A pilot project seeks to pave the way for local feeder industries to funnel their products into global supply networks, reports Sherine El-Madany If everything goes to plan in a new programme designed to improve the standards of Egypt's feeder industries door panels, seats, sun visors, windshields, floors, wheels and mirrors should be rolling off production lines by the end of next year, each with a "Made in Egypt" label that will tell customers that the product in question meets the highest specifications. The impetus behind the programme began last July when General Motors (GM) expressed concern over the quality control of the local automobile feeder industry that supplied GM's assembly plant in Egypt. As a result the Ministry of Foreign Trade and Industry teamed up with the Industrial Modernisation Center (IMC) and the Commercial International Bank (CIB) to pave the way for the National Suppliers' Development Programme (NSDP). "The NSDP seeks to upgrade the capacity of local suppliers across all sectors of industry as well as enhance their export readiness and competitiveness," said Helmi Abul- Eish, IMC executive director. "The programme also aims to maximise job opportunities and increase industrial investment." The programme will initially target 20 of Egypt's largest automotive suppliers, companies that supply parts not just to GM but the majority of car manufacturers operating in Egypt. Through the IMC individual suppliers will be offered technical and financial assistance to upgrade their product specifications. And in return for better quality parts GM will place the local suppliers that successfully meet its global quality requirements on its global network of suppliers, opening up the possibility of exports to GM assembly plants from Brazil to Turkey, which will be able to order auto parts from Egypt's local feeder industry. "The NSDP has enabled GM to pinpoint weaknesses and is now helping us overcome the problems," explained Mohamed Farouq, vice- chairman and CEO of automotive supplier Mobica. "Now our goal is to eventually export 40 per cent of our production. This can only be achieved through better quality and delivery logistics." GM has chosen its own consultants to help local suppliers upgrade and modernise to a standard that will allow them to enter and compete in the GM global sourcing network. "Our suppliers provided us with good quality units but they were not consistent enough and needed some reworking," said Don Butler, GM Egypt chairman and managing director. "So we decided... to work towards increasing the capability and efficiency of our top 20 suppliers." GM consultants will help the company's suppliers by providing support across a range of activities, including technical assistance and training, process control, cost accounting and human resources and financial management. The IMC, a joint European/ Egyptian programme, will provide 85 per cent of the LE1 million required from each of the 20 participating suppliers. The individual suppliers will have to find the remaining 15 per cent -- LE150,000 -- of the payment, a condition intended to ensure commitment to the programme. IMC will, in addition, provide technical assistance in identifying the upgrading needs of each supplier. Once those needs are identified a gap closure plan will be formulated which, once implemented, should ensure that the supplier receives GM accreditation. The programme is now in its first phase -- a six-week gap analysis -- and should be completed by December next year. To help local suppliers fund their 15 per cent share of costs the CIB has created a range of financial instruments tailored to the needs of SMEs. Such has been the interest in the pilot project that it has attracted the attention of a host of household names with Procter & Gamble, Unilever, Cadbury, LG, Miraco, Schneider and Siemens all contemplating future schemes. "The main goal behind the NSDP is to integrate Egypt into the global economy by upgrading individual companies and creating a modern and competitive industrial base capable of supporting our export sector," said Rachid Mohamed Rachid, minister of foreign trade and industry.
