Growing Agriculture and Agri-business

1. Growing Agriculture and Agri-business TAIEB FAKHRI, Director of Project Studies-APIA (Agencyfor Promotion of Investments in Agriculture)

2. ECONOMIC INDICATORS OF THE AGRICULTURE SECTOR • More than 10 M. ha: 5,2 M. ha cultivated area, 4,8 M. ha nature trails and permanent grasslands, 1,6 M. ha forests) • The sector participates: 8,5 % GDP, • 18% workforce, • 500 000 farmers • 10% investments in the economy • 10%of the value of exports • Main imported products: • Cereals (wheat and barley): + 2,7 M. tons • Maize: 1,1 M. tons • Sugar: 0,5 M. tons • Main exported products (2017-2018): • Olive oil : + 180 000 tons (+50% Ag. Exp) • Dates: 113 000 tons • Citrus: +20 000 tons • Sea products: 16 000 tons 5 bioclimatic floors

3. ECONOMIC INDICATORS OF THE AGRO-FOOD INDUSTRY • The sector participates on average: • 3,7%GDP, • 19% value added of the industrial sector, • 22% Industrial investments, with 60 M.TND of foreign direct investment flows • 10% of the value of total exports • More than a hundred export destinations, Main markets remain those of the E.U. (Italy, France, and Spain) and Libya. New destinations are emerging, such as: US, Canada, Russia, Japan, the Middle East and sub-Saharan Africa (Niger, Senegal and Côte d'Ivoire). • 4,3 B. TNDimports in agriculture and agri-food industry in 2014 • 2,3 B. TNDexports in agriculture and agri-food industry in 2014

4. ECONOMIC INDICATORS OF THE AGRO-FOOD INDUSTRY • Companies in this sector:6500 • More than 1050 Companies have > 10 jobs • Almost 200 fully exporting companies • More than 170companies in partnership • Jobs in the sector: 90.000 Autres pays (60)

5. BRANDS HAVE TRUST TO TUNISIA

6. These big brands trust Tunisia LU LOWENBRAU MAÏZENA MINUT MAID NESTLE ORANGINA PRESIDENT PRINCE RED BULL, ROUGEMONT TANG SPRITE SCHEWEPPS … ALSA BECK’S COCA COLA CANDIA CRISTAL CRISTALINE DANONE EMMI HEINEKEN KNORR KRAFT LASSONDE LESSIEUR LIPTON

7. Food IndustrySuccess Stories • DANONE • Partnership with the Tunisian Firm of Agribusiness Industries (STIAL)   • DANONE Group Tunisia - STIAL, the leader in dairy products in Tunisia with over 70% market share, 80 million euros turnover and a staff of 660 employees. • UNILEVER • (Dutch-British multinational) • Maghreb distribution platform for Unilever products imported from Europe • "Cultural Interface" of penetration of Arab markets.

8. PROVEN COMPETITIVENESS 1st world exporter of dates (in terms of value) 2nd largest exporter of olive oil after EU Export to 118 countries (Italy, Libya, Spain, France, USA, ...) 25% of exports to neighboring countries, 9th largest producer of canned tomato • Availability of agricultural produces: • Early • Recognized taste • from a reasonable agriculture (pesticides, fertilizers, ...) • value for money acceptable • Biological and Geothermal Cultures in full swing • Competitive operating costs of projects and better profitability by report to other countries in the region Strengths Export

9. High potential sectors Packaging olive oil, fruits and vegetables • Important suppliers • Value added field Tomato derivatives • Recognized know-how • Big producer • Growing consumption in the world Organicproducts • Geothermal energy and earliness Semi-preserved vegetables & cooked dishes • Easy reconversion in organic mode • Diversity of products • Proven potential • Terroir products and the Mediterranean Diet

10. Main activities of the sector in Tunisia(Food industries)

11. MILK & DERIVATES • Industrial fabric: 10 dairy plants (2.3 ML / day), 45 cheese factories (0.28 ML / day) including 4 units of processed cheese, 1 unit of milk drying (0.15 ML / Jr) and 4 yoghurt production units (0.25 ML / day) • Quantitymilled: 850 M. liters (74% of the national production): • Beverage milk (60 %) • Derivatives (yoghurt, dairy desserts, cheeses, ...) (38.4 %), • Drying: Milk powder (1.6 %). • The activity participates at the level of the Agri-Food Industry sector with: 11% of the value of production, 7% of investments, 3.6% of the value of exports and 2.2% of the value of imports, • Trade balance: Slightly surplus (TC: 112.8%) • Importation : milk powder, cheese for melting, condensed milk and some times drinking milk • Exportation : drink milk, processed cheese, yoghurt and milk dessert

12. PACKAGING AND PROCESSINGOF SEA PRODUCTS • Canned goods (canning and salting) : • Processed species: sardines, tuna, anchovies • Number of units and processing capacity: • Sardine : 18 units (138 T/day) • Tuna : 11 units (188 T/day) • Quantity transformed • Sardine : 6 560 T • Tuna : 5 066 T

13. Refrigeration & freezing  : • Species: crustaceans, molluscs, clams, sea bream, sea bass ... • The units have benefited from a major upgrade program and a health approval from the European Union: - 213Units were approved to export fresh, frozen and/or live fishery products. - 11 purification units were approved to export clams and mussels • 80% of exports are oriented towards European markets. • The main products exported are crustaceans (shrimps), cephalopods (octopus and cuttlefish) and blue fin tuna.

