Aeronautics, a Promising Sector in Morocco
Aeronautics, a Promising Sector in Morocco
Morocco stands as a strategic gateway for ‘Aeronautics in Morocco’, positioning itself as a pivotal platform on the African continent for the aviation industry. With its close proximity to Europe, political stability, and competitive labor costs, Morocco offers substantial advantages, particularly in the aeronautics subcontracting market. Yet, the journey to becoming a leader in this sector is still unfolding.
The Moroccan aeronautics sector is enjoying an annual growth rate of 15 to 20% (13.8% in 2013 according to the Moroccan Office des Changes). Today over a hundred companies in the aeronautical sector are set up in Morocco, employing over 8000 people in total. Among these companies, we can mention some International key players like Airbus Group, Boeing or Dassault aviation. However, the internationalization of the sector is limited, since 72% of investments in this sector come from French companies, followed by Moroccan firms (21%). Investments from American companies do not exceed 3%. For instance, this year’s worldwide top 10 in the aerospace sector is composed of 6 American companies, and only one French, one Italian and one British company. This market is generating a turnover of around 800 million euro (5% of Morocco’s total exports) and is one of the top priority sectors in Morocco’s Industrial emergence plan. Indeed, factories are expanding and companies are recruiting driven by a global growth and considerable orders. For all these reasons, the sector is likely to increase twofold by 2020 according to the Moroccan Space and Aeronautical Industries Group’s president.
Nevertheless, in order to become a heavy-weight player in the sub-contracting market, Morocco will need to manufacture more complex components and reverse its training deficiencies to meet the needs and high production rates imposed by global aircraft manufacturers. Indeed, several countries are competing in the sub-contracting market such as Mexico, India or Malaysia. Morocco is among the worldwide Top 8 regarding aerospace & defence manufacturing investments received between 2001 and 2011. Some of these countries offer cheaper labor for instance. Consequently, Morocco has to counterbalance by producing more complex parts and by improving the local supply chain (i.e. licensing local distributors). Indeed, the less back and forth between Moroccan and foreign plants take place, the better in terms of time and money saving.
Even though the aeronautics sector’s development looks promising, Morocco still encounters training inadequacy since the growth started only in 2004. To be a key player and to attract global manufacturers, a significant high-skilled pool of personnel is required (i.e. 20 000 people will be needed by 2020 in this industry). This applies mostly to machinists and technicians since there are already Moroccan engineers specialized in aeronautics. The Institute of Aeronautics Professions (IMA) and the ISMALA (Specialized Institute for Aeronautics and Airport Logistics Professions) were hence established to counterbalance the inefficiency of Morocco’s public sector educational system. Since then, more than 1500 people have graduated from these institutes but aeronautics manufacturers still have to train young machinists in-house for an average of two years before they are completely productive.
Another influential factor for Morocco’s aeronautics industry future is Bombardier’s on-going establishment in the country, planned to open at the end of this year; first plant on the African continent enabling the company to sell several of its aircrafts, well suited for the African continent features. This set-up is not random, but largely due to Moroccan subventions and tax benefits (not revealed but said to be close to 20 million US dollars). This calculated move by the Moroccan authorities will have a big impact on the aeronautics industry and provide a multitude of business opportunities in this sector. The government also created a free zone for aeronautics companies close to Casablanca’s airport. The companies that will choose to set up there will benefit from VAT exemption and corporate tax among other.
The aeronautics sub-contracting market has a real potential in Morocco. In 2012, Morocco’ aeronautics exports exceeded its imports for the first time. The country has already achieved to attract the key global players but it seems that global players are not yet planning to produce entire airplanes in this country. Morocco needs to overcome its training deficiencies and create more added- value in the aeronautics sector.
