The pandemic, and the supply chain pressures that followed, have challenged FIDI Aﬃliates operating out of North Africa, presenting them with generic international obstacles – such as rising costs – and unique local ones. However, as Andrew Mourant discovers, the resourceful businesses of Algeria, Egypt, Morocco and Tunisia have made the most of the situation, with some ready to eye new opportunities
This has long been true of Morocco, which has also profited from recent events. ‘This market is perhaps unusual in that we’ve benefited from supply chain disruption brought about by the pandemic,’ says Gil Recizac, local Managing Director for AGS.
Some companies have shifted manufacturing facilities to the country to escape further chaos and avoid exorbitant freight costs. Morocco’s proximity to European markets, along with new tax-free zones (in Tangiers, for example), has acted as a further stimulus. Product- makers from mainland Europe have moved in to take advantage, easily able to dispatch their goods back across the Mediterranean.
While this has generated new business for AGS, it’s not all good news, admits Recizac. ‘New players have been lured into the market, which has resulted in a lot of unexpected competition,’ he says. ‘Companies sending trucks from Europe now have agents in Morocco to make sure these are full on the return journey.’
Post-pandemic business took an upturn in 2022, when moves delayed because of prolonged border closures could finally go ahead. AGS Morocco was strengthened by the arrival of two new sales reps from other branches, while participation in VIE, France’s international internship programme, helps ensure a steady inﬂux of new talent.
‘Our size, international footprint and variety of core businesses – moving/relocation/records management/fine art/FF&E [furniture, fixtures and equipment] – also attract people,’ says Recizac.
The price and scarcity of container ships has been an ongoing headache throughout the moving industry. ‘Corporate clients had no choice but to absorb the increased rates, although they offset these by reducing moving allowances, moving fewer employees, or shortening the duration of assignments.
‘High freight rates resulted in more consolidated shipments for us. Given our proximity to Europe, we used trucks for some moves, which helped, because prices were more reasonable and transit times shorter.’
Recizac says the growth in Pan-African moves, as Africans increasingly invest in their own continent, remains part of the business future, even though moving within Africa can often be challenging.
That said, AGS has seen a substantial increase in FF&E, relocation, records management and fine art transport services.
Jamyl Bouayad, MD at Bedel, says the ‘climate of confidence’ in some countries, especially Morocco, is spurring on this trend. Yet, he’s cautious about the outlook.
‘The pace of recovery in Africa since 2021 isn’t marked enough to erase the consequences of past crises: the drop in per capita income in many countries; and the rise in poverty and unemployment,’ he says. ‘The ability of governments to act is burdened by rapidly increasing debt and tightened conditions for countries with access to external financing.’
Difficulties persist for moving companies that want to replace skilled, tech-savvy staff reaching retirement age. ‘Some business qualifications are no longer available on the job market, and firms must train young people to ensure the same level of service quality,’ Bouayad says.
‘We’re obliged to look internationally. It may seem surprising, but it can also be difficult to fill job roles such as executive assistants or secretaries. Our customers pay much more attention to the experience people have, especially “soft skills”, beyond diplomas and technical skills. Candidates take increasing care about what the company offers, as well as working conditions – premises, hours, parking space, benefits, etc.’
The price and availability of containers is a problem that has lingered and triggered increasingly high costs. As the container ﬂeet worldwide has shrunk, demand has, inevitably, increased. Firms must often book transport 50 days in advance, instead of 10 days before the pandemic.
There’s a different picture across the border in Algeria – culturally, politically, and economically – and the country can appear something of a closed book to the wider world. ‘It’s a traditional society that follows a model of sovereign and protectionist development,’ says AGS local manager Alexandre de Beauregard [see panel on p45, and feature on p57].
As the largest producer of gas in Africa, it’s also richer than outsiders might imagine. Like Morocco, it avoided the upheavals of the Arab Spring, but tensions have simmered nevertheless. Three years ago, widespread public protests resulted in Abdelaziz Bouteﬂika being replaced as president by Abdelmadjid Tebboune. One economic consequence has been protectionism, with the Algerian government controlling consumer imports and promoting goods made domestically.
Meanwhile, efforts continue to diversify non-hydrocarbon exports and wean Algeria off its dependency on oil and gas. AGS carries out between 100 and 150 international moves annually, import and export combined. Grappling with the moving industry’s twin headaches of finding good staff and tracking down containers has proved less onerous than for some neighbouring countries. ‘There’s a good level of training and skills in Algeria, and it isn’t difficult to find people who match our needs,’ says De Beauregard.
‘We provide working conditions that respect local and international standards – and our work makes sense (to staff) because you can immediately see that it’s useful: a service.’
The nature of overseas trade in Algeria means there’s no problem with containers, according to De Beauregard, because the country – despite government policy – remains a major importer of
common consumer goods. ‘Most containers landing in ports are returned empty by shipping companies, so the sharp increase in rates hasn’t had a significant impact here.’
