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Markets: Marble for Maghreb

By Alfredo Martini, CRESME*

(January 2010) The building branch on the African Continent has experienced an all-out boom in recent years: spurred by excellent economic performance and large projects to boost infrastructure, the past 8 years have seen regular growth of 8.5% per year achieving a turnover of 167 billion € (341€ per capita turnover).

2008 alone saw growth of over 9.4% – comparable to that of such countries as China (+12.6%) or India (+14.9%). Whereas 2009 saw negative growth throughout industrialized nations with considerable investment cutbacks (in Europe -7.9% and in the USA -14.4%), statistics published by Sistema Informativo Mondiale sul mercato delle Costruzioni (SIMCO) show strong growth of +6% in the region as compared to negative growth worldwide (-2.6%). SIMCO is a worldwide data recovery system for the building industry operated by CRESME.

2010 will see a convergence with an upward trend (+7.6%) due to large infrastructure projects being started and strong cash flow from abroad, especially from India and China. By comparison worldwide economic growth is expected to reach +3.3%.

All of Africa’s Mediterranean countries have enjoyed exceptional buoyancy in the building branch. Moreover the mid- and long-term prognosis for investment is a positive one. This is not only true for large engineering projects but also for private building projects of homes in the region making up more than one quarter of the region’s investment. 2009 is expected to show increased growth in the private building sector. However, beware of statistics: the expected increase of +22% must be seen relative to the negative growth of 14% in 2008…

The building branch took on a decidedly lively course between 2007 and 2009 particularly in the Maghreb region, that is in the francophone countries of Morocco, Algeria and Tunisia. Combined with excellent results as shown by all North African countries in light of the Trade Agreement and the Euro-Mediterranean Free Trade Zone, the region offers enormous potential for the Italian building sector and its suppliers.

This is particularly true for the natural stone branch especially with regard to the private building sector… Italian stone producing industry is well advised to watch the North African Markets closely not only in regard to the expected growth of the building sector and the entire economy but also because Italian companies already active in the region are placed to increase performance for the entire sector, particularly in francophone countries.

Export figures confirm that the branch is moving and has recognized the potential of the Maghreb markets. The value of worked natural stone exported from Italy to Maghreb countries saw an average growth of +17% or 55 million € between 2001 and 2008. Growth in 2008 was in keeping with the mid-term average but slowed compared to the exceptional year 2007 (+44% relative to 2006). The increase in export volume between 2001 and 2008 was +13% on average.

Preliminary figures of the Italian Board of Statistics Istat shows an increase of natural stone exports in the first 7 months of 2009 by +14% relative to the same period of the year before. However the growth leads back to price increases only as the export volume saw a clear decrease (-36%). Possible interpretation is greater demand for high-end products.

For the Italian natural stone industry potential growth in Africa along the Mediterranean coast is considerable. The region made up for 5% of total Italian stone exports in 2008, of which only 3.2% fell back on the Maghreb region … Steps in conquering the market have been slow, surprising considering its enormous potential: of the 104 million € in exports to Africa 84% were destined for the North. A relatively small portion of 17 million € found its way south of the Sahara distributed among Nigeria, South Africa, Equatorial Guinea and Senegal.

In a nutshell North Africa is a region of enormous socio-economic potential for development with a vast market of 157 million population and a building industry of over 40 million €. The building branch enjoys yearly sustained growth in the order of +7%. Encouraged by the export figures of years gone by, the Italian natural stone industry would be well advised to focus on Mediterranean African Nations as target markets.

It is reasonable to assume that these countries will play an increasingly important role on the global stage. This is the context in which the Euro-Mediterranean Conference of 1995 agreed a free trade zone coming into effect 2010. The schedule probably cannot be kept. But with 40 member States and 600 million consumers this will one day be one of the world’s larges free trade zones.

* CRESME, is a Non-Profit-Organization researching the building branch since 1962.

Marbre Expo Fair, Tunis

Interbuild Egypt Fair, Cairo, June, 17.-21., 2010

Photos: Mazagan Beach Ressort