"I, Arab" - Perspectives Of Tunisian Family Business CEO Slim Zeghal. An Interview
Updated: Oct 9, 2020
Slim, you run a large Tunisian family business that is active across the MENA region and has ambitions to enter the European market. 10 years after the Arab spring, what has changed for Tunisia and the region?
Well, a lot has changed, in the region and in the world. And not all countries have had similar paths. On a global level, multilateralism has been severely damaged, especially by the Trump administration, and the US pulling out from so many UN institutions. Maybe it is time to rethink global governance. The MENA region deserves and requires more attention, especially Libya, Syria, Iraq and Yemen who have been pushed into chaos. And Lebanon is not far from it either. Gone are the strong dictators, sure, but the situation seems to be worse now than before. Worse for the local populations, worse for the region's stability, worse for the refugees and the migration flows they create and the overall Mediterranean disasters we are seeing. And until today we are lacking a plan for the future. The two countries that somehow made it safely through the Arab Spring are Egypt and Tunisia, in two very different directions. Egypt is back to a stronghold government with a successful economy, and Tunisia is enjoying the pains of Democracy: political instability, a difficult economic situation and much needed reforms, but at the same time, real elections, freedom of speech and freedom of press. The recent Covid outbreak did not help improve the overall situation in MENA at all. The pandemics' impact only increased the fragile political, social and economic ecosystems.
I mentioned before that you have ambitions to take your business further north. You are well-connected across Europe, and particularly in France. What are the challenges North African countries face compared to their European neighbours? And are there advantages you can leverage in Tunisia?
One of the major challenges is related to the currency regulations in all North African countries. Access to hard currency is regulated. Investing abroad is complicated. There are other aspects that hinder the ease of doing business, such as the limited sophistication of the economic eco-system and its level of integration. And don't forget the high interest rates and continuous currency devaluation. One other complication people from the south suffer from is called “visa”. It is much harder to travel the world freely when you hold a Syrian passport than when you hold a German one. This is a major hurdle people in our part of the world have to overcome. That's for the challenges.
On the other hand, Tunisia has many advantages to offer: a well trained and multi-lingual workforce, its proximity to Europe, a multicultural environment that marries African, Arab, Mediterranean and European influences. We have entered a number of free-trade agreements and we have an infrastructure that I would call "acceptable to work with".
For those not too familiar with the Middle East or North Africa – where do the two regions differ in terms of conducting business?
A lot has to do with the former foreign powers that colonised or at least controlled the region and the legacy they have left in terms of administration, bureaucracy and legal system. North Africa, mainly Morocco, Algeria and Tunisia, has a French legacy. This also extends to Mauritania. On the other hand, the Middle-East, including Egypt, has been shaped by the Anglo-Saxon influence. Another important aspect is related to how governments handle the issue of currency. In all North-African countries, currency is regulated and cannot be freely traded. This is a major limitation in all business aspects. The Middle-East at large does not suffer such constraints. Lastly, when it comes to the matter of business language, you will find that French is still widely used in the Maghreb while more Arabic and English are used in the Mashrek.
Tunisia is a safe country to travel to, popular with European tourists and the smallest country in Northern Africa. Do you see parallels between Tunisia and the UAE? Are Dubai and Abu Dhabi maybe even role models for your country?
Tunisia is indeed the smallest country in the Maghreb in size, but this is not the case in terms of population as it is more populous than Libya, and much more so than the UAE. Today, I do not see many parallels between the two, even though I quite like the trajectory the UAE have followed in the recent past, and the successes they were able to build on. That really shows what visionary leadership can do. They probably got inspired by Singapore and were able to improve on that same model. Tunisia has had a great visionary leader at its independence, and he understood early on the importance of education and healthcare, which are also key to the UAE's success today. Unfortunately, we have somehow lost the path in the recent past and we need to re-build our vision.
How important are family-owned businesses to the Tunisian economy in particular and the Northern African economy in general?
I do not have clear statistics at hand, but we all know that family-owned businesses play a major role worldwide, even in advanced economies such as Germany. In Tunisia, they certainly represent the essence of the private sector, and this private sector is also in itself the essence of the growth and development for the country. Because of history, this might be less true in Algeria, but family-owned businesses and the private sector in general are developing better now than they have before.
You are on the boards of several organisations, representing businesses in your country and your region. How are family businesses you talk to taking on the next generation issue?
