Business Briefs: Moroccan Agricultural Sector Lauded; New Investments Push Packaging, Finance, Aerospace, and Energy Sectors; While Kosmos Puts Its Project on Hold – Jean R. AbiNader

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

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

Jean R. AbiNader

February 14, 2018

Why Agriculture is a key sector in Moroccan economy was detailed in an article in the North Africa Post. It reviewed a report in the Euro Med Invest Business Guide that pointed out that despite the variances in rain that result in swings of up to 5-8% of GDP a year, the country is investing in long-term solutions to add value to the sector. Currently, 15% of arable land is irrigated on privately-owned farms dedicated to export. As cereal, olive, and legume crops still rely on rainfall, the government is moving towards more efficient water management.

It has introduced drip irrigation, which will grow to 550,000 hectares from 2008 to 2020, and promoted diversification of crops, for example, the introduction of quinoa, which withstands drought well. The government has implemented a Green Morocco Plan for upgrading the agricultural sector and a Halieutis Plan for the fishing industry. Both are considered national priorities.

The article points out that “Under the Green Morocco Plan, foreign businesses can target agricultural projects (through land leases or equity participation), processing projects or else selling agro-industrial equipment and agri-food products. Leading sectors include dairy products, oilseeds, cereals, dried fruits and nuts, confectionery, seafood products and canned goods, aromatic and medicinal plants, organic production and home produce.”

Investments target growing segments, with announcements in diverse sectors. Pro-Gest Spa, the paper and packaging group of Zago industries, have launched a new plant in Marrakech valued at some $37 million. It will initially be a warehouse and box-erecting plant, to be upgraded with a corrugator so that it will be an integrated corrugated packing facility with 50 employees serving the local agricultural export market as well as customers in West Africa.

Aerospace continues its growth as Thyssenkrupp announces its plans to build a sales and production organization to grow its aerospace business in Morocco. The 21,000 square feet facility will open this summer, near Casablanca, and offer storage for aluminum, steel, and titanium, alongside materials processing services. It has already signed agreements with parts manufacturers Figeac Aero and ARM Group. Joachim Limber, chief executive of parent company Thyssenkrupp Materials Services remarked that “This new site underlines our ambition to be a reliable and strong partner alongside our customers,”

In other aerospace news, French aircraft manufacturer Daher opened a third plant in Tangier, after its first plant in Tangier (2001) and second in Casablanca (2007). The report in Xinhua  said that the new plant, to be built on an area of two acres, will manufacture metal and composite structures as well as parts for the aircraft engine. It is expected to employ an additional 250 workers.” With more than 130 companies

The Moroccan aeronautical industry has made significant strides over the past decade, with its industrial base growing from a few companies to over 130, including international leading brands such as Boeing, Bombardier, Airbus, Safran, Thales, and Hexel Composite.

Automobile sector adds new player as Spanish equipment maker Gestamp announces its entry into the African market by locating its first plant in Kenitra, scheduled to open in 2019. Gestamp specializes in the design, development and manufacture of highly technical metal components for the automotive industry. This latest effort is a joint venture with the local component manufacturer Tuyauto. Active in 21 countries, Gestamp’s Moroccan plan will support its two main global customers, Renault-Nissan and PSA.

The plant will be located near PSA’s new facility in Kenitra as part of its supply chain ecosystem. “Morocco in particular and Africa as a whole are emerging markets with strong growth potential in vehicle manufacturing,” said Gestamp executive president Francisco J. Riberas.

Opel to start car exports to Morocco from its European plants following PSA’s purchase of Opel from GM last year as a move calculated to challenge market leader Volkswagen. Opel is shifting its model line-up to PSA’s production platforms as part of a recovery plan that targets a return to profitability by 2020.

Conflicting energy exploration news as ONHYM announced that Kosmos Energy is shifting operations away from Morocco to concentrate on proven reserves in West Africa. The move was seen as needed to reduce exploration risks while allocating capital to more lucrative ventures. It was pointed out that Kosmos Energy will oversee the seismic acquisition work and the processing and interpretation of 3D seismic up to submission of the final report to ONHYM on the Cap Boujdour blocs.

At almost the same time, ONHYM announced the signing of agreements with Royal Dutch Shell and Spain’s Repsol to conduct onshore oil and gas explorations in southern Morocco. The explorations will be carried out at an onshore site in the southern region of Souss-Massa, which covers an area of 9,990 square km. Repsol, one of the world’s leading publicly-traded oil and gas companies, will be the operator of the project. It is expected that $164 million will be invested in oil and gas exploration this year. Since 2000, $2.7 billion has been invested in onshore and offshore exploration, 96% of which was paid by ONHYM’s partners.

 And banking keeps getting bigger as Attijariwafa Bank Group (AWB) signed an MoU with the CGB Bank of Ghana to broaden AWB’s outreach in Ghana, ECOWAS, and other countries. The published story said that “Under the partnership the two institutions will operate as correspondent banks, facilitate trade finance, deepen capital markets and jointly organize business missions designed to enhance trade and investment between Morocco and Ghana.” This would include retail banking, insurance, consumer finance, corporate and investment banking. The immediate benefit is that “The partnership will ensure that AWB customers mainly in Francophone countries engaged in businesses in Ghana will make use of GCB to transact banking businesses while GCB customers transacting businesses in Ghana will also use GCB platforms and channels.”

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