doing business in Leading research, exploration and exploitation of hydrocarbons and mines.

Promoting the oil, gas and mineral resources of Morocco.

Developing meaningful partnerships with international investors.

Strengthening links with the world market.

Contributing to economic and environmentally sustainable development. Contents doing business in Morocco 2012 ƒƒ Top 7 Reasons ��������������������������������������� 4 ƒƒ Top 80 companies (Center Gatefold) ��������38 ƒƒ Country Overview ���������������������������������� 6 ƒƒ Banking Penetration ���������������������������� 40 ƒƒ AMDI – Our services ������������������������������ 8 ƒƒ Banking ������������������������������������������������ 42 ƒƒ Investing in Morocco ��������������������������� 10 ƒƒ Capital Markets ������������������������������������ 48 ƒƒ Economic Outlook ������������������������������� 12 ƒƒ Insurance ��������������������������������������������� 50 ƒƒ Starting a Business ������������������������������ 14 ƒƒ Transport ���������������������������������������������� 52 ƒƒ Taxation ����������������������������������������������� 18 ƒƒ Infrastructure ��������������������������������������� 56 ƒƒ Offshoring �������������������������������������������� 20 ƒƒ Mining �������������������������������������������������� 58 ƒƒ Aeronautics ������������������������������������������ 22 ƒƒ Agriculture �������������������������������������������� 60 ƒƒ Automotive ������������������������������������������� 24 ƒƒ Fisheries ����������������������������������������������� 62 ƒƒ Energy �������������������������������������������������� 26 ƒƒ Pharmaceuticals ���������������������������������� 64 ƒƒ Information Technology ����������������������� 30 ƒƒ Consumer Behavior ����������������������������� 66 ƒƒ Telecoms ���������������������������������������������� 32 ƒƒ Tourism ������������������������������������������������ 68 ƒƒ Textiles ������������������������������������������������� 34 ƒƒ Practical Information ���������������������������� 72

ƒƒ Corporate Finance ������������������������������� 37 Sectors qualifying for Moroccan government incentives.

Dear reader: Since you have this publication in hand, the chances Bombardier, and Li & Fung, just to mention a few, are that you and your company are considering have chosen Morocco. Morocco as your next investment destination. Last but not least, my entire team and myself are at Believe me, Morocco offers numerous reasons to your disposal to help you prepare your Moroccan invest, and we provide some overview of these in entry. Please turn to pages 8 and 9. the following pages. Morocco is politically stable, We look forward to greeting you in Morocco. has an excellent growth pedigree, enlightened governance, extraordinary infrastructure, and offers a range of incentives for foreign investors, namely in government-designated priority areas. Ahmed Fassi Fihri With such strengths, it will come as no surprise that Ahmed Fassi Fihri, Director, leading companies such as Renault, CapGemini, AMDI, Morocco Investment Development Agency Top 7 reasons to invest in Morocco

Stable political environment Morocco is the safest and most stable country in the Middle East and North Africa region for investors. Morocco is a democratic and social constitutional monarchy. Since coming to the throne in 1999, King Mohamed VI has pursued many democratic reforms. The King appoints the prime minister who then appoints a cabinet of 22 ministers. The Parliament consists of the Chamber of Counselors (the upper house) and the Chamber 1 of Representatives (the lower house). The 270 counselors are elected indirectly by local councils, professional organizations, and labor syndicates to serve nine-year terms. One- third of the upper house is elected every three years. The 395 representatives are elected by popular vote to serve five-year terms.

The Occident of the Orient Strategically positioned on both the Atlantic Ocean and the Mediterranean Sea, less than 14 kilometers from Europe, Morocco is a regional center for trade, manufacturing, warehousing, redistribution, sales, call centers, and an array of IT services reaching Europe, Africa, the Middle East, and the Americas. It is ideally positioned for shipping goods between the Americas, Africa and the Mediterranean. The massive harbor at 2 Tangier provides much of the infrastructure for this. In addition, Morocco is party to trade agreements that allow it to reach a billion consumers duty-free. Morocco has a free market economy and one of the region’s lowest corruption levels. Due to its international nature, Morocco retains Western customs in food, drink and clothing. French language and culture is commonplace and the use of English is being widely adopted.

Strong growth Morocco’s economy boasted an average growth rate of 5.1% between 2001 and 2010 despite the international financial and economic crisis. GDP grew 4.9% in 2009, the largest increase across the Mediterranean region. During the same period, inflation increased less than 2%, the lowest rate in the region. Overall treasury debt declined 3 from 73% to 50% of GDP between 2000 and 2010. Strong domestic demand and public investment have contributed to the country’s growth. Household consumption grew by an average 8% per year between 2004 and 2010 to $52 billion (MAD 442 billion), while public investment nearly tripled during the same period to reach $20 billion (MAD 167 billion).

Proven returns on investment Morocco has a consistent track record in gathering Foreign Direct Investment (FDI). Among the 22 countries of North and Western Africa, it is one of the largest recipients of 4 foreign direct investment with more than $1.2 billion of inward FDI in 2010, as tracked by the World Bank.

4 Doing Business in Morocco | 2012 Edition Top 7 Reasons

Enlightened government support The Moroccan government stimulates or directs economic activity in strategic areas, including aeronautics, automotive, offshoring and tourism. In addition, incentives provide selected sectors (mining, export industries, tourism, real estate, handicrafts and maritime) with partial or total exemptions from VAT, income tax and import duties. Incentives are also available to businesses that invest in one of Morocco’s Free Trade Zones (FTZs). 5 The Tangier FTZ offers incentives to investors who set up businesses on undeveloped land, including exemptions from duties and taxes associated with the acquisition of land, license and “urban taxes” for 15 years, VAT on all exported goods, and corporate taxes for five years, with a reduced 8.75% corporate tax thereafter.

Attractive business environment Morocco’s domestic market of 32 million inhabitants is the second largest in the Maghreb. It also has the best road, rail and port network in North Africa. It has a simplified tax code with tax incentives for foreign businesses and a simplified customs schedule with two flat-rate tariffs on imported goods brought into Morocco to expand a business. The country has reformed its labor laws and clarified employment rules and the government is increasing funding for vocational training. Since the 1980s, the 6 government has privatized 114 formerly state-run enterprises. Due to the Free Trade Agreement and WTO accession process, Morocco is a secure investment with legal safeguards in the form of “sectoral codes” that regulate business sectors and are applied equally to domestic and foreign investors.

Free trade agreements In 2004, Morocco became the second Arab nation (after Jordan in 2000) to enter into a Free Trade Agreement with the US. In 2005, Morocco joined the EU Neighborhood Association for trade, and in 2008 was the first Arab country in the MENA region to be granted the coveted “Advanced Status” as a full trading partner. As a result, Morocco is the only country in North Africa to have completely free and open trade rights with the 7 US and all the countries of the EU. Morocco has also entered into bilateral free trade agreements with most of the other countries of the MENA region and is now engaged in obtaining agreements with the rest of Africa, as well as numerous countries in the Americas, Asia, and the Pacific. As a result, Morocco today has more free and open trade agreements than any other nation in the MENA region and Africa.

2012 Edition | Doing Business in Morocco 5 Enlightened monarchy

he Kingdom of Morocco is the westernmost country Tourism and workers’ remittances have played a critical Tin North Africa. With a population of about 32 million role since the Kingdom’s independence. The production inhabitants and an area of 710,850 square kilometers, of textiles, clothing and leather goods is part of a growing Morocco is part of the Maghreb region, which also manufacturing sector, which is also seeing higher includes Tunisia, Algeria, Mauritania, and Libya, with added-value sectors having good growth: automotive, which it shares cultural, historical and linguistic ties. electronics and aeronautics to name a few. ●

Morocco is a constitutional monarchy with an elected parliament. Executive power is exercised by Tétouan Tangier Nador the government and King Mohamed VI. Legislative Melilla power is vested in both the government and the Kenitra Oujda two chambers of parliament, the Assembly of RABAT Fez Casablanca Meknés Representatives and the Assembly of Councillors. NORTH ATLANTIC Bou The king can also issue decrees called dahirs having Arfa the force of law. The political capital is Rabat, but the OCEAN Safi largest city is Casablanca. Other main cities include Marrakech Marrakech, Tetouan, Tangier, Salé, Fez, Agadir, Ouarzazate Meknes, Oujda, Kenitra and Nador. Agadir

In Africa, Morocco constitutes the fifth largest economy, even though it is only ranked 9th in terms Algeria of population. Tarfaya 0 100 200km Morocco’s economy is free-market. Government 0 100 200mi reforms and steady yearly growth in the region of Northern portion of Morocco 4% to 5% since 2000 have helped to diversify and strengthen the Moroccan economic base. The Strong legs to stand on major resources of the Moroccan economy are Percentage of GDP by sector of the economy, 2009 financial services, real estate and tourism, followed Electricity, gas, water by agriculture and manufacturing. Economic growth 3% Mining 3% drivers are diversified, with new service and industrial Other services poles in cities such as Casablanca and Tangier. 5%

Construction Industry and mining contribute about one-third of 7% Finance, real the annual GDP. Construction and manufacturing estate, business services provide about 23%. The industries that recorded the Transport, storage 20% highest growth are tourism, telecoms, information communication technology and textiles. Morocco is the world’s third- 7% largest producer of phosphorus (after China and Agriculture and the US). Morocco is the world’s biggest exporter of Public fishing admin., health, phosphates, whether as raw material or processed as 16% fertilizer. education 9% Retail trade, tourism The services sector accounts for just over half of 14% Manufacturing GDP. Morocco, however, still depends heavily on 16% agriculture, which accounts for 14% of GDP but fully 40% to 45% of employment. Sales of fish and GDP 2010: $90.8 billion seafood are important as well. Source: African Development Bank, World Bank

6 Doing Business in Morocco | 2012 Edition Country Overview

North Africa comparative economies

Morocco Population: 32.3 Algeria GDP 2010: 90.8 Population: 35.4 GDP per cap. 2010: 2,796 GDP 2010: 162 Libya GDP growth: 4.8% GDP per cap. 2010: 4,567 Population: 6.5 FDI 2010: 1.2 GDP growth: 3.6% GDP 2010: 62 FDI 2010: 2.3 GDP per cap. 2010: 9,957 GDP growth: 17.77% Tunisia FDI 2010: n.a.

Algeria Libya Egypt MOROCCO Tunisia Population: 10.5 GDP 2010: 44.3 GDP per cap. 2010: 4,199 GDP growth: 1.3% Mauritania FDI 2010: 1.4 Egypt Mali Population: 84.5 Niger GDP 2010: 219 GDP per cap. 2010: 2,698 Chad GDP growth: 1% FDI 2010: 6.4

Benin Nigeria Ghana Sudan Mauritania Cameroon Population : 3.4 GDP: 3.6 GDP per capita: 1,044 GDP growth: 5.2% FDI: 0.014 D.R. Congo

Tanzania

Population in Millions Angola GDP 2010 $Billions (Libya 2009) Zambia GDP growth 2010-2011 GDP per capita 2010 in US$ (Libya 2009) FDI net inflows 2010 $Billions

Source: World Bank

2012 Edition | Doing Business in Morocco 7

South Africa Opening doors for investors The Moroccan Investment Development Agency (AMDI) was completely revamped in 2009 to facilitate foreign investment into Morocco, and to launch outbound marketing using the agency’s seven foreign bureaus.

MDI’s purpose is two-fold. It Aprovides advice and orientation AMDI is the first place to go for information about investing in Morocco. for foreign investors interested in Moroccan opportunities, and renewable energy, offshoring and outsourcing (that promotes Moroccan interests is, call centers and back office operations), agro- Ahmed Fassi Fihri abroad to identify and convince processing and textiles. Acting Director foreign investors to start businesses in Morocco. All AMDI services are free. AMDI publications cover several aspects of doing business in Morocco. These are available free for The agency endeavours to provide the best digital download at the Invest in Morocco website environment for the successful development of new (www.invest.gov.ma), which is available in French and businesses. To do this, it provides investors with key English. Choose “Our Services” in the top menu and information about: “Publications” on the drop-down menu. • Specific investment opportunities • Regulatory changes The 36 publications available for download cover the • Administrative procedures legal and fiscal aspects of doing business in Morocco, • Local partners the investment incentives and taxes, among other matters. Other publications analyze various economic AMDI is organized into three divisions. The investment sectors. Most publications are available in English and division does the ground work for foreign investors French, and some are translated into Spanish or Arabic. who are prepared to set up a business in Morocco. It can assist them with administrative procedures, as Linked to others well as market research or financing. The business AMDI works closely with other government agencies, development division promotes Morocco outside the such as those that operate in tourism, solar and country, and a third division offers support services. renewable energy, agriculture and the Tanger Med Free Zone special development agency. These close Different specialities ties can simplify and accelerate matters for investors. Agency specialists work in several key areas the government has identified for priority development. Another group of AMDI partners are the 16 Regional Among these are experts in automotive, aeronautics, Investment Centers (CRI for their French abbreviation). Ten steps to setting up a company in Morocco Step 1 Step 2 Step 3 Step 4 Step 5 Declarations Reservation Articles of Application Blocking Subscription of a Name Incorporation Form of Capital and Payment

Source: AMDI

8 Doing Business in Morocco | 2012 Edition AMDI – Our services

automotive hub is in Tangier. Renewable energies are more dispersed but the Region de l’Orient (on the Mediterranean Sea) has developed a strong position.

One-stop shop AMDI can provide answers for foreign investors on several matters, such as financing. AMDI does not provide direct financing itself, but it has privileged access to many of the top actors in the Moroccan financial sector. This includes traditional retail and investment banks, private equity players, the Casablanca Stock Exchange and several government-backed programs for which companies with Moroccan partners may qualify.

Regarding setting up a company, AMDI has outlined the ten steps required (see chart below). When it comes to government aid or incentives, AMDI can help identify assistance that may be available for a Navigate the Moroccan territory specific type of project. How AMDI can help foreign investors It can also provide information about government Upstream Midstream Downstream assistance for training and continuing education. This includes both upfront and ongoing training AMDI prepares AMDI provides AMDI does for the six sectors that Morocco has identified as background and various services: follow-up work: Metiers Nationaux (priority professions) – offshoring, sales materials for * Technical * Company visits automotive, aeronautics and aerospace, electronics, prospection assistance * Statistical textiles and leather goods, and agro-processing. * Preparation of questionnaires AMDI canvases contracts for * Analysis of different areas for government further The agency can also provide detailed information potential investors funding requirements about the various free trade or special economic * Preparation of zones that Morocco has developed throughout the contracts for tax country. In addition, AMDI provides regular updates benefits on the cost of key manufacturing inputs such as labor costs and utility rates. This information is available on Foreign AMDI main office AMDI main office their website under the “Invest in Morocco” tab. representative Rabat Rabat offices (7 offices Lastly, via its AfterCare branch, AMDI provides follow- Source: AMDI/Invest In Morocco worldwide) up assistance to foreign investors after their setup in Morocco. This illustrates AMDI’s commitment to long- These centers develop inbound foreign investment term relationships - something that helps explain the for specific regions. high rate of renewal investments. ●

Some regional specialities have already taken shape. For more information: For example, the aeronautics cluster is located Moroccan Investment Development Agency (AMDI) near Casablanca in the town of Nouaceur. The www.invest.gov.ma

Step 6 Step 7 Step 8 Step 9 Step 10 Trading Tax Register of Social Official Constituent and Fiscal ID Commerce Security Gazette Acts Deposit Subscriptions Registration Affiliation Publications

2012 Edition | Doing Business in Morocco 9 A tale of two investors For AMDI, all investors are created equal. Here is how AMDI helped a Spanish manufacturer (Sage Energia y Produccion) and a start-up (Elephant Vert) with their entries into Morocco.

s Ahmed Fassi-Fihri, the director of AMDI AInvest in Morocco, can testify, foreign investors AMDI helps foreign investors of any size or shape enter Morocco. come in all sizes and shapes: “For Sage Energia y Produccion (SEP), Morocco was only one option as a cross between a biotech company and a micro- on a wide palette,” he explains. “While for Elephant financier. Vert, a Swiss start-up, we were the natural choice. But no matter what the investor’s needs, we try to “Despite our unusual profile we mean serious help them out.” business in Morocco,” pursues Couasnet. ”We intend to invest about €25 million in Morocco Sebastien Couasnet, the country representative from now until 2015. Most of that will be for a of Elephant Vert in Morocco, says AMDI’s level of manufacturing facility in Meknes, located within assistance was unexpected. “I was very pleasantly one of the country’s agropoles (see pages 60 - 61), surprised,” says Couasnet. “I had been expecting and then two others in Berkane and Souss. Our administrative bureaucracy and slowness, but no, plants will employ 500 people and produce both not at all. It was quite the opposite. I was assisted bio-fertilizers and bio-pesticides.” Elephant Vert will in a consistent and helpful way for more than two also have an administrative office in Rabat, close months.” to the Ministry of Agriculture, and a research and development center. Elephant Vert is not a typical foreign investor. Founded in Geneva in 2010, the company is funded One thing that Couasnet found most useful by the Antenna Technologies Foundation, a non-profit from AMDI was the profuse advice on legal and organization that promotes innovative agricultural and administrative procedures, and more importantly, financial solutions. Elephant Vert could be described help in understanding financing options.

Flocking to Morocco Selected recent foreign investments into Morocco Company Country of origin Amount* Nature Location Tekfen Turkey 600 Mining-phosphates Pipeline RJ Corp Ltd. India 100 Consumer goods (soft drinks) Multi-city Meridionale Impianti SpA Italy 20 Electricity production (PV panels) n.a. Delphi Automotive Inc. USA n.a. Automotive components (plant extensions) Tangier Maphar SA France 27 Pharmaceuticals (logistics platform) Casablanca Li & Fung Ltd. Hong Kong/China 300 Textiles, clothing n.a. Logica Inc. UK n.a. Offshoring, software, cloud services Rabat (Technopolis) *Figures in $M Source: AMDI/Invest in Morocco

10 Doing Business in Morocco | 2012 Edition Investing in Morocco

perhaps 50 employees,” explains SEP’s Rodriguez. “But we fully expect to grow over the years and perhaps then use Morocco as a regional platform for expansion to Maghreb and West African countries.”

Low-cost but skilled labor was a main factor in choosing Morocco. “Accessing trained personnel, or receiving training assistance from the government, was very important for us,” says Rodriguez. “Our operation here will carry out industrial design, namely for automotive and aeronautics applications, and we need qualified engineers and programmers to do this work.”

Another important attraction was domestic demand. SEP’s Moroccan subsidiary IPEM can live from its domestic contracts as well as export contracts. IPEM expects that up to 75% of its staff will be Moroccan “AMDI gave me very clear explanations on the at first, and even more later on. administrative processes, and my counterpart at AMDI, Nejma, was very consistent in her follow-up to SEP and Elephant Vert agree that the stability of the my queries,” explains Couasnet. country is another advantage.

David Rodriguez, general manager of Sage Energia y “Economic and political stability, as well as long- Produccion, backs up this point. “For us, the dealings term personal safety were certainly factors for us, in with AMDI lasted for about ten months in 2011,” says addition to Morocco’s location,” explains Couasnet Rodriguez. “AMDI helped us in four ways. The main of Elephant Vert, adding that location was also a key way was an explanation of Moroccan legislation and factor for Elephant Vert. how the Moroccan government could help my company, especially “We did not really give much in terms of incentives and grants “Working with AMDI thought to other Maghreb (see pages 18-19).” was a true pleasure and countries,” Couasnet explains. “Morocco was the natural choice. SEP is a Spanish company unexpectedly so,” says Casablanca has very good flight based in Valladolid, and active connections both to Europe and in the design and manufacture of Sebastien Couasnet of to other African countries and industrial processes with various that is important for our future applications, most notably in Elephant Vert biotech. development.” the automotive, aeronautics, energy and agriculture sectors. SEP’s subsidiary in AMDI’s help in explaining financing options – be it Morocco, called IPEM, is to provide these services from the Moroccan government or from other local and products to clients in the EU and the USA, as sources – was another influencing factor for both well as in the Tangier Free Zones.” companies.

SEP also took advantage of AMDI assistance to Both SEP and Elephant Vert took advantage of special identify local partners and find a suitable location. tax and financing incentives that apply to high-tech and to agriculture, just two of the six priority areas For SEP, the natural location was the Tangier Free that the Moroccan government has defined. Trade Zone, next to the large automotive cluster that has sprouted around Renault’s mammoth plant there. “Perhaps the ten-month interaction with AMDI was Elephant Vert took advantage of the Maroc Vert plan longer than usual,” posits SEP’s Rodriguez, “but it for agricultural development and its eight agropoles. enabled us to go back and forth between different investment options, and different incentive packages “Our initial investment will be about €1.5 million with that the government put on the table.” ●

2012 Edition | Doing Business in Morocco 11 Re-structured for growth Morocco continues its upward trend. This year will see challenges from ongoing efforts in the energy and extractive sectors, but the reforms that King Mohamed VI initiated after he came to the throne in 1999 are taking hold.

he basics of the Moroccan economy remain stable in Tspite of the crisis and the country displays a degree of resilience in the face of external shock, with a growth in gross domestic product (GDP) of 4.9% in 2009 and The Moroccan economy is becoming less dependent on agriculture. 3.3% in 2010. Nevertheless, the crisis has highlighted structural weaknesses, in particular in certain export- be confirmed in 2011 (up by 11.5%), driven by strong oriented sectors such as textiles and clothing. external demand and the major investment program of the Office Cherifien des Phosphates (OCP) which The continuation of the macroeconomic and hopes to increase its production capacity in mining, structural reforms put in place over the past decade, chemicals and fertilizers. combined with the revival of non-agricultural activities and demand from Morocco’s partners, offer favorable Production of thermal and hydraulic energy rose by prospects for growth and the economy should expand 34.7% and 16.7% respectively during the first ten by 4.6% in 2011 and 5.0% in 2012. months of 2010, compared with the same period in 2009, and contributed to electricity production, The Moroccan economy has been, traditionally, making up for the drop in imports from Spain and dependent on the agricultural sector but over the Algeria and the fall in production from the Tahaddart past decade has embarked upon a diversification of power plant. its structure. More and more growth comes from the secondary and tertiary sectors. The international crisis and its debilitating effect on the economies of Morocco’s trading partners had The main drivers of growth in 2010 were the good a major impact on processing industries, which are performance of non-agricultural activities and a revival of the sectors most heavily hit by the crisis Recession-proof Morocco in 2009. Non-agricultural activities were affected by Evolution of real GDP growth rates since 2002 the 2009 international crisis but recovered in 2010 9% to reach their pre-crisis level. They recorded an improvement in added value of 5% and the trend is 7% expected to continue in 2011, helped by growth rates in the secondary and tertiary sectors of 5% and 5.6% 5% respectively.

Extractive activities (notably phosphates) were hard hit 3% by the crisis in 2009, with a drop in their added value of 23.8% compared with the previous year. But the 1% mining sector met expectations in 2010 as demand picked up, in particular from the US and Brazil, and 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 recorded growth of 10%. This trend was expected to Source: African Development Bank

12 Doing Business in Morocco | 2012 Edition Economic Outlook

the good cereals harvest, the control of inflation, a revival in transfers from Moroccans living abroad, the availability of consumer credit (up by an annual rate of 8.7% at the end of October 2010) and steps to support household purchasing power in the 2010 budget. These include a revision of income tax rates that came into effect at the beginning of 2010 which lowered the maximum rate to 38% from 40% and raised the tax threshold from 24,000 Moroccan dirhams (MAD) to MAD 30,000 ($2,700 to $3,400). Household consumption, which accounted for an average 58% of GDP during the period 2005-09, rose by 4.1% in 2010 and should continue its strong performance in 2011, with an increase of 5.6%.

Investment benefited from the improvement in economic activity and the vitality of public and private investment. Gross fixed capital formation at current prices (GFCF) progressed by 6.9% in 2010, after falling back by 0.6% the previous year. Credits for equipment financing had advanced by 25.8% at the strongly oriented towards exports and account, end of the first eight months of 2010 compared with on average, for 16.5% of the total added value of the same period in 2009. Imports of capital goods, the secondary sector. But the revival in industrial other than aircraft, saw a similar advance with an activity, which began in 2009, continued in 2010, with annual growth rate of 5.1%. GFCF should maintain the exception of the textile and clothing sector, in its strong performance in 2011 with growth of 7.4% particular leather, and aeronautics, which continued over 2010. At the same time its contribution to growth to show substandard performances. Processing should rise from 2.3% in 2010 to 2.5% in 2011. industries recorded progress of 3.1% in 2010 and should continue to grow at a rate of 3.6% in 2011. Fiscal Policy The budget deficit increased in 2010 due to higher The international crisis affected the tertiary sector spending. Estimates for 2011 suggest a moderate only moderately, which managed to maintain its 2009 decline due to lower spending growth which will be growth rate in spite of a slight drop in tourism. In 2010 it mainly financed by internal resources, unlike the 2010 recorded growth of around 5%, supported by the good deficit which took advantage of favorable financing performance of the primary and secondary sectors and on the international market. healthy national and foreign demand. This progress was expected to continue in 2011 and reach 5.6%. Monetary Policy Inflation as measured by the variation in the cost of Tourism benefited in 2010 from the recovery in global living index continued to be very moderate in 2010, tourism. Arrivals rose by 12% in the first ten months remaining at under 1%. The prices of food and non- of the year compared with the same period in 2009 food goods rose respectively by 0.4 % and 0.9 %. ● with a total of 7.9 million tourists. The number of overnight stays in classified establishments also This article was edited from the African rose by 11.5%, mainly concentrated in the cities of Development Bank’s annual publication, Marrakech, Agadir and Casablanca, which between African Economic Outlook, 2012 edition. them accounted for two thirds of the extra overnight Further information can be found at stays. Occupancy rates rose by two points during www.africaneconomicoutlook.org, or by the first ten months of the year compared with same contacting the AfDB communications period in 2009, reaching 45%. Receipts from tourism department: [email protected] rose by 6.6% over the period.

Internal demand continues to play its role as an Note : The most recent economic forecast for Morocco from the African engine of growth. It was boosted in particular by Development Bank is expected to be released by June 15, 2012.

2012 Edition | Doing Business in Morocco 13 No Byzantine complexity Setting up a company in Morocco is relatively simple and fast. Morocco also differs from its neighbors since it enables foreigners to operate without local partners.

he creation of a company in TMorocco is easier than in most of the North Africa and Middle East region. Two weeks suffice for the Two weeks is all it takes to create a company in Morocco. Frederic Elbar procedures, whether one does it Managing Director independently or via one of the For light and flexible structures, this is the preferred Maghreb Consulting Regional Investment Centers (CRI in legal form. An SARL can have one or more partners French). The CRIs offer a “one-stop- who may be individuals or legal entities, resident or shop” window that manages all the administrative not in Morocco. There is no minimum capital to set steps for creating the corporate entity. One needs up a SARL. to contact the regional CRI for the area where one wishes to set up. At the more complex end of the scale is incorporation, that is setting up a company with Unlike other Maghreb countries, in Morocco it is not multiple shareholders and a board of directors. necessary to appoint a local shareholder or partner. In French this is a Societe Anonyme (SA). The Indeed, a foreigner can create a business without minimum capital to set up a SA is about $35,000 resorting to Moroccan partners. (MAD 300,000).

