“We need to create more opportunities and synergies between Moroccan and Andalusian aerospace companies”
Maria El Filali is the General Manager of the Industrial Association of Moroccan Aerospace Companies (GIMAS). She gives us her vision of the aerospace industry in Morocco and the new challenges ahead as a strategic sector for European investors.
Strengths and weaknesses of Morocco in the aerospace business worldwide.-
Morocco is today recognised as being among the most competitive aerospace industry in the emerging world, with more than 100 companies established today. The strengths are 1/ the government’s support for investors in terms of financial incentives, 2/ the creation of a technicians training school – IMA – dedicated to aerospace companies for composite, sheet metal, machining, wiring, and fitting operators, which has already trained more 1500 people since its opening in April 2011, and 3/ the creation of Midparc- a free zone industrial park located in the midst of the aerospace hub near Mohamed V Airport in Nouasser-Casablanca.
Its weakness would be the need to diversify more to other markets, not just French companies. This trend is changing thanks to the recent set up of Bombardier, UTC, and other companies.
Midparc, a free zone dedicated chiefly to the aerospace industry.-
One of the key attributes in driving recent growth in aeronautics has been the creation of Midparc, with an investment over 80.6 million €. The Midparc integrated industrial zone offers an exceptional and unique logistical position at the gates of Europe and Africa. Companies based there can benefit from corporate tax exemption for the first five years of operation and a reduced rate of 8.75% for the following 25 years. Midparc is an extension to the Casablanca aviation industry zone (Aéropole), a reference industrial zone in Morocco that already hosts several international companies. The government is looking for more companies to set up, allowing the country to benefit from foreign expertise and technology transfers, and also, according to the Ministry of Finance, to help to generate an estimated 15,000 new jobs by 2015. It will also help pave the way for Morocco to build its exports while assuming a greater role in the global aerospace industry.
A geo-strategic location, with governmental incentives.-
Morocco is located 14km away from Andalusia, the third most important aerospace hub in Europe and 2 days by road away from Toulouse, another key aerospace hub. Language and culture make Morocco a friendly country for companies where business is easy.
The Moroccan supply chain is another advantage. Companies that set up here are sure to find clients or suppliers in the neighbourhood! Also, with key players like Bombardier, Aerolia-Airbus, Safran group with six subsidiaries, Zodiac Aerospace, Thales Ratier-Figeac UTC, Eaton, etc, investors have new opportunities in this sense.
The governmental incentives allow a subsidy of 15% of total investment, and a contribution to training costs of around 2000 € per operator/technician, and 6000 € per engineer. The diversified and well developed supply chain allows for more local integration and more complex parts to be shipped directly to the end client. A number of Moroccan companies are single-source for different programmes. Companies are exempt from VAT while importing new equipment for two years after they start, also exempt from corporate tax during 5 years, and 8.75% afterwards if they are in the free zone or 17.5% in non-free-zone areas.
The Moroccan Institute of Aeronautics (IMA).-
The IMA is a training centre created out of an innovative partnership between the public and the private sector. IMA’s mission is to provide companies in the aerospace industry with qualified and well trained operators, technicians and middle-managers. Training costs are free of charge for companies if the National Pact for Industrial Emergence device is used. The structural support of IMA in terms of training for technicians is critical to support the growth of the aerospace industry in Morocco. Thanks to IMA, turnover is very low and resources do not move from one company to another. When major OEMs establish themselves, they start training their future collaborators at IMA where they spend 6 to 9 months as trainees, spending 2 weeks at IMA and 2 weeks at the company. IMA is a good example of a successful public-private partnership where the government has built and equipped the training centre, and GIMAS is in charge of its management.
8 out of the 10 fastest growing markets in percentage terms will be in Africa. What should the role of aerospace investors in Africa be?
The North African countries are starting to capitalise on the desire of European companies to move production offshore and take advantage of the close proximity. Morocco’s aeronautics sector now accounts for 5% of its exports, with a turnover of 800 million € and employing about 10,000 people. Recent years have seen strong expansion with the sector growing by 20% in 2013 and 17% in 2012. Offsets will probably be part of the market approach, companies can play their bargaining power through their investment, and it works the other way around between governments and companies. Closer ties with African countries will probably help foster the business between European and African companies.
Highly specialised SMEs vs. the small ones.-
The majority of our companies are SME’s, they are key to any industry worldwide. Of course OEMs want to deal with integrators rather than a huge number of suppliers. The key would be for small companies to focus even more on innovation and to partner with companies with whom than can supply more complex and integrated parts.
Two regions as close as Andalusia and Morocco, but still far from better aerospace cooperation.-
We need to create more opportunities and synergies between Moroccan and Andalusian companies. We are less than one day’s travel from each other, and we can imagine what Moroccan and Andalusian Joint Ventures would have to offer. Morocco can be also a strategic gateway to Africa for Spanish companies.
A challenge for the future.-
Our challenge is to better represent our companies in major aerospace events, to accompany their growth by continuing to develop training programs that adequately fit their needs, and play a key role the local integration of the supply chain. Our companies must be able to respond to the growing demand of OEMs which outsource in Morocco. The Moroccan aerospace base is attractive, and more and more companies set up their business in the country. We have to provide the support that companies need for their growth. As the sector continues to progress, Morocco’s next goal is to be able to build complete aircrafts within 10 years, a target that should see the sector play a bigger role in adding value to the economy.