Development of the Tunisian economy: the marble industry

  • 25 August 2014

The economy of Tunisia has long been regarded as an outstanding success both in Africa and in the Middle East. The current situation, however, is complicated by political uncertainty, due to the transition that is going through. During 2012 and 2013, the attention of the Tunisian government on political transition, in fact, led to a neglect of economic reforms. The problems of the Tunisian economy are evident and, in fact, have caused several rating downgrades of the country. As the economy recovers, the government of Tunisia is challenged to reassure investors and businesses, bringing the budget deficit and the current account under control, improve the country’s financial system, aiming at the reduction of the high rate of unemployment, and the reduction of economic disparities between the more developed coastal region and the interior depleted.

It is interesting to deepen the extraction and processing of marble, considered strategic for its socio-economic impact in the inner areas of the country. The strengthening of the field of marble and stone is strategic for the revival of economic activities in the areas of regional development. Tunisia has great potential: there are eight varieties of marble and marble stone of good quality whose deposits are still partially exploited.

Specifically, the marble sector has 188 companies engaged in the extraction and processing of stone and marble in the industrial and semi-industrial. In addition to these, there are approximately 170 units that deal with the processing of marble in the traditional way, with staff and technical capacity reduced. The processing of marble and stone has a truly impressive in view of the macro-sector of the production of building materials in Tunisia, which is one of the most dynamic and rich prospects for investment. The extraction of the marble is concentrated around the major basins within a radius of 30km to the south / south-east of Tunis (Jebel Oust, Cap Bon) in the North / North-West of the country (Mateur, Chemtou, Teboursouk, Siliana , Le Kef) and the Centre-West (Thala-Kasserine). Processing, craft or retail is instead spread throughout the country, focusing mainly around the major population centres, which are the so-called markets of domestic production and imported marble.

The main stakeholders are the ones who control the supply chain from extraction to processing to marketing of local products in Tunisia and imported and export their materials in blocks or as finished products. The number of such operators is not very high. It is generally held company wholly Tunisian placed around the area of Tunis, or in the vicinity of large cities. Some work instead directly from the place of extraction.

The demand for stone materials in Tunisia is in constant growth thanks to the continued development of the sector of public and residential. The building industry and public works realized an average annual turnover of 5 billion DT and contributes to about 7% of GDP, draining 25% of the investments and giving direct employment to 40,000 people working in 2,800 SMEs.

Since the quality standard of the buildings is constantly growing, the search for valuable materials pushes the demand for domestic and foreign products quality up. In this way, we are witnessing on the one hand to improve the quality of local production of manufactured goods that are made with the finest quality of local stone and – on the other – the increased imports of processed stone and materials that are not available locally. In particular, Tunisia matter granite, travertine and white and coloured marbles to increase the range available on the market, which consists of local marble stone and marble that tend to resemble very much for tint and brightness. The range of marble stones Tunisian is varied from the point of view of their nature, colour, and aptitude for machining and polishing.

Another factor that affects the demand for marble consists in competition with ceramics in the market for wall coverings and flooring. This involves the development of new products and the adoption of more advanced techniques and technologies. This competition is a benefit both on the supply side, which is required to improve the quality, both on the demand side because you have access to better products and lower cost.

The distribution of stone products in Tunisia sees the central role of companies in the mining and processing of marble. The market is characterized by a group of large companies that have developed an integration path by controlling the supply chain from mining to marketing, managing the strategic business of processing. In this context, they import foreign materials not available locally, supplementing their product range and thus acting as suppliers for small processing enterprises, providing them with the meal (from local or foreign). These small companies scattered nationwide across the Tunisian territory, not having the technical skills and technology to perform the cut blocks, and are dedicated to cutting of sheets and finish of the final product sold at retail.

An additional distribution channel that has emerged in recent years consists of the largest real estate development companies that – working primarily in residential construction and the construction of shopping centres and hotels – are sourcing directly marble in blocks. Some of them have developed an internal capacity of processing while many others rely on the material to external operators. Finally, there are some cases of property development companies that have set up trading companies in the field of building materials.

