Algeria - IndustryAlgeria-Industry
Algerian industry has been dominated by oil and natural gas in two ways. First, the hydrocarbon sector is by far the largest industrial sector. Second, the revenues generated by the export of oil, gas, and related products have been the main source of investment capital for other industries.
The Algerian government continues to increase the role of industry in the economy by encouraging diversification to tackle a budget deficit that resulted from low oil and gas prices. Economic contribution of the sector has increased to reach 5.6% of total GDP. According to figures from the National Statistics Office (Office National des Statistiques, ONS), industry grew by 3.1% in terms of added-value in 2018.
The fastest-growing industrial segment in the second quarter of the year, in annualized terms, was wood, paper and cork (10.1%), followed by water and energy (8.2%), and agro-industry (3.7%).
With low oil prices imposing limits on state-led capital expenditure, the government is seeking to attract more private sector investment – both domestic and foreign – as part of more general economic diversification efforts, and to reduce the country’s import bill by stepping up local production.
Sub-Sector Best Prospects
Opportunities
To achieve growth targets for this sector, authorities have taken several steps to encourage and facilitate investment in manufacturing. Prominent among these were measures in the 2015 Finance Law introducing five-year exemptions from taxes on corporate profits, corporate revenues and professional activities, as well as a 3% interest rate subsidy for bank loans for companies operating in a wide range of industrial segments, including steel and metallurgy, electrical and electronic goods, automotive, aeronautics, pharmaceuticals, and agri-business.
Heavy industrial activity is growing rapidly in Algeria, with plans for large-scale expansion in several segments, such as steel and construction materials. Manufacturing industries – including automotive and electronic goods assembly – also appear set for growth as foreign and domestic firms, spurred by import restrictions, build production facilities in the country. However, the success of these industries will depend on how quickly they can build effective and profitable local ecosystems, increase integration rates and generate economies of scale.
Additional Resources
Further resources for the Algerian infrastructure sector can be found at these websites: Ministry of Industry & Mines, National Agency of Investment Development
Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
The Algerian government continues to increase the role of industry in the economy by encouraging diversification to tackle a budget deficit that resulted from low oil and gas prices. Economic contribution of the sector has increased to reach 5.6% of total GDP. According to figures from the National Statistics Office (Office National des Statistiques, ONS), industry grew by 3.1% in terms of added-value in 2018.
The fastest-growing industrial segment in the second quarter of the year, in annualized terms, was wood, paper and cork (10.1%), followed by water and energy (8.2%), and agro-industry (3.7%).
With low oil prices imposing limits on state-led capital expenditure, the government is seeking to attract more private sector investment – both domestic and foreign – as part of more general economic diversification efforts, and to reduce the country’s import bill by stepping up local production.
Sub-Sector Best Prospects
- Agro-Industry
- Petrochemicals
- Fertilizers
- Electronics & Household Goods
- Steel & Steel Products
- Pharmaceuticals
- Water & Energy
- Construction materials
- Minerals
- Automotive
Opportunities
To achieve growth targets for this sector, authorities have taken several steps to encourage and facilitate investment in manufacturing. Prominent among these were measures in the 2015 Finance Law introducing five-year exemptions from taxes on corporate profits, corporate revenues and professional activities, as well as a 3% interest rate subsidy for bank loans for companies operating in a wide range of industrial segments, including steel and metallurgy, electrical and electronic goods, automotive, aeronautics, pharmaceuticals, and agri-business.
Heavy industrial activity is growing rapidly in Algeria, with plans for large-scale expansion in several segments, such as steel and construction materials. Manufacturing industries – including automotive and electronic goods assembly – also appear set for growth as foreign and domestic firms, spurred by import restrictions, build production facilities in the country. However, the success of these industries will depend on how quickly they can build effective and profitable local ecosystems, increase integration rates and generate economies of scale.
Additional Resources
Further resources for the Algerian infrastructure sector can be found at these websites: Ministry of Industry & Mines, National Agency of Investment Development
Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.