Considering Morocco had virtually no domestic aerospace manufacturing 20 years ago, the aerospace industry is still relatively young. Indeed, since the beginning of the century the aerospace sector has experienced unprecedented growth. From 2001 to 2011 the number of companies operating in the sector increased from 10 to more than 100, and employees in the sector grew from 300 to in excess of 10,000. In that same period sales increased to over $1bn. According to Joseph Mitchell, CEO of Bio-Cellular Design Aeronautics, “Morocco’s aeronautics sector is experiencing an upward trend. The country could highly benefit from having an entity that allows cross-talks between the different ministries related to this segment, including defence, homeland, industry and research.” Currently, there are about 200 aerospace companies in the country, including international original equipment manufacturers (OEMs) such as Boeing, Bombardier, Safran, Thales and UTC Aerospace Systems.
According to Melissa Marzalek, business development manager for the Midparc Casablanca Free Zone, “Boeing traditionally used the supply chain in the North American market, while Airbus used European and Northern African suppliers. However, they are now crossing over, as there is plenty of room for new players in the global supply chain.” In 2016 Boeing signed an agreement with the government to help expand the country’s aerospace sector. The Boeing ecosystem project aims to help raise Morocco’s aeronautics exports by $1bn and create 8700 jobs.
At the same time, Airbus continues to be active in the market through its subsidiary Stelia, and the company is building €40m worth of facilities that will manufacture components and spare parts for the company’s airliners, creating up to 800 jobs. Similarly, Thales is seeking to expand its operations with the hope of making Morocco its African hub, and expanding both its civil and defense activities. Furthermore, growth in the sector has expanded manufacturing to the extent that Morocco now produces a wide array of airplane components. “In Morocco the missing supply chain links would be companies conducting heat treatment as well as composites manufacturers. Therefore, government subsidies could incentivise investment in these areas,” Marzalek told OBG. Commercial airplanes are expected to double by 2035, and consequently there will be a rise in the global demand for airplane parts to support OEMs. The aerospace industry could play an important role in producing parts for this demand.
The development of economic zones devoted to aerospace has proved important in providing a platform for the growth of the growing aviation-related sector. These include Aéropole Nouaceur and the Midparc industrial zone, both in Casablanca, as well as facilities in Tangiers, Kenitra, Oudja and Salé – all of which host aerospace players.
Numerous incentives have been put in place to attract investment to these economic zones, some of which include financial subsidies equal to 15% of total investment (reaching up to 30% under specific conditions) as well as financial contribution for training costs that amount to €6000 per engineer and €2000 per technician. Additionally, free zones offer corporate tax exemptions for five years, among a variety of other incentives. Such incentives have been successful in attracting investment, developing the aerospace infrastructure and improving production efficiency overall.
However, more investment in technology is necessary, as there continues to be enormous pressure from global supply chains to decrease costs. In this regard, Morocco has the advantage of having a large pool of skilled human resources who are low-cost in comparison to that of its European and North African competitors. In proportion to labour and other business expenses, electricity is the highest cost in the country – therefore, lowering electricity costs would potentially make Morocco even more advantageous in the eyes of a wide array of international investors.
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