For Investment Promotion in the West Bank and Gaza

For Investment Promotion in the West Bank and Gaza

PROMOTING INDUSTRIAL ZONES AND INVESTMENT MOBILIZATION USAID WB/G SO1: EXPANDING ECONOMIC OPPORTUNITIES CONTRACT NO. 294-C-00-00-00071-00 Target Investor Profiles (TIP) for Investment Promotion in the West Bank and Gaza SUBMITTED ON AUGUST 2002 TO THE USAID MISSION TO THE WEST BANK AND GAZA MARGOT ELLIS, CTO BY THE SERVICES GROUP (TSG) SULEIMAN AREF, MASSAR ASSOCIATES AARON BRICKMAN, CONSULTANT PETER CARR, VICE PRESIDENT HUGH DOYLE, CEO TRINA RAND, STAFF CONSULTANT BETH WALSH, SENIOR RESEARCHER 2300 CLARENDON BOULEVARD 1110 ARLINGTON, VIRGINIA 22201 USA WWW.TSGINC.COM USAID PRIZIM Project Target Investor Profiles Table of Contents Summary of TIP Activity 2 Annex A: Final list of 150 (Excel sheets) A1 Annex B: Company profiles for final 150 B1 Annex C: First cut companies from initial research (Excel sheets) C1 Annex D: Initial long list of companies (Excel sheets) D1 The Services Group Page A - 1 USAID PRIZIM Project Target Investor Profiles Summary of TIP Activity: Introduction and Background The development of target investor profiles under the PRIZIM project is a key element in training and building promotional capacity in Palestinian economic development agencies, including both PIPA and PIEFZA. This represents the beginning of an ongoing database compilation of target firms both in the Middle East region and around the world that have demonstrated a foreign investment interest and whose sectoral activities fit the comparative advantages of the West Bank and Gaza. This activity was carried out from April to June 2002, during an especially unstable political time in the West Bank and Gaza. Because of this exceedingly difficult situation two elements of the initial scope of work could not be accomplished; training of Palestinians at TSG headquarters and a comprehensive telephone survey of prospective investors. The initial goal was for 250 target firms to be included in this identification. Details would include information about the firm’s activities, global operations, FDI inclinations if available, as well as details of the senior management personnel of the firm responsible for FDI decisions. Companies included in the final list are considered worthwhile investor targets for the future. It would be counter-productive to launch a campaign during the current political unrest and consequent negative investment climate. Should companies be contacted now, the West Bank and Gaza would enter radar screens of decision-makers just as they are seeing intensive media coverage of infrastructure and other damage in addition to a highly negative political climate. Instead, this initial period can be used for background research and the solidification of marketing plans. Sector Identification In response to a need to increase the rate of job creation, much of the Middle East has seen FDI diversify beyond established sectors like hydrocarbons and agriculture in the past 10-15 years. While investment in oil and gas remains robust, FDI has increasingly come in new areas in the manufacturing and services sectors, including apparel making and various activities related to information technology. Information technology, apparel manufacturing, and stone and marble represent three industry sectors in the West Bank/Gaza that are primed for investment and have been identified for near-term promotion efforts. While small overall compared to Asia, North America, and Europe, the Middle Eastern information technology services sector has posted strong rates of growth in various related indices, including general demand for goods and services, internet usage, and telecommunications demand. Two critical considerations for the IT sector at present are the global slowdown in demand for most products and services and managing an existing oversupply of products. Investment in IT has decreased significantly over the past 18 months, and the IT sector has yet to recover. Many investors indicate that at present few major overseas investments were planned until economic circumstances changed. The cost and quality of local labor, The Services Group Page A - 2 USAID PRIZIM Project Target Investor Profiles English language ability, and proximity to universities and research centers offer the West Bank/Gaza an advantage over regional competitors. FDI in the apparel-manufacturing sector in the Middle East continues to grow, especially among countries that have preferential access to the lucrative US and EU markets. Although generally water-intensive, the related textiles manufacturing sector, including both synthetic and natural products, is also a significant sector in the Middle East. Apparel manufacture tends to be labor intensive, to have low barriers to market entry, and to be fairly sensitive to demand among large consumer markets and to price competition. Market entry to the US and EU through existing trade pacts may be a major advantage for the West Bank/Gaza. The skills and experience of the local workforce are also positive attributes. Demand and market price are critical considerations affecting new investment in production in the stone and marble sector. The high domestic demand and