14. OLIVE OIL BRANCH • 309 000 olive farmers, more than 1 600 oil mills with a capacity of more than 30 000 tons / day, 7 pomace olive oil extraction units, 39 subsidized oil packaging units, 28 packaging units for olive oil and 15 refining units (including 5 for olive oil and olive pomace olive oil) • Processing activity participates at the food industry sector at the level of: 6% of the value of the production, 9% of the investments and 34% of the value of exports • Export of packaged olive oil: currently more than 15% of the total quantities exported of Olive oil last season against 0,9% during the 2005/2006 season

15. CEREAL DERIVATIVES • 1st activity of the Food Industry sector in terms of number of units, 2nd in terms of contribution to overall value of production and 4th in value of exports, • Flour mill and semolina: 23 functional units, 2300 jobs. Functional capacity: 2,8 M tons (1,6 soft wheat and 1,2 durum wheat) Utilization rate: 71% for durum wheat and 66% for soft wheat. • Pasta and couscous: 6 integrated units, 1250 jobs. Pasta: 79% of the production. • Biscuits: 13 units, 2730 jobs, 110,000 tons per year of processing capacity used up to 73%. Range of products: Dry, salted, stuffed and coated cookies (60%) - Liquid cookie (30%) - Soft cookie (10%). • An important development of the importation of common wheat for the production of flour for export and the production of pastry flour. Thanks to the Upgrade Program (PMN), the branch has experienced remarkable development in product quality and the acquisition of a high level of technology and innovation and diversification of the range

16. CONDITIONNING OF DATES • Production: 193000T of which 135000T DegletNour (about 2% of world production), • 75 packing stations. The capacity offered is underutilized (40%), nearly 30% of the harvest, of which 80% of DEGLET NOUR passes through these stations, • Exportation + 100 000 T / 560 Million Dinars • Tunisia is the world's largest exporter in terms of value (28%) and fourth in terms of volume.

17. CANNED FRUITS AND VEGETABLES • 29 units of canned fruits and vegetables, 7 units of salad méchouia, 29 units of table olive, 28 units of dried tomato. • The production of canned tomato concentrates is the most important activity in this sector : • 28 units with a processing capacity of approximately 35 000 T/ day of fresh tomato, (8 units for aseptic packaging: 6000 T / day) • A production of 97 000T of tomato concentrates (9th world producer) and 3 000 T canned tomato, • Local consumption: 80 000 T of tomato concentrates (the world's largest consumer), • Tunisiaproduces : • 33 400 T harissa, • 10 750 T canned fruits (quince, apricot, strawberry, fig, apple ... etc), • 16 780 T canned salad méchouia,and semi-preserves (table olives, artichokebottoms, capers ... etc.), • Exportation: more than 40 MDT on average per year on Libya, France and Italy.

18. Other activities in full swing • AROMATIC AND MEDICINAL PLANTS. • HERBS • fruit processing (carob tree, prickly pear, dates, figs,) • fruit juice (pomegranate, grapes,...) • ALGAE CULTURE: Production of spirulina, • ORGANIC PRODUCTS

19. INVESTMENT LAW N°71-2016

20. Promotion of value added and competitiveness of national economy Achieving sustainable development MAIN OBJECTIVES job creation and skills development Achieve regional development Integrated and balanced

21. 1 Market access: Freedom of investment. Simplification of procedures. Administrative traceability. Freedom of acquisition, rental or exploitation of property and buildings. Possibility of recruiting 30% of foreign executives. Guarantees Equality between local and foreign investor. Protection of property and intellectual property. Freedom to transfer profits and capital abroad. Main provisions 2 4 Governance: Superior Council of Investment, Tunisian Investment Authority Tunisian Investment Fund 3 Dispute settlement 5 Tax and financial incentives

22. Tax and financial incentives 1. REGIONAL DEVELOPMENT • First group • Exemption from corporation tax for 5 years • Take charge of the employer contribution to social security for 5 years • - Investment bonus (grant) of 15% with a ceiling of 1.5 MDT • - 65% of the cost of infrastructure work in the industry sector 1st group • Second group • Exemption from corporation tax for 10 years • Take charge of the employer contribution to social security for 10 years • - Investment bonus (grant) of 30% with a ceiling of 3 MDT • - 85% of the cost of infrastructure work in the industry sector 2nd group

23. Tax and financial incentives 2. Prioritysectors (including primary processing activity of agricultural and fishery products such as fresh milk processing. cheese production. canned and semi-preserved fruits and vegetables. production of organic food etc.) Investment bonus (grant) of 15% with a ceiling of 1 MDT • 3. Agriculture, fisheries and aquaculture • Exemption from corporation tax for 10 years • Investment bonus (grant) of 15% with a ceiling of 1 MDT 4. Economic sectors (géothermal and AMP sectors) Investment bonus (grant) of 15% with a ceiling of 1 MDT

24. Tax and financial incentives 5. Grants for productivityimprovement: 50% - Material investments for the mastery of new technologies (all sectors) - Material investments to improve productivity (Agriculture, fisheries and aquaculture) - Immaterialinvestments (all sectors: standardization, certification, exploitation of patents, accompaniments, studies, audience, website...) - of research development - Employee training that leads to the certification of skills (grants of 70%) 6. Sustainable development grant: 50%

25. Tax and financial incentives Projects of national interest - investments over 50 Million DT - and/or creation of more than 500 jobs The ceiling of the grant is 30 million dinars (instead of 5 MD)