The commercial strategy for the domestic market is mainly based on the proposal for a competitive value for money, since the final consumer Tunisian is extremely sensitive to the purchase price. In general, there is a different perception of the fact that marble is locally produced or imported. While local production has reached acceptable standards of quality, and this has enabled it to gain a good reputation, on the other hand resists the Tunisian consumer attitude towards buying foreign marbles (and Italians in particular) at the time when you want to give prestige to the property in the building.

As mentioned earlier, the major players in the industry are those that control the supply chain from extraction to processing to marketing of local products in Tunisia and imported and export their materials in blocks or as finished products.

In 2012, imports of stone materials showed a value of 32,363,201 DT and an amount of 125,115,205 tons. In the same year, exports reached 109,031 tons and a value of 28,750,125 DT. Tunisia imports mainly granite and travertine materials absent on the spot, or processed into blocks and exports marble and stone marble industry largely in the form of blocks.

The trade balance of the sector has been negative for about 3.6 million DT, confirming the trend of previous years and sees Tunisia unable to compensate with its products the importation of the finest materials and highest added value. Also in 2012, Italy has confirmed its position as the premier provider of Tunisia. Italian exports are based on the rich marble (Carrara particularly) and travertine. As instead regards the granite, Italy is in second place behind Spain. Italy also maintains its role as the premier provider of technologies for extraction and processing. This record is still threatened by countries such as Spain, Turkey and the Republic of China, which provide technology to lower costs.

One of the critical factors for the development of the stone sector in Tunisia is the infrastructure situation in the production areas of the centre-west and north-west. Although there is a network that connects all the areas concerned, it is one lane roads and two-way traffic, with no lighting and signage minimized. It follows that the transport from areas of the interior marble industry (Thala, Kasserine, Maktar, Siliana, Le Kef, Jendouba) to the processing areas are in proximity of the large coastal cities, is not easy. There are plans for the modernization of existing roads and the extension of the motorway network to the inside. For 2014 has already been granted Tunisia a loan of 240 million dinars from the FADES (Arab Fund for Development) for the construction of 7 projects of rehabilitation of 200 km of roads in 6 Governorates of the interior of the country and for the ‘asphalting of about 750 km of rural roads. Another critical point concerns the logistics and maritime links with Europe. Although the World Bank in its report of 2014 positions Tunisia at the 74th place in the index of logistics performance, defining a framework on the whole satisfactory, the concentration of freight traffic in the port of Rades poses problems of overcrowding.

Human Resources

The Tunisian companies in the stone industry have an average number of staff often overflowing with qualifications below the standard. In particular, in addition to a number of companies are well-equipped and staffed technically able to manage manufacturing processes, many more have recourse to an intensive use of unskilled labour to reduce costs of investment in equipment of last generation. In addition to lowering costs, the purchase of technology, it is often -given assumptions that the positioning of the companies in depressed areas of the north-west or the counter-west- often have a value of “social” to establish a bond of proximity to the local community, which is often alien intervention by the local political authorities who do not hesitate to offer unconditional support in the face of job creation.

Are there specific training programs for the sector, managed by CTMCCV (Technical Centre for Construction Materials, Ceramics and Glass) and of ATFP (Tunisian Agency for Vocational Training), which has centres dedicated professional and that any company can use for professional development programs tailored.

Access to credit

The Tunisian banking system is very rigid and is being restructured. To get a loan you must hold collateral or a guarantee by a foreign bank. Even the difficulties related to the transfer of currency (convertibility of bank DT only); make financing operations on site very difficult. As instead regards the repatriation of profits and the normal financial activities related to development of totally exporting companies, there are no particular problems in the handling of currency between Tunisia and abroad.

Croatian economy: chronic problems and critical situations

  • 7 August 2014

In July of 2013 Croatia became the 28th   Member State of European Union. Today, after a year, from the entrance in Europe, however, the economy of the country is still in the grip of the crisis and the chronic problems of the country.