potential for increased exports for Palestinian stone presents a good opportunity for investment in the stone cutting and finishing sector within West Bank/Gaza once peace returns to the region and unfettered import and export activity resumes. There are ample raw materials, and the distance between quarries and potential cutting and finishing workshops is minimal. Methodology The target sectors, as established through prior research and analysis, are listed below and are broken down by their standard industrial classification codes (SIC). These sectors were chosen in part because they would be least likely to be disrupted by the perception of an unstable investment climate. SIC 1411 Quarrying of stone and marble SIC 23 Apparel and other finished products made from fabrics and similar materials SIC 3281 Manufacturing of stone and marble products SIC 7389 Business services (call centers, back-office operations) SIC 7371 Computer programming services SIC 7372 Prepackaged software SIC 7373 Computer integrated systems design SIC 7374 Data conversion (computer processing and data preparation and processing services) In the preliminary stages two database sources were used to obtain target sector company records in the primary and secondary target markets. Two thousand company records were obtained from Dun & Bradstreet (D&B) and supplemented with additional company records from the online InSite 2 subscription database. Through D&B, a more precise company search was conducted than could be accomplished solely through online databases: for instance, for most of the target sectors D&B provided records for companies that have existing subsidiary relationships in Middle Eastern countries. D&B’s results yielded no stone and marble companies from the target markets with subsidiary relationships in the Middle East. It should be noted that the D&B database is concentrated with The Services Group Page A - 3 USAID PRIZIM Project Target Investor Profiles North American, European, and Japanese companies; other regions are not as well represented among company records. Database search results were backed up by online searches. The InSite 2 database was searched specifically to include companies from the primary and secondary target markets for which the D&B search did not yield significant results. The search parameters were set differently for each target sector and target market in an effort to gain as representative a company list as possible. During the process, it was noted that the InSite database does not allow searching by location of subsidiaries; therefore, the InSite results include companies that may or may not have existing subsidiary relationships in Middle Eastern countries. Following the initial analysis of all database company listings that were returned, the list of candidate companies included nearly 400 records. Additional records were included due to the potential for overlap between the two databases used, and due to the fact that certain large multinationals might be represented in the lists in several different countries. This was expected to be especially true in the software sector; therefore, extra company records were included to make up for a potential deficit. The database searches yielded a large amount of companies, more than 2000 in total. To gain a realistic group of candidate companies, time was spent researching every entry to determine its status and relevance. In most cases, a financially viable company with a history of foreign investments would be a potential candidate, whereas a small company in its infancy with no overseas investments would be excluded. A company with a significant international sales presence was not necessarily included unless it also had foreign operations or facilities or demonstrated tendencies in that direction. The aim was to arrive at a concise, useable list as the end result rather than a large, unfocused list. Time and money are routinely wasted by investment promotion organizations chasing down leads that could be easily determined to be non-starters from the beginning. The companies included in the end result for this project would all be candidates, rather than speculations. As mentioned, it was expected that a final group of 250 companies would be chosen from the initial researched group to be profiled by the consultants. In the end, a lesser number of candidate companies emerged. The initial goal of 250 became

View Full Text

Details

  • File Type
    pdf
  • Upload Time
    -
  • Content Languages
    English
  • Upload User
    Anonymous/Not logged-in
  • File Pages
    603 Page
  • File Size
    -

Download

Channel Download Status
Express Download Enable

Copyright

We respect the copyrights and intellectual property rights of all users. All uploaded documents are either original works of the uploader or authorized works of the rightful owners.

  • Not to be reproduced or distributed without explicit permission.
  • Not used for commercial purposes outside of approved use cases.
  • Not used to infringe on the rights of the original creators.
  • If you believe any content infringes your copyright, please contact us immediately.

Support

For help with questions, suggestions, or problems, please contact us