The simplest legal form for a company is the equivalent Registering a SARL company in Morocco involves six of the limited liability company (LLC). In French this is procedures and takes 12 days. By comparison the a Société Anonyme à Responsabilité Limitée (SARL). regional average for North Africa and the Middle East

Let us help your North African entry

14 Setting up a business

investors, information about the setting up of the company and about the investment of foreign funds must be given to the exchange control board office.

Taxation The Moroccan tax system is codified under the General Tax Code (CGI). The main points applicable to local companies are: • Basic corporate tax rate of 30% • Exact tax base and rate depend on the type of activity • Tax exemption for the first five years of operation (for exportation or for hotels) • Value added tax (VAT) is applied at a flat rate of 20% • Tax on dividends is 10% and this excludes any further taxation.

Morocco has signed tax treaties with almost 40 countries to avoid double taxation. A full list of these countries is available on the website of the Ministry of is eight procedures and 20 days, according to the Economy and Finance. World Bank study Doing Business 2012. Tax incentives (see tables on pages 18 and 19) The first step is to obtain a “Certificat Négatif”, which Under Moroccan law and economic incentives, certain registers the company name at the Intellectual Property sectors receive tax incentives, for example for the Moroccan Office (OMPIC). Next a deposit is paid in export of goods and services or hotels. There are also a bank and a receipt obtained called the “attestation export processing zones (zones franches in French) de depot” in French. After legalizing the company that provide specific tax and customs privileges. statutes at the local mayor’s office (Commune), documents must be filed with the tax office to register Taxation of individuals the company with the Ministry of Finance for obtaining For individuals, whether expatriate or simply on tax identification numbers, and with the Tribunal of temporary assignment, the tax code specifies that Commerce, after having published information in a these people are liable to tax in Morocco if they have local newspaper and in the official newspaper. This a permanent residence in Morocco or they remain in is the most time-consuming step taking seven days. Morocco for a period of at least 183 days continuously Finally, have a company stamp made. Also, for foreign or intermittently during the fiscal year.

We are focused on business in North Africa, a region of high growth and potential. Based in Casablanca (Morocco), we offer legal and tax advice. Our experienced staff speaks English, French and Arabic and reacts fast and realistically. Specializing in company law and taxation over all Maghreb countries, we accompany our clients in various projects: investment deals, public or private tenders, and establishing partnerships with local companies or entrepreneurs.

15 Moreover, the employer in Morocco must retain a regulations. Special regulations from the central bank withholding tax for the employees personal income authority or the foreign exchange bureau (Office des tax. These are established on a sliding scale, with a Changes www.oc.gov.ma) must be fulfilled. maximum rate of 38% when the employee’s salary exceeds approximately $23,500 annually (MAD Investments from abroad in foreign currency must 200,000). Companies must pay the personal income first be declared to the competent authorities. The tax owed by employees. Employers should note that initial investments may consist of monies paid into the staff expect their wages on a net basis, so companies capital of subsidiary companies, or cash paid through should include these taxes in their calculations to bank accounts associated with the company’s assess total payroll costs. operations, or payments for acquisitions of assets such as real estate. It is legal to repatriate greater Social security and labor law funds than were imported initially. Retained profits Social security contributions are taken both from can be transfered provided that the company has employee wages (at 8% rate) and from employers paid its taxes. (at 16% rate). However, non-Moroccan staff assigned by their employer to Morocco from a Careful attention should be paid to imports of nation which has signed a social security agreement services. Indeed, although one may pay foreign with Morocco may be exempt from local dues if they services from Morocco, the type of service imported prove they are still contributing to social security in (brand or franchise royalties, technical assistance their country of origin. fees, management fees, etc.) must respect Moroccan foreign exchange regulations that specify the The use of foreign labor is regulated in Morocco. procedures for payment of each type of service. However, a foreigner can obtain a valid work permit if they are detached by a foreign company and Real estate remain subject to social security of their country of A foreigner (either individual or corporate entity) can origin. A person may also be allowed to work as easily acquire property (land or building) provided the legal representative of a Moroccan corporation that it is not agricultural land. Property is subject to (for example the general manager of a SARL). detailed legal and administrative processing. This On the other hand, if neither case applies, the guarantees security for investors but is accompanied employer must submit an application to the national by a relatively heavy bureaucracy. employment agency (ANAPEC), which will assess if Moroccan applicants can be found to fulfill the Legislation required functions. Moroccan corporate law is based on French law but with adaptations for the Moroccan economy. Laws Foreign exchange regulations are published in Arabic and French. ● Of obvious concern to foreign investors is whether one can repatriate income, dividends or interest on For more information: investments back to one’s country of origin. Ministry of Economy and Finance www.finances.gov.ma Moroccan national employment agency (ANAPEC) Because the Moroccan dirham (MAD) is not a freely www.anapec.org convertible currency, Morocco has specific exchange Foreign exchange bureau (Office des Changes)

The company was founded by Frederic Elbar, who benefits from almost 20 years of experience in North and Central Africa. For six years, Mr. Elbar was partner with PWC in Central Africa, and for almost nine years he was partner of French law firm CMS Bureau Francis Lefebvre in North Africa in charge of the region. Mr. Elbar provides his expertise in helping foreign companies and investors set up business in North Africa, from his base in Casablanca, the economic capital of the Kingdom of Morocco.

Maghreb Consulting & Training Legal and tax advice www.maghreb-consulting.com 16

Moroccan taxes made easy The Moroccan tax code is quite straightforward. Here are some of the highlights.

Direct taxes Morocco offers many tax credits and subsidies to foreign companies. The Value Added Tax (VAT) in Morocco is set at a standard rate of 20%. There are three reduced rates Corporate Taxes (7%, 10% and 14%) for specific products or services. Capital gains are taxed at a 30% flat rate. Foreign Basic food staples, books and publications, certain companies can take advantage of numerous tax loans and financial services are not subject to VAT. credits or subsidies (see chart below). The AMDI (Invest in Morocco investment promotion agency) can Aside from the VAT, there are specific excise provide further details. (consumption) taxes, for example on alcohol, tobacco, The following table summarizes the corporate tax sugar, petrol products and others. scale: Tax treaties Morocco has signed free trade or tax treaties with over Basic rate 30% of profits sixty countries worldwide, and this number increases Rate applicable for financial services every year. The latest status can be verified on the 37% of profits AMDI website. Morocco applies withholding taxes at companies (e.g. banks, insurance, etc.) the flat rate of 10% on dividends, interest payments Optional rate for construction or 8% of the and royalties. When a tax treaty exists, deductions engineering companies contract amount may apply and the actual rate may be lower.

Beneficiary Tax incentives * Companies exporting goods and /or services First 5 years : exemption from corporate tax, pro rated based on export sales As of Year 6 : taxation at the reduced corporate tax rate of 17.5% also pro rated on export turnover Hotels and similar Same as for export companies ; revenues must be generated in foreign currency

Export Free Zones Exemption from customs duties First 5 years : exemption from corporate tax As of Year 6 : taxation at the reduced corporate tax rate of 8.5% for 20 years. Companies having “Casablanca Finance City” First 5 years : exemption from corporate tax, pro rated based on export sales status ** As of Year 6 : taxation at the reduced corporate tax rate of 8.5% For employees : personal tax rate limited to 20%. Companies having signed an investment Exemption from customs duties on the investments convention with the government Qualifying condition : investment must be above MAD 200 million (ca. $23 million) Newly established companies Exemption from VAT on investments for 24 months

*Information provided by Maghreb Consulting; ** Credit institutions, insurance companies and brokers, consulting firms to the financial sector

18 Doing Business in Morocco | 2012 Edition Taxation

ends on December 31 of the same year. Moroccan companies are obliged to adopt IFRS accounting rules progressively.

Without going into full details, Moroccan accounting rules are inspired from French rules. Companies must prepare annual summaries of their accounts on the closing of the fiscal year based on the records kept in various ledgers (livre journal, grand livre and livre d’inventaire in French). The annual summaries must include balance sheet, accounts payable and receivable, profit and loss statement, cash flow statement, and additional information or notes.

“Although consolidated reporting is only mandatory for publicly-traded companies in Morocco, it is proving more and more useful for foreign companies Personal income tax having Moroccan subsidiaries,” explains Emmanuel The table below provides the current scale applicable Amon, managing director of Viareport, a French for personal income tax in Morocco: software company with operations in Morocco.

Income level (annual, in thousands) Tax rate Audit and certification The rules for auditing and auditors in Morocco were less than 30 MAD 0% modified in 1999. External audits are required for from 30 to 50 MAD 10% joint stock companies (societe anonyme), for publicly from 50 to 60 MAD 20% listed companies and for LLCs (SARL) having annual revenues above MAD 50 million ($5.8 million). The from 60 to 80 MAD 30% audit must be led by a commissaire aux comptes from 80 to 180 MAD 34% (statutory auditors) and certain restrictions apply. For above 180 MAD 38% certain types of company, two statutory auditors are required. ● There are several tax credits or possible deductions for foreign taxpayers in Morocco. It is best to consult For more information: with regional tax authorities or the central government Moroccan Tax Ministry www.portail.tax.gov.ma for full details. For expatriates, there are no particular Invest in Morocco Agency (AMDI) www.invest.gov.ma tax clauses, but Morocco has signed non-double Ministry of Finance www.finances.gov.ma taxation treaties with most countries. Moroccan accountants and auditors association www.acam.assoc.ma Accounting and reporting Ordre des Experts Comptables du Maroc In Morocco, the fiscal year starts on January 1 and www.oecmaroc.com

Beneficiary Grants (subsidies) * Export services** Exemption from corporate tax, under the same conditions as export companies Government subsidy in order to reduce employee tax rate to a maximum of 20% Qualifying condition : company must be established in a so-called near-shoring zone Companies having signed an investment Government contribution to cover certain expenses (real estate, external infrastructure, and convention with the government training costs) Companies benefitting from Hassan II funds Reimbursement of real estate acquisition and construction costs, up to a defined per cent (specific sectors) Any company employing staff in Morocco Reimbursement of training expenses, within certain limits *Information provided by Maghreb Consulting; ** Credit institutions, insurance companies and brokers, consulting firms to the financial sector

2012 Edition | Doing Business in Morocco 19 Low barriers to high value To improve its attractiveness in the offshoring sector, Morocco has introduced valuable incentives and developed infrastructure to accommodate technology-intensive companies. Foreign investors have started flocking.

o, offshoring in Morocco is not a high-speed Nboat race. It refers to a set of three key activities Offshoring is a key area for development in Morocco’s national industrial pact. that European and North American companies are sub-contracting out to specialist firms in costs. By comparison, costs between Morocco and Morocco, including IT outsourcing, call centers and southern Europe for certain financial services are telemarketing. revealing with a differential in the cost of labor of up to 50%. Moroccan programmers and engineers develop solutions to European software problems for Offshoring, considered as a high value-added niche, CapGemini. Specialists respond to customer has already substantially contributed to Morocco’s service or other back office tasks for WebHelp development. It is the most advanced of selected out of Casablanca call centers. And telemarketers priority areas, with well-defined and attractive handle outbound sales and marketing campaigns for incentives (see page 18 and 19) and is backed by companies such as Teleperformance. good training programs that provide skilled human resources. The Moroccan government seems to have hit the jackpot when it selected offshoring as one of the The Ministry of Industry, Trade and New Technologies seven key development areas within its national has overseen the establishment of twin dedicated industrial pact. Along with aeronautics, automotive offshoring zones. These two platforms, called Casa and other sectors, offshoring is showing good results. Nearshore and Technopolis, are fully operational and No wonder the World Bank has chosen Morocco as already host over 70 companies. the “best global reformer in 2011”. Next on plan are Fes Shore, Tetouan Shore and And because of the low cost of its workforce and the Oujda Shore, named after the cities where they are combined financial incentives on offer, Morocco has a located. Construction is well-advanced and the first strong competitive advantage for offshoring operating office spaces will be ready before the end of 2012.

Ambitious targets for IT and offshoring Current 2008 Target 2013 Employment 32,000 58,000 Offshoring revenues $95 mill. $700 mill. Direct + $820 million GDP Increases Induced +2.3 billion Source: Maroc Numeric strategic plan

20 Doing Business in Morocco | 2012 Edition Offshoring

Insight HR: 15 620 people have been trained Training is one of the main pillars of the industrial strategy Emergence. Morocco recognizes that the availability and quality of human resources helps determine its attractiveness and contributes to increased productivity and improved competitiveness. To this end, several projects have been completed or are underway in collaboration with professional associations and operators in the field of training. Since launching in 2009, the National Pact for Industrial Emergence (EINP), intended to implement the Plan Emergence, some 15,620 people were trained and placed in 217 companies operating in the global businesses of Morocco.

attractiveness is the geographic proximity, which is a factor that weighs financially. Proximity to headquarters enables companies such as IT applications maintenance or call centers to save Morocco’s offshoring efforts are bearing fruit. In terms on management travel costs, and thus increase of numbers, the Ministry points to an export turnover profitability. of $820 million in 2011 and confirms that the target employment of 100,000 new jobs by 2015 is already Low costs and high incentives halfway achieved. For companies offshoring in Morocco, geographical proximity is certainly one factor of appeal. But this As for development prospects, “they are positive with is not all. Morocco has other aces up its offshoring 100,000 jobs created and the expectation of about sleeve which means the country can boast of a unique $2.3 billion in offshoring revenues attained in 2015,” package to interested foreign companies. explains a Ministry spokesperson. That means 70,000 new jobs over the next three or four years and a four- Morocco offers a pool of qualified human resources fold increase in revenues generated. and the nearshore zones all have incentives and subsidies to assist companies with training efforts on International confidence ongoing education. Morocco’s appeal can no longer be hidden and is becoming well known to foreign companies in search Morocco also offers an attractive incentive framework of cost-effective and nearby solutions. “Nearly a centered around a personal income tax rate capped hundred international companies have placed their at 20%. As for housing, it is diversified and in line with confidence in the sector by installing branches in best international standards, including dedicated Moroccan offshoring parks,” explains Abderrafie integrated industrial platforms with cabled, air- Hanouf, CEO of MedZ Sourcing, a subsidiary of conditioned and guarded offices. Caisse de Depot et de Gestion Development. “Our cumulative investment over the next five years Morocco’s efforts in developing and promoting its will reach one billion dollars, aiming to develop and offshoring zones have paid off. The country is now one manage competitive offshoring zones, offering client of the world’s most sought-after destinations in the companies efficient services and infrastructure,” says field. Proof thereof comes from A.T. Kearney’s 2011 Mr. Hanouf of MedZ Sourcing. ● Global Services Location Index, in which Morocco appears in the top 30 most attractive countries. For more information: National Pact for Industrial Emergence 2009-2015 A.T. Kearney ranks attractiveness based on three www.emergence.gov.ma criteria: the banking and financial structure, the MedZ Sourcing - www.medz-sourcing.com business environment, and the quality of labor Ministry of Industry, Trade and New Technologies available. Also playing a role for Morocco’s www.mcinet.gov.ma

2012 Edition | Doing Business in Morocco 21 Aviation takes off Morocco has developed an internationally competitive aerospace platform that is already recognized worldwide.

en years ago, Morocco focused on the potential Tof the aeronautics and space industries. Today, aeronautics is a significant engine of growth, with annual growth prospects of 20%. The industrial base The aviation sector is attracting more foreign and Moroccan Investors. includes more than 100 companies, consisting mainly of subsidiaries of multinationals or of joint ventures The sector continues to attract foreign and Moroccan between Moroccan and international operators. This investors. Investments grew markedly from $34 cluster includes aircraft maintenance, logistics, wiring, million in 2009 to $41 million in 2010. In other words, mechanical engineering, sheet metal, assembly, aeronautics continues to earn its kudos as one of the surface treatment and composite materials. key industrial priorities in Morocco’s so-called metiers mondiaux – the key professions for which the country More than 8,000 skilled workers are currently wishes to develop world-class expertise. employed in the aeronautics sector and future ambitions are big. The sector expects to reach 15,000 Still climbing jobs by 2015 and 23,000 by 2020. Aeronautics in Morocco is still on the climb due to a combination of factors. Firstly, there is the generally Much of the aerospace cluster is located in the positive worldwide industry outlook, with top aircraft economic capital Casablanca (Aeropole Nouaceur) manufacturers enjoying full order books for the next and, to a lesser degree, in the Tangier free trade five years. zone. Within GIMAS (Groupement des Industries Marocaines Aéronautiques et Spatiales), the Climbing high federation that covers aeronautics and space Evolution of export earnings - key industries industries in Morocco, optimism about the future of the aviation industry is aplenty. 5000 4500 “Moroccan order books are filled and the kingdom has 4000 become a globally recognized low-cost destination 3500 for aviation, offering logistical proximity and a skilled 3000 workforce,” explains GIMAS Chairman Hamid el

Andaloussi. “Morocco has become the destination of ($M) 2500 choice for operators in the aerospace sector.” 2000 1500 International references include EADS, Boeing, 1000 Labinal, Snecma, Aircelle, Creuzet, Zodiac, Daher and 500 Souriau. The sector contributes high added value, with a production value of around $665 million in 2010, 0 against only $575 million in 2009. Thanks to export 2004 2009 2010 sales, it also brings in foreign currency. For the year Aeronautics Automotive Electronics Offshoring 2010, this reached $260 million against $230 million in 2009. Source: UNCTAD

22 Doing Business in Morocco | 2012 Edition Aeronautics

Success Story Bombardier lands in Morocco Canadian aircraft manufacturer Bombardier is planning its Moroccan debut in late 2013. The company has signed a letter of intent to develop an extensive manufacturing facility at the aeronautics cluster in Nouaceur near Casablanca. Although finalized discussions are still ongoing, Bombardier plans to invest $200 million for the establishment of the unit. The money will be spread over eight years beginning in 2013. Company spokesperson Haley Dunne explained: “The project will first enable Bombardier to produce simple components and structures, such as aircraft floorboards.” Although Bombardier has not yet divulged the names of the Moroccan management team, the local strategy remains one of strengthening the company’s position in emerging Secondly, new investors are still flocking to Morocco. markets, notably to take advantage of substantially cheaper Large Canadian aircraft manufacturer Bombardier is production costs. The new company is expected to generate the latest to announce a substantial investment (see 850 direct jobs and a further 4,000 indirect ones. sidebar) amounting to over $200 million. This will be the second major accolade for the government’s Emergence plan, intended to develop a strong national Whether via organic growth or via new joint venture industrial base. To date the prime industrial success story openings, 2012 promises to be beneficial for local companies. Another growth factor is that Morocco is has been that of French auto manufacturer Renault, which adding new capabilities and areas of expertise that has made large commitments in the Tangier area. integrate different technologies and add new value. The wide base of companies cover many of the links To meet these concerns, including providing 15,000 in the industrial chain: manufacturing, assembly, trained staff by 2015, the Institute of Aeronautical surface treatment, engine and fuselage maintenance, Professions (IMA) was launched in 2010 to provide design and CAD-CAM. Morocco is fourth worldwide training in fitting and assembly of aircraft components, for the manufacture of electrical wiring. aircraft sheet metal, composite materials, CNC machining, and electrical systems. Educating the workforce According to GIMAS, the sector is liable to double in More than 300 people were trained in the first year size over the coming years, taking advantage of this and IMA proposes to train 1,000 people annually by combination of favorable factors. 2014 instead of the 800 previously planned.

But there are challenges. Chafib Khalifa, deputy IMA Director Abdelbasset Bentoumi says the length CEO of Midpark, a 165-hectare industrial park near of training, tailored to each business, ranges from 23 Casablanca and platform destination for aviation to 42 weeks and includes core training “in French, industries, underlines the main difficulty encountered quality control, knowledge of aeronautics and by companies in the sector. aircraft, interpersonal communications and safety. The aviation industry, where quality and reliability are “One of the biggest challenges faced by aerospace the watchwords, requires a fundamental teaching of companies in Morocco is undoubtedly staff training,” educational rigor and professional commitment.” ● Mr. Khalifa states. “This does not fully meet the needs of companies. New hires are often trained internally, For more information: which requires an investment in time and money. But GIMAS (Groupement des Industries Marocaines there is a risk that trained staff will quickly abscond, Aéronautiques et Spatiales) www.gimas.org attracted by better-paying offers from competitors. This National Pact for Industrial Emergence 2009-2015 can lead to a wage war and a loss of competitiveness.” www.emergence.gov.ma

2012 Edition | Doing Business in Morocco 23 Road to riches Morocco believes that a strong automotive manufacturing base can bring employment and export currencies. Fiat and Renault share that vision and is it now becoming a reality.

ntil recently, Morocco was like most emerging Umarkets when it came to cars – they were mostly imported. For the kingdom, the first step towards car manufacturing came in 1960 with its first automobile assembly plant, built for Somaca near Casablanca. The going was tough for the first 35 years, until an agreement was signed with Fiat in 1995 to assemble Morocco produced €800 million ($1 billion) in car components in 2009. some models. to $500 million) on a massive plant near Tangier. The “We had to compete against a massive influx of used Moroccan government was determined not to repeat car imports, up to 90,000 vehicles per year,” explains the mistakes that caused the Fiat failure. Larbi Belarbi, the head of Somaca and also of the Moroccan auto federation, AMICA (L’Association “The government realized it needed a strong auto Marocaine pour l’Industrie et le Commerce de manufacturing cluster to truly become a worldwide l’Automobile). actor in the area,” explains Mr. Belarbi. “So the Tangier Free Zone was conceived with Renault as its In 2009, fully 93% of car registrations were new queen bee and a swarm of component suppliers from vehicles, whereas that figure had only been 32% in all corners of the world as her attendants.” 2001. Alas, the Italian honeymoon only lasted until 2002 when Somaca ran into difficulties. Thankfully, Moving up the value chain Renault saw an opportunity and in 2003 acquired Formerly all cars assembled in Morocco were Somaca for the assembly of its Logan model and CKD (complete knock down) with parts delivered various light commercial vehicles. to Morocco from other countries in pieces and assembled locally. Gradually local components The next step was Renault’s decision in September started to be manufactured and used, such as 2007 to invest on a massive plant near Tangier, electric wiring and textile seats. Local factories also capable of producing up to 400,000 vehicles per started to do metal stamping for the bodywork and year in the near future. The investment included machining for engine parts. Today, about three- a first phase of €350 million ($435 million), and a quarters of the cars produced in Morocco are from second phase of €200 to €400 million ($250 million local content. Ma-renault-cco Top Moroccan automotive companies Rank Company Year Founded Rev. 2010* CEO Website 1 Renault Maroc 1928 486.1 Jean Frederic Piotin renault.ma 2 Somaca (80% Renault-owned) 1959 424.9 Larbi Belarbi See renault website 3 Auto Hall 1907 330.9 Abdellatif Guerraoui autohall.ma 4 Sopriam 1977 258.4 Loic Morin sopriam.ma 5 Centrale Auto Cherifienne 1929 234.9 Victor el Baz volkswagen.ma * Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

24 Doing Business in Morocco | 2012 Edition Automotive

Breakdown of vehicles registered, 2009 Government Rental cars vehicles 1% 3%

Light goods vehicles 20%

Private cars 76%

Total: 1,457,000 vehicles Source: AMICA study

The country’s two assembly plants are located in Even so, Morocco frets about the difference in levels Tangier, where the Renault Logan is produced, and of labor productivity and automation (i.e. robots), in Casablanca, where Somaca produces various which are substantially higher in Spain. Moreover, models. Some of this production is exported to Spain local suppliers need to strengthen their steel foundry and other European countries, as well as to North and and stamping capabilities to compete in those areas. sub-Saharan Africa. Government strategic impulse Since 1996, the local production of automotive The Moroccan government has never been shy about components has jumped from almost €200 million to its automotive ambitions. The sector is viewed as over €800 million ($250 million to $1 billion) in 2009. the top priority in the national industrial plan. Much The increasing use of local content has increased the of the funding for local and foreign investors comes number of component manufacturers in Morocco. from the Hassan II Fund, which provides subsidies of These now supply both domestic and foreign markets, 50% for land acquisition, 30% for plant construction Spain in particular. or acquisition, and 10% for equipment.

Moroccan component manufacturers have some For the Ministry of Industry which oversees the fund, strong competitive advantages, for example in areas these investments are designed to make vehicle requiring intensive use of skilled labor. These include assembly a permanent part of the Moroccan industrial electronic components, cloth seats and electric landscape, as well as to upgrade component cabling, which itself accounts for more than 50% of manufacturing to international standards and Morocco’s automotive exports by value. stimulate R&D efforts on upstream activities. The plan is for Moroccan-designed and built vehicles to start Morocco’s labor costs are highly competitive as well, rolling off local assembly lines one day soon. about a fifth of those in Spain and less than one-tenth of those in France. Morocco has travelled a long way in the past 50 years. It now boasts 85% car ownership per capita, Average pay in the auto sector virtual autonomy in producing its own vehicles, and is even gaining valuable foreign currency from vehicle Country Monthly salary ($) and component exports. ● Morocco 310 Spain 1,611 For more information: AMICA (Moroccan Association of Auto Manufacturers France* 3,985 and Distributors) www.amica.ma * France based on extrapolation from OECD data Ministry of Industry, Trade and New Technologies Source: Ministry of Industry, OECD www.mcinet.gov.ma

2012 Edition | Doing Business in Morocco 25 Mixing it up Morocco is the largest energy consumer in North Africa but depends on imports for 93% of its energy needs. Good news therefore that the energy mix is shifting, as the country makes aggressive plans to diversify its energy sources.

ike many emerging markets, Morocco is energy- Lhungry. According to the International Energy Agency, from 1999 to 2009 the country’s energy consumption leaped 46% to reach about 16,000 KTOE (kilotons of oil equivalent). This makes Morocco the largest energy consumer in the Maghreb. Alas the country needs to import almost all of its energy needs.

The framework for the energy situation in Morocco Prospects look good for domestic oil production. is straightforward. Electricity production is open to private players. The distribution of electricity to end production (oil is at 62%). Coal has witnessed the users is almost completely a state monopoly, with largest growth, since it represented only 8% of the the Office National de l’Electricite (ONE) being the thermal mix in 1980. Last in line is natural gas, a main public utility. Incipient privatization, however, is recent arrival. This can be explained by the fact that transforming local utilities an important gas pipeline linking Algeria to Spain transits through Morocco, yielding royalty payments In 2010, Morrocan power plants produced a total in kind. of 20,850 GwH of energy. More than 80% of this electricity came from thermal power plants (see Hydroelectric power production is Morocco’s second chart). About 16% came from hydroelectric and source of power. The country has 100 dams holding so-called STEP plants. Renewable energy (mostly back a total of 15.8 billion cubic meters of water. wind) accounted for the rest but that proportion is One limit to hydroelectric power is the fluctuation scheduled to increase significantly in the future. of rainfall in Morocco and therefore of the dams’ electricity-generating capacity, which fluctuates from For its thermal plants, Morocco relies on three 8% to 1.6% depending on rainfall and therefore dam combustibles. The main source is oil, which Morocco capacities. imports from Saudi Arabia (57.1%), Iraq (23.5%), Russia (15%) and Iran (4.4%), in 2010. Following Morocco also imports electricity from Spain, to the tune oil comes coal, which now fires up 22% of power of 4,607 GwH in 2011, or about 7% of domestic needs.