According to a ranking made by the Economist, Croatia -along with countries such as Ukraine, Libya, Venezuela and the Central African Republic- it would be among the ten worst economies in the world.

In fact, the Balkan Country is still one of the few economies in the EU to don’t show signs of recovery. Inflation -according data of Croatian Institute for Statistics (DZS) – has grown again, with yet another decline of 0.8 per cent of GDP in the second quarter of 2014 is the eleventh consecutive semester with sign negative. Despite some economic indicators -such as growth in imports and industrial production- had raised hopes of a slight recovery, the decline in GDP is even higher than that recorded in the first three months of this year (-0.4%). Economic experts predict that on a yearly basis, the GDP in 2014, the Croatian will see a decline of 0.6 per cent. The factors that most contributed to the economic downturn is the lack of direct investment, the lack of recovery in the construction sector and the contraction of the personal expenses of the population due to high unemployment (18%) and widespread pessimism about future prospects.

Among the structural deficits of the Croatian economy, unemployment strikes directly the population. Croatia is the third EU country with the highest unemployment, after Greece and Spain. In January 2014, in fact, the unemployment rate was 22%, the highest in twelve years. Out of a population of 4.4 million, according to the National Bureau of Statistics, only a quarter is regularly employed. Retirees are about one million. The good news is that the unemployment rate fell to Croatia in July, for the first time in two years, under the threshold of three hundred thousand units, amounting to 17.9 percent of the entire workforce. The statistical data show widespread Croatian Employment Office.

According to the government the decline in the number of unemployed – in July for the fifth consecutive month – is also accompanied by a substantial growth in employment that would not be due solely to the traditional strong summer demand for seasonal workers in tourism. The statistical data, in fact, also show a decline in the number of unemployed in other sectors, especially in manufacturing.

Another structural problem that plagues Croatia is the national debt. The public debt, which in 2013 accounted for 59.6% of GDP, is now 64.7%. The excessive deficit Croatian resulted in January 2014, the opening of a European procedure against Croatia, guilty of not complying with the stringent EU standards. The Ecofin (Economic and Financial Affairs Council) agreed to a request from the European Commission to open an excessive deficit procedure. According to the data provided by the Croatian authorities, the Croatian government deficit for 2013 was significantly above the EU’s 3% of GDP and is expected to increase in 2014 and in 2015 the correction program was already established and today was confirmed: to be within the threshold of 3% by the end of 2016, the Government of Zagreb are asked to bring the deficit / GDP ratio to 4.6% at the end of this year, to 3.5% at the end of 2015 and 2.7% in 2016 to hit these targets are required to consolidate the state’s budget, proceed with the reforms of the public administration and the labour market, to revise the cost and improve the tax system.

Croatia has responded with an extraordinary package of austerity measures approved last April, which provide for an increase in the excise on fuel and telephone costs, as well as heavy cuts in agricultural subsidies and small and medium-sized enterprises. Measures that are projected to reduce the deficit to about 0.4%, according to the Croatian Dalje. For years, Zagreb has committed to review its public spending and reforming a government, which, since the days of Yugoslavia, is considered too great if commensurate to the actual size of the population. The latest proposal is to privatize major highways of the country, which should yield between 2.5 and 3.2 billion euro, but the final figure will depend on the period, which may vary from a minimum of thirty up to a maximum of fifty years. This capital should reach into the coffers of the Croatian state in February and in this way save public expenditure.

The Croatian government, in addition, to cope with the steady decline of revenue coming into the state coffers from VAT and income tax, has decided to tax next year bank deposits and savings. The levy will be on the interest of twelve percent per annum, while the savings will be excluded more modest, although so far it has not been decided the limit of deposit exempted. In this way, the government expects to collect about 50 million euro. The new fee should take January 1, 2015 and in 2016 is expected the introduction of property tax that is expected to hit in the first place the owners of three or more houses.

The renewable energy sector in Turkey is a new market for European companies?

  • 5 August 2014

The energy consumption in Turkey

In recent decades, Turkey has been one of the energy markets, which recorded the fastest growth in the world. The demand for electricity is approximately tripled over the last fifteen years (currently Turkey is the second country in the world-after China to increase energy demand).

