Hamid Ould Ahmed
ALGIERS (Reuters) – Swiss investors unveiled Algeria’s first Western-style shopping mall on Wednesday, a 70-million-euro project that marks the first major foray by foreigners into the energy exporters’ untapped retail market.
Algeria has 35 million people and one of the highest levels of income per capita in Africa but international retailers have been put off by curbs on foreign investment and a conflict between government forces and Islamist rebels.
A joint venture of Swiss banking group Valartis and Swiss department store operator Jelmoli financed the shopping mall, recreation and office complex in the Algerian capital and said it plans two more worth 80 million euros.
“Our presence here confirms that the investment climate is positive. We have confidence in the authorities, especially in this sector. That’s why we want to continue,” said Alain Rolland, Managing Director of Valartis Asset Management.
“Contrary to what the foreign media say, the (security) situation has improved. We should forget the trauma because there is a new generation now.”
A supermarket operated by a division of private Algerian firm Cevital will open at the complex this week, while a multiplex cinema, shops and a bowling alley are scheduled to open there later this year.
The previous attempt by a foreign retailer to break into Algeria’s retail market was when French retailer Carrefour
launched a franchise project with a local partner. It pulled out at the end of last year.
FEW FOREIGN BRANDS
Most Algerians shop in small neighbourhood stores or markets and there are almost no foreign retail brands. Many fast-food outlets have added the prefix “Mc” to their name in a nod to McDonald’s restaurants — which has no presence in Algeria.
Rolland, who is also chairman of Societe des Centres Commerciaux et de Loisirs d’Algerie (SCCA), the joint venture behind the mall, said it was planning another complex in Algiers and one in the western Algerian city of Oran.
“We have invested around 70 million euros in this project,” he told Reuters on the sidelines of a presentation on the complex. “We plan to build another complex in Oran with an estimated (cost of) 45 million euros.”
“A second one is planned for Algiers with a cost of around 35 million euros because Algiers has the capacity to have a second complex,” he said.
Valartis Group holds a 74 percent stake in the joint venture while Jelmoli owns the remaining 26 percent, Rolland said.
The Swiss investors began their project in Algeria four years ago, as Algeria began to emerge from more than of a decade of violence that killed an estimated 200,000 people.
The violence has eased in the past few years after hundreds of rebels surrendered to the authorities, though al Qaeda-linked militants mount occasional attacks outside the major cities.
Investors hoping to capitalise on improving security have, however, been discouraged by a growing trend towards economic nationalism. Algerian authorities say measures restricting foreign investment are intended to protect national interests.
Source: Reuters Image: Reuters