| Exporting Africa: technology, trade and industrialization in Sub-Saharan Africa |
|Part II. Country studies|
|11. The Ivory Coast|
What can be said about firms' performance and export orientation on the basis of this study of six industrial firms in the Ivory Coast? First of all, it is useful to recall that a firm's performance is understood here as its capacity to increase or consolidate its market: share in foreign or domestic markets. Over the period of the study, the firms in the sample have achieved respectable performances in terms of sales on various markets and the composition of their product ranges. However their experiences differed.
Traditional analyses of market performance generally assume that an export strategy will work against domestic market development. This study has not revealed any such an opposition. Capral and Saco, with more than 80 per cent of their sales on export markets and export-oriented strategies, should according to the traditional analysis not be interested in their domestic markets. This is not the case. Capral. for instance, which strives to maintain its export orientation, is nevertheless making significant efforts to improve its share of the domestic market. Likewise Cotivo, which has achieved considerable progress on export markets, nevertheless carries on with its efforts to strengthen its position on the domestic market.
On the other hand, Cosmivoire and Trituraf, although essentially oriented towards the domestic market, have turned to export markets. This was made possible, inter alia, by their performance and expansion on the domestic market, whereas Uniwax, with technical potential and the capacity to be competitive on export markets, seems to be a prisoner of its agreement with Vlisco, which confines Uniwax's sales to regional markets.
Only Saco has a true export strategy. Its access to and success on export markets are determined by the international networking of the firm's activities through the trading branch of its mother company, Cacao Barry, and its physical presence on the markets through its European branch.
It is also commonplace to link the performance of firms in developing countries to government policies: the usual argument is that firms in these countries survive only thanks to high protection barriers and incentives, which supposedly generate inefficiency and the waste of resources. Cosmivoire, a medium-sized firm, is an example of a firm enjoying strong protection in its domestic market but still seeking to win ground in export markets against constant pressure from its competitors. In this case, the government policy applies equally to Cosmivoire and its principal competitor on the local market. Hence public policy cannot explain Cosmivoire's dynamism. In fact Cosmivoire's main strength is certainly the boldness of its managers, who are capable of identifying the needs of the market and satisfying them, using simple technologies. Cosmivoire would have performed better if the government had been able to guarantee fair competition within its sector: its main competitor is a subsidiary of a powerful multinational which receives many advantages from the government.
This example proves that government definitively has a role to play in creating the best conditions for competitive markets. In any case, the high protection of Cosmivoire's market has not prevented the firm from improving its DRC. Similarly, government policy in fighting against smuggling by reducing tariffs and taxes on wax prints and reducing production costs has been particularly beneficial for Uniwax's results.
The argument that it is necessary to make intensive use of high technology to build up competitive positions was not confirmed in the ease of Cosmivoire and Uniwax, which operate in very competitive sectors. These two firms do not in feet have the necessary resources to acquire the latest technology, unlike their competitors. It is probably the internal organization of the firms and their capacity to identify needs and adjust their products to them that explains their relative success, rather than the capacity to use high technology. As for the firms' linkages, Uniwax's situation is ambivalent: on the one hand it gets support from Vlisco, which helps the firm in acquiring technology and equipment. It also benefits from the trading partnership with CFCI, which helps to sharply reduce its distribution costs. But the constraints under its market-sharing agreement with Vlisco limit its ability to develop an active export strategy. Capral, in contrast, benefits fully from its links with NestlÃ©, both for labour organization and training and for access to high technologies and the international distribution of its products.
At different levels, Saco with the French group Barry, Trituraf with Unilever via Blohorn, Uniwax with Vlisco and Cotivo with Schaeffer benefit from their parent firms. Cosmivoire is an exception, relying mainly on the experience and motivation of its managers and using its external partnership as a complement to its own efforts. We also note a monopolistic tendency on the part of Blohorn, which, after a vain attempt to eliminate Cosmivoire, succeeded in buying its other competitor, Trituraf.
We should again mention the difficult situation of Saco, a firm which processes cocoa beans and whose evolution is closely linked to the uncertainties of the cocoa market. This raises some particular problems since Saco was established in order to reduce the effects of these uncertainties. The implication is that local processing of raw materials needs to go beyond minimal processing if it is to add value and sophistication to the product, in a true manufacturing activity, and so transcend the raw material markets.
Finally, the shift towards export markets by Ivorian industrial firms (new exporters) has resulted in:
1 heavy investment efforts to bring production technologies up to date to meet international standards.
2 a reorganization and reorientation of sales and marketing strategies, with the need for more appropriate trading networks and more frequent and expensive advertising.
3 a choice of niches and segments on international markets which is often imposed on them and often characterized by instability, with very narrow profit margins. This has sometimes resulted in considerable financial losses.
4 government action, in the form of export incentives (subsidies or other supportive measures), which have proved to be necessary for securing and retaining export markets. On the other hand, government involvement in the supplying and pricing of raw materials has often generated significant rents, which have been captured by powerful multinationals through their local subsidiaries and which are not necessarily reinvested in local industry. These interventions have often also created various bottlenecks and additional costs for the firms.
These features are an indication of the actions which could be taken to favour an export orientation, which would be of benefit for both the industries concerned and the national economy.