The Energy-Environment sector one of the priorities of intervention necessary for the integration of Turkey into the European Union. For this reason, the country is called to invest 130 billion euro by 2023 (hundredth anniversary of the founding of the Republic).

The current demand projections for the period up to 2020 indicate that the average annual growth in demand will be between 6% and 8%. According to a moderate scenario, up to 2020 will require an additional capacity of 40,000 MW. The optimistic scenario, however, for the same period provides an additional capacity of about 60,000 MW. In this perspective, the need for investment in the electricity sector during this period is estimated to exceed $ 100 billion. Among all the countries of the southern and eastern Mediterranean, Turkey is thus the nation with the highest financing requirements for the energy sector.

The objectives in the energy sector that Turkey aims to achieve by 2023 are:

  • Increase in installed capacity to 120,000 MW
  • Increasing the share of renewable energy to 30 percent
  • Maximizing the use of hydropower
  • Increase in installed wind power capacity to 20,000 MW
  • Installation of power plants with 600 MW of geothermal energy and 3,000 MW of solar energy
  • Increased length of lines 60.717 km
  • Once the capacity of the distribution of 158.460 MVA
  • Increased use of smart grid
  • Increase the storage capacity of natural gas to 5 billion m3
  • Definition of stock exchange energy
  • Commissioning of nuclear power plants (two nuclear power plants operating, and a third under construction)
  • Construction of a coal with a capacity of 18,500 MW

The renewable energy sector

Turkey has the highest potential for hydropower, wind and geothermal energy in Europe. It also has a great potential of solar energy per year equivalent to 1.3 mega tonnes of oil equivalent since it is located between 36 and 42 degrees north latitude and 26 degrees east longitude and 45 and overlooks the Mediterranean Sea, the Sea Aegean and the Black Sea. Moreover, the potential annual biomass in the country is about 372 TWh. In other words, Turkey is privileged from the point of view of renewable resources. Despite this, the share of renewable energy in the total energy balance is negligible.

In 1970, primary energy consumption in Turkey was 19 Mtoe (221 ​​TWh), reached 105 million Mtoe (1,221 TWh) in 2010 and, according to the official scenarios, it is expected to double, reaching 2,442 TWh in year 2020.

Today, fossil fuels such as natural gas, coal and oil supply nearly 90% of Turkey’s total primary requirement. In terms of supply of electricity, fuels, CO2-intensive have a market share of approximately 72%. The rest is met from renewable sources, of which about 89% comes from hydropower. Currently, only about 11% of the electrical energy is supplied from wind, geothermal, biomass and by the time that 77% of fossil fuels are imported, that is to say that 55% of the total consumption is covered by sources imported, the country can be considered to be extremely dependent on foreign sources. The main reason that explains the energy dependence is the uneven growth of new installed capacity in relation to the increase much faster than the demand, mainly due to the rapid expansion of the population and the economy. A second but equally important reason is the easy access to fossil fuels, natural gas and oil at relatively low cost, since Turkey as a transit country for such fuels. The scenarios mentioned above assume a constant dependence on imported fuels for years to come, subject to the nuclear option currently in progress.

According to estimates, about 70% of energy demand will be covered by imported fossil fuels; the remaining 30% will be met by domestic resources, of which about 60% from coal and lignite, about 30% from renewable resources and about 10% from other national resources. As a result, in terms of electricity, Turkey intends to meet by 2023 30% of estimated needs with renewable energy.

The State Turkish have undertaken several measures to exploit indigenous resources and increase the share of renewable energy sources to electricity production is to strengthen energy security, reducing dependence on foreign, that to reduce emissions of carbon dioxide (CO2 ) and combat climate change. Various incentives to encourage the production of electricity from renewable energy sources have been developed and promulgated by various laws. The key points of these laws cover a variety of incentives for natural and legal persons involved in the production of electricity from renewable sources; these incentives are explained in detail in the following sections.