For all that there’s a sense of political fragility in Tunisia, its proximity to Libya, in a state of perpetual chaos, has brought economic benefits – not least to the local branch of AGS. ‘A lot of embassies that would have been in Libya are here – 50-70 per cent of our clients are diplomats,’ Sami Afankous, Deputy Manager at AGS Tunisia, told FIDI Focus.
The other mainstay of AGS business in Tunisia is big industrial companies, especially petroleum firms such as Total and Shell, French firms linked with transportation, and worldwide pharma and distribution companies, albeit these now employ limited numbers of foreigners.
But the departure of the African Development Bank – which began a decade ago and was once a profitable source of trade for AGS – has left a void that has yet to be filled completely. Moreover, bureaucracy makes business life difficult, Afankous says, with the government seeking to limit exports and imports.
Tunisia’s recent upheavals have discouraged international investment. ‘There’s no money here and the country can’t borrow – the country is struggling to pay its functionaries [civil servants].’
As for tackling COVID, AGS adopted a global strategy to ensure all employees were paid even when not working – a lifeline for them, but a big demand on the company’s finances. Besides the soaring price of freight, packing materials have also become more expensive. It makes for a tough climate and is bad news for customers. Afankous says that being upfront from the outset is the best way of dealing with things. ‘We need to adapt and engage with all our clients, and work with suppliers to find the best prices,’ he adds.
Among changes implemented by Tunisia Branch Director Michel Vuillin is the recruitment of ‘quality staff’, some through IVE, to add extra support. He’s also introduced new training programmes. ‘It has been a struggle to hire [suitable] local staff, but we always manage to do it,’ says Afankous.
He believes AGS will continue its post-COVID bounceback after what has been ‘a hard time for everyone’. The company has expanded its range of services to include office moves, customs clearance, and fine art. ‘We’re getting a better image in general,’ says Afankous. And despite competition in some areas from smaller local firms ‘they aren’t as reliable… sometimes [their staff] work, sometimes they don’t’.
Few FIDI Affiliates in the region seem more optimistic than Jerry Nazzal, President of Express International Group (EIG), the Cairo-based company founded by his father, George, more than 50 years ago. It helped that COVID restrictions in Egypt were less draconian than in many parts of the world – in fact, ‘a little on the lax side’, says Nazzal, with locals often blasé about rules and regulations. ‘We weren’t under curfew. Business was 50-70 per cent of usual levels and we didn’t really stop. Egypt is such a vast country; you can’t stop the wheels turning. Cairo doesn’t sleep.’
The diverse nature of EIG’s business helps keep it resilient, not least its growing trade making cardboard and paper packaging. This started in 2008 but suffered a big blow three and a half years ago when fire ripped through the plant. It has taken quite some time to recover, but the operation is now back on track, and Nazzal sees scope for expanding and marrying two strands of his business.
‘I’m planning to start a trucking business. We sell our boxes to people involved in agriculture, so now I can sell them logistics as well. I’m starting to become a supply chain.’
When FIDI Focus spoke to Nazzal in 2019, he expressed frustration at how doing business in Egypt languished in the last century, but technology is finally starting to supplant fiddly paperwork.
Government has set an example, albeit belatedly, and now makes e-payments through its portal. The old ways aren’t dead yet, says Nazzal, but Egyptians are ‘full-on’ engaged with new technology and faster communications.
Like many FIDI members, however, he worries about replacing valuable staff nearing the end of their career, and now looks to recruit ‘simpler’ people from the suburbs rather than worldly ‘city boys’ tempted by jobs in the digital world. Two years ago, he discovered an employment agency – of which there are few in Egypt – that helped fill vacancies at the packaging plant. ‘It takes full responsibility – vetting people and providing daily labour – and it works perfectly.’
Removals have now returned to pre-pandemic levels, with a steady trade in corporates moving in and out. Such is Nazzal’s confidence in the future that he is now targeting expansion into the Gulf states, opening an office in Saudi Arabia, having already set up in the United Arab Emirates. ‘Saudi has become quite a market – the building and expansion is mind- boggling and I want to be part of that,’ he says. ‘It’s the last place I thought I’d end up, but the Saudis are very business friendly. They want investors.’
AGS Algeria focuses on domestic moves
Alexandre de Beauregard, Branch Manager at AGS Algeria, says the local market for international removals is experiencing a ‘challenging time’.
During 2020 and 2021, large numbers of non-diplomatic foreign residents left the country. This was the result of both COVID-19 and the Hirak protest movement, which led to the end of the presidency of Abdelaziz Bouteﬂika and the installation of Abdelmadjid Tebboune as President of the republic.
‘These events are now things in the past and we do believe the country will return to normal over time,’ says de Beauregard, ‘but in between, we have to adapt.’
This, he adds, is informing the company’s commercial policy, including: ‘Tightening our relationship to the diplomatic market in Algeria; and reclaiming our ITGBL status with the US embassy – something our newly acquired FIDI status will help us a lot on.
‘We also want to increase the number of domestic moves we make for Algerian citizens and Algerian companies. We have the know-how required in our company to provide these services and we are being asked more often to provide them, too.’