder exports from the U.S. will remain good as long as DEIP and GSM are in place. Milk powder is used in the manufacture of UHT milk and canned condensed milk. The dairy product market in C te d'Ivoire has been dominated by imports from Europe, cheese and other specialty products will continue to come from this source. Milk powder in consumer packaging is also a potential market for U.S. exports. A) Rank 4 B) Name of Sector Alcoholic Beverages C) PS&D Commodity Heading Wine and Spirits (No Regular Reporting) 1993 1994 1995 D) Total Market Size 20,000 HL 18,000 HL 19,000 HL E) Local Production 0 0 0 F) Total Exports 0 0 0 G) Total Imports 20,000 HL 18,000 HL 19,000 HL H) Imports from U.S. 1,000 HL 1,000 HL 1,500 HL Comments: These figures do not include beer as this segment of the market is dominated by local production of around 2 million hectoliters (HL) while imports are only around 500 HL. Wine accounts for over 90 percent of the import figures reported and is predominately from Europe, France in particular. As a former French colony, the French wine tradition is firmly rooted in C te d'Ivoire. Diversification of sources is, however, beginning, and offers a good window of opportunity for U.S. exporters. A) Rank: 5 B) Name of Sector: Canned and Prepared Vegetables C) PS&D Commodity Heading: Tomato Products & Other Preserved Vegetables 1993 1994 1995 D) Total Market Size 10,000 MT 10,500 MT 12,000 MT E) Local Production 500 MT 500 MT 1,000 MT F) Total Exports 0 0 0 G) Total Imports 9,366 MT 10,000 MT 11,000 MT H) Imports from U.S. 500 MT 500 MT 750 MT Comments: Over 80 percent of this market is made up of tomato products, with tomato paste comprising the bulk of this. Imports are mainly from Europe, with Italy being the major supplier. Local production has been on again off again, however, the devaluation may provide this sector a boost. This sector is very price competitive, particularly tomato products. U.S. exporters should explore the possibility of providing mixed containers of canned vegetables plus other grocery items. A) Rank: 6 B) Name of Sector: Frozen Mackerel C) PS&D Commodity Heading: Frozen Mackerel (No Regular Reporting) 1993 1994 1995 D) Total Market Size 20,000 MT 22,000 MT 25,000 MT E) Local Production 0 0 0 F) Total Exports 0 0 0 G) Total Imports 20,00 MT 22,000 MT 25,000 MT H) Imports from U.S. 0 0 0 Comments: As with most staple foods, mackerel imports are very price sensitive. Imports of mackerel are mainly from Europe, in particular the Netherlands, as well as from other African nations to the north. The main price differential between U.S. and other sources appears to be the cost of refrigerated shipping. The distances are not really that different, but the lack of traffic creates a very high price structure from the U.S. C te d'Ivoire produces as well as imports a wide range of fish products.