Potential of renewable energy

Hydroelectric

Turkey has an estimated hydropower potential of 430 terawatt hours (TWh), which represents 1.1% of the global potential and the 13,75% of the EU’s potential. In theory, the hydroelectric potential of Turkey is able to meet up to 46% of its electricity needs by 2020 There are about 678 sites available for the construction of hydroelectric power stations, 172 of which are already under development. However, only 30% (130 TWh) of this potential is achievable. Approximately 97% of this economic potential lies in fourteen of the twenty-six river basins in Turkey.

In Turkey, the main rivers are located in the eastern regions. In essence, the system of the rivers Tigris and Euphrates, with its vast catchment area and its high altitude, contributes to the abundant potential of the country, allowing the construction of large power plants. In addition to the above, the recent work on small hydropower generating further energy potential of 38 TWh per year. These small plants, built on an elevation and rivers having a lower surface drainage, are mostly located in the western areas.

Currently there are 172 operating hydroelectric power plants with a total installed capacity of 13.7 GW and an annual energy production amounted to 47.8 TWh. Other 94 stations, with a total capacity of 5.2 GW and an annual energy potential of about 17,560 GWh, are currently under construction. Additional 506 hydroelectric power plants will be built in the near future, reaching a total installed capacity of 63.24 GW and an annual production of about 155 TWh by 2020 on the basis of a study published recently by the Ent Hydraulic State on small hydropower, could be acquired an additional technical potential energy of about 5 TWh / year, 3 TWh of which seem economically feasible.

A percentage between 32% and 35% of electricity demand expected, between 440 and 480 TWh, can be satisfied by the energy produced by hydroelectric power plants.

Solar Energy

Turkey has abundant resources related to solar energy, as it is located in a sunny belt between 36 and 42 degrees north latitude. The potential of the country is estimated at 1.3 billion tons of oil equivalent (15,120 TWh) and is distributed among the various regions. Most of these areas are suitable for the development of solar energy systems.

Due to the size of Turkey and the geographic location of each of its regions, the average annual total solar radiation and sunshine hours are different for each region. The average annual total radiation varies from a minimum of 1,120 kWh / m2 per year in the Black Sea region, with 1971 hours of sunshine a year, to a maximum of 1,460 kWh / m2 per year in south-east Anatolia with 2993 hours of sunshine. The averages of the other regions vary between these two limits. Assuming a standard installation of solar energy having a performance ratio of 0.75, the average annual electric potential varies between 1,118 kWh / kWp in the region of Eastern Anatolia and 815 kWh / kWp in the Black Sea region.

On the basis of studies conducted by YEGM, the average annual duration of sunshine in Turkey is 2640 hours to 7.2 hours per day and the total average solar radiation is estimated to be 1,311 kWh / m2 per year, for a total daily 3.6 kWh / m2, which correspond to annual potential of about 1,512 TWh.

Wind Energy

Due to its geographical location, Turkey is under the influence of different systems of atmospheric pressure. During the winter, the high pressure system extends its area of impact as far as the southern latitudes of Turkey, causing strong winds from the north and especially from the north-east. Anatolia, in particular the western part, is under the influence of westerly winds and the North-West. During the summer, Turkey is influenced from the centre of the Azores high pressure which causes constant winds from the north, especially in the western regions of Turkey. The strong difference between the centre of this high pressure in the Azores and the low pressure centre of Basra to the east creates north-eastern winds in the eastern region. The southern regions, as well as those of the East, are generally under the influence of the winds coming from the south and southeast.

The technical potential of wind energy is estimated to be around 114 GW of capacity in the regions where the wind speed is higher. It is believed that approximately 20GW of this potential are economically exploitable. The calculations show that the technical exploitable potential is between 200 and 400 TWh. However, the economically exploitable potential is between 35 and 70 TWh and currently only 9-10% of it is used.

