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Business Brief: Morocco Shines as Business Bridge with Europe; Automobile Manufacturing Continues Growth as New Companies Enter Sector – Jean R. AbiNader

Jean R. AbiNader, MATIC
September 8, 2017

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Although most of the recent attention on Morocco’s growing economy focuses on the success of its outreach to Africa, Morocco still has extensive and profitable ties with Europe, as illustrated by the increasing numbers of French professional schools establishing campuses in Morocco, and the number of international companies investing in the automobile sector and bringing high value jobs to the country.

A solid base for training business professionals.

While much has been made lately of Morocco’s increasingly vibrant commercial role in Africa, very little attention has been paid to the benefits of these ties to Morocco’s traditional trading partners in Europe. A recent Le Monde article detailed how Morocco’s well-equipped infrastructure, political stability, and solid diplomatic relations with African states make it a natural hub for connecting Europe and Africa. As importantly, its role as a center for preparing African professionals is growing.

Trade ties are strong and long-standing, supported by well-trained managers and executives at home on both continents. “There is a need for a cadre hub that can provide the skills Africa needs for its development,” said Thierry Sibieude, director of the Essec Africa-Atlantic campus. High-level executives trained in Morocco or Tunisia are valuable employees as they have the bi-continental awareness to be effective immediately,  according to Christophe Elie-Dit-Cossack, vice-president in charge of international affairs at the Paris-Dauphine University.

Training Moroccans and other Africans in Morocco enables them and their companies to have a stronger understanding of the cultural, business, and social mores of how commerce is done, the technical and legal considerations, and how management can best function to achieve results. One result has been the growth of European campuses in Morocco.

“A city like Casablanca, connected by air to all African and European cities, with a dynamic economic fabric and an old multiculturalism, has the right soil to develop the economic and research programs of the professional schools,” says Eric Maurincomme, director of INSA Lyon, which opened a campus in Fez in 2014. The French institutions want to become centers for African students and professional from across the continent, and Morocco is a natural location. In Fez, the campus specializes in training cadres in developing skills relevant to business start-ups, the dominant need in Africa’s professional education.

Morocco’s cooperation is also a common response to a very active competitor, China. “Chinese economic diplomacy is very relevant in Africa,” recalls Souad Benbachir, Director General of the Moroccan commercial bank CFG Bank. He believes that training the business people of tomorrow makes sense, within the framework of Euro-Moroccan partnerships, and is vital if EU companies are to remain major players in the francophone countries of West Africa and beyond.

Automobile manufacturing builds momentum.

The success of Renault and Peugeot in Morocco is leading other manufacturers in automotive supply chains to invest there. Given its stability, infrastructure, and logistics networks, Morocco’s aspiration to become an economic tiger in Africa is in sight. Recent announcements of expansions and investments covered in the North Africa Post bear out that ambition.

According to Spanish media reports, its car parts maker, Ficosa, is planning a plant in Rabat to produce in-vehicle cameras. The estimated investment is some $26 million, with a start date of 2021 with 800 direct well-paying jobs. Last July, Canada’s auto parts manufacturer Linamar announced that it will build a $280 million plant to supply engine parts to the new Peugeot factory before expanding to new plants that should open soon in Morocco.

US auto parts maker Delphi Corp. announced plans to set up a factory making electrical distribution systems and a research and development center in Morocco; while Japanese parts manufacturer, JTEKT, will be a $17 million facility in Tangier to meet its customers’ needs.  In additional, Italian auto parts manufacturer, Sogefi, will build an engine filters plant in Tangier estimated at around $12 million.

Morocco’s goals for the sector are well defined in the latest industrial acceleration plan – a goal of 190,000 jobs by 2020, of which 100,000 currently exist, and 65% locally produced components in exported cars by that time, up from the current 40%.

The North Africa Post article mentions that Morocco’s proximity to the European market, modern infrastructures, free trade zones, qualified cheap manpower, open economy and stability have all contributed to making Morocco a regional car industry hub attracting investments by automotive giants such as Renault and Peugeot in addition to world class car parts manufacturers.”

More investment partnerships established.

Attijariwafa Bank and Sumitomo Corporation have signed an MoU to establish a long-term partnership for operations in Africa. Sumitomo, a leading Japanese energy and manufacturing conglomerate, is already active in solar energy projects and car parts manufacturing in the Kingdom and wants to leverage this experience in other African countries, something that has been part of the King’s agreements signed with various states.

An article in Morocco World News said that the purpose of the MoU, “is to promote cooperation between the two groups in the automotive, infrastructure, chemical, mining, and agriculture sectors in Morocco and Africa at large.” For example, Sumitomo Wiring Systems in Tangier employs 19,000 people, and is one of 50 Japanese companies active in Morocco. In 2016, trade between the two countries reached $700 million.

Ikari Data, Managing Director in charge of Business Development at Sumitomo Corporation Europe Limited, said that the Japanese group decided to sign this agreement with Attijariwafa bank to “support our presence and operations at the continental level and also to have access to the network and expertise of the Moroccan bank, which is now an integrated African financial group capable of supporting our new regional strategy in the countries where the Group already operates.”

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