Arab Spring – the impact on North Africa’s C&T

The 2011 Arab Spring revolutions in North Africa have had profound effects on the industries in those countries affected. Megan Detrie reports from Egypt and Kaci Racelma reports from Algeria on how the cosmetics industry has held up

The impact of the Arab Spring revolution has rattled though North Africa, leaving no economic sector unscathed, including the cosmetics industry. Despite the fact that the growth of cosmetics markets in countries like Tunisia, Egypt and Libya remains limited in lieu of the year of demonstrations and political upheaval, efforts are currently being made to boost the industry. Comparatively peaceful Morocco has also seen steady development in its personal care market.

The export market for North Africa overall has seen spectacular growth in recent years, led by a surge in exports of French personal care product exports to the region, says French industry association FEBEA (Fédération des Entreprises de la Beauté), and a broadening of international brand product lines appearing on the market.

In its 2010 figures, FEBEA reported an increase in French personal care product exports to African countries. While the annual report called the market ‘modest’ in scale, compared with some other regions, it noted a rapidly increasing demand for personal care products amongst consumers in Egypt (a 70% increase from 2009), Tunisia (+22.8%), Morocco (+18%) and Algeria (+14%).

Multinationals such as Unilever, Procter & Gamble, Oriflame, Avon and Henkel along with L’Oréal have all established a dominant presence in the region, while local manufacturers continue to command the lower income market.

Still, as the Arab Spring revolution leaves newly democratised countries with unstable economies and wary foreign investors, market consultants and distributors remain hesitant about entering the market.

While most of the cosmetics trade in the region consists of Europe and the UK exporting cosmetics to North Africa, the UK’s Cosmetic Toiletry & Perfumery Association (CTPA) noted in its 2010 sector report that the Middle East and North Africa was also starting to sell cosmetics back to Britain. Indeed that year there were £19.7m (US$30.9m) worth of MENA personal care products sold in Britain; a 0.7% rise from the previous year, though still a small portion of the £2.7bn annual imports of personal care products to the UK. However, British exports to the region declined 5.9% in 2010 to £154.2m ($242m). The majority of UK exports to North Africa and the Middle East consist of perfumes, beauty products and oral care products, while imports from the region are largely made up of hair products.

As for French exports, Anne-Marie Breton, FEBEA’s international regulations specialist, says companies must take a “different approach for North Africa,” going into the future. “Morocco must be approached differently than Algeria, but the countries are very important to our industry, it’s definitely a growing market,” she says.