Oil refining leads the business Top five energy companies in Morocco Rank Company Activity Founded 2010 Rev. * CEO Website 1 Samir Oil & gas 1959 4,331.0 Jamal Baamer samir.ma 2 Afriquia Oil & gas 1959 1,637.4 Aziz Akhannouch akwagroup.com 3 Shell du Maroc Oil & gas n.a. 1,112.3 Mohammed Raihani n.a. 4 Jorf Lasfar Energy Company Electricity production 1997 572.4 Abdelmajid Iraqui Houssaini jlec.ma 5 Energie Electrique de Tahaddart Electricity production 2010 68.0 n.a. endesa.es * Figures in $M Note: Only top 3 oil & gas companies listed; Source: Economie Entreprises “Les 500”, Mediaside analysis

26 Doing Business in Morocco | 2012 Edition Energy

Changing the energy mix Projections for energy production by source

16000 14,580 MW

14000 14% Solar

12000 14% Wind

10000 14% Hydro MW 8000 14% Oil 5,292 MW 6000 11% 2% Natural Gas 4000 24% 24% 26% Coal 2000 7% 34% 0 7% Nuclear Changes coming 2008 Projected 2020 The profile of Moroccan energy production is expected to change drastically in forthcoming years Source: ONHYM as the government’s plans for energy independence take shape. The most notable changes concern A key measure to accomplish this is the National renewable energy. Increasing the use of renewable Energy Strategy (Strategie Energetique Nationale or resources to produce energy as a way of overcoming SEN) signed in March 2009. SEN set up three agencies: the country’s dependence on energy imports is a the Agency for the Development of Renewable and main focus of Moroccan government policy-making. Efficient Energy (Agence de Developpement des Morocco is committed to having wind, solar and Energies Renouvellables et de l’Efficacite Energetique hydroelectric power represent 42% of its power or ADEREE); the Energy Investment Company generation by 2020. (Societe d’Investissements Energetiques or SIE); and

Close Up The Earth’s crust in Morocco hides untold secrets

The National Bureau of Petroleum and Mines (ONHYM), which to explore for oil in the deep offshore block of the Essaouira was created in 2005, is the geologist’s best friend in Morocco. basin. This work focused on 3D and 2D seismic acquisition and This independent, self-financed public institution is in charge well drilling. The results showed 15 oil prospects. of contributing to the kingdom’s growth by fostering the On the minerals/mining front, ONHYM’s first task was to development of its mineral riches (except phosphates, handled complete proper geological mapping. These studies revealed by OCP, see page 58). As such, ONHYM has two aces up its a rich crust to be exploited: rare earth materials, niobium and sleeve: petroleum and its derivatives, and minerals. its cousin tantalum (used for steel alloys), uranium and iron The good news for Morocco is that it is about to become ore are but some of the pickings. Overall, ONHYM is working oil-wealthy. ONHYM, either on its own or in partnership with on 28 minerals projects, of which ten are in partnership private foreign investors, has carried out exploratory drillings, with foreign investors. One example is the 2011 project with revealing reserves both offshore in the Atlantic (Tangier- the American company Newmont in the Lesser Atlas area. Larache area) and onshore (Gharb basin region). As an Using geochemical methods, the venture seeks to assess the example of a partnership, the Ras Tafelney exploration project potential for precious and basic metals, namely using bulk was conducted jointly with Vanco, based in Houston, Texas, leach extraction techniques.

2012 Edition | Doing Business in Morocco 27 the Moroccan Agency for Solar Energy (Agence sites selected, four will have power generation capacities Marocaine pour l’Energie Solaire or MASEN). of 400 or 500 MW.

ADEREE and MASEN promote the use of Ain Beni Mathar will increase ONE’s production capacity renewable energy and energy efficiency by from 200 to 250 MW by 2012 and enable it to supply nearly providing plans and incentive measures, 1590 GWh per year, of which 55 GWh will come from solar. overseeing development projects, identifying potential resources, and through similar actions. Although the renewable efforts are focused on solar and SIE seeks to attract and organize private funding wind, ADEREE is also overseeing pilot projects in biomass for energy projects. A 2010 law provides the and capturing energy from the ocean tides and currents. legal framework for these projects. With Morocco’s 3,500 kilometers of Atlantic coastline, the potential for ocean-generated energy is significant. Morocco is also integrating itself in the energy system of the African and Euro-Mediterranean Energy efficiency region to strengthen energy security, Not all of the government’s efforts are focused on energy reduce supply costs, expand exchanges, supply. Increasing energy efficiency is another focus. develop cooperation, technology transfer Energy efficiency is being promoted as a national priority and solidarity. Morocco plans to integrate as the quickest and least expensive way to better use with Mediterranean solar energy plans and and save energy while reducing energy bills. Indeed, regional initiatives such as Transgreen. energy efficiency is a top priority in Morocco’s energy Transgreen was signed in July 2010 to study strategy with an ambition to save 12% in 2020 and 15% the feasibility of a power network between the in 2030 of energy consumption. From this perspective, North and South of the Mediterranean shores energy efficiency action plans have been implemented and to develop interconnections around the in all key sectors, including transportation, industry and Mediterranean basin. construction. According to the government, the savings could be substantial. Almost half of the savings (48%) Wind and solar could come from industry, nearly a fourth (24%) from A new Moroccan wind farm was inaugurated transport and 19% from housing. in June 2010 and represented an investment of $320 million. Located near Tangier, the wind The government is implementing the energy efficiency farm has 165 units capable of producing 140 program progressively by distributing energy-saving light MW of electricity. Additional wind farms are in the development stage and will produce an additional 570 MW by the end of 2015. Betting on natural elements Morocco’s renewable energy plans - present and future The target is to generate about 2,000 MW from Phase 1 wind by 2020. The financing for this comes from 2008 to 2012 mixed public-private sources, since funding and operation of some of the wind farms is conceded to private companies. $2.8 Billion

Investment Completed by 2011: Regarding solar energy, the target also is to * Mixed thermal-solar plant Ain Beni Mathar 472 MW generate 2,000 MW by 2020, representing 14% of national electric capacity and save a million * Wind farm Tanger 1 140 MW tons of oil annually. MASEN is implementing this * Hydro-electric plant Tanafuit el Borj 40 MW strategy. * Gas turbine plant Mohammedia 3 x 100 MW * Diesel plant Tan-Tan 116 MW Progress in solar energy mirrors that of wind power. A first combined cycle (mixed gas solar) * Extension diesel plant Dakhla 16 MW at Ain Beni Mathar was inaugurated in 2010 New plants with a capacity of 472 MW, of which about Total = 1,084 MW 5% is solar. A further roll-out of solar capacity is planned but with fewer, more concentrated Still planned for 2012: Total = ca. 600 MW plants than is the case for wind. Of the five solar

28 Doing Business in Morocco | 2012 Edition Energy

bulbs, modifying building codes and broadcasting Insight awareness campaigns nationwide. Solar powered villages Demand One of the successes in Moroccan energy is the rural Energy demand in Morocco has been growing fast, on electrification program using solar panels. average by 7.5% annually from 1995 to 2005. From Started in 1998 by the public utility Office National 2008 to 2009 demand dipped a bit, with growth at de l’Electricite (ONE), the program saw access to an only 2.5% (or 15.1 MTOE). Both 2010 and 2011 saw autonomous electric supply increase from 22% of the rural demand growing at rates above 5%, indicating the population in 1996 to almost complete coverage (96.5%) sustained energy hunger. 2010 had 6.7% growth to 16.1 MTOE, whereas 2011 had 5.0% at 16.9 MTOE. by 2009. Using an innovative financing scheme and relying on With Morocco determined to take its energy future in private partners, the program set about providing energy to its own hands, many foreign companies are jumping rural villages via solar panels, which are cheaper to set up on the bandwagon to help make things happen and than establishing a connection to the central power grid. reduce the country’s energy dependence. Energy projects have been one of the key segments for Each client received a solar panel, one 150 amp-hours inbound FDI over the past years. ● battery, a regulator and one 12-volt outlet with two sockets. But those who were willing or able to pay for higher capacity For more information: systems were able to install more lights. The battery can MASEN (Agence Marocaine de l’Energie Solaire) store enough power to last up to five days, allowing the www.masen.org equipment to run year round even in bad weather. ADEREE (Agence Nationale por le Developpement des The program proved so successful that ONE has advised Energies Renouvellables et de l’Efficacite Energetique) other sub-Saharan countries on the topic, and has even www.aderee.ma sold part of its Senegalese joint venture to the World Bank. SIE (Societe d’Investissements Energetiques) www.siem.ma ONE (Office National de l’Electricite du Maroc) www.one.org.ma Later Energy Ministry (Ministère de l’Energie, des Mines, de l’Eau Until 2020 et de l’Environnement) www.mem.gov.ma n.a.

Investment MASEN - Integrated solar program * Solar plant Ain Beni Mathar 400 MW Phase 2 * Solar plant Sabkha Tun 500 MW 2013 to 2015 * Solar plant Foum el Oued 500 MW * Solar plant Boujdour 100 MW $8.5 billion * Solar plant Ouarzazate 500 MW Total = 2,000 MW

Investment * Clean coal thermal plant Jorf Lasfar 2 x 350 MW Wind program * Clean coal thermal plant Safi 2 x 660 MW * Wind farm Turfaya 580 MW * Solar plant Ouarzazate 500 MW * Wind farm Akhfenir 200 MW * Wind farm Bab el Oued 50 MW * Wind farms Different locations 570 MW * Wind farm Haouira 50 MW * Hydro-electric plant El Menzal Mdes 550 MW * Wind farm Jbel Khalladi 120 MW * Hydro-electric plant (STEP) Abdelmounen 550 MW Total by end 2012 = 1,000 MW New plants * Wind farm Taza 150 MW

New plants * Wind farm Tanger 2 150 MW * Wind farm Koudia el Baida 300 MW * Wind farm Tiskrad 300 MW * Wind farm Boujdour 100 MW Additional total by 2020 = 1,000 MW Investment figures include rehabilitation budgets for existing plants.

2012 Edition | Doing Business in Morocco 29 IT sector gets a helping hand The high potential of the information technology sector has sparked so much interest on the part of government that it conceived the Digital Morocco 2013 strategy to develop the sector.

orocco is working hard to improve its ranking Mon the world’s connectivity stage and use the IT sector’s dynamism to generate employment and economic growth. Foreign companies are jumping on the bandwagon.

“Morocco is well positioned and has great potential By 2015, Morocco’s IT sector is expected to reach $8.2 billion in revenues. to become a technology and innovation hub in North Africa,” U.S. Assistant Secretary of State for Scientific KPO centers) and about 3,000 jobs for the domestic Affairs, Kerri-Ann Jones stated at a recent conference market needs, namely systems integrators for in Rabat. Moroccan companies, according to APEBI.

The Moroccan government could not agree more, To complete the quantitative panorama, the sector and numerous private companies have not waited for counts almost 1,000 companies, with about 170 a government invitation to set up operations in the APEBI-member companies accounting for 95% country. of turnover. Among these heavy hitters are several multinationals and domestic companies: Capgemini, According to the association of information technology Bull Morocco, Brams Technologies, Astec, Sage companies (APEBI), the aggregate revenues of local Morocco, Omnidata, GFI Morocco, IWC, HP, Microsoft industry (in the distribution, hardware, and service and Disway, just to name a few. segments, but excluding telecoms operators), has grown from $330 million in 1998 to $525 million in Given the successful implementation of the various 2001 and fully $985 million in 2011. programs and strategies, the IT sector is on target to reach $8.2 billion in revenues (including telecoms) by The IT sector generates close to 28,000 jobs in 2015. Also expected are an aggregate 58,000 jobs in export-oriented IT companies (for example, BPO or the sector.

Growing by bits Top Moroccan information technology companies Rank Company Year Founded Rev. 2010* CEO Website 1 Disway 2010 198.1 Hakim Belmaachi disway.com 2 Maroc Bureau 1960 91.8 Abderrahmin Zniber marocbureau.ma 3 Webhelp Maroc 2000 66.0 Dirk vam Leeuwen webhelp.fr 4 Bestmark 1993 55.3 Oussama Ghissassi bestmark.ma * Figures in $M Note: Chart does not include telecoms companies; Source: Economie Entreprises “Les 500”, Mediaside analysis

30 Doing Business in Morocco | 2012 Edition Information Technology

Success Story Moroccan success in payment systems Founded in 1995, Hightech Payment Systems (HPS) is a Moroccan SME that has managed within less than a decade to elbow its way into the hotly-contested electronic banking segment. For the company’s entrepreneurial founder Mohamed Horani, and his partners, key success factors included an innovative corporate culture, a flexible business model that adapted to changing environments, and steady international expansion onto five continents. Currently ranked among the top ten worldwide companies in its sector, HPS’ star product is called PowerCARD, a versatile software for electronic payments. PowerCARD is used by almost 100 clients in banking, telecoms, distribution, and other sectors in 60 countries. For more information: Professor Lhacen Belhcen, ESCA School of Management Co-author of the HPS case study

The ministry is proposing to extend the Injaz offer to But for IT to play its full role as a growth driver, two all university master’s level students for the 2011-12 issues must be tackled. academic year. This would represent about 45,000 students in nearly 110 institutions. “Our corporate fabric needs to be updated, in particular entrepreneurial start-ups and SMEs need For small enterprises, the ministry created the to be incubated and fostered,” says APEBI President Moussanada IT program and so far more than Lakhlifi Mohammed. “And we need to improve 100 companies have enrolled to improve their IT access for citizens to computer equipment and the knowledge base. For micro-enterprises, the Infitah Internet and thus anchor the use of IT in daily life. The program promotes IT awareness and training. Since its challenge is to act quickly and extensively.” inception, more than 1,400 small enterprises have taken advantage of the subsidized initiative. Another program, The state’s helping hand Rawaj, touches on retail and distribution needs. Rawaj Although the private sector carries the bulk of the facilitates data exchange for barcodes and inventory IT sector’s development, the Moroccan government management and receives a 75% state subsidy. is not sitting by idly. King Mohamed VI has taken a personal interest in the Digital Morocco 2013 program Reaching the government electronically (Plan Maroc Numerique in French), launched in 2009 by Next in line are e-government services. “We have the Ministry of Industry, Trade and New Technologies. progressed from 104th to 56th place in the Online Service Index of the United Nations,” says Badr Among other priorities, Digital Morocco aims at Boubker, director of the Digital Morocco plan. “Some facilitating the use of IT by the general public, e-government services have already been launched, computerizing SMEs, and the digitizing public while others are being tested, for example the Watika administration operations. Three years on, many of site, which enables downloading of standard forms or these goals are well underway. making an online appointment at a hospital.” ●

For example, the Injaz program, which reached For more information: 26,000 students in 44 schools in 19 cities in two years APEBI (association of information technology (2009-2011), enables students to acquire a laptop and companies) www.apebi.org.ma Internet access while benefiting from a state subsidy Ministry of Industry, Trade and New Technologies of up to 85% of the cost, capped at $425. www.mcinet.gov.ma

2012 Edition | Doing Business in Morocco 31 Telecoms is picking up Market privatization and liberalization have ensured the development of a healthy telecoms market in Morocco. Areas of future development include mobile data flows, further fixed-line penetration and Internet access.

elecommunications is no sneezing matter Morocco’s low fixed-line penetration offers investment opportunities. Tin Morocco. The sector contributes about 5% of the national GDP. Morocco’s big step in pockets, the market for mobile telephony is quickly preparing its telecoms industry for competition reaching saturation. Mobile penetration reached the and private enterprise participation was the 1998 109% penetration mark. At the end of 2011, Morocco split of the monopoly Office National des Postes et counted about 36.5 million mobile subscribers. Maroc Telecommunications (ONPT) into a postal branch (La Telecom is market leader with 47% share, followed by Poste Maroc) and a telecoms branch (Maroc Telecom). Meditel at 33% and then Wana/Inwi at 20%. Maroc Telecom was established as an independent 100% government-owned company. Mobile rates have been dropping thanks to competition. The average revenue per minute dropped This scission presaged the auctioning of the second 33% from 2010 to 2011, from 1.12 to 0.74 MAD/min mobile license, later in 1999. The winning bid was (about 9 cents/minute). Part of the drop in charges is filed by the Spanish-Portuguese duo of Telefonica due to the increased interconnectability between the and Portugal Telecom, acquiring 32.18% each. A three mobile operators. There had been pressure from third entrant in the mobile arena was Wana Corporate consumer groups since they claimed that Moroccan in 2009, after being granted a license for second rates were among the most expensive in the region. generation mobile phone services. Usage increased by 39% from 41 minutes/month to 57 minutes/month. The Moroccan government also created the telecoms regulatory body (Agence Nationale de Regulation On the other hand, in the positive spectrum, mobile des Telecommunications or ANRT), in 1999, in order operators are hoping that as smart phones become to regulate the nascent competitive industry, and to more commonplace, data exchange will take on encourage innovation. a bigger impact. ANRT sees the need for another change in regulation as the mobile world moves to As could be expected with three market competitors billing no longer based on time and distance of call, backed by deep French, Kuwaiti and Moroccan but on the volume of data transferred.

Moroccan troika Top three Moroccan telecoms companies Rank Company Ownership Founded 2010 Revenues* CEO Website 1 Maroc Telecom Vivendi (France) 1998 3,703.5 Abdeslam Ahizoune iam.ma 2 Medi Telecom (Meditel) France Telecom et al. 1999 667.0 Mohamed Elmandjra meditel.ma 3 Wana Corporate (Inwi) ONA + Zain (Kuwait) 1999 432.7 Frederic Debord wana.ma * Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

32 Doing Business in Morocco | 2012 Edition Telecoms

Analysis Driver of foreign investment Telecoms, especially the mobile variety, have traditionally been a major engine of foreign direct investment, and Morocco is no exception to the rule. The three operators in competition nationally all have foreign shareholders, and the 20-year battle has barely begun. Morocco’s traditional main operator – what used to be ONPT until Maroc Telecom was founded by law in 1998 – is a $3.7 billion giant that is active in all telephony segments. When partially privatized by the government in 2001, 30% (now increased to 53%) of the company was acquired by Vivendi of France, while about 17% of shares are traded publicly, and the government maintained a 30% share. Number two in the market is Meditel (Medi telecom), founded in 1999, based upon its capture of the second As Ahmed Khaouja, ANRT’s director of competition and operator surveillance has said: “Digital mobile telecoms license. At its inception, and for its first convergence and the increasing importance of IP ten years, Meditel was a child of mixed blood: Spanish and (Internet Protocol) for data exchanges between Portuguese for about 64% (via Telefonica and Portugal parties is having an impact. Data traffic is bound to Telecom), and Moroccan (government via its holding CDG) multiply 20-fold in the future.” for the remainder. In 2009, Spain and Portugal divested, replaced first by Moroccan investors, who then flipped their Slow fixed-line growth 40% stake for €640 million to France Telecom (Orange). Fixed-line penetration has seen recent slow growth, The third and latest entrant to the market is Wana Corporate after a decline in the mid-2000s. Currently Morocco counts only 3.7 million landlines, or about the (branded Inwi for the Moroccan masses), which has SNI and same level as Tunisia, a country with one-third its Kuwaiti ownership (31%). In 2009, the upfront investment for population. Of these landlines, many come from Zain of Kuwait was $324 million. Wana clients who have access to wireless fixed lines using the CDMA technology. MAD/min (2011 vs. 2010), while usage dropped from 136 minutes/month to 126 minutes/month. Fixed lines suffered drops on both average revenue and average usage. Rates dropped from 1.01 to 0.95 Internet access is faster on the pick-up. Of the 3.2 million Internet clients in 2011, more than 80% were Attached to their mobiles accessing over 3G mobile access. The growth here Evolution of mobile subscribers, 2000 to 2011 has been much stronger than for fixed lines, with 90% increase in 3G Internet access year-on-year. The 40 expectation is that within five years there will be five 35 million clients.

30 According to analysts and the ANRT, despite 25 increasing levels of saturation, there is still a silver 20 lining to the telecoms cloud. Aside from new services and the concomitant rise in revenues per subscriber, 15 Morocco can count on increasing numbers of double- 10 subscribers. ● Subscribers (millions) 5 For more information: 0 Agence Nationale de Regulation des 0 01 02 03 04 05 06 07 8 9 10 11 200 20 20 20 20 20 20 20 200 200 20 20 Telecommunications (ANRT) www.anrt.net.ma Source: ANRT Ministry Industry et al. www.mincom.gov.ma

2012 Edition | Doing Business in Morocco 33 Textiles are durable After a slump in 2009, the textile sector continues to present significant potential for development. With some state support and a reconfiguration of the international market, manufacturers are preparing for a new offensive.

epresenting nearly 12% of Moroccan exports and Rthe top industry in terms of jobs, the Moroccan textile sector is an essential activity. Overall, textiles mean more than 1,500 factories employing over Some foreign companies in Morocco are planning to increase local production. 200,000 workers throughout the kingdom. of Industry and Commerce argues that the growth In 2009 the sector confronted two new realities potential by 2015 could be as high as 60%. No that slowed the momentum. First, there was the wonder the government has identified textiles and progressive encroachment of Chinese goods into leather goods as a key economic priority. European markets, creating tough competition for incumbent suppliers, namely from North Africa and “Big brands like Li & Fung and Marks & Spencer particularly Morocco. Then the economic crisis hit have started returning to Morocco after having left in Europe and demand for Moroccan textiles dropped. search of better quality-price ratios in the Far East,” enthuses one government official. For some analysts, this period of turbulence has been overcome. Both a recent analysis by English firm Other companies, like the Spanish giant Inditex Oxford Business Group and data from the Moroccan of Zara fame, are strengthening their presence in Industrial Observatory show a 6% increase in textile Morocco and plan to increase their local production exports in 2011, when Morocco exported $3.5 billion quotas. In fact, Inditex is planning to boost its worth of textiles and leather goods despite the Moroccan production capacity from 60 to 150 million unfavorable context. pieces in the mid-term, making Morocco the second largest supplier to Inditex after China. Better yet, during the first four months of 2012, the rate of growth of the sector appears to be accelerating Industry insiders also say that Camaieu, a major significantly with 13% growth in exports. The Ministry brand in women’s ready-to-wear fashion, plans to Rich in fiber Top Moroccan textile companies Rank Company Activity Founded 2010 Revenues* CEO Website 1 Richbond Furnishings 1964 82.3 Abdelaziz Tazi richbond.fr 2 Softgroup Textile Textiles & real estate 1918 79.5 Abdellatif Kabbaj softgroup.ma 3 Maroc Modis Textiles & leather n.a. 70.2 Gregory Petit-Peucelle n.a. 4 CTC Maroc Synthetic fibers 1977 61.4 Khlaid Benjelloun n.a. 5 Co. Indust. Des Fibres. Fibers 1951 30.6 Benaissa Didouh lacif.net * Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

34 Doing Business in Morocco | 2012 Edition Textiles

“export consortia”, launched by the Ministry of Industry, in cooperation with the United Nations Industrial Development Organization (UNIDO) and the Italian government.

On the competitive front, one expert at the Ministry of Industry explains that “the recovery is also due to the adjustments in sourcing policies from China.”

Morocco intends to capitalize on these trends in three ways: fashion clothing (habillement mode in French) and fast fashion, home textiles, and high-tech fabrics. The first is fashion clothing, which has made its reputation with clients. Morocco intends to exploit this renown more in international markets. One way is via “fast fashion,” smaller and need-by-yesterday re-orders that offer significant growth opportunities in the current environment of tight initial orders and fast re-orders when garments fly off the shelves.

Part two regards home textiles which are now closely double its production in Morocco to 12 million units associated with lifestyle. The third segment is the as a result of the the renewed attractiveness of the development of high-tech and “smart” textiles used in sector following the 2009 crisis. the automotive industry, agriculture or construction.

Reasons for recovery Three forms of state support There are two factors that help explain the sector’s To promote its visibility on international markets, rebound in 2011. First, textile professionals say while Morocco organized two major events in 2011: there was an impact on the order books in 2009 it was Morocco in Mode and Morocco Sourcing. These never to the extent of full cancellations. Also Chinese exhibits enabled 153 participants including 24 suppliers were not as competitive as at first thought. foreign companies to exhibit their products and meet international outsourcers. What happened here? Quite simply, China suffered increased production costs and lack of flexibility. The government has also arranged financial subsidies Chinese costs have exploded by more than 40% over for textile suppliers who supply, among others, the past three years, following increases in wages, Marwa, Paris Texas, Moda Line, Active Line, Crossing raw materials costs and logistics. Simultaneously, Fingers and Blue Icoma. This provides the suppliers there is a structural trend in Morocco towards greater with financial support in exchange for guarantees on sustainability, namely via closer production centers. increasing export quotas.

