Tunisia’s olive oil industry is going from strength to strength and the country’s economy depends heavily on the product’s export. Yet small, family-owned farms are struggling to modernise their operations and compete with global market players.
The cultivation of olives in Tunisia began some three millennia ago. With year round sunshine and fertile soil, the country offers perfect conditions for the crop. Its oil is thought to have miraculous properties and is used not only for nutrition but also in cosmetics and medicine.
Perched on the hills of Kairouan lies the olive grove of the Slama family. The Slama Group, launched in 1930, is one of the biggest family-owned olive oil producers in Tunisia. Its know-how and the business have been passed from generation to generation.
Today, the original founder’s three grandsons successfully continue the family tradition. Their oil is becoming a world-famous brand, exported to the EU, North America, China and Russia. Nearly 600 people work in the groves during the picking season.
“These people come from local villages and olive picking is an important source of employment for many families who chose to stay in their villages instead of relocating elsewhere,” explained Naoufel Chebbi, Slama’s Deputy General Manager.
Challenges of a family firm
The firm has diversified its business and the family label is now a guarantee of quality for other products as well.
Recently, the group, which employs 4,000 people in Tunisia, opened its own supermarket chain, Aziza, with over 165 stores across the country. But olive oil remains their signature product.
When the group started to expand and diversify production, the challenge was to create efficient governance which would cover all the businesses.
“Today, around 20 family members work for the group,” said Chiheb Slama, one of the two Slama brothers. “However, simply being a family member is not a guarantee that one will work for the group. Everyone needs to prove themselves.”
For almost two years, the company was assisted by international advisers from the EBRD’s EU-funded Advice for Agribusiness programme who helped the owners review and improve their corporate governance.
“We have introduced formal governing bodies and procedures which today serve as a safeguard that the business will function in a professional way. If we hadn’t improved our governance, it would have been more difficult for us to continue to grow and expand on international markets,” said Ghassen Slama, Chiheb’s brother.
EU support for economic growth
"Supporting the productivity and competitiveness of companies such as the Slama Group, which employs hundreds of people in one of the poorest regions of Tunisia, allows us to fulfill both our development and economic support objectives", explains S.E. Patrice Bergamini, Ambassador of the European Union to Tunisia.
“Slama Group is an example of how the EBRD supports local agribusiness companies by providing them with international expertise which helps them improve their businesses,” said Nemanja Grgic, Principal, Agribusiness Advisory, EBRD.