There are various approaches and there is "no one size fits all" approach. I know of businesses that have decided to separate the business ownership from the operational management. They rely entirely on external managers and allow family members to hold positions on the Boards of Directors. There are others, equally successful, who have integrated second and third generation family members in the business. What I note, though, is that there is still no gender equality. Women do not get the same chances to be involved in their families' businesses as men do. And this will have to change soon as our societies evolve rapidly.
Do you see a family office culture developing in Northern Africa?
Very little still. It will come as even more wealth will be created within family-owned businesses, and with new generations seeking opportunities outside the family's core business. As we move from business founder and first generation entrepreneur to the following generations, business and wealth management will have to rely more and more on external professionals and their expertise.
How easy or difficult is it for Northern African wealth owners to get access to top quality financial services in Europe? Or are you rather looking eastwards to find what you are looking for in Dubai, Abu Dhabi or Bahrain?
The issue here is more related to the FX regulations constraints as I mentioned earlier. It does not make a difference if it is Europe or Dubai or elsewhere. Actually, Europe is closer for Morocco, Algeria, Tunisia. Geography and our recent history relate more to Europe than to the Middle East. Although you might have significant wealth in your own country you are not legally entitled to hold any of that wealth abroad. No funds, no real-estate, no shares. That is a bigger problem than access to financial services.
Let’s return to your business again. Altea Packaging - as the name gives away - is in the packaging industry. Do the discussions about sustainability have an impact on your business and if so in what way?
Of course they do. We see more and more brand owners asking for either recyclable or biodegradable or bio-sourced or post-consumer recycled materials. The trend is here. This is a big trend, and there is no turning back. I must admit that it is stronger trend in wealthier economies than in developing ones where the affordability of packaging is of a major concern, too. And the paradox here is that the packaging weight in the cost of goods is bigger in poorer countries where the purchasing power is lower and where you have to package small portions instead of going for the family package. On a more positive note, we work closely with several of our clients on issues like source reduction by down-gaging the packages we use, by reducing material usage, by working on carbon footprint reduction, by moving away from PVC and similar materials to ones that are more environment friendly.
Packaging keeps perishable foods fresh and makes it easier to transport them – issues faced especially in Sub-Saharan Africa. Would Africa not be a much bigger and more important market for you than Europe?
Ultimately, it would, with the population growth and hopefully, the purchasing power catching up. Today, it is still developing because much less goods are packaged. The per capita packaging consumption in Africa is probably six times less than Europe if not more. However, Africa should take this as an opportunity to develop its packaging needs in a sustainable way. It could limit secondary packaging usage and all that does not have an immediate benefit to the consumer. It should learn from all the developments being made today towards recyclability and degradability of the packaging once it is disposed.
How does the ongoing pandemic affect the development in Africa – including Northern Africa? Does it maybe even hold unforeseen opportunities?
It is a difficult question to answer. There are sectors that could indeed benefit strongly: e-commerce, long-distance education, IT at large. However, what I have seen in the food industry for instance is that it has not been beneficial. We have also had serious issues related to goods transportation and border crossing. Land borders were abruptly closed. No clear protocol was set in place as to how to proceed from there on. This has caused major supply-chain disturbances with the first Covid outbreak. The lockdowns did not help either and many companies were forced to stop production. We’ll see what the future holds!
Lastly, you wrote a book recently called “I, Arab”. In a few words – what is it about and what motivated you to write this book?
In this book I am expressing the thoughts of a rather modern pro-western Arab about what is happening in the world today, about conflicts and terror in my neighbourhood, the Middle-East in general, global warming, education, development, migration and more. It might give the reader a different view than what they might be used to when consuming news provided by American and European outlets. I am using a sarcastic tone to engage the reader and often I am addressing the American public directly. While complaining about western hegemony and its media that is shaping western public opinions, I am advocating for a more tolerant and less violent world, questioning issues related to identity, religion and the so-called Arab Spring. Anyone can see that the image of the “Arab” has been deteriorating steadily and rapidly in the recent past, and I want to correct this image. This book is a call for understanding and hopefully a contribution to initiating a dialog that will lead to a better communication, which should be the remedy to the rise of intolerance, nationalism, racism and discrimination
Slim, it is always a pleasure speaking to you. Thank you for your insights into Northern Africa I am looking forward to seeing you again soon.
Mr. Slim Zeghal is the CEO of Tunisian Altea Packaging, a family-owned company active across the EMEA region. He was a guest and speaker at the latest edition of the Africa Family Office Summit in Mauritius.