Morocco: Shipping out textiles
Morocco’s textile industry is slowly recovering from the effects of the global downturn by boosting overall exports and restoring growth. However, declining demand in Europe could yet hamper the sector’s trajectory.
Textiles and clothing account for almost 12% of Moroccan exports. An average of 600m items are exported annually, with key products including mesh, jeans/denim, knitwear, sportswear and household textiles. Knitwear has accounted for the largest share in recent years, with around 350m exported items to Europe generating an average of Dh8bn (€717.4m) annually. Large companies handle 60% of Moroccan textiles production, with 33% of these firms having foreign participation.
In spite of the challenging global environment, including high production from lower-cost exporters in Asia, the textile and clothing industry in Morocco grew 4.4% in 2011, and the value of exports reached Dh29.5bn (€2.6bn). Exports of textiles and clothing increased by 17.8% in the first half of 2011 compared to the same period of 2010, according to the Moroccan Association of the Textile and Garment Industry (Association Marocaine des Industries du Textile et de l’Habillement, AMITH) before dropping again in August as orders slowed and consumption rates declined in Europe, the Kingdom’s main trading partner. Despite the slump, the first eight months of 2011 saw textile exports to the EU grow by 24.2%, amounting to more than Dh1.33bn (€120m).
Although the sector posted overall growth in 2011, exports were low compared to other regional players. In November 2011, clothing exports to the EU increased 4.7% year-on-year, while Tunisia’s grew by 4.8% and Turkey’s by 5.7%. Progress was also slow in the textile segment, with Moroccan exports to the European market growing by 0.7%, while Tunisia’s grew by 1.3% and Turkey’s by 5.4%.
Given the performance of regional rivals, Morocco has had to work hard to maintain its competitiveness. To resist the current crisis and sustain the sector’s growth, a number of companies are increasingly forming export consortia, which allow participating companies to share resources that enable them to boost productivity and obtain better representation on an international level. Ateliance, a consortium of eight textile companies, for example, was formed in 2008 and has seen its exports rise by 10%.
All textile consortia receive support from the export consortia initiative (Consortiums d’Exportation) which was launched by the Ministry of Foreign Trade in cooperation with the UN Industrial Development Organization (UNIDO) and the Italian government.
To increase exports, however, the textiles segment must also boost production and thus the number of employees manufacturing products for export. Although the segment is the kingdom’s top industrial employer, with around 1500 factories providing jobs to around 200,000 workers, the AMITH reported in early 2011 that the sector needed 20,000 additional workers in the short term to accommodate demand.
To staff these new positions, the Office of Vocational Training and Job Promotion (Office de la formation Professionnelle et de Promotion du Travail, OFPPT) and the AMITH have introduced a number of recruitment initiatives to expand staff rolls: indeed, by June 2011, new graduates had already filled 5500 vacancies, primarily in the country’s main urban areas.
To promote the sector on the global stage, Morocco hosted two major events in textiles last fall, Maroc in Mode and Maroc Sourcing, where the total number of participants amounted to 153, including 24 foreign companies. Over 30 Moroccan companies were also present at the international trade fair Zoom By Fatex held in Paris in February to promote the Moroccan textile and clothing sector in Europe, especially on the French market.
As for the country’s exports, at the end of February 2012, textile shipments amounted to Dh4.88bn (€437m), a slight increase from Dh4.84bn (€433.7m) a year earlier. Despite this, 2012 will likely be characterised by uncertainty due to declining levels of consumption and demand in Europe, where demand for clothing is expected to fall by up to 3% in 2012.