“In the face of declining demand, retailers have chosen Also, with attention long focused on international to rationalize their supply and minimize risk-taking,” markets, there is now a realization that the domestic says Mustafa Sajid, president of the Moroccan Textile market, valued at $4.7 billion, should not be ignored. Industry Federation (AMITH). Lastly, the government is placing hope on the A second factor that has helped the rebound is that implementation of a program supporting investment more and more Moroccan suppliers have grouped in the upstream spinning, dyeing, finishing of fabrics together into export consortiums. These cooperative (threads and yarns), since Morocco currently imports structures enable suppliers to share resources and the majority of its raw material. ● thus boost productivity, and benefit from better international (outbound marketing) representation. For more information: Ministry of Industry and Commerce www.mcinet.gov.ma Furthermore, the textile industry consortia now Moroccan Textile Industry Federation (AMITH) receive the support of the government initiative www.textile.ma/amith

2012 Edition | Doing Business in Morocco 35

Corporate Finance Top 80 companies Banking penetration

Q&A • Fund raising: from both private and institutional More deals investors, as well as traditional debt from banks Banking for all What are the strengths that have made Morocco second-ranked in Africa in terms of FDI? • Financial engineering: for mega-projects, this Morocco top 80 companies at a glance Much of the growth of the Moroccan Corporate finance is still a golden fleece, has included cost-benefit analysis and finance Many factors are contributing to my country’s although things were better two years ago. structuring, as well as financial advisory and 2010 2010 2010 2010 banking system is due to increased access attractiveness. Good economic growth rates. A structured set of government initiatives that are bearing fruit. Low company valuation services. Year revenues profits CEO/ Year revenues profits CEO/ to banking services. Banque Centrale debt levels. The financial sector in Morocco is healthy and he market for corporate Rank Company Sector founded $M $M Managing Director Website Rank Company Sector founded $M $M Managing Director Website Populaire (BCP), Morocco’s second largest plays a key role in funding projects in key industries. Let finance and investment In retrospect, 2011 was characterized by an unstable 1 OCP (Office Cherifien Phosphates) Mining, energy 1920 2,898.45 586.35 Mostafa Terrab ocpgroup.ma 43 Comp. Gen. Immobiliere Real Estate 1960 148.52 25.99 Mohammed Ali Ghannam cgi.ma T bank, explains their success. me cite tourism, energy, infrastructure, manufacturing, banking services in Morocco regional geopolitical environment, and illiquid 2 SAMIR Energy 1959 2,467.35 55.70 Jamal Baamer samir.ma 44 Sopriam Automotive 1977 147.19 n.a. Loic Morin sopriam.ma real estate and finally agriculture as examples. is relatively young. It started stock and bond markets. This made fundraising 3 Maroc Telecom Telecoms 1891 2,124.53 662.91 Abdeslam Ahizoune iam.ma 45 Brasseries du Maroc Agro-food 1919 146.59 16.66 Pierre Castel brasseries-maroc.com What is the role of BCP within the various off in the mid-1990s, to operations difficult. Nonetheless last year witnessed 4 ONE (Office Nat'l Electricite) Energy 1963 1,390.92 n.a. Ali Fassi Fihri one.org.ma everal factors contribute Mouhssine Cherkaoui 46 Univers Acier Industrial 2002 142.32 n.a. Mohammed Azmi universacier.com government sector plans? accompany privatizations and some sizeable operations worth mentioning: 5 Altadis Maroc Agro-food 1910 932.84 n.a. Larbi Bellaha imperial-tobacco.com Sto increased banking Administrateur Directeur 47 Palmeraies Koutoubia Agro-food 1985 142.06 n.a. Tahar Bimezzagh koutoubia.net We play an important role, formalized by various Général, Upline initial public offerings on the • beginning of SNI asset disposal, namely via the 6 Afriquia Energy 1959 932.84 n.a. Ali Wakrim afriquia.ma penetration. The first is Casablanca Stock Exchange. sale of part of food processor Lesieur-Cristal to 48 Amendis Public utility 2001 141.52 n.a. Olivier Dietsch veoliaeau.com undeniably the densification conventions signed between BCP and the government, Corporate Finance 7 Royal Air Maroc Transport 1957 862.41 n.a. Driss Benhima royalairmaroc.com and bolstered by the fact that BCP is the only bank in Sofiprotéol and Moroccan institutional investors 49 Yazaki Maroc Industrial 2000 138.26 n.a. Redouane Haribeche yazaki.com Rachid Agoumi of the banking network and its 8 Shell (Maroc) Energy n.a. 633.66 26.85 Mohamed Raihani shell.com Morocco to be rated “investment grade” by Standard Things have evolved since, and the past decade • three IPOs (Stroc Industry, Jet Alu and S2M) Directeur Général, extension to remote areas that 9 Marjane Holding Retail 1990 587.55 22.32 Mohamed El Amrani marjane.co.ma 50 Marsa Maroc Public utility 2006 139.19 27.32 Mohamed Abdeljalil sodep.co.ma & Poor’s. Our key role in real estate deserves mention: has seen a good degree of maturing, as services • capital increases (BCP and Label’Vie) Banque Centrale had witnessed low banking usage 10 Total Maroc Energy 1926 515.39 n.a. Eric Gosse total.ma 51 SCBG Agro-food 1919 136.39 n.a. Pierre Castel n.a. we were leaders in setting up “Fonciere Emergence”, an become more professional. A number of renown • massive bond and negotiable debt security issues. Populaire levels. Proximity is a key lever for fund that owns various industrial assets and logistics 11 Douja Addoha Real Estate 1988 505.20 n.a. Anas Sefrioui groupeaddoha.com 52 Centr. Auto. Cherifienne Automotive 1929 133.80 n.a. Victor el Baz volkswagen.ma financial institutions, including Upline Group (part banking services. To increase platforms, and then rents them to tenant companies. 12 Centrale Laitiere Agro-food 1929 544.64 38.45 Driss Bencheikh centralelaitiere.com of Banque Centrale Populaire or BCP), have The sluggish regional and international context will 53 Acima Retail 2002 129.40 n.a. Mohamed Lamrani acima.ma this closeness-to-the-customer factor, several This reduces their capital needs. accumulated a wealth of experience via two continue to influence market conditions in 2012. 13 Cosumar Agro-food 1929 387.13 38.45 Mohammed Fikrat cosumar.co.ma 54 Maghreb Steel Industrial 1975 128.86 n.a. Fadel Sekkat maghrebsteel.com banks set up so-called lightweight agencies, to 14 Medi Telecom Telecoms 1999 380.00 41.51 Mr. Mohamed Elmandjra meditel.ma BCP is actually part of Groupe Banque decades of rich offerings. We should see a year of further consolidation and 55 Coficab Maroc Automotive 2001 118.94 n.a. n.a. coficab.com reduce investment costs, while simultaneously Populaire. Tell us more about the usefulness of 15 Lydec Public utility 1997 378.00 n.a. Jean-Pierre Ermenault lydec.ma tightening liquidity. 56 Radeema Public utility 1971 116.00 15.26 Mustapha El Habti radeema.ma introducing other technology-intensive solutions. your regional branches. Within corporate finance, the Moroccan scene has 16 Lafarge Ciments Construction 1928 356.74 111.87 Mohammed Kabbaj lafarge.ma 57 Disway Telecoms 2010 112.87 4.80 Hakim Belmaachi disway.com Structured as a cooperative bank, we have BCP as the been most active for the following: Yet this will not prevent several important 17 Al Omrane Holding Real Estate 2004 332.89 19.79 Najib Larraichi alomrane.ma Another key growth driver was provided by 58 Nexans Maroc Industrial 1947 108.74 n.a. Frederic Vincentr nexans.ma central hub and ten regional banks as spokes around • Capital markets: here the twin drivers are corporations from raising funds for ongoing 18 Jorf Lasfar Energy Energy 1997 326.09 34.25 Abdelmajid Iraqui Houssaini jlec.ma changes in the regulatory environment. For a it. This gives us a nationwide footprint, and a deep activities on the stock market and the private debt growth. For some, it will mean opening their capital 19 Label' Vie Retail 1985 325.69 n.a. Zouhair Bennani labelvie.ma 59 Les Grands Travaux Routiers Construction n.a. 107.14 n.a. Jean-Yves Leborgne colas.com long time, the minimum income requrements set understanding of regional competitive advantages. In market. For the former, the usual suspects have to institutional investors and investment funds. 20 Petrole du Maghreb Energy 1945 279.92 n.a. Ahmed Bouaida n.a. 60 Autoroute du Maroc Public utility 1989 105.74 n.a. Othmane Fassi-Fihri adm.co.ma for opening an account was a major obstacle, turn, this has helped many a foreign direct investor. been IPOs, secondary market share issues, and For others, it will imply access to capital markets 21 Renault Maroc Automotive 1928 277.05 n.a. Jean Frederic Pioti renault.ma 61 Global Engines (Hyundai) Automotive 2000 93.28 7.40 Khalil al Sheikh hyundai.ma since much of the population was excluded. The other share-related transactions. For the latter, via bonds and negotiable debt securities. Lastly, impulse given by the Moroccan Central Bank 22 Societe Nationale Siderurgie Industrial 1974 274.19 n.a. Ayoub Azami sonasid.ma 62 Cooper Pharma Pharma 1933 87.55 n.a. Ayman Cheikh Lahlou cooperpharma.ma the market has seen the issuance of company some players might restructure their debt, namely (Bank Al Maghrib) for low income banking in 2010 for the development of micro-credit lending, in 23 Libya Oil Maroc Energy 1993 272.39 n.a. Ezzedin Manyouni oilibya.com 63 Laprophan Pharma 1949 86.62 n.a. Hassan Bennis laprophan.com bonds and other financing instruments overleveraged actors. Moreover, SNI will continue 24 Salam Gaz Energy 1991 255.66 8.60 Abdelkader Benbekhaled salamgaz.ma made access to banking services much broader. parallel to new bank account creations. 64 Dimagaz Energy n.a. 84.29 n.a. n.a. n.a. • Strategic operations: these include divesting its non-strategic assets. The Moroccan 25 Inwi Corporate (Wana) Telecoms 1999 246.54 n.a. Mr. Karim Zaz wana.ma privatizations, public-private partnerships, government might add extra boost to the market 65 Groupe CMCP Pulp paper 1949 82.76 6.26 Marc van Lieshout internationalpaper.com More specifically at BCP, the emphasis has always Growth from the Moroccan diaspora 26 Office National Eau Potable Public utility 1972 242.87 9.20 Ali Fassi-Fihri onep.ma mergers and acquisit-ions, private placements, if it revives its privatization process, or issues been on increasing the number of account holders, The Moroccan diaspora has always been an 27 Somaca Automotive 1959 255.46 n.a. Larbi Belarbi See renault website 66 Asment Temara Construction 1976 82.36 n.a. Brahim Laraqui asment.co.ma joint ventures, etc. tenders for expert financial support and advice. ● the depth of penetration. Banking agencies have important part of the business of BCP Banque 28 Holcim Maroc Construction 1972 236.07 44.58 Dominique Drouet holcim.ma 67 Nestle Maroc Agro-food 1984 82.02 n.a. David Saudan nestlemaghreb.com been established in far-flung, remoter areas of the Populaire. BCP currently holds a more than 50% 29 Afriquia Gaz Energy 1959 229.68 21.92 Mr. Aziz Akhannouch akwagroup.com 68 Eaux Minerales d'Oulmes Agro-food 1933 81.02 n.a. Mohammed Bensalah oulmes.com country, be it in the less accessible mountainous market share in this important banking segment, Shall we do a deal in Morocco? 30 Lesieur Cristal Agro-food 1940 229.14 10.19 Mr. Samir Oudghiri Idrissi lesieur-cristal.ma 69 MIFA Industrial 1947 79.96 7.13 Abdeslam Sijelmassi mifa.ma Upline Group, part of BCP bank since 2008, private equity ventures. MAD 7.5 billion at areas of the Atlas chain or in the deep south. since remittances from overseas Moroccans 31 CMH Energy 1976 226.55 n.a. Hassan Agzenai cmh.co.ma 70 Jet4You (TUI) Transport 2005 78.09 6.66 Karim Baina jet4you.com boasts of two decades of experience in various the end of 2011. Diverse risk/return portfolio Unlike other banks, the BCP network is principally represent almost 10% of national GDP. 32 Ciments du Maroc Construction 1952 198.83 54.37 Mohamed Chaibi cimentsdumaroc.com financial services. Here is how we can help your offers access to varied PE funds, including 71 RADEEF Public utility 1969 77.56 7.60 Najib Lahlou Mimi radeef.ma outside of the major urban centers. Managem Mining, energy 1930 191.63 18.72 Mr. Abdellaziz Abarro managem-ona.com financial needs in Morocco. infrastructure, tourism, real estate and others. 33 72 Toyota du Maroc Automotive n.a. 77.49 n.a. Adil Bennani toyota.co.ma BCP has pioneered this field since the late 34 Redal Public utility 2001 189.70 n.a. Olivier Dietsch veoliawater.com In addition to this traditional agency structure, 1960s, catering to the more than three million 1. Brokerage. Through personal advice and 4. Corporate finance. Through a team of 15 73 Maphar Pharma 1951 76.56 n.a. Patrice Fuster maphar.ma 35 SGTM Construction 1971 175.97 n.a. Ahmed Kabbaj sgtm-maroc.com there have been four innovative programs that Moroccans located throughout the world (see an electronic trading platform, full access investment bankers, we offer the gamut of 74 Sews Cabind Maroc Automotive n.a. 76.29 n.a. n.a. sws.co.jp 36 Auto-Hall Automotive 1907 175.04 12.73 Abdellatif Guerraoui autohall.ma have proven successful for BCP: the low income sidebar on page 43). After obtaining a full to Moroccan financial exchanges. Regular investment banking services: debt and equity 75 Gazafric Energy n.a. 76.29 n.a. n.a. gazafric.com research and analysis notes to guide you. instruments, M&A, as well as privatizations. 37 Alliances Developpement Real Estate 1994 174.04 n.a. Alami Lazraq alliances.co.ma banking program dedicated to a broad segment banking license for its French subsidiary, BCP 38 Office National Aeroports Transport 1990 173.31 18.06 Dalil Guendouz onda.ma 76 RISMA Tourism 1993 75.76 n.a. Mr. Azzedine Guessous accor.com of the population; a program of banking services established antennae in the main EU countries. 2. Asset management. About MAD 20 billion 5. Insurance brokerage. Our branch Chaabi 39 COPAG Agro-food 1987 173.24 n.a. Mr. Moulay Loulttiti n.a. 77 Auto Nejma Maroc Automotive 1963 74.49 7.46 Mohamed Amal Guedira autonejma.ma for retirees, stuctured via the two largest national In parallel, clientele offerings were expanded to under management. Winner of the coveted Courtage offers life and non-life insurance. pension funds CNSS and CIMR; the launch eventually encompass not only the standard “Alistotmar Chaabi Treasury” award. Sole 40 North Africa Bottling Agro-food 2003 171.51 n.a. Samia Bouchareb cocacola.ma 78 IMTC Transport 1987 73.56 n.a. Mohamed Karia imtc.co.ma Our clients include Maroc Telecom, Vivendi, OCP, of Souk Bank, a initiative of mobile branches portfolio (savings, investment and assistance Moroccan manager of a French fund. 41 Ziz Carburants Energy 1968 170.18 n.a. Hachemi Aouni n.a. 79 Sanofi-Aventis Maroc Pharma 1951 72.23 n.a. Patrice Fuster sanofi-aventis.ma Label’Vie, Axa, Autoroutes Maroc, ONCF, etc. that crisscross the souks (open-air markets) of products) but also new innovations. Islamic 42 Petromin Oils Maroc Energy 1968 155.45 7.60 n.a. petrominoils.com 80 Comanav Transport 1946 70.83 n.a. Taoufik Ibrahimi comanav-voyages.ma 3. Private equity. The leading partner in Further information on www.upline.co.ma the Kingdom for rural banking; and finally, the financial products are increasingly requested by Source: Magazine Economie Entreprises, “Les 500” Special Issue; Mediaside analysis involvement of the Banque Populaire Foundation this community abroad. ●

37 Doing Business in Morocco | 2012 Edition 38 Doing Business in Morocco | 2012 Edition 2012 Edition | Doing Business in Morocco 39 2012 Edition | Doing Business in Morocco 40 Corporate Finance Top 80 companies Banking penetration

Q&A • Fund raising: from both private and institutional More deals investors, as well as traditional debt from banks Banking for all What are the strengths that have made Morocco second-ranked in Africa in terms of FDI? • Financial engineering: for mega-projects, this Morocco top 80 companies at a glance Much of the growth of the Moroccan Corporate finance is still a golden fleece, has included cost-benefit analysis and finance Many factors are contributing to my country’s although things were better two years ago. structuring, as well as financial advisory and 2010 2010 2010 2010 banking system is due to increased access attractiveness. Good economic growth rates. A structured set of government initiatives that are bearing fruit. Low company valuation services. Year revenues profits CEO/ Year revenues profits CEO/ to banking services. Banque Centrale debt levels. The financial sector in Morocco is healthy and he market for corporate Rank Company Sector founded $M $M Managing Director Website Rank Company Sector founded $M $M Managing Director Website Populaire (BCP), Morocco’s second largest plays a key role in funding projects in key industries. Let finance and investment In retrospect, 2011 was characterized by an unstable 1 OCP (Office Cherifien Phosphates) Mining, energy 1920 2,898.45 586.35 Mostafa Terrab ocpgroup.ma 43 Comp. Gen. Immobiliere Real Estate 1960 148.52 25.99 Mohammed Ali Ghannam cgi.ma T bank, explains their success. me cite tourism, energy, infrastructure, manufacturing, banking services in Morocco regional geopolitical environment, and illiquid 2 SAMIR Energy 1959 2,467.35 55.70 Jamal Baamer samir.ma 44 Sopriam Automotive 1977 147.19 n.a. Loic Morin sopriam.ma real estate and finally agriculture as examples. is relatively young. It started stock and bond markets. This made fundraising 3 Maroc Telecom Telecoms 1891 2,124.53 662.91 Abdeslam Ahizoune iam.ma 45 Brasseries du Maroc Agro-food 1919 146.59 16.66 Pierre Castel brasseries-maroc.com What is the role of BCP within the various off in the mid-1990s, to operations difficult. Nonetheless last year witnessed 4 ONE (Office Nat'l Electricite) Energy 1963 1,390.92 n.a. Ali Fassi Fihri one.org.ma everal factors contribute Mouhssine Cherkaoui 46 Univers Acier Industrial 2002 142.32 n.a. Mohammed Azmi universacier.com government sector plans? accompany privatizations and some sizeable operations worth mentioning: 5 Altadis Maroc Agro-food 1910 932.84 n.a. Larbi Bellaha imperial-tobacco.com Sto increased banking Administrateur Directeur 47 Palmeraies Koutoubia Agro-food 1985 142.06 n.a. Tahar Bimezzagh koutoubia.net We play an important role, formalized by various Général, Upline initial public offerings on the • beginning of SNI asset disposal, namely via the 6 Afriquia Energy 1959 932.84 n.a. Ali Wakrim afriquia.ma penetration. The first is Casablanca Stock Exchange. sale of part of food processor Lesieur-Cristal to 48 Amendis Public utility 2001 141.52 n.a. Olivier Dietsch veoliaeau.com undeniably the densification conventions signed between BCP and the government, Corporate Finance 7 Royal Air Maroc Transport 1957 862.41 n.a. Driss Benhima royalairmaroc.com and bolstered by the fact that BCP is the only bank in Sofiprotéol and Moroccan institutional investors 49 Yazaki Maroc Industrial 2000 138.26 n.a. Redouane Haribeche yazaki.com Rachid Agoumi of the banking network and its 8 Shell (Maroc) Energy n.a. 633.66 26.85 Mohamed Raihani shell.com Morocco to be rated “investment grade” by Standard Things have evolved since, and the past decade • three IPOs (Stroc Industry, Jet Alu and S2M) Directeur Général, extension to remote areas that 9 Marjane Holding Retail 1990 587.55 22.32 Mohamed El Amrani marjane.co.ma 50 Marsa Maroc Public utility 2006 139.19 27.32 Mohamed Abdeljalil sodep.co.ma & Poor’s. Our key role in real estate deserves mention: has seen a good degree of maturing, as services • capital increases (BCP and Label’Vie) Banque Centrale had witnessed low banking usage 10 Total Maroc Energy 1926 515.39 n.a. Eric Gosse total.ma 51 SCBG Agro-food 1919 136.39 n.a. Pierre Castel n.a. we were leaders in setting up “Fonciere Emergence”, an become more professional. A number of renown • massive bond and negotiable debt security issues. Populaire levels. Proximity is a key lever for fund that owns various industrial assets and logistics 11 Douja Addoha Real Estate 1988 505.20 n.a. Anas Sefrioui groupeaddoha.com 52 Centr. Auto. Cherifienne Automotive 1929 133.80 n.a. Victor el Baz volkswagen.ma financial institutions, including Upline Group (part banking services. To increase platforms, and then rents them to tenant companies. 12 Centrale Laitiere Agro-food 1929 544.64 38.45 Driss Bencheikh centralelaitiere.com of Banque Centrale Populaire or BCP), have The sluggish regional and international context will 53 Acima Retail 2002 129.40 n.a. Mohamed Lamrani acima.ma this closeness-to-the-customer factor, several This reduces their capital needs. accumulated a wealth of experience via two continue to influence market conditions in 2012. 13 Cosumar Agro-food 1929 387.13 38.45 Mohammed Fikrat cosumar.co.ma 54 Maghreb Steel Industrial 1975 128.86 n.a. Fadel Sekkat maghrebsteel.com banks set up so-called lightweight agencies, to 14 Medi Telecom Telecoms 1999 380.00 41.51 Mr. Mohamed Elmandjra meditel.ma BCP is actually part of Groupe Banque decades of rich offerings. We should see a year of further consolidation and 55 Coficab Maroc Automotive 2001 118.94 n.a. n.a. coficab.com reduce investment costs, while simultaneously Populaire. Tell us more about the usefulness of 15 Lydec Public utility 1997 378.00 n.a. Jean-Pierre Ermenault lydec.ma tightening liquidity. 56 Radeema Public utility 1971 116.00 15.26 Mustapha El Habti radeema.ma introducing other technology-intensive solutions. your regional branches. Within corporate finance, the Moroccan scene has 16 Lafarge Ciments Construction 1928 356.74 111.87 Mohammed Kabbaj lafarge.ma 57 Disway Telecoms 2010 112.87 4.80 Hakim Belmaachi disway.com Structured as a cooperative bank, we have BCP as the been most active for the following: Yet this will not prevent several important 17 Al Omrane Holding Real Estate 2004 332.89 19.79 Najib Larraichi alomrane.ma Another key growth driver was provided by 58 Nexans Maroc Industrial 1947 108.74 n.a. Frederic Vincentr nexans.ma central hub and ten regional banks as spokes around • Capital markets: here the twin drivers are corporations from raising funds for ongoing 18 Jorf Lasfar Energy Energy 1997 326.09 34.25 Abdelmajid Iraqui Houssaini jlec.ma changes in the regulatory environment. For a it. This gives us a nationwide footprint, and a deep activities on the stock market and the private debt growth. For some, it will mean opening their capital 19 Label' Vie Retail 1985 325.69 n.a. Zouhair Bennani labelvie.ma 59 Les Grands Travaux Routiers Construction n.a. 107.14 n.a. Jean-Yves Leborgne colas.com long time, the minimum income requrements set understanding of regional competitive advantages. In market. For the former, the usual suspects have to institutional investors and investment funds. 20 Petrole du Maghreb Energy 1945 279.92 n.a. Ahmed Bouaida n.a. 60 Autoroute du Maroc Public utility 1989 105.74 n.a. Othmane Fassi-Fihri adm.co.ma for opening an account was a major obstacle, turn, this has helped many a foreign direct investor. been IPOs, secondary market share issues, and For others, it will imply access to capital markets 21 Renault Maroc Automotive 1928 277.05 n.a. Jean Frederic Pioti renault.ma 61 Global Engines (Hyundai) Automotive 2000 93.28 7.40 Khalil al Sheikh hyundai.ma since much of the population was excluded. The other share-related transactions. For the latter, via bonds and negotiable debt securities. Lastly, impulse given by the Moroccan Central Bank 22 Societe Nationale Siderurgie Industrial 1974 274.19 n.a. Ayoub Azami sonasid.ma 62 Cooper Pharma Pharma 1933 87.55 n.a. Ayman Cheikh Lahlou cooperpharma.ma the market has seen the issuance of company some players might restructure their debt, namely (Bank Al Maghrib) for low income banking in 2010 for the development of micro-credit lending, in 23 Libya Oil Maroc Energy 1993 272.39 n.a. Ezzedin Manyouni oilibya.com 63 Laprophan Pharma 1949 86.62 n.a. Hassan Bennis laprophan.com bonds and other financing instruments overleveraged actors. Moreover, SNI will continue 24 Salam Gaz Energy 1991 255.66 8.60 Abdelkader Benbekhaled salamgaz.ma made access to banking services much broader. parallel to new bank account creations. 64 Dimagaz Energy n.a. 84.29 n.a. n.a. n.a. • Strategic operations: these include divesting its non-strategic assets. The Moroccan 25 Inwi Corporate (Wana) Telecoms 1999 246.54 n.a. Mr. Karim Zaz wana.ma privatizations, public-private partnerships, government might add extra boost to the market 65 Groupe CMCP Pulp paper 1949 82.76 6.26 Marc van Lieshout internationalpaper.com More specifically at BCP, the emphasis has always Growth from the Moroccan diaspora 26 Office National Eau Potable Public utility 1972 242.87 9.20 Ali Fassi-Fihri onep.ma mergers and acquisit-ions, private placements, if it revives its privatization process, or issues been on increasing the number of account holders, The Moroccan diaspora has always been an 27 Somaca Automotive 1959 255.46 n.a. Larbi Belarbi See renault website 66 Asment Temara Construction 1976 82.36 n.a. Brahim Laraqui asment.co.ma joint ventures, etc. tenders for expert financial support and advice. ● the depth of penetration. Banking agencies have important part of the business of BCP Banque 28 Holcim Maroc Construction 1972 236.07 44.58 Dominique Drouet holcim.ma 67 Nestle Maroc Agro-food 1984 82.02 n.a. David Saudan nestlemaghreb.com been established in far-flung, remoter areas of the Populaire. BCP currently holds a more than 50% 29 Afriquia Gaz Energy 1959 229.68 21.92 Mr. Aziz Akhannouch akwagroup.com 68 Eaux Minerales d'Oulmes Agro-food 1933 81.02 n.a. Mohammed Bensalah oulmes.com country, be it in the less accessible mountainous market share in this important banking segment, Shall we do a deal in Morocco? 30 Lesieur Cristal Agro-food 1940 229.14 10.19 Mr. Samir Oudghiri Idrissi lesieur-cristal.ma 69 MIFA Industrial 1947 79.96 7.13 Abdeslam Sijelmassi mifa.ma Upline Group, part of BCP bank since 2008, private equity ventures. MAD 7.5 billion at areas of the Atlas chain or in the deep south. since remittances from overseas Moroccans 31 CMH Energy 1976 226.55 n.a. Hassan Agzenai cmh.co.ma 70 Jet4You (TUI) Transport 2005 78.09 6.66 Karim Baina jet4you.com boasts of two decades of experience in various the end of 2011. Diverse risk/return portfolio Unlike other banks, the BCP network is principally represent almost 10% of national GDP. 32 Ciments du Maroc Construction 1952 198.83 54.37 Mohamed Chaibi cimentsdumaroc.com financial services. Here is how we can help your offers access to varied PE funds, including 71 RADEEF Public utility 1969 77.56 7.60 Najib Lahlou Mimi radeef.ma outside of the major urban centers. Managem Mining, energy 1930 191.63 18.72 Mr. Abdellaziz Abarro managem-ona.com financial needs in Morocco. infrastructure, tourism, real estate and others. 33 72 Toyota du Maroc Automotive n.a. 77.49 n.a. Adil Bennani toyota.co.ma BCP has pioneered this field since the late 34 Redal Public utility 2001 189.70 n.a. Olivier Dietsch veoliawater.com In addition to this traditional agency structure, 1960s, catering to the more than three million 1. Brok erage. Through personal advice and 4. Corporate finance. Through a team of 15 73 Maphar Pharma 1951 76.56 n.a. Patrice Fuster maphar.ma 35 SGTM Construction 1971 175.97 n.a. Ahmed Kabbaj sgtm-maroc.com there have been four innovative programs that Moroccans located throughout the world (see an electronic trading platform, full access investment bankers, we offer the gamut of 74 Sews Cabind Maroc Automotive n.a. 76.29 n.a. n.a. sws.co.jp 36 Auto-Hall Automotive 1907 175.04 12.73 Abdellatif Guerraoui autohall.ma have proven successful for BCP: the low income sidebar on page 43). After obtaining a full to Moroccan financial exchanges. Regular investment banking services: debt and equity 75 Gazafric Energy n.a. 76.29 n.a. n.a. gazafric.com research and analysis notes to guide you. instruments, M&A, as well as privatizations. 37 Alliances Developpement Real Estate 1994 174.04 n.a. Alami Lazraq alliances.co.ma banking program dedicated to a broad segment banking license for its French subsidiary, BCP 38 Office National Aeroports Transport 1990 173.31 18.06 Dalil Guendouz onda.ma 76 RISMA Tourism 1993 75.76 n.a. Mr. Azzedine Guessous accor.com of the population; a program of banking services established antennae in the main EU countries. 2. Asset management. About MAD 20 billion 5. Insurance brokerage. Our branch Chaabi 39 COPAG Agro-food 1987 173.24 n.a. Mr. Moulay Loulttiti n.a. 77 Auto Nejma Maroc Automotive 1963 74.49 7.46 Mohamed Amal Guedira autonejma.ma for retirees, stuctured via the two largest national In parallel, clientele offerings were expanded to under management. Winner of the coveted Courtage offers life and non-life insurance. pension funds CNSS and CIMR; the launch eventually encompass not only the standard “Alistotmar Chaabi Treasury” award. Sole 40 North Africa Bottling Agro-food 2003 171.51 n.a. Samia Bouchareb cocacola.ma 78 IMTC Transport 1987 73.56 n.a. Mohamed Karia imtc.co.ma Our clients include Maroc Telecom, Vivendi, OCP, of Souk Bank, a initiative of mobile branches portfolio (savings, investment and assistance Moroccan manager of a French fund. 41 Ziz Carburants Energy 1968 170.18 n.a. Hachemi Aouni n.a. 79 Sanofi-Aventis Maroc Pharma 1951 72.23 n.a. Patrice Fuster sanofi-aventis.ma Label’Vie, Axa, Autoroutes Maroc, ONCF, etc. that crisscross the souks (open-air markets) of products) but also new innovations. Islamic 42 Petromin Oils Maroc Energy 1968 155.45 7.60 n.a. petrominoils.com 80 Comanav Transport 1946 70.83 n.a. Taoufik Ibrahimi comanav-voyages.ma 3. Private equity. The leading partner in Further information on www.upline.co.ma the Kingdom for rural banking; and finally, the financial products are increasingly requested by Source: Magazine Economie Entreprises, “Les 500” Special Issue; Mediaside analysis involvement of the Banque Populaire Foundation this community abroad. ●