In Turkey there are a number of cities with relatively high wind speeds. These are been classified into six regions suckers which vary from a minimum of about 3.5 m / s to a maximum of 5 m / s at an altitude of 10 m, corresponding to a theoretical production between 1000 and 3000 kWh / (m2 year). The most attractive sites are the Marmara Sea region, the Mediterranean Sea, the Aegean Coast and Central Anatolia. Consequently, the main installed wind power capacity of Turkey is distributed between these regions, namely the Aegean, Marmara and Mediterranean.

Geothermal Energy

In 2012, the geothermal potential of Turkey is estimated to be 31.5GWt and 4.5GWe, with a total installed capacity of 94.2 MW used directly as thermal and 104 MW converted into electricity. The high geothermal potential depends on the unique position of the country. Active tectonics on the band that joins the chain of the Alps and the Himalayas are no active volcanoes and young groundwater. Most of the geothermal energy potential is located in the Aegean and Central Anatolia. The proven geothermal capacity of existing wells and springs is about 4,078 MW.

The temperature of the fluids in geothermal fields determines the manner of use. Fields with a geothermal fluid at high temperatures are generally in the western part of Turkey, located beneath the graben (a depressed area located between parallel faults) formed as a result of the recent tectonic activity. In the regions of Central and Eastern Europe, there are sources of low and medium temperature zone located along the North Anatolian.

Potential of Biomass

The potential of natural biomass in the country is estimated to be around 372 TWh. This energy resource includes various agricultural residues such as grain dust, wheat straw, nuts and various types of waste. About 53% of the natural potential, 198 TWh, is suitable for the production of electricity.

Fishing: a new partnership agreement between Morocco and the EU

  • 4 August 2014

Morocco has ratified a fisheries protocol with the European Union, which is the basis for the resumption of European fishing vessels in Moroccan waters after a break of more than two years.

The four-year agreement on fishing was reached in December 2013, but for its entry into force is awaiting the ratification by the Mediterranean country.

EU vessels, in accordance with that determination will get you some rights to fish in Moroccan waters in exchange for financial assistance from the European Union for the development of the fisheries sector in Morocco. The protocol is the second most important of its kind and belongs to a new generation of fisheries agreements after the reform of the Common Fisheries Policy of the EU. In fact, it places a strong emphasis on environmental sustainability, economic viability and international law.

Specifically, through this protocol states that the fishing opportunities will increase by one third compared to the previous protocol and will now total 80,000 tons for small pelagic species with additional fishing opportunities for demersal species, tuna and artisanal fisheries. In total, the fishing categories exploited by both segments of the industrial fleet and small-scale covered by the Protocol are six. The EU member states are affected by these concessions are eleven (Spain, Portugal, Italy, France, Germany, Lithuania, Latvia, the Netherlands, Ireland, Poland and the UK), for an estimated 120 ships.

The cost to the taxpayer of the EU to access these more chances decreased by 30% compared to the previous protocol. The total cost for the European Union amounted to 30 million euro per year (16 million for access to the resource and altri14 million to support the fishing industry in the country). In addition, the contribution of owners is estimated at 10 million Euros, giving a total budget of 40 million for Morocco. In addition, the new protocol also provides more job opportunities for the Moroccan fishermen.

The Commissioner for Maritime Affairs and Fisheries Commissioner -Maria Damanaki- said: “I ​​am delighted that this protocol can finally enter into force: our fishermen have been waiting for this day for more than two years. Now we must ensure that our ships are able to resume activities as soon as possible. This new protocol is an example for those responsible for international governance of fisheries: we made sure that the rights of EU fisheries do not exceed the limit scientifically valid, that there should be a sustainable fishery, and that European vessels are not in competition with local fishermen. I am confident that the EU financial support will help build a sustainable future for fishing in Morocco through the targeted sector support. ”

Within the protocol has been also included a clause on human rights and, as with all EU agreements, an in-built mechanism of suspension which ensures the right of the EU to unilaterally suspend the protocol in case of violation of human rights.

In addition, regular and detailed communications requirements for Morocco are intended to demonstrate the extent of the economic and social sector support on local populations. This reporting mechanism will include details on how each sector support project serves the best interests of the local population on a geographic basis.