Algiers and Tunis – Randon, a Brazilian manufacturer of highway implements, intends to deliver at least US$ 30 million in products in Algeria this year, with the possibility of sales reaching US$ 40 million. "We had trouble catering to the Algerian market because of the appreciated real (Brazilian currency). Now that the value of the real is more ‘real’, we are able to compete," said to ANBA the director at the company, Erino Tonon, who is participating in a trade mission of the Brazilian Ministry of Development, Industry and Foreign Trade.
The company owns an assembly line in Algiers in partnership with a local company. The vehicles are shipped from Brazil disassembled, to be put together and sold in the Arab country. In 2009, Randon should export to the Algerian market at least 1,500 semi-trailers in completely knocked down (CKD) kits and 10 ready-to-use heavy off-road trucks.
In 2008, even with the real appreciated for most of the year, the company’s deals in Algeria generated revenues of US$ 25 million. The Algerian partner is responsible for the assembly, distribution and servicing of vehicles sold, Randon being the supplier of technical assistance. Currently, three of the company’s employees are in Algiers to train local workers.
Randon runs a similar business in Morocco, where approximately 500 units are assembled each month. Now, according to Tonon, the company is negotiating a partnership along the same lines in Egypt.
In the first leg of the mission, in Tripoli, Libya, Tonon prospected the market to check whether it is possible to set up the same type of operation in the country. "There is a possibility," he said.
According to him, Libya is a growing market and should become larger than Morocco, despite having a considerably smaller population. The reason for that is, according to the executive, that the country has a greater repressed demand for products such as Randon’s. Besides, it has plenty of oil, a source of abundant revenues.
Lower cost
Tonon added that exports of disassembled vehicles are advantageous, as the costs are lower. In Algeria, for example, the import tariff on an assembled vehicle is 30%, whereas a CKD pays 5%. The cost of freight from Brazil to the Arab country for ready-to-use semi-trailers is higher as well.
The delegation headed by the minister of Development, Industry and Foreign Trade, Miguel Jorge, left Algiers late in the afternoon on Wednesday (28) and arrived in Tunis early in the evening. On Thursday, the businessmen will attend a seminar and business roundtables in the capital of Tunisia.
*Translated by Gabriel Pomerancblum