37 Doing Business in Morocco | 2012 Edition 38 Doing Business in Morocco | 2012 Edition 2012 Edition | Doing Business in Morocco 39 2012 Edition | Doing Business in Morocco 40 Corporate Finance Top 80 companies Banking penetration

Q&A • Fund raising: from both private and institutional More deals investors, as well as traditional debt from banks Banking for all What are the strengths that have made Morocco second-ranked in Africa in terms of FDI? • Financial engineering: for mega-projects, this Morocco top 80 companies at a glance Much of the growth of the Moroccan Corporate finance is still a golden fleece, has included cost-benefit analysis and finance Many factors are contributing to my country’s although things were better two years ago. structuring, as well as financial advisory and 2010 2010 2010 2010 banking system is due to increased access attractiveness. Good economic growth rates. A structured set of government initiatives that are bearing fruit. Low company valuation services. Year revenues profits CEO/ Year revenues profits CEO/ to banking services. Banque Centrale debt levels. The financial sector in Morocco is healthy and he market for corporate Rank Company Sector founded $M $M Managing Director Website Rank Company Sector founded $M $M Managing Director Website Populaire (BCP), Morocco’s second largest plays a key role in funding projects in key industries. Let finance and investment In retrospect, 2011 was characterized by an unstable 1 OCP (Office Cherifien Phosphates) Mining, energy 1920 2,898.45 586.35 Mostafa Terrab ocpgroup.ma 43 Comp. Gen. Immobiliere Real Estate 1960 148.52 25.99 Mohammed Ali Ghannam cgi.ma T bank, explains their success. me cite tourism, energy, infrastructure, manufacturing, banking services in Morocco regional geopolitical environment, and illiquid 2 SAMIR Energy 1959 2,467.35 55.70 Jamal Baamer samir.ma 44 Sopriam Automotive 1977 147.19 n.a. Loic Morin sopriam.ma real estate and finally agriculture as examples. is relatively young. It started stock and bond markets. This made fundraising 3 Maroc Telecom Telecoms 1891 2,124.53 662.91 Abdeslam Ahizoune iam.ma 45 Brasseries du Maroc Agro-food 1919 146.59 16.66 Pierre Castel brasseries-maroc.com What is the role of BCP within the various off in the mid-1990s, to operations difficult. Nonetheless last year witnessed 4 ONE (Office Nat'l Electricite) Energy 1963 1,390.92 n.a. Ali Fassi Fihri one.org.ma everal factors contribute Mouhssine Cherkaoui 46 Univers Acier Industrial 2002 142.32 n.a. Mohammed Azmi universacier.com government sector plans? accompany privatizations and some sizeable operations worth mentioning: 5 Altadis Maroc Agro-food 1910 932.84 n.a. Larbi Bellaha imperial-tobacco.com Sto increased banking Administrateur Directeur 47 Palmeraies Koutoubia Agro-food 1985 142.06 n.a. Tahar Bimezzagh koutoubia.net We play an important role, formalized by various Général, Upline initial public offerings on the • beginning of SNI asset disposal, namely via the 6 Afriquia Energy 1959 932.84 n.a. Ali Wakrim afriquia.ma penetration. The first is Casablanca Stock Exchange. sale of part of food processor Lesieur-Cristal to 48 Amendis Public utility 2001 141.52 n.a. Olivier Dietsch veoliaeau.com undeniably the densification conventions signed between BCP and the government, Corporate Finance 7 Royal Air Maroc Transport 1957 862.41 n.a. Driss Benhima royalairmaroc.com and bolstered by the fact that BCP is the only bank in Sofiprotéol and Moroccan institutional investors 49 Yazaki Maroc Industrial 2000 138.26 n.a. Redouane Haribeche yazaki.com Rachid Agoumi of the banking network and its 8 Shell (Maroc) Energy n.a. 633.66 26.85 Mohamed Raihani shell.com Morocco to be rated “investment grade” by Standard Things have evolved since, and the past decade • three IPOs (Stroc Industry, Jet Alu and S2M) Directeur Général, extension to remote areas that 9 Marjane Holding Retail 1990 587.55 22.32 Mohamed El Amrani marjane.co.ma 50 Marsa Maroc Public utility 2006 139.19 27.32 Mohamed Abdeljalil sodep.co.ma & Poor’s. Our key role in real estate deserves mention: has seen a good degree of maturing, as services • capital increases (BCP and Label’Vie) Banque Centrale had witnessed low banking usage 10 Total Maroc Energy 1926 515.39 n.a. Eric Gosse total.ma 51 SCBG Agro-food 1919 136.39 n.a. Pierre Castel n.a. we were leaders in setting up “Fonciere Emergence”, an become more professional. A number of renown • massive bond and negotiable debt security issues. Populaire levels. Proximity is a key lever for fund that owns various industrial assets and logistics 11 Douja Addoha Real Estate 1988 505.20 n.a. Anas Sefrioui groupeaddoha.com 52 Centr. Auto. Cherifienne Automotive 1929 133.80 n.a. Victor el Baz volkswagen.ma financial institutions, including Upline Group (part banking services. To increase platforms, and then rents them to tenant companies. 12 Centrale Laitiere Agro-food 1929 544.64 38.45 Driss Bencheikh centralelaitiere.com of Banque Centrale Populaire or BCP), have The sluggish regional and international context will 53 Acima Retail 2002 129.40 n.a. Mohamed Lamrani acima.ma this closeness-to-the-customer factor, several This reduces their capital needs. accumulated a wealth of experience via two continue to influence market conditions in 2012. 13 Cosumar Agro-food 1929 387.13 38.45 Mohammed Fikrat cosumar.co.ma 54 Maghreb Steel Industrial 1975 128.86 n.a. Fadel Sekkat maghrebsteel.com banks set up so-called lightweight agencies, to 14 Medi Telecom Telecoms 1999 380.00 41.51 Mr. Mohamed Elmandjra meditel.ma BCP is actually part of Groupe Banque decades of rich offerings. We should see a year of further consolidation and 55 Coficab Maroc Automotive 2001 118.94 n.a. n.a. coficab.com reduce investment costs, while simultaneously Populaire. Tell us more about the usefulness of 15 Lydec Public utility 1997 378.00 n.a. Jean-Pierre Ermenault lydec.ma tightening liquidity. 56 Radeema Public utility 1971 116.00 15.26 Mustapha El Habti radeema.ma introducing other technology-intensive solutions. your regional branches. Within corporate finance, the Moroccan scene has 16 Lafarge Ciments Construction 1928 356.74 111.87 Mohammed Kabbaj lafarge.ma 57 Disway Telecoms 2010 112.87 4.80 Hakim Belmaachi disway.com Structured as a cooperative bank, we have BCP as the been most active for the following: Yet this will not prevent several important 17 Al Omrane Holding Real Estate 2004 332.89 19.79 Najib Larraichi alomrane.ma Another key growth driver was provided by 58 Nexans Maroc Industrial 1947 108.74 n.a. Frederic Vincentr nexans.ma central hub and ten regional banks as spokes around • Capital markets: here the twin drivers are corporations from raising funds for ongoing 18 Jorf Lasfar Energy Energy 1997 326.09 34.25 Abdelmajid Iraqui Houssaini jlec.ma changes in the regulatory environment. For a it. This gives us a nationwide footprint, and a deep activities on the stock market and the private debt growth. For some, it will mean opening their capital 19 Label' Vie Retail 1985 325.69 n.a. Zouhair Bennani labelvie.ma 59 Les Grands Travaux Routiers Construction n.a. 107.14 n.a. Jean-Yves Leborgne colas.com long time, the minimum income requrements set understanding of regional competitive advantages. In market. For the former, the usual suspects have to institutional investors and investment funds. 20 Petrole du Maghreb Energy 1945 279.92 n.a. Ahmed Bouaida n.a. 60 Autoroute du Maroc Public utility 1989 105.74 n.a. Othmane Fassi-Fihri adm.co.ma for opening an account was a major obstacle, turn, this has helped many a foreign direct investor. been IPOs, secondary market share issues, and For others, it will imply access to capital markets 21 Renault Maroc Automotive 1928 277.05 n.a. Jean Frederic Pioti renault.ma 61 Global Engines (Hyundai) Automotive 2000 93.28 7.40 Khalil al Sheikh hyundai.ma since much of the population was excluded. The other share-related transactions. For the latter, via bonds and negotiable debt securities. Lastly, impulse given by the Moroccan Central Bank 22 Societe Nationale Siderurgie Industrial 1974 274.19 n.a. Ayoub Azami sonasid.ma 62 Cooper Pharma Pharma 1933 87.55 n.a. Ayman Cheikh Lahlou cooperpharma.ma the market has seen the issuance of company some players might restructure their debt, namely (Bank Al Maghrib) for low income banking in 2010 for the development of micro-credit lending, in 23 Libya Oil Maroc Energy 1993 272.39 n.a. Ezzedin Manyouni oilibya.com 63 Laprophan Pharma 1949 86.62 n.a. Hassan Bennis laprophan.com bonds and other financing instruments overleveraged actors. Moreover, SNI will continue 24 Salam Gaz Energy 1991 255.66 8.60 Abdelkader Benbekhaled salamgaz.ma made access to banking services much broader. parallel to new bank account creations. 64 Dimagaz Energy n.a. 84.29 n.a. n.a. n.a. • Strategic operations: these include divesting its non-strategic assets. The Moroccan 25 Inwi Corporate (Wana) Telecoms 1999 246.54 n.a. Mr. Karim Zaz wana.ma privatizations, public-private partnerships, government might add extra boost to the market 65 Groupe CMCP Pulp paper 1949 82.76 6.26 Marc van Lieshout internationalpaper.com More specifically at BCP, the emphasis has always Growth from the Moroccan diaspora 26 Office National Eau Potable Public utility 1972 242.87 9.20 Ali Fassi-Fihri onep.ma mergers and acquisit-ions, private placements, if it revives its privatization process, or issues been on increasing the number of account holders, The Moroccan diaspora has always been an 27 Somaca Automotive 1959 255.46 n.a. Larbi Belarbi See renault website 66 Asment Temara Construction 1976 82.36 n.a. Brahim Laraqui asment.co.ma joint ventures, etc. tenders for expert financial support and advice. ● the depth of penetration. Banking agencies have important part of the business of BCP Banque 28 Holcim Maroc Construction 1972 236.07 44.58 Dominique Drouet holcim.ma 67 Nestle Maroc Agro-food 1984 82.02 n.a. David Saudan nestlemaghreb.com been established in far-flung, remoter areas of the Populaire. BCP currently holds a more than 50% 29 Afriquia Gaz Energy 1959 229.68 21.92 Mr. Aziz Akhannouch akwagroup.com 68 Eaux Minerales d'Oulmes Agro-food 1933 81.02 n.a. Mohammed Bensalah oulmes.com country, be it in the less accessible mountainous market share in this important banking segment, Shall we do a deal in Morocco? 30 Lesieur Cristal Agro-food 1940 229.14 10.19 Mr. Samir Oudghiri Idrissi lesieur-cristal.ma 69 MIFA Industrial 1947 79.96 7.13 Abdeslam Sijelmassi mifa.ma Upline Group, part of BCP bank since 2008, private equity ventures. MAD 7.5 billion at areas of the Atlas chain or in the deep south. since remittances from overseas Moroccans 31 CMH Energy 1976 226.55 n.a. Hassan Agzenai cmh.co.ma 70 Jet4You (TUI) Transport 2005 78.09 6.66 Karim Baina jet4you.com boasts of two decades of experience in various the end of 2011. Diverse risk/return portfolio Unlike other banks, the BCP network is principally represent almost 10% of national GDP. 32 Ciments du Maroc Construction 1952 198.83 54.37 Mohamed Chaibi cimentsdumaroc.com financial services. Here is how we can help your offers access to varied PE funds, including 71 RADEEF Public utility 1969 77.56 7.60 Najib Lahlou Mimi radeef.ma outside of the major urban centers. Managem Mining, energy 1930 191.63 18.72 Mr. Abdellaziz Abarro managem-ona.com financial needs in Morocco. infrastructure, tourism, real estate and others. 33 72 Toyota du Maroc Automotive n.a. 77.49 n.a. Adil Bennani toyota.co.ma BCP has pioneered this field since the late 34 Redal Public utility 2001 189.70 n.a. Olivier Dietsch veoliawater.com In addition to this traditional agency structure, 1960s, catering to the more than three million 1. Brok erage. Through personal advice and 4. Corporate finance. Through a team of 15 73 Maphar Pharma 1951 76.56 n.a. Patrice Fuster maphar.ma 35 SGTM Construction 1971 175.97 n.a. Ahmed Kabbaj sgtm-maroc.com there have been four innovative programs that Moroccans located throughout the world (see an electronic trading platform, full access investment bankers, we offer the gamut of 74 Sews Cabind Maroc Automotive n.a. 76.29 n.a. n.a. sws.co.jp 36 Auto-Hall Automotive 1907 175.04 12.73 Abdellatif Guerraoui autohall.ma have proven successful for BCP: the low income sidebar on page 43). After obtaining a full to Moroccan financial exchanges. Regular investment banking services: debt and equity 75 Gazafric Energy n.a. 76.29 n.a. n.a. gazafric.com research and analysis notes to guide you. instruments, M&A, as well as privatizations. 37 Alliances Developpement Real Estate 1994 174.04 n.a. Alami Lazraq alliances.co.ma banking program dedicated to a broad segment banking license for its French subsidiary, BCP 38 Office National Aeroports Transport 1990 173.31 18.06 Dalil Guendouz onda.ma 76 RISMA Tourism 1993 75.76 n.a. Mr. Azzedine Guessous accor.com of the population; a program of banking services established antennae in the main EU countries. 2. Asset management. About MAD 20 billion 5. Insurance brokerage. Our branch Chaabi 39 COPAG Agro-food 1987 173.24 n.a. Mr. Moulay Loulttiti n.a. 77 Auto Nejma Maroc Automotive 1963 74.49 7.46 Mohamed Amal Guedira autonejma.ma for retirees, stuctured via the two largest national In parallel, clientele offerings were expanded to under management. Winner of the coveted Courtage offers life and non-life insurance. pension funds CNSS and CIMR; the launch eventually encompass not only the standard “Alistotmar Chaabi Treasury” award. Sole 40 North Africa Bottling Agro-food 2003 171.51 n.a. Samia Bouchareb cocacola.ma 78 IMTC Transport 1987 73.56 n.a. Mohamed Karia imtc.co.ma Our clients include Maroc Telecom, Vivendi, OCP, of Souk Bank, a initiative of mobile branches portfolio (savings, investment and assistance Moroccan manager of a French fund. 41 Ziz Carburants Energy 1968 170.18 n.a. Hachemi Aouni n.a. 79 Sanofi-Aventis Maroc Pharma 1951 72.23 n.a. Patrice Fuster sanofi-aventis.ma Label’Vie, Axa, Autoroutes Maroc, ONCF, etc. that crisscross the souks (open-air markets) of products) but also new innovations. Islamic 42 Petromin Oils Maroc Energy 1968 155.45 7.60 n.a. petrominoils.com 80 Comanav Transport 1946 70.83 n.a. Taoufik Ibrahimi comanav-voyages.ma 3. Private equity. The leading partner in Further information on www.upline.co.ma the Kingdom for rural banking; and finally, the financial products are increasingly requested by Source: Magazine Economie Entreprises, “Les 500” Special Issue; Mediaside analysis involvement of the Banque Populaire Foundation this community abroad. ●

37 Doing Business in Morocco | 2012 Edition 38 Doing Business in Morocco | 2012 Edition 2012 Edition | Doing Business in Morocco 39 2012 Edition | Doing Business in Morocco 40 Corporate Finance Top 80 companies Banking penetration

Q&A • Fund raising: from both private and institutional More deals investors, as well as traditional debt from banks Banking for all What are the strengths that have made Morocco second-ranked in Africa in terms of FDI? • Financial engineering: for mega-projects, this Morocco top 80 companies at a glance Much of the growth of the Moroccan Corporate finance is still a golden fleece, has included cost-benefit analysis and finance Many factors are contributing to my country’s although things were better two years ago. structuring, as well as financial advisory and 2010 2010 2010 2010 banking system is due to increased access attractiveness. Good economic growth rates. A structured set of government initiatives that are bearing fruit. Low company valuation services. Year revenues profits CEO/ Year revenues profits CEO/ to banking services. Banque Centrale debt levels. The financial sector in Morocco is healthy and he market for corporate Rank Company Sector founded $M $M Managing Director Website Rank Company Sector founded $M $M Managing Director Website Populaire (BCP), Morocco’s second largest plays a key role in funding projects in key industries. Let finance and investment In retrospect, 2011 was characterized by an unstable 1 OCP (Office Cherifien Phosphates) Mining, energy 1920 2,898.45 586.35 Mostafa Terrab ocpgroup.ma 43 Comp. Gen. Immobiliere Real Estate 1960 148.52 25.99 Mohammed Ali Ghannam cgi.ma T bank, explains their success. me cite tourism, energy, infrastructure, manufacturing, banking services in Morocco regional geopolitical environment, and illiquid 2 SAMIR Energy 1959 2,467.35 55.70 Jamal Baamer samir.ma 44 Sopriam Automotive 1977 147.19 n.a. Loic Morin sopriam.ma real estate and finally agriculture as examples. is relatively young. It started stock and bond markets. This made fundraising 3 Maroc Telecom Telecoms 1891 2,124.53 662.91 Abdeslam Ahizoune iam.ma 45 Brasseries du Maroc Agro-food 1919 146.59 16.66 Pierre Castel brasseries-maroc.com What is the role of BCP within the various off in the mid-1990s, to operations difficult. Nonetheless last year witnessed 4 ONE (Office Nat'l Electricite) Energy 1963 1,390.92 n.a. Ali Fassi Fihri one.org.ma everal factors contribute Mouhssine Cherkaoui 46 Univers Acier Industrial 2002 142.32 n.a. Mohammed Azmi universacier.com government sector plans? accompany privatizations and some sizeable operations worth mentioning: 5 Altadis Maroc Agro-food 1910 932.84 n.a. Larbi Bellaha imperial-tobacco.com Sto increased banking Administrateur Directeur 47 Palmeraies Koutoubia Agro-food 1985 142.06 n.a. Tahar Bimezzagh koutoubia.net We play an important role, formalized by various Général, Upline initial public offerings on the • beginning of SNI asset disposal, namely via the 6 Afriquia Energy 1959 932.84 n.a. Ali Wakrim afriquia.ma penetration. The first is Casablanca Stock Exchange. sale of part of food processor Lesieur-Cristal to 48 Amendis Public utility 2001 141.52 n.a. Olivier Dietsch veoliaeau.com undeniably the densification conventions signed between BCP and the government, Corporate Finance 7 Royal Air Maroc Transport 1957 862.41 n.a. Driss Benhima royalairmaroc.com and bolstered by the fact that BCP is the only bank in Sofiprotéol and Moroccan institutional investors 49 Yazaki Maroc Industrial 2000 138.26 n.a. Redouane Haribeche yazaki.com Rachid Agoumi of the banking network and its 8 Shell (Maroc) Energy n.a. 633.66 26.85 Mohamed Raihani shell.com Morocco to be rated “investment grade” by Standard Things have evolved since, and the past decade • three IPOs (Stroc Industry, Jet Alu and S2M) Directeur Général, extension to remote areas that 9 Marjane Holding Retail 1990 587.55 22.32 Mohamed El Amrani marjane.co.ma 50 Marsa Maroc Public utility 2006 139.19 27.32 Mohamed Abdeljalil sodep.co.ma & Poor’s. Our key role in real estate deserves mention: has seen a good degree of maturing, as services • capital increases (BCP and Label’Vie) Banque Centrale had witnessed low banking usage 10 Total Maroc Energy 1926 515.39 n.a. Eric Gosse total.ma 51 SCBG Agro-food 1919 136.39 n.a. Pierre Castel n.a. we were leaders in setting up “Fonciere Emergence”, an become more professional. A number of renown • massive bond and negotiable debt security issues. Populaire levels. Proximity is a key lever for fund that owns various industrial assets and logistics 11 Douja Addoha Real Estate 1988 505.20 n.a. Anas Sefrioui groupeaddoha.com 52 Centr. Auto. Cherifienne Automotive 1929 133.80 n.a. Victor el Baz volkswagen.ma financial institutions, including Upline Group (part banking services. To increase platforms, and then rents them to tenant companies. 12 Centrale Laitiere Agro-food 1929 544.64 38.45 Driss Bencheikh centralelaitiere.com of Banque Centrale Populaire or BCP), have The sluggish regional and international context will 53 Acima Retail 2002 129.40 n.a. Mohamed Lamrani acima.ma this closeness-to-the-customer factor, several This reduces their capital needs. accumulated a wealth of experience via two continue to influence market conditions in 2012. 13 Cosumar Agro-food 1929 387.13 38.45 Mohammed Fikrat cosumar.co.ma 54 Maghreb Steel Industrial 1975 128.86 n.a. Fadel Sekkat maghrebsteel.com banks set up so-called lightweight agencies, to 14 Medi Telecom Telecoms 1999 380.00 41.51 Mr. Mohamed Elmandjra meditel.ma BCP is actually part of Groupe Banque decades of rich offerings. We should see a year of further consolidation and 55 Coficab Maroc Automotive 2001 118.94 n.a. n.a. coficab.com reduce investment costs, while simultaneously Populaire. Tell us more about the usefulness of 15 Lydec Public utility 1997 378.00 n.a. Jean-Pierre Ermenault lydec.ma tightening liquidity. 56 Radeema Public utility 1971 116.00 15.26 Mustapha El Habti radeema.ma introducing other technology-intensive solutions. your regional branches. Within corporate finance, the Moroccan scene has 16 Lafarge Ciments Construction 1928 356.74 111.87 Mohammed Kabbaj lafarge.ma 57 Disway Telecoms 2010 112.87 4.80 Hakim Belmaachi disway.com Structured as a cooperative bank, we have BCP as the been most active for the following: Yet this will not prevent several important 17 Al Omrane Holding Real Estate 2004 332.89 19.79 Najib Larraichi alomrane.ma Another key growth driver was provided by 58 Nexans Maroc Industrial 1947 108.74 n.a. Frederic Vincentr nexans.ma central hub and ten regional banks as spokes around • Capital markets: here the twin drivers are corporations from raising funds for ongoing 18 Jorf Lasfar Energy Energy 1997 326.09 34.25 Abdelmajid Iraqui Houssaini jlec.ma changes in the regulatory environment. For a it. This gives us a nationwide footprint, and a deep activities on the stock market and the private debt growth. For some, it will mean opening their capital 19 Label' Vie Retail 1985 325.69 n.a. Zouhair Bennani labelvie.ma 59 Les Grands Travaux Routiers Construction n.a. 107.14 n.a. Jean-Yves Leborgne colas.com long time, the minimum income requrements set understanding of regional competitive advantages. In market. For the former, the usual suspects have to institutional investors and investment funds. 20 Petrole du Maghreb Energy 1945 279.92 n.a. Ahmed Bouaida n.a. 60 Autoroute du Maroc Public utility 1989 105.74 n.a. Othmane Fassi-Fihri adm.co.ma for opening an account was a major obstacle, turn, this has helped many a foreign direct investor. been IPOs, secondary market share issues, and For others, it will imply access to capital markets 21 Renault Maroc Automotive 1928 277.05 n.a. Jean Frederic Pioti renault.ma 61 Global Engines (Hyundai) Automotive 2000 93.28 7.40 Khalil al Sheikh hyundai.ma since much of the population was excluded. The other share-related transactions. For the latter, via bonds and negotiable debt securities. Lastly, impulse given by the Moroccan Central Bank 22 Societe Nationale Siderurgie Industrial 1974 274.19 n.a. Ayoub Azami sonasid.ma 62 Cooper Pharma Pharma 1933 87.55 n.a. Ayman Cheikh Lahlou cooperpharma.ma the market has seen the issuance of company some players might restructure their debt, namely (Bank Al Maghrib) for low income banking in 2010 for the development of micro-credit lending, in 23 Libya Oil Maroc Energy 1993 272.39 n.a. Ezzedin Manyouni oilibya.com 63 Laprophan Pharma 1949 86.62 n.a. Hassan Bennis laprophan.com bonds and other financing instruments overleveraged actors. Moreover, SNI will continue 24 Salam Gaz Energy 1991 255.66 8.60 Abdelkader Benbekhaled salamgaz.ma made access to banking services much broader. parallel to new bank account creations. 64 Dimagaz Energy n.a. 84.29 n.a. n.a. n.a. • Strategic operations: these include divesting its non-strategic assets. The Moroccan 25 Inwi Corporate (Wana) Telecoms 1999 246.54 n.a. Mr. Karim Zaz wana.ma privatizations, public-private partnerships, government might add extra boost to the market 65 Groupe CMCP Pulp paper 1949 82.76 6.26 Marc van Lieshout internationalpaper.com More specifically at BCP, the emphasis has always Growth from the Moroccan diaspora 26 Office National Eau Potable Public utility 1972 242.87 9.20 Ali Fassi-Fihri onep.ma mergers and acquisit-ions, private placements, if it revives its privatization process, or issues been on increasing the number of account holders, The Moroccan diaspora has always been an 27 Somaca Automotive 1959 255.46 n.a. Larbi Belarbi See renault website 66 Asment Temara Construction 1976 82.36 n.a. Brahim Laraqui asment.co.ma joint ventures, etc. tenders for expert financial support and advice. ● the depth of penetration. Banking agencies have important part of the business of BCP Banque 28 Holcim Maroc Construction 1972 236.07 44.58 Dominique Drouet holcim.ma 67 Nestle Maroc Agro-food 1984 82.02 n.a. David Saudan nestlemaghreb.com been established in far-flung, remoter areas of the Populaire. BCP currently holds a more than 50% 29 Afriquia Gaz Energy 1959 229.68 21.92 Mr. Aziz Akhannouch akwagroup.com 68 Eaux Minerales d'Oulmes Agro-food 1933 81.02 n.a. Mohammed Bensalah oulmes.com country, be it in the less accessible mountainous market share in this important banking segment, Shall we do a deal in Morocco? 30 Lesieur Cristal Agro-food 1940 229.14 10.19 Mr. Samir Oudghiri Idrissi lesieur-cristal.ma 69 MIFA Industrial 1947 79.96 7.13 Abdeslam Sijelmassi mifa.ma Upline Group, part of BCP bank since 2008, private equity ventures. MAD 7.5 billion at areas of the Atlas chain or in the deep south. since remittances from overseas Moroccans 31 CMH Energy 1976 226.55 n.a. Hassan Agzenai cmh.co.ma 70 Jet4You (TUI) Transport 2005 78.09 6.66 Karim Baina jet4you.com boasts of two decades of experience in various the end of 2011. Diverse risk/return portfolio Unlike other banks, the BCP network is principally represent almost 10% of national GDP. 32 Ciments du Maroc Construction 1952 198.83 54.37 Mohamed Chaibi cimentsdumaroc.com financial services. Here is how we can help your offers access to varied PE funds, including 71 RADEEF Public utility 1969 77.56 7.60 Najib Lahlou Mimi radeef.ma outside of the major urban centers. Managem Mining, energy 1930 191.63 18.72 Mr. Abdellaziz Abarro managem-ona.com financial needs in Morocco. infrastructure, tourism, real estate and others. 33 72 Toyota du Maroc Automotive n.a. 77.49 n.a. Adil Bennani toyota.co.ma BCP has pioneered this field since the late 34 Redal Public utility 2001 189.70 n.a. Olivier Dietsch veoliawater.com In addition to this traditional agency structure, 1960s, catering to the more than three million 1. Brok erage. Through personal advice and 4. Corporate finance. Through a team of 15 73 Maphar Pharma 1951 76.56 n.a. Patrice Fuster maphar.ma 35 SGTM Construction 1971 175.97 n.a. Ahmed Kabbaj sgtm-maroc.com there have been four innovative programs that Moroccans located throughout the world (see an electronic trading platform, full access investment bankers, we offer the gamut of 74 Sews Cabind Maroc Automotive n.a. 76.29 n.a. n.a. sws.co.jp 36 Auto-Hall Automotive 1907 175.04 12.73 Abdellatif Guerraoui autohall.ma have proven successful for BCP: the low income sidebar on page 43). After obtaining a full to Moroccan financial exchanges. Regular investment banking services: debt and equity 75 Gazafric Energy n.a. 76.29 n.a. n.a. gazafric.com research and analysis notes to guide you. instruments, M&A, as well as privatizations. 37 Alliances Developpement Real Estate 1994 174.04 n.a. Alami Lazraq alliances.co.ma banking program dedicated to a broad segment banking license for its French subsidiary, BCP 38 Office National Aeroports Transport 1990 173.31 18.06 Dalil Guendouz onda.ma 76 RISMA Tourism 1993 75.76 n.a. Mr. Azzedine Guessous accor.com of the population; a program of banking services established antennae in the main EU countries. 2. Asset management. About MAD 20 billion 5. Insurance brokerage. Our branch Chaabi 39 COPAG Agro-food 1987 173.24 n.a. Mr. Moulay Loulttiti n.a. 77 Auto Nejma Maroc Automotive 1963 74.49 7.46 Mohamed Amal Guedira autonejma.ma for retirees, stuctured via the two largest national In parallel, clientele offerings were expanded to under management. Winner of the coveted Courtage offers life and non-life insurance. pension funds CNSS and CIMR; the launch eventually encompass not only the standard “Alistotmar Chaabi Treasury” award. Sole 40 North Africa Bottling Agro-food 2003 171.51 n.a. Samia Bouchareb cocacola.ma 78 IMTC Transport 1987 73.56 n.a. Mohamed Karia imtc.co.ma Our clients include Maroc Telecom, Vivendi, OCP, of Souk Bank, a initiative of mobile branches portfolio (savings, investment and assistance Moroccan manager of a French fund. 41 Ziz Carburants Energy 1968 170.18 n.a. Hachemi Aouni n.a. 79 Sanofi-Aventis Maroc Pharma 1951 72.23 n.a. Patrice Fuster sanofi-aventis.ma Label’Vie, Axa, Autoroutes Maroc, ONCF, etc. that crisscross the souks (open-air markets) of products) but also new innovations. Islamic 42 Petromin Oils Maroc Energy 1968 155.45 7.60 n.a. petrominoils.com 80 Comanav Transport 1946 70.83 n.a. Taoufik Ibrahimi comanav-voyages.ma 3. Private equity. The leading partner in Further information on www.upline.co.ma the Kingdom for rural banking; and finally, the financial products are increasingly requested by Source: Magazine Economie Entreprises, “Les 500” Special Issue; Mediaside analysis involvement of the Banque Populaire Foundation this community abroad. ●

