ALGERIA FY 08 BFIF PROPOSAL

UNCLAS SECTION 01 OF 02 ALGIERS 000220

SIPDIS

SIPDIS

STATE FOR EEB/CBA (WINSTEAD) AND NEA/MAG (FLOWERS)
COMMERCE FOR NATE MASON

E.O. 12958: N/A
TAGS: ECON BEXP KIPR ETRD AG
SUBJECT: ALGERIA FY 08 BFIF PROPOSAL


1. SUMMARY AND JUSTIFICATION: Embassy Algiers submits the
following request for FY 08 Business Facilitation Incentive
Funds (BFIF) in support of commercial outreach outside of
Algiers. The U.S.-Algeria commercial relationship has grown
dramatically over the past 3 years -- from USD 11.5 billion
in 2005 to approximately USD 20 billion in 2007 -- but
remains focused on energy sector investments. There is great
potential for U.S. business in non-energy sectors and also
outside of the capital. In 2008, we would like to make four
outreach trips: to south-central Algeria (Hassi Messaoud,
Gassi Touil, In Salah); the east (Skikda, Annaba, El Tarf);
the central-east (Bejaia, Djijel, Constantine); and the west
(Mostaganem, Oran, Tlemcen, Sidi Bel Abbes). We estimate the
total cost of all four trips will be USD 11,500. These
outreach trips will not only allow us to visit American
companies located outside of Algiers, but also to meet with
local chambers of commerce, importers' associations, business
councils, private industrial zones, and public and private
Algerian companies who could partner with American companies
and exporters. Regular (i.e., at least once every two years)
outreach trips are critical to maintain our network of
contacts, as well as to develop new contacts. Additional
security in the form of Embassy bodyguard support, which will
be mandated for most of these trips, increases the cost of
the trips substantially. This BFIF support will enable us to
supplement our reduced FY08 travel budget and compensate for
cuts in the FCS travel budget mandated by the Department of
Commerce. END SUMMARY AND JUSTIFICATION.

SOUTH-CENTRAL OUTREACH: HASSI MESSAOUD, GASSI TOUIL, IN SALAH
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2. Program Description: Econoff and Commercial Specialist
would travel to the oil and gas center of Algeria, Hassi
Messaoud, for commercial outreach. Hassi is the site of a
large percentage of U.S. investment in Algeria and the center
of numerous opportunities in both sectors. Nearly all
outbound oil and gas pipelines traverse the city, where
primary product quantities are measured and secondary
products are refined. The passage of hydrocarbons reform
legislation in spring 2005 has encouraged the GOA to seek
partners to help Algeria extract resources from the ground
efficiently and quickly, while energy prices remain high.
The GOA has explicitly declared its interest in seeking
additional U.S. service-firm partners to complement the
approximately 50 U.S. service firms already operating in
country. Hassi is home to the offices of most oil and gas
producer as well as service firms. Hassi also holds
potential for U.S. firms in a variety of sectors, including
oil and gas field services, construction, and corporate
services (catering, housing, etc.). FCS has not previously
conducted outreach to Hassi Messaoud, Gassi Touil, or In
Salah.

Main sites to be visited would include:

-- Hassi Messaoud
-- Hassi Berkine (various company base camps)
-- Gassi Touil
-- In Salah

Duration: 3 to 4 days
Estimated Budget: USD 2,000

EASTERN OUTREACH: SKIKDA, ANNABA, EL TARF
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3. Project Description: Econoff and Commercial Specialist
would travel to Skikda, Annaba and El Tarf, areas which have
not been visited in two years. Skikda is the site of a major
oil refinery currently being built by Kellogg, Brown and Root
(KBR). Annaba and El Tarf are major centers for heavy
industry, particularly by state-owned companies. As the GOA
begins to privatize these state-owned industrial companies,
there is great potential for U.S. companies to invest.
Annaba and El Tarf also represent a potential destination for
U.S. exports.

Main sites to be visited include:

ALGIERS 00000220 002 OF 002



-- Port of Skikda and the petroleum industrial zone
-- Annaba Chamber of Commerce and industrial zone
-- El Tarf Chamber of Commerce and industrial zone

Duration: 3 to 4 days
Estimated Budget: USD 3,000

CENTRAL EASTERN OUTREACH: BEJAIA, DJIJEL, CONSTANTINE
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4. Project Description: Econoff and Commercial Specialist
would travel to the cities of Bejaia, Jijel and Constantine
in north-central and northeastern Algeria. Bejaia is the
center of agribusiness in the country. The region holds
potential for U.S. investment and exports in plastics and
light industrial manufacturing equipment. Bejaia is also
home to Algeria's most dynamic Chamber of Commerce and the
third-largest port in the country in terms of container
traffic volume. Djijel has promise for the tourism industry
and houses a well-known industrial zone in the port of
Djendjen. This port was originally designed as a free trade
zone, but after Algeria began working towards WTO accession,
the GOA declared Djendjen to be an industrial zone.
Constantine has promise in the construction, public works and
healthcare sectors, as well as in equipment and educational
supplies.

Main sites to be visited include:

-- Port of Bejaia and the industrial zone of Akbou
-- Cevital, Danone Djordjura, Ifri, Candia, and Soummam
agribusiness industries (potential partners, consumers and
distributors of U.S. products)
-- Bejaia Chamber of Commerce
-- Soummam Chamber of Commerce
-- Port of Djendjen and the industrial zone
-- Constantine Chamber of Commerce and industrial zone

Duration: 3 to 4 days
Estimated Budget: USD 3,000

WESTERN OUTREACH: MOSTAGANEM, ORAN, TLEMCEN, SIDI BEL ABBES
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5. Project Description: Econoff and Commercial Specialist
would travel to the western cities of Mostaganem, Oran,
Tlemcen, and Sidi Bel Abbes. The region is a major hub for
Algerian private companies, which continue to be primarily
oriented towards Europe. Several of these companies have
told FCS that they are interested in developing ties with the
U.S. This trip presents an opportunity to explore best
prospects for U.S. business. Potential sectors for U.S.
business include tourism, agribusiness, construction,
healthcare/medical equipment and ICT.

Main sites to be visited include:

-- Port of Mostaganem and industrial zone
-- Port of Oran, New Hospital of Oran, industrial zone of
Oran, Tapis d'Or (major private Algerian company),Forum des
Chefs d'Entreprises (FCE),Telecom Institute, Hyproc
(Sonatrach tanker company)
-- Energy Port of Arzew
-- Port of Ghazaouet
-- Tlemcen Chamber of Commerce and Le Rouet (private Algerian
textile company)
-- Sidi Belabbes Chamber of Commerce and Djillali Liabes
University

Duration:3 to 4 days
Estimated Budget: USD 3,500


6. Embassy Points of Contact are Economic and Commercial
Officer Jeff Mazur (E-mail: MazurJ@state.gov, Office:
213-0770-082-209) and Commercial Specialist Faiza Gamoura
(E-mail: GamouraF@state.gov, Office: 213-0770-082-274).
FORD