Transport & Logistics sector Morocco Commissioned by the Netherlands Enterprise Agency Business opportunities Dutch companies in Transport & Logistics sector Morocco Authors: Commissioned by: Mr. Marco Rensma Mr. Saad Hamoumi Dutch business opportunities Transport & Logistics sector Morocco About the authors Mr. Marco Rensma studied Development Economics (MSc) at the Erasmus University Rotterdam (the Netherlands) and International Relations (MSc) at the University of Amsterdam (the Netherlands). Before starting his own company MEYS Emerging Markets Research in 2010, Mr. Rensma worked for more than fifteen years in the public and private sector in the Netherlands, promoting (regional) economic growth and improving the business environment in the Netherlands. He was – among others – for six years manager and deputy director at the Chamber of Commerce in Rotterdam during which time he and his team of highly skilled professionals supported over one hundred business associations and many individual companies on how to expand their business activities. Besides being owner-director of MEYS, Mr. Rensma is a lecturer at The Hague University of Applied Sciences (the Netherlands), and coordinator of The Hague University Africa Business Program. He teaches English BA-courses in international marketing, business-to-business marketing and qualitative market research. Mr. Saad Hamoumi has a PhD in Economics specialized in Transport and International Relations. Following a research experience in the USA at UC Berkeley, he joined the private sector in Morocco. Now he brings over 29 years’ experience, a good deal of which is devoted to business development of national and international projects. Mr. Hamoumi launched and developed two major projects in Morocco; one is the project of International Duty Free shops; 50 shops in 8 international Moroccan Airports, and the other major project is Oriflamme Cosmetics branch of a multinational company. Oriflamme Cosmetics Morocco was the first company in direct sales and reached 12,000 distributors in the first year. Mr. Hamoumi works as an international organizations expert for USAID, EU, Word Bank, and is also deeply knowledgeable of the SMBs and SMEs market in Morocco, the associative world and various economic sectors specific characteristics. Mr. Hamoumi is Chairman of the Dutch-Moroccan business council, active within Morocco’s national employer organization CGEM including Chairman of CGEM’s SME Commission. Page | 1 Dutch business opportunities Transport & Logistics sector Morocco Foreword Although the Kingdom of Morocco is only 14 km away from mainland Europe, doing business in the Kingdom demands a total different approach. Dutch companies are used to do business within a specific timeframe, based on formal contracts between buyer and supplier, and using the latest IT-technologies for business communication. In Morocco business is done more on informal and personal (face-to-face) contacts, in which you take time to learn and understand each other better, and therefore place more emphasis on inter-personal trust than on formal contracts. For Dutch companies to become successful in Morocco it is therefore necessary to adapt to the local business culture, thereby connecting to local businessmen to get things done and take time to learn and understand the country. We would like to thank all Dutch companies and business associations who participated in the interviews for this market research. Their viewpoints on doing business in Morocco provided us with very valuable insight information on how Dutch companies can operate successfully in Morocco. Also, we would like to thank the representatives of AMDL for their view on Dutch business opportunities in Morocco’s transport and logistics sector. Mr. Marco Rensma Mr. Saad Haamoumi Barendrecht (the Netherlands) Casablanca (Morocco) March 2018 Page | 2 Dutch business opportunities Transport & Logistics sector Morocco Executive Summary The Royal Dutch embassy in Rabat and Rijksdienst voor Ondernemend Nederland (RVO) wanted to gain a better insight in the business opportunities for Dutch companies in the Transport and Logistics sector in Morocco1 by bringing together the needs and opportunities in Morocco on the one hand and Dutch solutions and technologies on the other hand. Morocco’s economy has beengrowing with an annual average of four percent during the last tenyears. Political stability and her geostrategic location offers the country a competitive advantage compared to other countries in northern Africa. Foreign direct investments in Morocco are among the highest levels in Africa, providing almost two-hundred thousand qualified jobs. The focus of the foreign investments are in real estate, manufacturing industry and tourism. Especially during the last fifteen years the objective of the Moroccan government was to develop more high-end productive investment projects resulting in the creation of free zones for companies active in the automotive and aeronautics industry. Foreign direct investments in the transport and logistics sector in Morocco are with less than three percent in total foreign direct investments relatively limited. Main foreign investors are coming from Spain, France, United Arab Emirates, Saudi Arabia, and the USA. With a share of 4.5 percent in total foreign direct investments inflows in Morocco in 2016, the volume of Dutch foreign investments is among the Top10 in Morocco. This position of the Netherlands is mainly due to several large Dutch companies active in Morocco like DAF, Philips, Unilever, and APM Terminals. Compared to other African countries in which Dutch companies are active, Morocco receives relatively low levels of Dutch foreign direct investments. Of the 40 African countries which received Dutch foreign direct investments in 2016, Morocco ranked number 17 which is below the level of the other North African countries Libya (nr. 6) and Tunisia (nr. 14). In Algeria Dutch companies withdrew their investment resulting in a negative level of FDI stock. The geostrategic location of Morocco within Africa and the Mediterranean, the signing of free trade arrangements withthe EU, USA, Turkey, together with a rise in income per capita, has resulted in increased volumes of international trade during the past fifteen years. The vast majority of Morocco’s foreigntrade (98 percent) comes by sea making it crucial for further economic growth to invest in the country’s 35 commercial ports. Since 2008 the Moroccan government invested on average per year 3.0 – 4.0 billion dirhams in expanding and modernizing its seaports and will continue to do so in the period up to 2030. This include investments in upgrading the shipbuilding industry and expanding and modernizing the fishing industry. These multi-billion investments inMorocco’smaritime sector provides strong business opportunities for Dutch companies. Besides the growth in maritime transport, Morocco’s road, air and rail freight transport together with the logistics sector have shown strong growth rates as well. Large public investments in the country’s physical infrastructure in recent years, have contributed to the expansion of domestic transport and logistics. The construction of 1800 km of new expressways, expansion of the rail network, and the development of logistic and industrial zones led to a sharp rise in the number of companies active in transport and logistics. Currently Morocco’s transport and logistics sector contributes about four percent to GDP and provides jobs to one million people. At the same time further growth in the transport and logistics sector is hampered by a large informal (unregulated) system. About half of the companies active in road freight transport are active in this informal system. A vast majority of these companies are very small, having only 1- 2 (old) trucks, providing services below cost price thereby underpinning the efficiency of the whole road freight transport sector. The Moroccan business association for the transport and logistics sector AMDL is aware of this situation and make it one of her top priorities in the next few years. In addition, AMDL has set priorities to the enhancement of logistic skills, optimization of 1 The Western Sahara is listed as a non-self-governing territory under Article 73 e of the Charter of the United Nations. Any reference in this report to (the cities in) the Western Sahara should be read in this context. For more information: https://www.rvo.nl/onderwerpen/internationaal-ondernemen/landenoverzicht/marokko/westelijke-sahara Page | 3 Dutch business opportunities Transport & Logistics sector Morocco logistic flows and the strengthening of the sector’s governance as well to improve the overall (inter)national competitiveness of Morocco’s transport and logistics sector. For Dutch transport and logistics companies Morocco’s strong macro-economic developments, large public investments in the transport and logistics sector, and improvements in the regulatory framework of the country offers interesting business opportunities. In the maritime sector business opportunities can be found in the fishing industry, inland dredging of water reservoirs, supporting Morocco’s national shipbuilding strategy, and in providing assistanceto enhance the efficiency of Morocco’s custom; in road freight transport Dutch business opportunities are in urban logistics, innovative transport solutions, training of Moroccan professionals and support in improving the regulatory framework, professionalizing road carriers (quality management,