37 Doing Business in Morocco | 2012 Edition 38 Doing Business in Morocco | 2012 Edition 2012 Edition | Doing Business in Morocco 39 2012 Edition | Doing Business in Morocco 40 Fundamentally sound With more than $26 billion in assets, Morocco’s banking system is well-capitalized and growing fast. The country’s strategy is to become the dominant regional platform, thanks to conservative monetary policies and banking regulations, as well as expansive outbound tactics.

Banking innovations include mobile services in open air markets and talking orocco has a healthy interest in its financial ATMs for the illiterate. Msector. The country’s political stability and low risk levels have meant a steady increase in the During phase one, from 1961 to 1993, nationalized importance of the financial industries within the banks were transformed to privately held ones. overall economy. Phase two, from 1993 to 2006, was kicked off by a new Banking Decree (Nouvelle Loi Bancaire of In July 2011, the IMF noted that assets in the banking 1993), that loosened banking regulation by shifting sector exceeded 120% of GDP, compared to 109% to indirect regulation. Monetary regulations were the in 2007 and 81% in 2003. Financial services’ share norm, namely covering interest rates, banking ratios of GDP has risen with overall economic growth, for and monetary policy. Some banks disappeared (e.g. example increasing from 17.5% in 2005 to 20.4% of BNDE because of poor management). Other banks GDP in 2009. were privatized. Some small foreign banks (namely Spanish ones) disappeared. This phase also saw the Banking was not always such a sweet business introduction of universal banking rules (Basel I and here though. “Until 1961, banking was a controlled, II), including risk assessments and liquidity ratios. statist activity, with few actors and tight regulations,” This phase also witnessed the end of mandatory explains Hassan el Basri, president of the Moroccan employment rules, which had saddled banks with Banking Federation (part of CGEM, the employers’ inappropriate human resources. In the 1990s, organization). “In 1961 a progressive restructuring allowance was made for foreign banks to own was initiated. One can distinguish between three 100% of banking assets. That is when BNP Paribas phases in banking development since then.” France bought its share of BMCI, Credit Agricole

Morocco’s top 8 banks by revenues Rank Name Founded Rev. 2010* CEO Website 1 Attijariwafa bank 1911 1,715.4 Mohamed El Kettani attijariwafabank.com 2 BCP (Banque Centrale Populaire) 1961 1,175.3 Mohamed Benchaaboun gbp.ma 3 BMCE (Banque Mar. Commerce Extérieur) 1959 883.3 Othman Benjelloun bmcebank.ma 4 BMCI (Banque Mar. Commerce Industrie) 1943 464.8 Jacques Ardent bmci.ma 5 Société Générale 1913 422.6 Albert Le Dirac'h sgmaroc.com 6 Crédit du Maroc 1929 233.9 Pierre Louis Boissiere cdm.co.ma 7 Credit Immobilier Hotelier 1920 176.1 Ahmad Rahhou cih.co.ma 8 Arab Bank PLC 1961 16.1 Abdel Hamid Shoman arabbank.ma *Figures in $M Source: Economie Entreprises, Mediaside analysis

42 Doing Business in Morocco | 2012 Edition Banking

Insight Stimulus from abroad With about 3.3 million Moroccans living abroad, the country can count on its diaspora for beneficial financial impact, and more. According to the government’s Office des Changes, about $6.8 billion of inward remittances from Moroccans abroad flowed into the country in 2011. Yet cold cash is not the only benefit derived from the diaspora. Moroccans residing abroad are key in transferring skills acquired through formal education, training and professional experience. The diaspora is also entrepreneurial, setting up businesses in their host countries, landing contracts and sometimes opening up subsidiaries in Morocco. There are also the homecoming micro- entrepreneurs, who open up often small businesses upon returning home, for retirement or other reasons. Through this strong network of human, cultural and economic ties, the diaspora has proven a key contributor to France bought its share of Credit du Maroc, and Morocco’s growth, and an important window onto the world. Societe Generale France bought its share of Societe Generale Maroc. By Prof. Imane El Ghazali, ESCA School of Management

Thirdly, in 2006 another banking reform law shifted all Morocco has a dense banking infrastructure with regulatory powers to the Moroccan Central Bank, or 21 commercial bank branches per 100,000 people. Bank Al-Maghrib, although technically the Ministry of By comparison South Africa, which has one-and-a Finance still rubber stamps their decisions. half-times the population of Morocco, has ten bank branches per 100,000 people. The Bank Al-Maghrib was founded in 1959 and is based in Rabat. In June 2010 (the latest figures Growth factors available) it held net foreign reserves of $18 billion. Moroccan banking has been active, yet conservatively In addition to currency management, the bank also so, due mostly to two factors. “Firstly project finance supervises a number of privatized banks supplying has had an important impact on banking growth,” retail services. says Hassan El Basri. “As of the 2000s, private sector financing was introduced for large-scale projects, Three majors namely in the energy sector. These projects used to Today the Moroccan banking sector is dominated be 100% financed by foreign institutions, such as by three major local banks: Attijariwafa bank, BCP the World Bank, the European Investment Bank and (Banque Centrale Populaire) and Banque Marocaine the African Development Bank. Other large projects du Commerce Exterieur. The three major banks held were in the areas of telephony, particularly mobile around 80% of total assets in 2011. networks, as well as tourism and infrastructure.”

There are 76 financial institutions in the country “A second important growth factor,” proceeds Mr. El including 16 commercial banks, 37 financing Basri, “was penetration of banking infrastructure and companies, six offshore banks, and 14 micro-finance services among the public. In 2000, less than 40% of associations. Moroccan banks have kept clean the population had bank accounts, now about 60% do. balance sheets with low levels of bad debt, despite Accompanying and driving the account proliferation the growth in their lending portfolios. Non-performing has been the opening of new bank agencies.” loans represented 5% of total loans in 2011. Within the portfolios of the six publicly traded banks, on Another growth vector has been the development of the aggregate, four categories of loans represent lower-income banking, in particular the Al-Barid Bank, almost three-quarters of the total: household loans, the banking branch of the post office. Al-Barid was manufacturing, construction and finance. launched in 2010 to provide basic banking services to

2012 Edition | Doing Business in Morocco 43 those with modest incomes. It has agencies in 1,800 fund, Fonciere Emergence. As for retail banking, post office branches and aims to have six million there have been many initiatives to boost account customers by 2013. penetration (bancarisation in French) among the population. Banque Populaire (BCP) has introduced Elsewhere, Moroccan banks are competing for the a well-received “mobile banking” unit that appears business of Moroccans living abroad, helping them at weekly open-air markets throughout rural areas. transfer money to Morocco and invest in the country. Morocco also has “talking” ATMs, that enable illiterate France accounts for 41% of remittances from customers to perform basic banking operations. A Moroccans living in Europe while Spain accounts for final word on Islamic banking. Although still nascent 10%. Deposits held in Morocco by Europe-based in Morocco, various new regulations should assist in immigrants stood at $15 billion in 2010, about 20% of its development over the next years. ● total national banking deposits. For more information: To foster expansion, there have been many banking Moroccan Ministry of Economy and Finance innovations, such as “agences legeres”, or agencies www.finances.gov.ma staffed by two employees. Industrial investments are Bank Al Maghrib www.bkam.ma no longer subject to property purchasing taxes (charge Federation of Banks - Mr Hassan El Basri fonciere), which are now carried by a government www.cgem.ma (click on Federations Sectorielles)

Regional Banking Platform Building a financial hub Capitalizing on its banking strength, Morocco’s main financial players (banks, insurance companies, the stock ex- change) are now building Casablanca Finance City, a regional hub similar to financial centers in Dubai and Qatar. Along with industrial developments, such as automotive and headquarters for financial and non-financial firms active in aeronautics, Morocco sees the potential for developing a other countries. strong regional financial platform. To ensure the success of the venture, partnerships have With launch funding of $14.1 million, the Moroccan Financial been signed with the Singapore Cooperation Enterprise and Board will manage and promote Casablanca Finance City Luxemburg for Finance. CFC wants to emulate the key success (CFC) as a regional financial hub and gateway into the African factors of the 40-year old Singaporean model. Areas of markets, just as the Dubai International Finance Centre offers cooperation include the institutional and regulatory framework, a portal for Persian Gulf financing. optimizing legal frameworks for capital markets, and improving The venture’s shareholders include the creme de la creme the ease of doing business. The link-up with Luxemburg for of Moroccan finance, including the three leading banks, the Finance, the Grand Duchy’s finance promotional arm, covers Central Bank and CDG, several insurance companies, the both mutual business development and training. stock exchange, and others. CFC will offer favorable tax CFC will be located on a new site covering 100 hectares on advantages similar to those for the national free trade or the old Anfa airport. Construction will be in phases and is nearshoring zones. In April 2010, the Moroccan government expected to deliver a total of 1.4 million square meters of appointed Said Ibrahimi to head the CFC project. mixed-use space (40% office, 40% residential, 20% other), Although it is still early in the game, CFC has already signed so that CFC becomes an urban destination, not a financial its first six tenants and is in advanced discussions with ghetto. CFC will also include a large park. After its success another 20 partners. The types of tenants CFC is targeting developing its industrial sector, Morocco’s financial sector ball are financial and professional services, as well as regional is rolling.

Financial Center Location Founded CEO Website CFC Casablanca 2010 Said Ibrahimi mfboard.com

DIFC Dubai 2002 Addullah Saleh difc.ae

QFC Qatar 2005 Shashank Srivastava qfc.com.qa

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ALPHATRAD INTERNATIONAL – Optilingua Group – SAS au capital de 1 00 006 euros – RCS B 323 161 810 EVRY Avenue de la Tremblaie – ZAC la Tremblaie – 91223 Le Plessis Pâté Cedex – Tel : 0825 332 525 – Fax : 0825 335 858 www.alphatrad.fr SUCCESS STORY Attijariwafa bank heads into Africa Morocco’s top bank, Attijariwafa bank, has been following a progressive and successful southbound expansion into the heart of Africa. The bank’s director of international retail operations provides his insights.

Born in 2004 from the merger of Wafabank and the Commercial Bank of Morocco, Attijariwafa bank is both young and dynamic, and steeped in the By Mohammed Krisni traditions and business networks of its Managing Director founding banks, created in 1906 and International Retail 1911 respectively. Operations Attijariwafa bank Group Barely a year after the merger dust had settled, Attijariwafa embarked on its international expansion. The Moroccan borders were becoming too small for us! Our first step was in Europe, where our credentials helped us obtain a full banking license. Immediately thereafter, we set our focus on Africa – both our natural backyard of Maghreb North African countries, and the farther-flung UEMOA and CEMAC countries of West and Central Africa. (UEMOA), and as a bonus landed a foothold in Guinea-Bissau. Since 2005, we have grown this African foot print to cover 11 In the case of the Crédit Agricole subsidiaries, our strategic countries (out of the 19 in the zone). By the end of 2011, we thinking was to acquire a basket of country operations, since employed 4,905 staff in 503 agencies, handling 1.4 million that deal involved banks in Senegal, Cote d’Ivoire, Cameroon, client accounts. Gabon and the Congo. The goals of our international development are four-fold. Firstly, For us, greenfield growth does also exist, for example in we realize that the penetration of banking services in many Burkina Faso, in Mauritania, and via our representative office African countries is still low. We have been a key actor in this in Libya. effort in Morocco, where penetration levels rose substantially One of our key considerations in our acquisitions is to ensure in the past ten years. Secondly, we realize that an increasing smooth transitions with existing staff and managers. We number of companies and institutions need pan-African banking transfer our best practices within our new operations – be it services, through a broad-based network. We wish to maintain in the sales and marketing areas, in back office and systems, our leadership as the foremost francophone-based bank. or in personnel training at our Casablanca headquarters. We Thirdly we have developed unique expertise in project finance, also adopt relevant expertise from our local brethren. After namely for infrastructure projects, and we wish to capitalize on completing a deal, we usually establish a 12- to 18-month this beyond Moroccan borders. Lastly, we see higher growth roadmap for the integration. opportunities in some countries than at home. Attijariwafa bank in ten years? Do we grow opportunistically? Yes and no. Within the realm of African banks, we are currently ranked sixth Some of our pan-African growth has been via acquisitions. by assets, after four South African and one Egyptian bank. Other countries have been greenfield launches. We often Our vision is ambitious and we expect to continue growing in operate in stages, with our growth matching the preparedness geographic scope and in the breadth of our service offerings. of the country, or the opportunities that appear. We certainly look forward to accompanying the Moroccan For example, in Mali (where I served as CEO), we acquired financial authorities as they develop an African financial existing players. In Senegal, on the other hand, we progressed platform based in Morocco (Casablanca Financial Center). in phases. Phase one was the banking license. Phase two in January 2007 was the purchase of 67% of BST bank, and For more information: then 79% of CBAO bank in April 2008. We thus created the Ibtissam Abouharia: [email protected] leading bank in the West African Economic and Monetary Union Head of Financial Information and Investor Relations

46 Doing Business in Morocco | 2012 Edition ATTIJARIWAFA BANK ELECTED BEST BANK IN MOROCCO FOR 2011

International experts from the prestigious rating organizations : «The Banker », « Global Finance » and « Capital Finance International » have elected Attijariwafa bank as Best Bank in Morocco for 2011. AWA NK RD A B • 2 T 0 S 1

E 2

B The Group is thus being rewarded for its high performance and for its sound development strategy.

AFRICA While this is an umpteenth recognition for the hard work of its 15,000 employees, it is also, and AWARD www.attijariwafabank.com above all, a demonstration of the renewed confidence of its clients and partners alike. Casablanca bourse on the rebound Casablanca hosts Africa’s second-largest stock market after Johannesburg despite restrictions on the financial instruments it The Casablanca Stock Exchange is now the second largest African bourse. can trade. The bourse’s growth prospects are looking good. More recently, improvements have included the reduction of the trade settlement period from T+5 to T+3 (May 2001); the relocation of electronic-based he stock exchange in Casablanca was established trading to brokerage firms’ trading rooms (January Tin 1929. At that time, it was known as the Office de 2001); the introduction of new indices and weighting Compensation des Valeurs Mobilières, or the Office methods; and the establishment of five different types for Clearing of Transferable Securities. of quotation markets, including three equity markets, the bond market and the funds market (April 2004). Until 1967, the stock market saw relatively sluggish Lastly, new listing requirements were introduced in growth due to stifling restrictions, namely on currency January 2005. exchanges. To overcome such shortcomings, reforms were undertaken in that year to provide Morocco’s Ownership and governance financial markets with a well-organized legal and The CSE is a joint stock company (société anonyme) technical framework. with a board of directors and a supervisory board. CSE reports to the Ministry of Finance and Privatization, Another phase of growth occurred after Morocco and operates under well-defined terms of reference completed its structural adjustment program (1986 while complying with a set of rules known as General to 1996), which consolidated macro-economic Rules. CSE is jointly owned by the 17 brokerage firms fundamentals and successfully brought under operating in the marketplace, and has a share capital control its high level of debt and inflation. Part of of $2.2 million. this program, in 1993, laid the groundwork for the modern bourse, establishing a regulatory agency, There are currently 81 companies listed on the CSE, as well as accrediting brokerage firms and creating representing a market capitalization of $67.7 billion a private company responsible for its management. at the end of 2010. In 2010 two new companies This became the Casablanca Stock Exchange (CSE) were listed, and in 2011 the number rose to four in 2000. companies. Traditionally, banking and telecoms have

Trading in African equities Comparison of top African stock exchanges Stock market name Year Founded Co’s listed CEO Website Casablanca stock exchange 1929 81 Karim Hajji casablanca-bourse.com Johannesburg Stock Exchange 1887 410 Nicky Newton-King jse.co.za The Egyptian Exchange (Cairo) 1883 214 Mohamed Omran egx.com.eg Source: Mediaside analysis

48 Doing Business in Morocco | 2012 Edition Capital Markets

To attain this goal, the CSE management is on continuous road shows throughout the kingdom, meeting with companies to present the advantages of the stock exchange. Mr. Hajji’s schedule includes meetings with at least half a dozen companies each week around Caravane de la Bourse.

Another goal for the CSE is to reach half a million investors (i.e. individuals holding shares, as opposed to institutional investors) by 2015. To meet this goal, the CSE team is holding seminars and classes, either for a general public or for targeted financial actors. Until that target is reached, the CSE relies predominantly on institutional investors (70%) for its trading activity. Individual investors and foreigners contribute about 15% of market volume each. been the strongest equity sectors on the market. Aside from new listings, the CSE growth comes Recently, companies in the infrastructure activities, from additional cross-listings between countries. such as housing, construction and real estate, have For example in 2010 Tunisian car distributor Ennakl made strong showings, reflecting the country’s heavy Automobiles listed on both the Tunis and Casablanca investment priority for infrastructure. exchanges. There is similar interest from companies south of Morocco with less developed equity markets, “Here, the companies are often more recent for example Senegal or Guinea. CSE can also count creations, with more open-minded managers having on secondary listings from already-traded companies larger capital needs, so the CSE is a natural source of to raise additional financing from the stock market. funds for their investments,” explains CSE President Karim Hajji. Obstacles to growth The CSE does face some obstacles on its path to Most of the trading is of shares (equity markets), growth. “Morocco weathered the 2008 financial which represents 91% of the volume. The remainder storm quite well since it had little exposure to the of the trading is in the bond market. CSE does not yet risk-laden instruments, but there is wariness vis-a-vis offer currency trading, mostly because the Moroccan more sophisticated instruments,” explains Mr. Hajji. dirham is not freely exchangeable. “But there is a desire to start trading currencies and develop the bond market.” Growth by several means The number of companies listed on the CSE has seen One of the nagging issues for the CSE is that of relatively slow growth. “In Morocco we face several liquidity. “There is pent-up demand for further trading difficulties in convincing companies to list their shares capabilities, yet we are bound by tight regulations and publicly,” as explains Mr. Hajji. “Foremost is probably are hampered by high P/E ratios for our Moroccan the fact that top management is not yet used to the equities,” laments Mr. Hajji. “This discourages many loss of confidentiality, and some sharing of decision- investors. With not enough paper to go around, prices making. Many old school owners are control freaks on the stock market are quite high.” who do not wish to share.” Another restriction is that Moroccan pension funds Nonetheless, CSE’s ambitious growth target is to can only invest up to 10% of their holdings abroad, have 150 companies listed by 2015. Given recent adding to upward pressure on domestic equity performance, the CSE management is confident. pricing. But this may be resolved when changes to In 2010, the MASI index, one of two stock indices the financial rules take effect in 2014 or 2015. ● that track companies listed on the CSE, rose by 21%, and the volume of transactions rose by 65%, For more information: reaching $14 billion over the year. This means that Casablanca Stock Exch. www.casablanca-bourse.com after the 2009 slump, the CSE is almost back to its (Full digital annual report available to download) pre-crisis level. Economy and Finance Ministry www.finances.gov.ma

2012 Edition | Doing Business in Morocco 49 Insurance faces bright prospects Moroccan insurance has plenty of domestic potential, namely because of a new government framework regarding health coverage. The non-life sector leads but the much smaller life insurance sector presents Indeed, automotive insurance is the driver of the Moroccan insurance sector.

opportunities as well. 2011 revenues of $1.9 billion, up from $1.77 billion the year before.

espite the global economic downturn, the Within non-life, automotive is by far the largest DMoroccan insurance sector is performing well. At segment, accounting for 47% of premium revenues the end of 2011, private insurance companies earned ($875 million in 2011), up 6.4% over 2010. The $2.8 billion in revenues from customer premiums, an remainder of non-life is split between casualty and fire increase of 9.2% over 2010. Nevertheless, the growth premiums, representing shares in the non-life sector rate was lower than that prior to the recession. of 16.9% and 11.9% respectively.

“We are the largest Arab market, with the greatest Life insurance booms degree of sophistication and maturity,” explains Although the life insurance sector and related capital Bashir Baddou, managing director of the National products is much smaller than non-life, it is showing Insurance Federation (Federation Nationale de promising signs. Life and capital posted double-digit l’Assurance). “We even have a re-insurance company growth between 2010 and 2011, after poor performance and quality offerings.” in 2009-2010. The 15.9% boost in 2011 means the segment now totals premium revenues of $890 million. Non-life carries the sector The current growth in insurance comes primarily from Life insurance has significant future potential. For the non-life segment, which includes automotive, the past two years, Morocco has committed itself fire and casualty. Almost 70% of insurance premium to a policy of revitalizing its long-term savings. revenues comes from the non-life sector, representing New financial products have been introduced and

Public insurance at the top Top Moroccan insurance companies Rank Company Year Founded Rev. 2010* CEO Website 1 CNSS (social security) 1959 2,008.8 Said Ahmidouch cnss.ma 2 RCAR 1977 1,098.0 Moulay Cherkaoui rcar.ma 3 CIMR 1949 573.9 Khalid Cheddadi cimr.ma 4 Wafa Assurances 1972 526.2 Mohammed Arroub wafaassurance.ma 5 RMA Watanya 1949 520.2 Zouheir Bensaid rmawatanya.com * Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

50 Doing Business in Morocco | 2012 Edition Insurance

government and public and private insurance sector actors. According to the objectives of the partnership agreement, 90% of the population will be subject to compulsory health insurance and 50% will require independent health care insurance.

