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Reaching for excellence. (Tunisia-EU).

At the heart of Tunisia's preparations for entering the EU free trade zone in 2010 lies the mise a niveau programme. In context, the term mise a niveau can be roughly translated as meaning `upgrading competitiveness'. Thus, when the programme began in 1996, the aim was to enable the industrial sector in Tunisia to improve its performance sufficiently to be able to compete on equal terms on the international stage.

In practise, this meant that Tunisian manufacturing enterprises, some of which were old family businesses bogged down in outdated business systems, were to be given the opportunity of transforming themselves into state-of-the-art, 21st century international players. Since these companies would find themselves in cutthroat competition against the leanest, fittest firms from Europe, there was no room for half measures.

At the inception of the programme, some 2,000 of the largest manufacturing outfits involved in some way or the other with international trade were targeted and encouraged to join the programme. Incentives included generous subsidies and bonuses.

"The response was astounding," says Ridha Ben Mosbeh, Director General of the mise a niveau department in the Ministry of Industry. "It was clear that most of our companies were already thinking of modernising but did not know how to go about it. The programme gave them the great opportunity of doing what they knew they had to do; but the fact that they knew we would be there to support them gave them greater confidence."

Currently, some 2,218 companies have signed up for the programme and so far, 1,234 firms have successfully met the fairly stringent conditions and obtained the seal of approval from the Ministry of Industry.

How the programme works

All Tunisian companies involved in manufacturing and industry related service sectors, including off-shore firms; are eligible to apply to join the programme. The basic conditions are that they must have been in business for at least two years, be financially solvent and show a growth potential.

The company is then required to produce its mise a niveau plan. In most cases firms employ business consultants to make a thorough analysis of all its functions and point out strengths and weaknesses. With the analysis in hand, the firm working with consultants, then draws up detailed plans on how it can improve its organisational structures, modernise plant and equipment and change management patterns. The aim is to improve efficiency and competitiveness and thereby profitability. It also works out the additional investment it will require in order to carry out the restructuring.

The complete and detailed plan is then presented to a bank or another financial institution for funding. All financial organisations have a special mise a niveau department dedicated to just this operation.

Only when the financing has been approved will the firm's dossier be presented to the mise a niveau Bureau (MNB) in the Ministry of Industry. The firm also has to present its financial statement over the previous three years.

The evaluating team comprises the MNB and a 15 member steering committee (copil). The committee, which is headed by the Minister of Industry is made up as follows: five members from central administration, five from the private sector and five from financial institutions. MNB evaluates the dossier and then passes it on to Copil. Here the plan is put under the microscope and all aspects, including investment, return on investment, bench-marking, marketing and time frame are examined before the committee approves subsidies and conditions covering disbursements.

After the approval

Once a company's mise a niveau plans have got the approval from the industry Ministry, it can expect 70% of the cost of its business analysis to be covered up to a ceiling of TD30,000. It can receive a subsidy of 50% on the cost of equipment considered essential. This covers equipment used in laboratories, quality control, production and maintenance management systems and IT including setting up web sites and electronic trading systems.

Non-tangible investments, such as technical and management support, professional training, ISO certification, research and development, marketing and software design attract a 70% subsidy. There is an additional subsidy (up to 20%) available for other tangible investments depending on the financial plan.

Investing in the future

So far Tunisia firms have invested TD2,229m in the programme. The government, in turn has committed grants so far totalling TD311m. This is a massive investment by any measure but given the aim, which is to uplift the entire industrial sector of Tunisia, it might prove to be a small price paid for the end result.

The 2000 odd companies currently engaged in the programme constitute some 60% of the total industrial manufacturing turnover; 35% of total industrial exports and employ 40% of the country's industrial labour force. "Applying the mise a niveau programme is never easy," says the scheme's director general, Ridha Ben Mosbeh. "It is a complex undertaking. At times, companies have to undergo radical transformations on the run. They cannot close down their operations during the transition period. Despite this, on the whole, the scheme has been a roaring success."

A survey of 600 companies which had gone through the process showed that turnover had improved on average by 11% annually and export turnover had increased by 18% per annum. Fears that European-style restructuring would result in job losses have proved groundless. Instead, the labour force has increased by 5% but the most significant gain has been in senior positions which have grown by 17% per annum. This is a clear indication that Tunisian companies are rapidly approximating European organograms in terms of management structures.

"The biggest gain has been in the mind-set of the Tunisian businessman," says Ben Mosbeh. "People were happy to just continue in the same old way, whether it made sense or not. Priorities were wrong--often the most productive elements had the worst resources and the lest productive the best. There was little or no concept of the company's full potential. Marketing, labelling, advertising were all considered of no significant importance. In short, it was a closed mind set, making many Tunisian firms hopelessly out of their depth on the international stage."

Mosbeh says that once the mise a niveau procedure was set into motion, several things happened. "For the first time, many firms really looked at themselves through someone else's eyes. They could see where they were, what they were doing wrong and how far they could go. A process of constantly learning and adapting started. Before they were like big fish in a small pond; now they realised that with a free trade zone on the horizon, they were little fish in a big lake. They began to compare themselves with similar firms in Europe and thought, `yes, we can not only become like them, we can even beat them'. And that is what mise a niveau is all about."

The bureau will now switch its attention from large firms to small and medium sized ones. Here, Mosbeh says, incentives are not the spur. "What these firms need is consultancy, technical advice and coaching." There should be no shortage of consultancies when companies come looking for them. When the programme began, there were five consultancies, now there are well over 100, a sure sign of a country reaching out for excellence.
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Publication:The Middle East
Article Type:Brief Article
Geographic Code:6TUNI
Date:Oct 1, 2002
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