Aeronautics firms choose Morocco as a key partner in components development

Over the past decade, industry players like Boeing, Bombardier and Airbus have moved into Morocco to boost aeronautical capacity. Important deals and government incentives have helped the industry achieve a 17% annual average growth rate since 2010, and in 2015 aeronautics exports reached Dh7.3bn (€670m), according to the Office des Changes. Over 100 aerospace firms have established a base in the country and the sector employs over 10,000 people. The sector has been the recipient of support from the government and the Industrial Acceleration Plan (Plan d’Accélération Industrielle, PAI), but the authorities are committed to still further expansion, with efforts to accelerate growth, reach 30,000 employees and increase exports to $2bn a year by 2020.

Incentivising Growth

Already benefitting from low labour costs and an accessible location – particularly for Airbus’s European manufacturing facilities – the government has nonetheless set out a range of incentives to spur further growth in the sector and sought to increase collaboration with manufacturers. In recent years the government has worked closely with the Moroccan Association of Aeronautics and Aerospace (Groupement des Industries Marocaines Aéronautiques et Spatiales, GIMAS), a private sector industry group of more than 90 members, to support the development of dedicated manufacturing parks and training facilities. “It’s not just about monetary incentives, it’s about tailoring very specific legislation to support all the partners we have,” Maria Filali, managing director at GIMAS, told OBG.”

At the Midparc industrial centre, a 128-ha integrated platform which focuses on aeronautics and component manufacturing, and which is managed by GIMAS, corporate income tax is zero for the first five years of business, then rises to 8.75% for the following 20 years, after which it is 17.5%. Companies are also exempt from value-added tax and Customs duties, Customs procedures are simplified, and repatriation of profits and capital is allowed. Under the Hassan II Fund, which aims to do facilitate industrial development, aid of up to 15% of the total amount of the investment, capped at Dh30m (€2.75m), covers the purchasing or renting of real estate and professional buildings as well as the acquisition of industrial equipment. Moreover, two training centres for high-level aerospace activities have been created to meet the industry stakeholders’ needs – the Aerospace Training Institute and the Aerospace and Airport Logistics Training Institute, with training subsidies of up to Dh40,000 (€3667) per person recruited per year. Authorities have also sought to increase local procurement and up the percentage of locally produced components to 35% under the PAI. Doing so has required better training and education in the aeronautics field, something both the government and international companies have been investing in.

Major Players

French aerospace company Daher already has a presence, and will open a third factory worth $16.3m in 2017, and aerospace electronic systems firm Thales Group is to build a 3D metal printing centre. EADS Maroc Aviation, Boeing, Safran, Latécoère and Stelia, among others, are also in-country. Attracting a broader, more diverse range of firms will be essential to creating a more competitive environment, which in turn will help spur innovation and diversify the risks should French aeronautics lose market share.“We are now in the second phase, and we need to push the industry forward with more added value. We need more companies besides just French ones, which are already well established,” said Filali. “We have begun to act on this and have attracted more Canadian and American firms.”

One of the most important entrants in this respect is Canadian aerospace manufacturer Bombardier. Having arrived in 2013 in Midparc, the company plans to invest up to $200m by 2020, which is expected to create 850 direct jobs and nearly 4400 indirectly.