The agreement is expected to provide an additional boost to the insurance sector. It involves extending the coverage of people and goods, improving the quality of services and services, contributing more to the financing of economic activity, strengthening the sector’s presence abroad, and consolidating the insurance companies’ financial basics. In all, no less than 70 measures were defined in the contractual framework between business operators and the nine ministries involved in creating the program contract. Among these measures, the extension of minimum coverage for people and property and the improvement of the quality of benefits and services innovative tax incentives are on offer. Never before has are key elements for insurance companies. so much interest been given to encourage savings. These are fertile waters for both life insurance and Foreign markets financial capitalization products. Through its major shareholder group Saham, CNIA Saada has expanded its presence to 11 African The market leader for life insurance in Morocco is countries after the takeover of Collina. Wafa Insurance Wafa Insurance, owned by Morocco’s largest bank, has obtained the necessary permits to operate in Attijariwafa bank. Wafa Insurance dominates the life Tunisia. and capitalization segment, with 36.7% market share, claiming premium revenue of $325 million in 2011, up In 2011, Wafa created a joint venture with French 25.1% over 2010. company Inter Mutuelles Assistance to create a pilot project that could open the African gates. Societe This performance was driven by increased demand d’Assistance Maroc, the joint venture vehicle, targets for the savings products offered by the so-called non-resident Moroccans and African expatriates. With “bancassurance” companies. These are financial a target potential representing several hundred million companies allowed to sell both banking and insurance dollars, it is also considering options in the Algerian services to their clientele. In this case Wafa Insurance market as well as several sub-Saharan countries, where used the much bigger Attijariwafa bank’s extensive it could benefit from the presence of Attijariwafa bank. network of agencies and sales representatives to market their bancassurance products. Market threats also exist for Moroccan insurance. According to some professionals, these threats Alas, life and capitalization insurance seems to be include increased competition as new entrants a zero-sum game. Wafa Insurance’s double-digit arrive, as well as the implications of the Solvency II growth is offset by declines at competing insurers Directive on the use of retained earnings to reduce such as RMA Watanya or CNIA Saada. The decline in the risk of insolvency. bancassurance premium revenues for some players is explained by their decisions to exit insurance-as- Nonetheless, the overall prospects seem bright as savings products in favor of non-life products whose the market expands and additional services are performance is steady. introduced. ●

Program contract For more information: Not only was 2011 marked by financial growth for Moroccan insurance federation (Fédération Marocaine the 17 companies active in the private insurance des Sociétés d’Assurances et de Réassurance) sector, but also by the implementation of the www.fmsar.org.ma Program Contract, signed in 2010 by the Moroccan Caisse Nationale de Sécurité Sociale www.cnss.ma

2012 Edition | Doing Business in Morocco 51 Moving the goods Economic growth means more freight traffic. But while Morocco’s shipping and rail sectors are up to the task, its road sector has a way to go before it can meet the country’s growing transport demands.

orocco’s freight needs are met Mprimarily by road and sea. The country’s harbors are key to the import and export of manufactured Most Moroccan trucks are a bit older than this one. goods, whereas the roads are vital Omar El Kadiri for domestic demand and for certain divided highways from 600 kilometers in 2005 to 1,400 CEO, Globex/Fedex exports such as agricultural produce. in 2010. This has been financed via public-private partnerships and toll systems for intercity stretches. But Morocco’s inefficient allocation of transport resources makes for excessive transport costs. The remaining 27,000 kilometers of roads are According to the Moroccan road transport mostly unpaved. The transport ministry, however, association (FNTR), these costs account for an has embarked on a paving program partly linked to estimated 20% of GDP. With more efficient logistics the development of agricultural clusters (agropoles) and warehousing, the cost of logistics could drop to requiring an efficient connection to the supply chain. 15% of GDP by 2015. Morocco’s road transport industry is fractionalized. Fortunately Morocco recognizes the importance of According to the transport ministry, nearly 837,000 having a good transport infrastructure for economic commercial vehicles were registered in 2011. The development. This is shown in its five-year national plan road haulers association (FNTR) states that 56,600 for 2008-2012 which calls for investments of $18 billion. vehicles are registered with their members but most The next five-year plan will continue that effort. of these are more than 14 years old and 90% of their member companies have three or fewer vehicles. Roads According to the Ministry of Equipment and Transport, Morocco plans to make the sector more efficient Morocco has 60,000 kilometers of roads, of which by re-structuring the larger professional entities, 33,000 are paved. It has increased the network of the small and mid-sized entities, and the informal

Leaders of the pack Top Moroccan transport companies in comparison Rank Company Activity Founded Revenues $M CEO Website 1 Royal Air Maroc Airline 1957 1,513.7 Driss Benhima royalairmaroc.com 2 Jet4You Airline 2005 137.1 Karim Baina jet4you.com 3 IMTC Sea freight 1987 129.1 Karia Mohamed imtc.co.ma 4 Comanav (CMA-CGM) Sea 1946 124.3 Taoufik Ibrahimi cma-cgm.com 5 SNTL Logistics 2007 94.5 Oussama Loudghiri sntl.ma Note: All financial data is for 2011 unless otherwise stated, Source: Federation of Banks, Al-Maghrib Bank

52 Doing Business in Morocco | 2012 Edition Transport

Insight Rationalizing transport The Moroccan Agency for the Development of Logistics (Agence Marocaine de Developpement de la Logistique or AMDL) was initiated in 2011 as a semi-independent agency of the Ministry of Transport. AMDL coordinates different companies in the transport and logistics sectors: warehousing owners, freight forwarders, transport companies, and owner-operators. By 2015, AMDL plans to make available total warehousing and logistics platform space of 2,080 hectares (eventually 3,300 ha) and 70 logistics platforms in 18 cities nationwide. The objective is to rationalize the road freight transport segment, which is currently inefficient. The new measures of efficiency include a lowering of transport costs as a portion of GDP, meaning lower prices and greater competitive

advantage for export goods, as well as lower CO2 emissions. owner-operator entities that operate at a loss by offering below-operating cost services. Ports With about 3,500 kilometers of coastline on the Rail Mediterranean Sea and Atlantic Ocean, Morocco has In contrast to the road system, Morocco has the most 26 harbors, of which 11 are for mixed commercial extensive rail network in the Maghreb. Approximately use, another 11 are for fishing and the remainder are 1,900 kilometers of track (of which 20% are dual for yachting. tracks) are operated by the state-owned ONCF. In 2011, ONCF carried 28 million passengers and 32 The port of Casablanca on the Atlantic is the main million tons of freight. maritime entry point for Morocco, with more than 26 million tons of freight transiting annually. Casablanca However, 70% of the freight ONCF carries is has two container terminals and a third is being phosphates, which will soon be transported by more completed. It handles much of the country’s container efficient pipelines. ONCF is seeking replacement traffic, but this is down from previous years due to goods, including cereals and other agricultural competition from Tangier-Med. produce, perhaps in containerized forms. But ONCF faces an uphill battle since the country’s geographic Tangier-Med is a mega-project that aims to become disposition is not as conducive to rail freight as to road one of the largest ports on the Mediterranean. First freight. The distance from Tangier to Casablanca, for opened in July 2007, the port now has two container example, is only 350 kilometers. terminals and the capacity to handle over 8 million TEUs (twenty-foot equivalent units). ONCF is also focused on increasing ridership. Morocco has invested heavily in upgrading its rail On the horizon is another Mediterranean port, Nador infrastructure, improving rail beds and rolling stock West Med, which will focus on the hydrocarbon and installing electrified overhead catenaries. These sector and offer transhipment options for Atlantic-to- improvements have increased passenger traffic. In Mediterranean freight flows. ● 2010, ONCF carried about 30 million passengers compared to 20 million in 2005. For more information: Ministry of Equipment and Transport www.mtpnet.gov.ma Morocco is also soon to be the first African country La Fédération Nationale du Transport Routier au Maroc to have a high-speed rail connection, linking Tangier (road haulers) www.fntr.ma in the north to Marrakech in the center of the country, ONCF (Moroccan railways) www.oncf.ma about 750 kilometers.

2012 Edition | Doing Business in Morocco 53 Notre Expertise à Votre Service Notre Expertise à Votre Service

Pour vos envois en Express à l’international, importation ou Que vous soyez producteur, distributeur, importateur ou exportation, enveloppes ou colis, FedEx dispose du service dont exportateur, notre mission est de vous offrir les solutions les vous avez besoin. mieux adaptées à vos besoins, avec toujours la même préoccupation, l’optimisation des coûts, délais, et conditions de Contactez-nous au : 05 22 45 80 20 21 22 vos livraisons. Contactez-nous au : 05 22 45 80 51 Notre Expertise à Votre Service Que vous soyez producteur, distributeur, importateur ou exportateur, notre mission est de vous offrir les solutions les mieux adaptées à vos besoins, avec toujours la même préoccupation, l’optimisation des coûts, délais, et conditions de vos livraisons. Contactez-nous au : 05 22 45 80 51 Building boom Morocco’s infrastructure boom is turning investors’ heads. Each new government budget includes more infrastructure projects, attracting bidders from Spain, Turkey, Portugal and elsewhere.

orocco is investing heavily on infrastructure Mto boost economic development. Cranes are omnipresent. Earth-moving equipment rumbles throughout the kingdom. There are so many road, rail, harbor and industrial infrastructure projects going on that Morocco has earned the moniker “country under construction.” Morocco is investing heavily in infrastructure to boost economic growth. Infrastructure is always in top position in the national budget. Such investment directly impacts All this foreign interest has ruffled some local feathers. the country’s economic growth which increases its Moroccan construction firms (BTP or Batiments et transport requirements. Thus, major international Travaux Publics in French) want their share of projects operators who are facing dropping demand elsewhere too. The National Federation of BTP companies (FNBTP) due to the global economic slow-down are heading to is successfully lobbying to ensure they get them. The Morocco and its resilient economy. Ministry of Equipment and Transport has reserved at least 15% of projects for Moroccan BTP firms. Spanish operators are among the most prominent. Companies such as Copisa, BSA, Ecisa and Housing engineering firm Cido Consult all developed a Despite the international crisis, Moroccan Moroccan presence in 2011. The beginning of 2012 infrastructure is proving resilient. According to the has seen the Spanish rush continue with the arrival High Commission for Planning (HCP) in early 2012, of Grupo Mecanotubo, a construction company, construction activities continued to strengthen and Euro Geotecnica, an engineering company following the trend that started in mid-2011. specialized in geotechnical services. Social housing is one of the main drivers of this. The Turkish firms, such as Makyol, for the widening of the 37% increase in new projects, designed to house Rabat-Casablanca super highway, or Yapi Merkezi, for hundreds of thousands of low income families, the building the Casablanca tramway, have practically reflects the effect of incentives over the past two become household words in Morocco with their high years that have revitalized real estate activity. Add to visibility and big budgets. this a 26% increase in residential housing starts.

Built from cement Top Moroccan infrastructure companies Rank Company Year Founded Rev. 2010* CEO Website 1 Lafarge Ciments 1928 626.2 Mohammed Kabbaj lafarge.ma 2 Holcim Maroc 1972 414.4 Dominique Drouet holcim.ma 3 Ciments du Maroc 1952 349.0 Mohamed Chaibi cimentsdumaroc.com 4 SGTM (Soc Gen Travaux Maroc) 1971 332.3 Messrs Kabbaj sgtm-maroc.com * Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

56 Doing Business in Morocco | 2012 Edition Infrastructure

Success Story Warehouses sprout like mushrooms For the past two years, French company GSE has been busy designing and building some of the largest warehouses and logistics platforms in Morocco. After successful forays in other emerging markets, what attracted GSE to Morocco was the ease of doing business and the important market potential, due to the country’s emphasis on infrastructure development and the ambitious supply chain efficiency program (see page 53, sidebar on AMDL). GSE was assisted by Maghreb Consulting for its market entry. GSE’s main projects in Morocco have included vast warehouses for two top big box retailers Marjane and Label’Vie as well as a logistics platform for major trucking company SNTL. GSE is now preparing further projects with the French Chamber of Commerce.

The results of an HCP business survey among BTP the Beni Mellal to Berrechid highway (172 kilometers, professionals points to a continued improvement $705 million), and the Tit-Mellil to Berrechid highway in outlook for construction activity, underpinned by (30 kilometers, $150 million). increased demand from private households. Other sector indicators confirm this outlook. Cement Railways sales, for instance, rose 2.3% in the first quarter Morocco’s railway program includes significant of 2012, beating the average trend for the second structural investments, within the framework of successive quarter. HCP estimates that value added general agreements between the railway operator of the construction sector should increase by 6% ONCF and both the government and the Hassan II and 6.5% respectively during the first two quarters Fund for Social and Economic Development. of 2012. This covers the financing of the mega-project for “In terms of employment, the BTP sector employed Africa’s first high-speed train (Train à Grande Vitesse nearly 1,059,000 people in 2011, up from 1,029,000 or TGV), linking Tangier and Casablanca. The total people the year before, representing 9.18% of the budget for this is about $3.9 billion, of which about employed population aged 15 and over,” says Fatna $2.3 billion is for the TGV and the remainder for Shihab, head of social housing for the Ministry of modernizing existing railway assets. Housing. And ports Highways Harbors have not been forgotten in Morocco’s But the best is yet to come, foremost because infrastructure master plan for 2010-2030. Increasing Morocco’s highway construction program is far international trade has meant an explosion in from complete. “The additional program for 2015 shipping. Government plans include continuing includes another 384 kilometers, representing a work at the major project of Tangier Med II harbor to total investment of around $1.75 billion,” discloses increase the capacity to 8 million TEU (twenty-foot Othman Fassi-Fihri, Director General of Moroccan equivalent units). The port extension will add two new Highways (Autoroutes du Maroc) or ADM, the state- deep-water container terminals, providing 5 million owned operator of divided toll highways. TEUs of additional capacity. ●

ADM’s action plan includes widening to six lanes For more information: the Casablanca-Rabat highway (60 kilometers, $150 Ministry of Equipment and Transport million) by 2012, and the Rabat road bypass to be www.mtpnet.gov.ma completed in 2014 (41 kilometers, $330 million). Autoroutes du Maroc www.adm.co.ma Other projects should also follow in 2015, including FNBTP (construction federation) www.fnbtp.ma

2012 Edition | Doing Business in Morocco 57 Phosphates and more The Moroccan government recently kick- started the exploration and exploitation of other minerals in order to bring diversity to the country’s mining sector.

lthough Morocco relies more on its brains than Aits earthen sub-strata, mining does represent an important component for the economy. In 2010 the mining sector represented 6% of the country’s GDP, about 27% of the national export earnings, and provided employment to roughly 35,000 people. Phosphates are key for national exports and crucial for worldwide food security.

Like many other countries, Morocco is basically a The company is solely responsible for the production one-commodity show, with phosphates being the and sale of Moroccan phosphate resources, mined Moroccan bread-winner. Used mostly for agricultural at the Benguérir, Khouribga, Youssoufia mines in fertilizers, phosphates represent about 94% of total central Morocco, and the Boucraa mine in southern mining output by volume. Morocco. Altogether these sites represent about 86 billion cubic meters of reserves. OCP is a state- Morocco is believed to hold the bulk of global owned company created in 1920. phosphates reserves. The country is the world’s third-largest producer of phosphates and accounts Other minerals for around 17% of global output. Due to strong Morocco recognizes its mining sector is overly international demand and tight supply, prices are dependent on phosphates and needs to diversify. expected to remain high in 2012. Therefore it has started mapping out its geological resources under the National Geological Mapping The Phosphates Company (OCP) is one of the Plan and is actively leveraging private investors to world’s biggest exporters of phosphates. It has a help develop alternative minerals. monopoly on phosphate mining in Morocco and plans to double annual production capacity by Although still small by international standards, 2020 to 50 million tons a year. OCP employs almost Morocco is an active producer of precious metals 20,000 people. (silver and gold) and of other ores (iron, lead, zinc,

OCP on a cloud of its own Top five companies in the mining sector Rank Company Founded 2010 Rev.* Employees CEO Website 1 OCP 1920 5,200 19,044 Mostafa Terrab ocpgroup.ma 2 Managem 1930 336.4 69 Abdellaziz Abarro managem-ona.com 3 CMG Co. Miniere Guermassa 1988 102.0 597 Abdellaziz Abarro managem-ona.com 4 Soc. Metallurgique d’Imiter 1969 86.5 n.a. Abdellaziz Abarro managem-ona.com 5 Comp. Tifnout Tiranimine n.a. 80.6 n.a. n.a. n.a. *Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

58 Doing Business in Morocco | 2012 Edition Mining

Insight Grand Central Phosphate OCP, Morocco’s largest company with $5.2 billion in 2010 revenues, is helping move the country up the phosphate value chain. Why settle for the export of raw phosphates when one can produce finished or semi-finished products locally and export those? With this vision in mind, OCP is developing Jorf Phosphate Hub (JPH) in Jorf Lasfar, a coastal town about 125 kms southwest of Casablanca. JPH is no small project: the total investment is set for $1.17 billion, in two phases. Over 300 acres have been set aside for factories, storage warehouses, materials handling equipment, and of course new harbor facilities to export the products (chemicals, fertilizers, and other phosphate-based products). “The principle of JPH is to offer ‘plug-and-play’ options to companies wishing to develop downstream phosphate activities,” explains the JPH Project Manager at OCP. The hub will provide its industrial tenants with all the required infrastructure: water, electricity, waste treatment, pipelines, copper). In 2010 these latter four racked up production security, and of course roads and bridges to connect to the volumes of about 50,000 tons each. domestic and export supply chains. JPH will open in phases, Mineral deposits have been found throughout the with its first phase of four industrial plants opening in 2013, country. Lead, fluorine and antimony are found in the and the remainder in 2015. center of the country. The Anti-Atlas Mountains contain copper, manganese, gold and silver deposits, as well “Several viable petroleum systems, with good as strategic metals such as cobalt, tin and wolfram. hydrocarbon potential, exist in Moroccan sedimentary The High Atlas range has deposits of lead, zinc, basins.” ONHYM has carried out exploratory drillings, copper, manganese, iron and barite, while the eastern either on its own or via licenses granted to foreign part of the country has reserves of lead, zinc and coal. companies, and has identified 26 sites as promising for future exploitation. Morocco currently counts only To attract foreign attention to the country’s mining 18 active sites. opportunities, Morocco has substantially changed the legal framework for mining. “Mining companies that Investment prospects export from Morocco have the advantage of a lower The strategic potential for phosphates is downstream 17.5% corporate tax rate as do mineral producers in added-value activities, such as in the production who sell on to value-added transforming companies of phosphoric acid, ready-made fertilizers and for export,” explains Julien David of French law firm other chemical derivatives. The Moroccan chemical Gide GLN. industry is growing rapidly as new compounds are being produced locally. Hydrocarbon search Oil and gas exploration and research in Morocco Elsewhere, the emphasis is on finding and developing is spearheaded by the National Hydrocarbons and new minerals production, in partnership with qualified Mines Office (Office National des Hydrocarbures et foreign partners. Another area that offers future growth des Mines or ONHYM). potential is quarrying, namely for marble and granite. ●

Compared to its neighbors (Algeria, Mauritania and For more information: Libya) which have vast proven reserves, Morocco’s ONHYM www.onhym.com petroleum potential is still largely unknown. But OCP www.ocpgroup.ma geologic research carried out from 2000 to 2011 Ministry of Energy, Mines, Water and the Environment shows a glimmer of hope. According to ONHYM: www.mem.gov.ma

2012 Edition | Doing Business in Morocco 59 Growing agriculture Morocco’s agricultural sector has doubled in a decade. Now the country is developing high value added products for export while covering domestic needs.

n 2010, the agricultural sector amounted to $8.5 Ibillion or 14% of Morocco’s GDP, according to the Ministry of Agriculture. This is almost twice the contribution of a decade ago. And agriculture is one of Morocco’s largest employers, with four million people Olives on their way to becoming tapenade. active in the sector. The Moroccan rural population is estimated to total 18 million, or about 49% of all Moroccan agriculture is globalized. Although the households. country satisfies full domestic demand for many crops, (e.g. meat, fruits and vegetables) and even “Morocco can still count on the bounty of its land and exports many of these items, Morocco also imports the diligence of its farmers for a substantial part of the a variety of foods. country’s wealth,” explains explains Pascale Nejjar, director of FENAGRI, the federation of agricultural Green Morocco processors and manufacturers. “Agriculture remains a Morocco introduced the Plan Maroc Vert (Green pillar of our economy and will become more so as the Morocco Plan) to increase the proportion of land government enforces plans to increase productivity devoted to higher valued products, increase the and re-orient output to richer seams.” amount of irrigated land, develop a series of six agropoles (concentrated areas of fully integrated Morocco has about 8.7 million hectares of fertile soil production zones), and to expand agricultural and another 20 million hectares of semi-arid land. exports. Its fertile land is located in temperate areas where fruits and vegetables grow abundantly. The majority “Part of our emphasis is to increase our share of of the fertile land (67%) is devoted to the cultivation higher value-added processed foods, both for of cereals. The Atlantic coast and the Mediterranean domestic consumption and for export,” explains Ms. climates are both conducive to good harvests. Arid Nejjar. “In our strategic plan we have targeted sectors areas are more suited to low-density ranching and like olive oil, dairy products, ready-made foods such olive groves. as tajines or couscous.”

Big Food Top five agro-processing companies in Morocco Rank Company Activity Founded 2010 Rev.* CEO Website 1 Altadis Maroc Tobacco 1910 1,637.4 Larbi Bellaha altadis-maroc.ma 2 Centrale Laitiere Milk, dairy products 1940 956.0 Driss Bencheikh centralelaitiere.com 3 Cosumar Sugar 1929 679.6 Mohammed Fikrat cosumar.co.ma 4 Lesieur Cristal Oils 1940 402.3 Samir Oudghiri Idrissi lesieur-cristal.ma 5 Copag Diversified cooperative 1987 304.2 Moulay Loulttiti n.a. *Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

60 Doing Business in Morocco | 2012 Edition Agro-processing

Olive production Morocco is located in the Mediterranean olive belt, yet its production of olive oil is only 3% of the world total, compared to Spain’s 36% and Italy’s 25%.

To increase Morocco’s share of world olive production, the government implemented programs to improve the quality of the oil produced, increase domestic and foreign demand, and double the area dedicated to olive groves.

With almost $75 million in financing available to develop the olive oil industry, Olea Capital seeks to increase production capacity to 30,000 tons of olive oil. Most of the new prodution capacity is aimed at foreign markets.

Milk products is another target of the agricultural development plan and resources have been allocated to the segment’s development. Morocco Irrigation has shown excellent promise. In 2003 only counts 50 production units, of which 26 are only about 100,000 hectares were irrigated, or less cooperatives. The government program is focused than 0.1% of the country’s total land. In 2010, the on improving cattle races, reinforcing milk collection number of irrigated hectares had more than doubled and treatment facilities, and on diversifying cattle to about 250,000. The goal of Plan Maroc Vert is to feeding methods. reach 550,000 hectares under irrigation by 2020 and to shift from gravity irrigation to drip irrigation. The Processed foods government is subsidizing drip irrigation investments The main area of focus for the producers’ federation, for farms of less than five hectares when these are FENAGRI, is increasing the foreign demand for created through aggregation of smaller landholdings. Moroccan processed foods. But this is proving difficult despite the government assistance. Fruit out, cereal in Values of agricultural imports and exports in 2010 ($M) “The Moroccan government provides active support, for example in helping us with sales and Imports marketing efforts abroad,” says Nadia Mabrouk, founder of Saleva, an Agadir-based manufacturer of ready-made dishes such as tajine and tapenade, Cereals $1,274.9 an olive-based appetizer. “Landing international Exports distributors is our main difficulty, second is increasing awareness of our excellent products.” Milk and dairy products $245.6 Citrus fruits $327.5 Some Moroccan food processors have been Sugar $386.0 successful capturing foreign markets, such Venezia Ice, an ice cream maker. Certain food Oils $538.0 Vegetables (fresh, frozen or segments have started using creative Moroccan preserved) $222.2 branding. Tangerines from the northern Berkaane Tomatoes (fresh) $198.8 region have obtained an appellation d’origine Fruits (fresh, frozen or preserved) $175.4 controlée. Olive oil and other commodities are Other $1,625.7 Vegetables (canned) $175.4 soon to follow. ●

Other $748.5 For more information: Ministry of Agriculture www.agriculture.gov.ma Total = $1.9 Billion Total = $4.1 Billion FENAGRI (Fédération Nationale de l’Agroalimentaire) Source: Ministry of Agriculture and Fishing www.fenagri.org

2012 Edition | Doing Business in Morocco 61 Oceans of fish Representing almost two thirds of food exports from Morocco, the fishing sector has traditionally been an economic mainstay. Despite some obstacles, the sector is growing by capturing higher value-added activities.

ndowed with a 3,500 kilometer coastline, EMorocco is considered a world leader for certain seafoods. Fishing provides the kingdom with jobs, food security and foreign currency. In 2011, revenues The fishing sector is being reformed for higher productivity. from fishing amounted to $1.4 billion, or 1.5% of Morocco’s GDP. Although Moroccan waters conceal hundreds of fish species, four varieties account for 77% of exports: According to the UN’s Food and Agriculture frozen cephalopods such as octopus (27%); canned Organization, Morocco accounts for nearly 1% of fish mainly sardines (37%); fresh fish (8%); and frozen global production, amounting to more than a million crustaceans, namely peeled shrimp (6%). tons a year. This may seem tiny compared to China’s 15 million tons or Indonesia’s six million tons, but Approximately 70% of Moroccan fish exports end up it still places the country at the head of all other on European tables, although exports (mostly canned Mediterranean countries. fish) to other African nations tripled from 2000 to 2011, reaching $175 million. This market holds enormous Morocco can thank the little sardine for its good potential given the fragile supply of fresh fish in many fortune. It is the world’s largest producer of sardines, African nations. accounting for nearly half of the world’s catch, followed by Spain. Alas, almost three-quarters of Mostly frozen fish sardine production ends up in industrial byproducts, Breakdown of fish exports by value (2010) such as fish meal or oil. Canned sardines remain the lesser portion of the catch, and the export of fresh Oil sardines for human consumption remains small, Flour 4% although it is growing. 7 % Fresh “Canned sardines are the flagship product that makes 8% Frozen Morocco a world leader and justifies our large share 39% in world seafood exports,” explains Hassan Sentissi, Semi-preserved head of the Moroccan fish federation FENIP, one of 9 % many fish federations in Morocco.

