The North Africa Enterprise Development (NAED), a regional small and medium enterprise business development facility managed by the International Finance Corporation (IFC), has signed a memorandum of understanding in Algiers to develop a network of small manufacturing and retail units for BKL Industries. Building linkages between large companies and small enterprises through subcontracting, supply-chain management, and spin-off programmes has become a pillar of NAED’s technical assistance programme.
BKL Industries is a leading local private company in the PVC joinery manufacturing sector. The partnership between IFC, the private sector arm of the World Bank Group, and BKL aims to launch 30 small manufacturing units by December 2005. These units will manufacture and distribute BKL-customised PVC windows and doors to meet the burgeoning demand for housing by-products in Algeria: the country has a housing shortage of nearly 1.1mn units.
NAED will help BKL design and implement its small enterprise manufacturing and distribution network; bolster the managerial capacity of small entrepreneurs managing the units; and mobilise up to US$3mn in financing from domestic banks and agencies to support the start-ups of the small manufacturing units. Each unit will employ up to four people, and will also get technical assistance and credit facilities from BKL.
Sami Haddad, IFC director for Middle East and North Africa, notes: “NAED’s technical assistance to BKL underlines the thrust of our operations in Algeria: generating private sector job creation, and providing business management training and access to finance for small entrepreneurs. In addition, this partnership with BKL provides NAED with the opportunity to adapt to local conditions its expertise in developing small enterprise linkages, which can be replicated with other corporate clients in Algeria.”
Aside from servicing the local construction market, BKL’s establishment of a manufacturing and distribution network of small enterprises supports its medium-term strategy of securing a strategic alliance with an international company that makes complementary products.
Sammy Boukaila, general manager of BKL, adds, “Teaming up with IFC will enhance BKL’s chances of becoming a structured group with extended outreach to untapped markets in Algeria.” “Creating the first such network – a quasi franchise – in Algeria requires expertise. NAED will help select and train small entrepreneurs on management best practices and quality standards, which will strengthen our brand name,” he added.
BKL Industries, established in 1990, specialises in PVC extrusion and manufacturing of windows, doors and isolators glazing. BKL has an annual turnover of US$50mn and 343 staff, who are employed in its two industrial units and engineering office of housing joinery. BKL also exports products to France, Spain, Germany, Russia, Lebanon and Iraq.
NAED is the first small business development facility in the Middle East and North Africa region and is managed from IFC’s headquarters in Cairo, with IFC offices in Algiers and Rabat as well. It is a five-year US$20mn technical assistance programme for small businesses, cofunded by IFC and donor countries, including Belgium, France, Italy, and Switzerland. NAED’s key objective is to foster job creation in Egypt, Algeria, and Morocco by supporting the development of small businesses – the bedrock of all those countries “economies.