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Electrification sparks opportunity

Article - June 27, 2012
The 1976 National Plan introduced the target of nationwide domestic electrification, with many of the large state-run organisations, such as Sonelgaz, playing important roles
The implementation of this huge infrastructure program continues to this day, and the differences in levels of electrification that previously existed have been eliminated.

Coverage has risen from 33 per cent of the national territory (excluding sparsely populated areas) when independence was won in 1962, to 96 per cent in 2001. Between 2001 and 2010, 62,137 miles of low and medium-voltage electric lines, along with 3.5 million electricity meters, were installed – with all cables supplied by the government-owned SGP CABELEQ.

Demand for CABELEQ’s products will remain high, with newly industrialised zones, rural areas, telecoms, and highway and rail electrification schemes representing an assured market for at least the next 15 years.   

Investment in infrastructure had practically stopped during the 10 years of civil unrest during the 90s. Now that stability has been restored, the Algerian government is seeking to catch up. Through its 2010-2014 National Development Programme, the government is making huge efforts to improve the material well being of its people. Housing, roads, reservoirs and other facilities are being built across Algeria.

“These public procurement programmes have both stimulated domestic demand and have helped to meet expectations for a level of public services in the areas of housing, health, road and rail transport and education, which until [the current National Development Programme] had been lacking in Algeria,” says Minister of Finance Karim Djoudi. 
All these programmes require cables and other products that CABELEQ’s subsidiary Electro-Industries manufactures, and whose quality is renowned. Moreover, the continuing electrification of the country on its own promises the group 15 to 20 years of business.

As part of a national project to double Algeria’s electricity production in the coming years, Electro-Industries will supply an increasing number of power transformers. Already a leader in the manufacture of small and medium-sized power transformers, with almost 60 per cent of the market, they have not yet developed their range of the largest transformers: manufacturing such products is a lengthy and complex process.

To reach this goal, establishing a partnership with an international manufacturer is the best solution for Electro-Industries. In exchange for a long-term business relationship and the expertise of Electro-Industries in many segments of the market, the company wishes to acquire technical and managerial know-how.

Electro-Industries’ aim now is to create a joint venture, on a 51/49 basis to expand the company.

“We are planning to manufacture more high-power transformers (up to 2,000 kVA capacity), and we are looking for a partner with a worldwide reputation who can bring us technical skills. Money is not our concern; we are looking for the transfer of technological, management and training know-how. We produce a maximum of two high-power transformers per year, and the remainder has to be imported. There is already demand from companies such as Sonelgaz,” explains Mrs Boukaoula, who is also looking for partnerships to help produce large-capacity motors.

Electro-Industries’ ambitions are not limited to the Algerian market. Several regional opportunities have been identified and are seeking assistance from a partner so that they can be acted on and capitalised.