EMSNOW Reports: Electronics Manufacturing in Tunisia
EMSNOW has published a report which includes details from our tour of nine EMS companies operating there; seven of the nine are foreign-owned entities, while two are Tunisian national companies. This post includes highlights from this report.
Download the complete report.
Tunisia is gaining attention as a low-cost region to support the European electronics industry due to a number of factors:
- Proximity to Europe (2:20 hour flight from Frankfurt)
- Language (Arabic and French; many speak English)
- Workforce (Good educational system, plentiful and highly competent workers)
- Good infrastructure (Stable energy, communications, water, roads)
- Evolving ecosystem (Local electronics trade association, ELANTICA, local plastics and metal sources, IPC Training programs)
Tunisia itself is a beautiful, peaceful country with a proud history and fascinating culture, representing its unique expression of modern trends. According to the Agency for the Promotion of Industry and Innovation, in 2019 there were a total of 339 companies that produce in the electrical or electronics sector, 225 of which are completely export driven. EMSNOW estimates there are between 30 and 134 EMS companies (i.e. provide PCBA as a service) operating in Tunisia; many of these are smaller companies producing for the African market (e.g. Italian television makers). It is therefore estimated that there are currently only 30-40 companies that are 100% export companies doing EMS work.
Export companies are a legal distinction relating to tax free status in Tunisia. For EMS, this means companies that import electronic components, provide value added services and export finished goods. There are some details about this that add some complexity to logistics, including the requirement of a customs official to lock and unlock shipping containers, which is one of the challenges of doing business in Tunisia. However, the companies we met reported that they have been able to easily schedule these visits with customs officials; one EMS was even able to have two of their employees trained and certified to act as customs officers in their facility.
Other challenges include:
- Labor force turnover is high. As is common in nearly all ‘low labor cost’ regions, the labor rates do not stay low forever. Further, being close to Europe means there is a ‘brain drain’ to countries where skilled workers can earn more.
- Business has slowed down. The EMS industry is experiencing a pull-back in the first half 2024, impacting resources for investment.
- Rapid growth could strain infrastructure. Rising land prices and energy grid could impact future expansion
- Driving is an adventure: the EMSNOW team recommends getting a driver.
In spite of challenges, the future for EMS in Tunisia is very bright. Based on the knowledge and insights gained from EMSNOW’s recent tour, we believe that Tunisia is in a very favorable position to expand as a low-cost, high-quality region in support of the European EMS industry. Many of the larger European based EMS already have facilities there; some large OEMs are also based in Tunisia (e.g. Valeo, Sagemcom, Visteon, Marquart, Bosch, General Electric, Somfy, Autoliv); some of these have assisted EMS companies by selling them a facility and/or helping them to set up manufacturing there.
It will be interesting to see how the material supply base chooses to support this country as it further develops and grows its EMS industry. Will the distributors continue to support only from Europe as they do now or will they establish warehouses on the ground in Tunisia? This would be very beneficial to the industry.
Electronics manufacturing is recognized as an important industry for the future of Tunisia and is expected to be designated so by the Ministry of Industry. We believe that Tunisia has a bright future as one of the premier locations for the EMS industry in EMEA.
