Tunisia's Group Loukil Eyes African Expansion Amid Risks at Home

  • Aims to double sales from outside Tunisia by 2019, CEO says
  • Tunisia air conditioner plant to export to West Africa

Tunisian conglomerate Group Loukil is seeking to expand in Africa as a powerful union movement and delays in government reforms make it increasingly difficult to do business at home, Chief Executive Officer Bassem Loukil said.

"Our target between now and 2019 is to have 50 percent of our sales from outside Tunisia, spreading the risk. We don’t see any growth potential in Tunisia so if you want to grow and take advantage of your experience you have to go outside," he said in an interview in the Egyptian resort of Sharm El-Shiekh.

Tunisia has battled to restore growth since the 2011 uprising that ousted long-time dictator Zine El-Abedine Ben Ali and ushered in years of political instability. The government agreed a four-year $2.9 billion loan facility with the International Monetary Fund in 2016 but has struggled to push through painful reforms in a nascent democracy with a strong union movement.

Loukil said strict labor rules were hampering business and delaying much-needed reforms to end a currency black market that is discouraging investment.

Loukil made two investments in Tunisia in 2017; one in a truck assembly plant to export to West Africa and another in a Unionaire air-conditioners plant with an Egyptian partner. By March 2018, its output destined for export to West Africa as well as Libya and Algeria.  

The company plans to invest 20 million euros ($23.6 million) in 2018, including 5 million euros in the production, processing and export of cashew nuts and cocoa in Guinea and 6 million euros in Mali to produce and distribute tomatoes and potatoes with an Italian partner.

Loukil has signed an agreement with the government of Djibouti to establish a logistics platform for the import of cars and truck and has secured space at the port.

Loukil, speaking on the sidelines of an Africa business conference, urged his own government to float the currency, reform taxes and overhaul its customs system to encourage foreign investors and boost Tunisian businesses growth.

"We need to have strong and willing government to push these reforms forward and say ’no’ when it has to say ’no’ to the labor union demands, but it isn’t going to happen," he said.

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