Fish exports Morocco exports three categories of marine products. Topping the list is frozen fish, representing 39% of Canned 33 % exports. Next is canned and semi-preserved fish with a 42% share. Fresh produce accounts for only 8%. Other marine products, such as fish meal or fish oil, make up much smaller percentages. Source: EACCE Morocco

62 Doing Business in Morocco | 2012 Edition Fisheries

Sardines are big Breakdown of fish by catch (2010)

Shrimp Other 1 % 1% Molluscs Squid/octopus 0% 5%

White fish 9%

Sardine/anchovy 84%

Morocco has 30 production plants for canning and Source: EACCE Morocco preserving fish with an annual capacity of 300,000 tons and employing 21,000 people. The semi- and export markets, as well as protein for animal feed, preserved processors focus on salt curing and it confronts several obstacles, including land scarcity, anchovy processing as well as preserved or pickled rising property prices, an inadequate legal framework fish via more than 20 factories employing 6,000 and reliance on imports such as fry, spat and feed. people. Government support Fish processing in Morocco is the realm of SMEs but The Moroccan government program called Halieutis among the larger companies is La Monegasque & funds personnel training and structure improvements. Vanelli, the world leader for anchovies. During 2012, four new maritime training institutes will be created and $4 million will go into harbor (docking) Challenges to growth improvements. Although the Moroccan fishing sector has been growing consistently, it still faces challenges. Further development of the fisheries sector also requires resource preservation. According to Aziz “On the upstream side, we have a very fragmented Akhenouch, Minister of Agriculture and Fisheries, the fishing flotilla and fluctuations in the catch,” laments government has implemented programs to protect Mr. Sentissi, head of FENIP. “This impacts the marine fisheries on the Mediterranean coast. regularity with which we can operate our canning or preserving plants.” “This includes plans for sustainable fisheries and the enforcement of biological recuperation periods,” Mr. Another difficulty lies with the quality of conservation Akhenouch says, adding that strict fishing quotas equipment on the ships and port infrastructure where will be maintained to preserve fish stocks and enable docking facilities are a source of user complaints. reproduction for vulnerable species. ●

A recurring problem has been the high proportion of For more information: fish that ends up in low value-added uses, namely fish FENIP (La Fédération des Industries de Transformation meal and oil. Furthermore, a significant proportion of et de Valorisation des Produits de la Pêche) the catch is exported without processing. www.fenip.com Ministry of Agriculture and Fishing (Ministère de Moreover, aquaculture is under-developed. Although l’Agriculture et de la Pêche Maritime) fish farming could increase fish supply for domestic www.mpm.gov.ma

2012 Edition | Doing Business in Morocco 63 Pharma eyes export market The lifting of its long-existing protectionism has made the Moroccan pharmaceutical industry nimbler and more open to foreign assistance, placing the industry in a position to export to sub-Saharan markets.

he pharmaceutical industry is a key ingredient to Tthe Moroccan economy. In 2011, it accounted for more than $950 million in revenues (at the wholesale level) and employs about 40,000 people. Thirty-two pharmaceutical producers nationally supply the country’s 11,000 pharmacies. On The Moroccan pharmaceutical industry also produces for export. average, Moroccans spend $46 a year each on pharmaceutical products. founder of Galenica Pharmaceuticals and president of the Moroccan Pharmaceutical Association The Moroccan government has traditionally played an (Association Marocaine de l’Industrie Pharmaceutique active role in both encouraging and regulating local or AMIP). pharmaceutical producers, under the tutelage of the Ministry of Health. The government has never been In 2005 the Moroccan government approved two abashed about promoting local production, so as to health insurance programs. The first is a payroll- insure traceability and quality control over medical based mandatory health insurance plan called products. l’Assurance Maladie Obligatoire (AMO) for all working people. The second is the Regime d’Assistance “Among the most important aspects of the medical Medicale (RAMED) which finances health services for framework are the mandatory medical coverage 8.5 million Moroccans living below the poverty line, programs,” explains Abdelghani el Guermai, the about 30% of the population.

More and more pills As a result of these programs, between 2008 and 2010 Evolution of pharma revenues (wholesale) the Ministry of Health increased its pharmaceuticals 1,200 procurement budget from $5.7 million to $160 million.

1,000 Pharmaceutical products benefit from the absence of VAT on many important classes of medications, 800 such as those for hepatitis and chronic diseases. The M) $ (

s government also regulates pricing. e

u 600 n e v e

R Control and distribution 400 The government is active in checking product quality at several levels. Upstream, the National Laboratory 200 for the Control of Medical Products (Laboratoire National de Controle de Medicaments or LNCM) is 0 1 1 the controlling laboratory, whereas downstream the 99 00 0 02 03 04 05 06 07 08 09 10 01 19 20 20 20 20 20 20 20 20 20 20 20 2 Health Ministry controls at the pharmacy outlet level Source: IMS Health (via AMIP) on an ad hoc basis.

64 Doing Business in Morocco | 2012 Edition Pharmaceuticals

Like many emerging markets, Morocco puts particular emphasis on the development of less expensive generic drugs. This reduces costs while increasing access to a larger population. It also creates export potential to neighboring countries. According to AMIP, generics represented about 30% of drug sales in 2011 versus 70% for patented products.

“We see strong growth for generics in the Moroccan market due to government pressure to reduce health expenditures,” explains El Guermai, AMIP president. “However certain areas such as cancer and biotech- related products will remain green pastures for patented drugs.”

Local manufacturing, which is typically done under a licensing contract with a foreign patent-holder or by a local generic producer, accounts for 70% of domestic demand. Imports cover the remaining 30%. Approximately 8% of domestic production is sold as exports, mostly to sub-Saharan countries and to neighboring Maghreb countries. This represented almost $60 million in 2010. According to the pharmaceutical association, on an aggregate basis, Moroccan pharmaceutical Framework for international entrance producers spend about $34 million annually on quality Morocco offers many opportunities for foreign control measures. The proof of the production quality investors due to strong market growth and good lies with the World Health Organization, which has export potential from a Moroccan regional platform. classified Morocco as “Europe-zone”, implying that the quality controls are at European levels. The extension of generics to 50% or even 70% of the market value is one opportunity. Another is the The distribution of medical products in Morocco is local production of active pharmaceutical ingredients done mainly via a network of 40 wholesalers that (APIs), which is where Ranbaxy of India has found a reach out to the country’s pharmacies and hospitals. place. Another opportunity may arise over the next Wholesalers account for 80% of the flow, while 20% decade as qualified locally-educated researchers and goes directly from manufacturers to pharmacies or scientists enter the workforce and R&D focuses on hospitals. State hospitals are supplied via the state- specific sub-Saharan diseases. run Pharmacie Centrale de Berrechid. “Several measures exist to stimulate FDI in our Industry profile sector,” says El Guermai. “And the fact that perhaps The pharmaceutical industry in Morocco has seen 40% of production capacity sits idle in Morocco consistent growth by many benchmarks. The number means that foreign companies can take advantage of manufacturing facilities has grown from 22 in 2000 of market opportunities at lower risk levels than to 32 in 2011. Over the same period, the total units elsewhere.” Moreover, because of new government produced jumped from 178 million to 293 million. insurance schemes such as AMO for middle-class workers and RAMED for low-income Moroccans, This growth has come from a mixture of domestic healthcare in Morocco is expanding rapidly, companies focusing on generic products (such as creating new opportunities for foreign investors in Galenica or Cooper Pharma), and the entrance of foreign the sector. ● companies, either via joint ventures or via wholly-owned subsidiaries. There are no restrictions on foreign direct For more information: investment in the pharmaceutical sector, which may Moroccan Pharma Assoc (AMIP) www.amip.ma have been part of the appeal for such recent entrants Moroccan Health Ministry www.sante.gov.ma as Ranbaxy of India or Sanofi-Aventis of France. Directory of Moroccan pharmacies www.pharmacies.ma

2012 Edition | Doing Business in Morocco 65 Morocco’s new consumer society With increasing wealth and exposure to global trade, the Moroccan lifestyle is slowly being transformed. An expert at Morocco’s leading business school gives some pointers on understanding the changes. Shoppers at a recently opened hypermarket in the Mall of Morocco.

ccording to the Moroccan High Consumption patterns have also changed. Smaller APlanning Commission, my households seek easy-of-use and time-saving country is a balanced mix of classes. products and services. This means a greater demand The middle class is 53%, while the for appliances, frozen food and ready-made meals. lower class is 34% and the upper The workday has also changed with longer working By Imane El Ghazali class has 13%. The majority (44.5%) and more irregular working hours and shorter lunch Professor of of the middle class is salaried, while breaks. This may explain the explosion of home Economics 30% are self-employed. Monthly delivery and fast food. ESCA School of Management earnings range from $320 to $765 (MAD 2,800 to MAD 6,736). With spending on basics (housing, food, health) now covered, Moroccans are free to splurge on Moroccans are hard-working and thrifty. On average, communication, entertainment and travel. This means in 2011 we saved about 18% of our disposable distribution channels have changed as well. Corner income. Yet, we also know how to spend our hard- grocery stores and traditional open air markets earned dirhams. Real consumption per capita are giving way to supermarkets and hypermarkets increased by 4.1% in 2011 to $1,760 (MAD 15,500). (Marjane, Acima, Carrefour, Label’Vie and BIM), particularly in urban areas. Women are taking on According to Euromonitor, disposable income per greater responsibility in spending decisions, whereas capita has increased annually since 2004 and was this task was traditionally the purview of the male about $2,000 (MAD 16,831) in 2011. The increase in head of household. disposable income has enabled Moroccans to acquire products that were once considered luxuries. This Spending on healthcare has experienced strong increase is due to the significant wave of investment growth since the government decreed wider access carried out in recent years on infrastructure and to medical care (RAMED). As for education, the projects with strategic impact. growth of private schools shows that Moroccans have lost some of their faith in public schooling, and Traditionally Moroccan society consisted of large that they have greater disposable income available for families living under one roof. This culture has education. Nonetheless, these expenditures remain changed to more individualistic habits. The family small at only 2.4% of household spending in 2010. unit is more fragmented with households of two to three people becoming more numerous. Marriage has Although the majority of travel is by taxi or bus (a city also changed. In the 1960s, most women married at bus ticket costs $0.40), access to private vehicles is 17 and men at 24 years. Today the average age of growing fast. Some of us prefer to use scooters or marriage is 29 and 32 years, respectively. small motorbikes because of urban congestion.

66 Doing Business in Morocco | 2012 Edition Consumer Behavior

Dress habits follow the urban-rural divide. Rural areas (and the poor) tend to stick to traditional garb (such as the djellaba). Residents of big cities follow and purchase the latest fashions, especially younger people which explains the presence of different international brands (Zara, Mango, Diesel, Massimo Dutti, Celio, H & M) and strong national brands, such as Marwa.

In poor neighborhoods and rural areas, traditional markets are still the main place of purchase. They offer low prices and the possibility of bargaining, an entrenched habit among most Moroccans.

Online shopping is still nascent. Most Moroccan consumers prefer personal contact because shopping is considered entertaining but also because they are wary of giving credit card numbers online. But since Moroccans are very price-sensitive and good deals are sometimes to be had online, we expect e-shopping to grow. Formal and informal retail co-exist in Morocco. Increasing wealth stimulates formal retail, the new Information technology and telecoms have also Morocco Mall in Casablanca being a prime example. helped revolutionize the communication habits of Opened in December 2011, this is the biggest mall in Moroccans. Three telephony and Internet operators Africa with 600 major brands and an enormous indoor (Maroc Telecom, Meditel and INWI) compete for aquarium. Yet Casablanca also hosts traditional business and almost two million households have markets for food, clothing and other basic necessities. Internet access.

Cafés play an important part in our lives as popular The Moroccan economy is evolving rapidly, becoming meeting places, especially for men, and particularly one of the most dynamic in the MENA region and an for lower income people. The arrival of various chains attractive destination for international investors. ● (such as Paul, Starbucks and Venezia Ice) has changed the landscape. Women and couples now flock to these For more information: trendy places, which are very popular on weekends. ESCA School of Management www.esca.ma

2012 Edition | Doing Business in Morocco 67 Tuned in to tourism Strategies to increase bed capacity and visitor numbers have given Morocco’s tourism sector, one of the country’s largest GDP contributors, a real shot in the arm despite economic and political troubles elsewhere.

he Moroccan government commissioned its TVision 2010 strategy in 2001. Between then and 2010 the number of visitors to Morocco more The recently completed Mazagan resort on the coast southwest of Casablanca. than doubled from 4.2 to 9.4 million, according to Morocco’s National Tourism Federation. and employs 420,000 people, not including indirect employment. Part of the Vision 2010 strategy, called Plan Azur, was to build six new resort cities on the Atlantic and About 26% of international visitors are on package Mediterranean coasts. By 2010, two of the cities were tours and about the same proportion are individual already funded and being built, while the other four travellers. The largest segment of international were being put out to bid. travellers, fully 46%, are Moroccans residing abroad. Despite the country’s potential for conventions The success of Vision 2010 prompted King Mohamed and exhibitions, only 2% are business travelers. VI to launch Vision 2020 in November 2010. This aims So the Ministry of Tourism is studying the potential at raising tourist arrivals to 20 million by 2020 and of business tourism and is launching a promotional adding four additional cities to Plan Azur. campaign to attract business.

Tourism currently accounts for 9.6% of national GDP, “Marrakech and Agadir remain the principal tourism and fully 20% of foreign currency receipts. Banks and magnets, while Casablanca, Tangier and Rabat are private investors continue to plow funds into new mostly for business with some pleasure mixed in,” projects. says Said Tahiri, president of the National Tourism Federation. According to a 2009 McKinsey study of the sector, tourism accounts for about $600 to $700 million in Expanding capacity annual real estate investments (land and buildings) One of the difficulties Morocco is having because of

Top Moroccan tourism companies Rank Company Activity Founded 2010 Revenues* CEO Website 1 RISMA (Accor) Hotels 1993 133.2 Azzedine Guessous accor.com 2 Resort Co. (Mazagan) Beach resort 2008 105.3 Stephan Killinger mazaganbeachresort.com 3 Atlas Voyages Online travel 1964 63.2 Othman Cherif Alami atlasvoyages.com 4 Newrest Maroc Services Catering 1985 56.1 Karim Rahal n.a. 5 Kenzi Hotels Hotels 1988 53.7 n.a. kenzi-hotels.com *Figures in $M Source: Economie Entreprises “Les 500”, Mediaside analysis

68 Doing Business in Morocco | 2012 Edition Novotel Casa City Center

Le Novotel Casa City Center est un hôtel Novotel Casa City Center is a 4-star hotel 4 étoiles, situé en plein coeur de Casablanca, located in the heart of the city, between the riche d’un emplacement idéal, au centre du old medina and Hassan II mosque. quartier d’affaires, à quelques minutes de The hotel meets the expectations of both la médina et de la mosquée Hassan II. businessmen and tourists. L’hôtel répond parfaitement aux exigences d’une clientèle d’affaires et de loisirs.

Novotel Casa City Center Angle rue Zaid Ou Hmad Sidi Belyout - Casablanca - Maroc Tél. : (+212) 22 46 65 00 - Fax : (+212) 22 46 65 01 E-mail : [email protected] Designed for natural living*

*Conçu comme un espace naturel. Tourism

and Marrakech airports seeing over 1,000 flights a week, as compared to 200 flights weekly in the 1990s.

Morocco positions itself as a more upscale tourism destination than other Mediterranean basin countries such as Tunisia and Turkey, which tend to focus more S'informer Se développer on the mass market. Average spending for a tourist in Morocco is around $800 while in Tunisia it is $250.

“Tunisia emphasizes vacation clubs and mass tourism, which we are trying to avoid,” explains Mr. Tahiri.

Outlook and threats Given the importance of tourism on the balance of payments (foreign currency revenues), which is higher for tourism than phosphate exports and remittances from Moroccans living abroad, the sector is bound for further growth. But where will future growth come from?

“For Morocco, there are two niches that we are looking at,” says Imad Barakad, director general of Se former S'implanter SMIT (Societe Marocaine d’Ingenierie Touristique, or Moroccan Company for Tourism Engineering), an its success is matching hotel capacity with demand. autonomous entity that assists the Moroccan Tourism Currently some locations have an oversupply of beds Board in planning and aligning investors for large- while others lack capacity. However, this is being scale projects. addressed under Vision 2020 in which the government Speed up your international development plans to have 375,000 beds by 2020 compared to “Firstly, there is potential in the ocean cruise market. 178,000 in 2010 and 97,000 beds in 2001. Morocco currently has only a small share of cruises as opposed to the Greek islands,” Mr. Barakad The Open Skies Agreement with the EU signed in 2005 explains. “A second avenue for us to explore are niche A network of 3,700 affiliated companies has made Morocco much more accessible to tourists, vacations that are built around a specific interest or namely via low-cost operators from Europe (Ryanair, hobby. Here we are thinking of golfing, eco-tourism A bicultural team of 110 employees EasyJet), from the Middle East (Air Arabia), and even and cultural adventuring.” locally-developed alternatives (Jet4You). The number of flights has increased drastically with Casablanca To grow, Morocco’s tourism sector will need to Business building missions in Morocco and abroad / Media monitoring and calls for counter competition from other Mediterranean tenders / Customized market research / B to B match making / Economic and countries with strong tourism sectors. However, last The open skies effect regulatory information / Selection of contact persons / Thematic reports Tourist arrivals since 2004 year’s unrest in two of those countries, Egypt and Tunisia, increased tourism in Morocco. For instance, 10 CFCIM Fairs and UBIFRANCE Pavillions in Morocco / Strategic Partnership with in February 2011 after the events in Egypt, Morocco 9 saw a 17% increase in international tourists. the French network of Chambers of Commerce and Industry (ACFCI) and of the 8 foreign-based French Chambers of Commerce and Industry (UCCIFE) network 7 Another challenge is the economic recession hitting Public service delegation contract for UBIFRANCE in Morocco / Representation 6 the pocketbooks of Europeans who make up 80% to offices in Paris, Agadir, Fez, Marrakech, Meknes, Oujda, Rabat and Tangier

5 85% of Morocco’s visitors. But despite the expected Organization of your trade and business events decline, tourism increased 2% in 2011 compared to 4

Millions of tourists 2010 and is showing signs of continuing to expand in Support and advisory services for investors / Business opportunities 3 2012, according to the Ministry of Tourism. ● Recruitment assistance / Provision of postal address / Business and V.I.E. hosting 2 (Business Center) / Industrial parks / Mediation center / Social protection and 1 For more information: sanitary repatriation coverage 0 Office National du Tourisme du Maroc 2004 2005 2006 2007 2008 2009 2010 www.tourisme.gov.ma French Business School (EFA) / ESC Toulouse program, from Bachelor to MBA Source: Federation Nationale du Tourisme Federation Nationale du Tourisme www.fnt.ma ESC Casablanca “Grande Ecole” Program / inter and intra-company training

70 Doing Business in Morocco | 2012 Edition www.cfcim.org S'informer Se développer

Se former S'implanter

Speed up your international development

A network of 3,700 affiliated companies A bicultural team of 110 employees

Business building missions in Morocco and abroad / Media monitoring and calls for tenders / Customized market research / B to B match making / Economic and regulatory information / Selection of contact persons / Thematic reports

CFCIM Fairs and UBIFRANCE Pavillions in Morocco / Strategic Partnership with the French network of Chambers of Commerce and Industry (ACFCI) and of the foreign-based French Chambers of Commerce and Industry (UCCIFE) network Public service delegation contract for UBIFRANCE in Morocco / Representation offices in Paris, Agadir, Fez, Marrakech, Meknes, Oujda, Rabat and Tangier Organization of your trade and business events

Support and advisory services for investors / Business opportunities Recruitment assistance / Provision of postal address / Business and V.I.E. hosting (Business Center) / Industrial parks / Mediation center / Social protection and sanitary repatriation coverage

French Business School (EFA) / ESC Toulouse program, from Bachelor to MBA ESC Casablanca “Grande Ecole” Program / inter and intra-company training www.cfcim.org Practical Info Practical information for visitors to Morocco

OFFICIAL LANGUAGES: are turned forward one hour on the last Sunday in • Arabic and the Amazigh (Berber) language are the April and turned back again on the last Sunday in official languages of Morocco but French is widely September. taught and serves as Morocco’s primary language • There is no DST during Ramadan. The dates of of commerce and economics. It also is widely used Ramadan change from year to year. In 2012 it is in education and government. Spanish is spoken from July 20 to August 19. Clocks are turned back by some Moroccans, especially in the northern to Standard Time during Ramadan to make it easier regions, but a boost is being given to English- for Muslims to observe the Ramadan fast during language training. daylight hours.

CLIMATE: COMMUNICATIONS: • Morocco’s climate is moderate and subtropical, • Internet country code: .ma cooled by breezes off the Mediterranean Sea and • Telephone country code: 212 Atlantic Ocean. In the interior the temperatures are more extreme, winters can be fairly cold and HOURS: the summers very hot. Marrakech has an average • Businesses: 9 a.m. to 6 p.m. Monday to Friday winter temperature of 21°C (70°F) and summer • Government offices: 8:30 a.m. to 4:30 p.m., Monday temperature of 38°C (100°F). In the Atlas Mountains to Friday temperatures can drop below zero and mountain • Post offices: 8 a.m. to 6 p.m. Monday to Friday and peaks are snow-capped throughout most of the Saturday mornings. year. The winter in the north of the country is wet • Banks in Morocco are generally open from 9 a.m. and rainy, while in the south, at the edge of the to 3 p.m. in summer. In winter these times change Moroccan Sahara, it is dry and bitterly cold at night. to 8:30 a.m. to 11:30 a.m. and from 2:30 p.m. to 4 p.m. During the month of Ramadan (in July-August CURRENCY: 2012), banks are open from 9:30 a.m. to 2 p.m. • The national currency is the Dirham (MAD), which • Morocco offers informal and formal retail. Informal is subdivided into 100 santimat (singular: santim). retail includes open air markets (usually mornings) Banknotes are issued in denominations of 20, 50, and street vendors (including night markets). Every 100 and 200 Dirham. Coins are issued in 10, 20 day except Sunday. and 50 santimat, and in 1, 2, 5 and 10 Dirham. The • Stores and shopping malls are open Monday Dirham is fully convertible but export is prohibited. through Saturday, typically 9 a.m. or 10 a.m. to 6 a.m. or 7 p.m. Mall of Morocco is open Sundays. TIME ZONE: • Souvenir shopping (ceramics, leather goods, brass, • Morocco Standard Time is GMT. Morocco started clothing, etc.) is typically available every day, using Daylight Saving Time (DST) in 2012. Clocks including Sunday.

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Practical Info

ELECTRICITY: SITES: • Electrical current is 220 volts, 50Hz . Two-pin round • Three imperial cities are essential to visit during a stay in plugs are used. Morocco. Marrakech is the tourism capital of Morocco with its many palaces, parks and minarets. Fez is the TRANSPORTATION: cultural capital and boasts many ramparts and a large Casablanca airport: medina. Not to be missed either are the walls and the • Mohamed V airport is located 30km from door of the Kasbah of the Udayas in Rabat, the capital Casablanca. Taxis are available outside the airport of Morocco. Other jewels of Morocco include the terminal and have set fares to Casablanca, which mausoleum of Ismail I and the door of Bab al-Mansour is MAD 250 (about $30). Trains also run from the Meknes. Other towns in Morocco worth a visit are airport to Casablanca and Rabat. A first class ticket Casablanca, home of the great mosque Hassan II, and to Casablanca costs MAD 50 (about $5.75) and Tangier, notable for its large medina. MAD 100 (about $11.60) to Rabat. FOOD AND DRINK: Taxis • Coffee/tea: MAD 10-15 (about $1 to $1.70) Enquête OpinionWay : • There are two categories of taxis in Morocco. Petits • Sandwich: MAD 30-50 (about $3.50 to $5.70) 89% de clients satisfaits chez b2s. taxis are small- to medium-sized cars that travel a • Bottle of water: MAD 10-15 (about $1 to $1.70) limited range within a town or city. Officially they • Beer: MAD 30-100 (about $3.50 to $11.50) La moyenne plafonne un peu plus bas. use a meter and charge an initial fare followed by • Glass of wine: MAD 50-200 (about $5.70 to $23) distance-based increments. However some taxis are not metered. Confirm whether or not a taxi has RELIGION: a meter before getting in, and if not arrange the fare • Sunni Islam is the predominant religion in Morocco. in advance. There are also about 100,000 Christians mostly of • The other category is the grands taxi. These are French descent, along with a reported 8,000 Jews long-distance taxis that use fixed routes between who mainly live in Casablanca and Marrakech. cities and towns. They charge a fixed amount for specific routes and wait until they are full with other ALCOHOL: travelers before they set off (they can take up to six • Alcohol is forbidden in Islam but it is widely available persons per car). It is possible to arrange a fare for in Casablanca and other Moroccan cities. In fact, sole occupancy. Morocco produces two brands of beer and half a dozen wines. Trains • Morocco has a vastly improving train network Entertainment: particularly between the major cities. Tourists often • Cinemas: General entry MAD 35 to 60 (about $4 use the trains, which are quite comfortable. Consult to $7), 3D films MAD 49 to 60 (about $5.65 to $7). the Moroccan national train service ONCF for times and fares. Mediaside recommends and thanks the bookstore Carrefour des Livres in Casablanca for their assistance.

This publication was produced by Mediaside SARL Copyright 2012 Mediaside SARL. The publishers thank the 77 rue du Faubourg St Denis Mediaside SARL African Development Bank for their input. 75010 Paris All efforts have been made to insure Enquête réalisée par la société OpinionWay entre le 6 Tel +33 1 4483 9337 octobre et le 11 décembre 2011 auprès d'un échantillon Unless otherwise specified, all currencies accuracy of information provided. The are in US dollars. [email protected] (interrogé sous système CAWI) représentatif de l'ensemble www.mediaside.biz publishers are not held responsible for des clients du groupe b2s. OpinionWay a réalisé cette Publisher: Medaside SARL mistakes. The opinions expressed in étude en appliquant les procédures et règles de la norme (Christopher Fodor and Dany Laloum) Agence Marocaine du Developpement the articles, including the sponsored ISO 20252 des Investissements (AMDI) Editor-in-chief: Christopher Fodor statements, are those of the authors Director: Ahmed Fassi-Fahri and interviewees and do not necessarily Art director: Rohit Juneja Marketing coordinator: Ilham Doghmi represent the opinion of the Moroccon Contributors: Robert Goldsmith, Hayat government. A standard exchange rate b2s, le respect des engagements Gharbaoui, Younes Tantaoui, Nora Editorial and reseach coordinator: of 8.55 MAD-per-USD was applied. Guessoum Ali El Yaacoubi Photography: AMDI, Federation Nationale 32, rue Honaine (angle avenue Tourisme, FENAGRI Michlifen Agdal), Rabat Tel: + 212 537 67 34 20/21 0820 89 2000 Advertising sales: Dany Laloum, Fax: +212 537 67 34 17 Nora Guessoum, Stephane Benhaim www.invest.gov.ma CENTRE DE RELATION CLIENT www.b2s.fr Government/institutional relations: NF EN 15838 Hanane Baala www.marque-nf.com

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Enquête OpinionWay : 89% de clients satisfaits chez b2s. La moyenne plafonne un peu plus bas.

Enquête réalisée par la société OpinionWay entre le 6 octobre et le 11 décembre 2011 auprès d'un échantillon (interrogé sous système CAWI) représentatif de l'ensemble des clients du groupe b2s. OpinionWay a réalisé cette étude en appliquant les procédures et règles de la norme ISO 20252 b2s, le respect des engagements

0820 89 2000

CENTRE DE RELATION CLIENT www.b2s.fr NF EN 15838 www.marque-nf.com

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