Morocco working on becoming regional industrial hub

Sunday 08/01/2017
Employees work at a factory operated by Somaca in Tangiers. Somaca is part of an expanding web of car makers and parts suppliers in Morocco. (Reuters)

Casablanca - Morocco is working on becoming a ma­jor industrial hub in the Middle East and North Africa (MENA) region to diversify its agriculture-led economy.

The development of free trade zones, logistics and the educa­tional system over the past decade, along with the country’s strategic location, has helped the North Af­rican kingdom attract major com­panies. The efforts of the Moroccan Investment Development Agency (AMDI) led Boeing to sign a deal that could boost the kingdom’s aeronautics exports by $1 billion and create 8,700 jobs, officials said. Boeing already has a joint venture with France’s high-technology group Safran in Casablanca to build wire bundles and harnesses for air­craft makers.

AMDI was also one of the main negotiators of the contract signed with Canada’s Bombardier to build a manufacturing facility at the inte­grated industrial platform of Noua­ceur. The company announced in August that it planned to relo­cate some production facilities in Northern Ireland to Morocco to cut costs.

There are more than 100 Europe­an and US aviation industry firms operating in Morocco, which seeks to create another 23,000 jobs in the aeronautic sector by 2020 and increase exports to $1.6 billion per year, officials said.

The North African kingdom ex­ported $590 million worth of air­craft parts in the first eight months of 2016, accounting for 3.5% of Mo­roccan exports.

In the auto industry, Morocco has attracted big names such as Renault and PSA Peugeot Citroen. Renault’s factory in northern Mo­rocco is the largest car manufactur­er in Africa with a capacity to pro­duce 340,000 vehicles annually. It produced 229,000 cars in 2015, up from 174,000 the year before, the company said.

Jean-François Gal, director of the Renault factory, hailed Morocco as the “perfect location at the gates of Europe”.

With the expected opening of an assembly plant near Kenitra in 2019, PSA Peugeot Citroen hopes to sell 1 million vehicles in 2025 in Africa and the Middle East, includ­ing 200,000 in Morocco. The king­dom projects auto industry exports to reach $10 billion a year by 2020. The automotive sector became Morocco’s largest exporter in 2014 with a turnover of $4.4 billion, overtaking phosphates.

About 150 automotive-related manufacturers are operating in the country, the Moroccan Association for Automotive Industry and Trade said.

“Morocco has been working in the last few years to lure investors in both the automotive and aero­nautic industries as part of its strat­egy to diversify its economy and create job opportunities,” analyst Abdesslam Alaziz said.

He said many factors have con­tributed to Morocco’s industrial expansion.

“Young, skilled and cheap work­force, tax exemptions, free zones in various parts of the country, the logistical infrastructure and its ge­ostrategic location are among the factors that helped Morocco attract big names in the automotive and aeronautic industries,” he said.

Morocco has tried to develop its higher education system in a way to meet the demands of the indus­trial sectors. It created the Institute of Aeronautic Jobs (IMA) in which students learn advanced trade skills related to aerospace manu­facturing and engineering.

It has also offered foreign com­panies tax exemptions, provided most of the production is destined for export.

“Another key factor is Morocco’s political stability compared to oth­er neighbouring countries,” Alaziz said.