AEROSPACE INDUSTRY NOVEMBER 2018
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AEROSPACE INDUSTRY NOVEMBER 2018
AMONG THE
WORLD'S MOST
DYNAMIC AEROSPACE
LOCATIONS
2
A 20-YEARS JOURNEY TO BUILD A LEADING AEROSPACE INDUSTRY
Number of companies
Boeing sourcing
Non-exhaustive ecosystem
130
Industrial
acceleration plan
Midparc
launching
IMA aerospace
engineering school
52
MATIS aerospace
joint-venture
Safran Aircraft
Engines
22
5
2000 2004 2008 2018
Sources: Companies website, Moroccan Ministry of Industry and Trade
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 3
MOROCCO'S AEROSPACE INDUSTRY SPREADS ITS WINGS
Sales Employees Companies Integration
(USD bn) (k employees) (# companies) (% local integration)
+33 % +55 % +30 % +71 %
1.2 15.5 130 29 %
0.9 100
10.0 17 %
2014 2018 2014 2018 2014 2018 2014 2018
Morocco’s Aerospace ranked #5 most attractive country for suppliers
#1 in Africa
Source: Office des changes, AMDIE, Mazars 2016 Commercial Aerospace Study Insight for Suppliers
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 4
A FORECAST GROWTH OF MORE THAN 20% PER YEAR IN THE COMING YEARS
A turnover multiplied by at least 2 times in 5 years +130 new companies expected to choose Morocco by 2030
Forecast turn over evolution based on backlog ($ bn) Number of aeronautic players present in Morocco
X2 + 90
$ 2.6 bn1 ~220
Forecast based on ~130
current backlog - Not
$ 1.2 bn
including Boeing's
ecosystem
2018 2021 2018 2030
1. On the basis of existing capabilities, excluding the additional turnover generated by the expected 90 new companies / Source: Experis, MIICEN, BCG Analysis
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 5STRONG INSTALLED CAPABILITIES
Aeronautic Aero structure Engineering MRO
Equipment Assembly work packages Mechanic, Electric, Heavy/line engine support
Equipment, final assembly (fuselage, nacelles…) Electronic, Hydraulic services interiors
& test ( Actuators, Cockpit Composite structural & non- Study, design, FEA,
& Cabin Equipment) structural Simulations 3D Printing
A High Value and
diversified Supply
Chain
Machining Special processes Sheet metal works Electrical wiring
CNC machining Anodizing Cutting metals stamping , Wiring /technical
/aluminum/steel/titanium (OAC,OAD,OAS,OAT…) bending, shot peening, or harnesses electronics
metal analysis/ Plating, coating, phosphating, welding processes systems testing
mechanical testing passivation
Source: AMDIE, GIMAS
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 6A UNIQUE
COMBINATION OF
COMPETITIVE
ADVANTAGES
7MOROCCO IS STRATEGICALLY LOCATED
"Morocco is to Europe what Mexico is to the USA"
Monthly average labor cost
Europe 2,300$/m (Spain)
Closest African
75% of European import transit
14 km country to the US and
through the Straits of Gibraltar
Europe
14km from Europe
Tangier Med Port
7-hour flight to North
America
Monthly average labor
cost 330$/m Morocco
Source: TMSA, MIICEN
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 8MOROCCO IS WELL CONNECTED WITH THE REST OF THE WORLD, THANKS IN
PARTICULAR TO TANGER MED PORT
Tanger Med Port is connected to 174 ports in 74 countries 1st sea connectivity in Africa, 16th worldwide
UNCTAD Connectivity 2017
index 1 China
2 Singapore
... ...
13 France
1-2 d
10 d
14 Taiwan
15 Sri Lanka
16 Morocco
17 Japan
95 % of the Moroccan 19 Italy
foreign trade transits
through sea routes ... ...
22 Turkey
26 Egypt
27 Portugal
... ...
137 Tunisia
Connected cities < 10 days 10 to 20 days
Source: TMSA, UNCTAD
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 93 HOURS AWAY FROM WESTERN EUROPE AND 7 FROM THE US
A platform for travelers between Africa, Middle-East, Europe & America
16 international airports
Triple Open Sky agreement with the US,
7h
the EU and Canada
3h Casablanca #1 hub between Europe
and Africa
More than 1,200 weekly flights
Strong advantage for technological
transfers & subsidiary management
Source: RAM, IATA, ONDA, BCG analyses
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 10MOROCCAN FTAS GIVING TAX-FREE ACCESS TO 55 COUNTRIES
Association Agreement with the European
Agreement with USA Union (1996)
Free Trade Agreements
(2005) Advanced status granted in 2008 with
FTA with EFTA
55 countries
Agreement with Turkey (2003) (#1 in Africa)
Agadir Agreement with Egypt, Jordan, and Tunisia
Morocco to become member of the
(2004) Only African country
Economic Community of West African
United Arab Emirates Agreement (2003)
States (ECOWAS)
Arab League Agreement (1998)
having a FTA with
the US
Africa Continental Free Trade Agreement
(AfCFTA) signed by 44 countries in March
2018
Source: Institutional websites
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 11A COMPREHENSIVE
ECOSYSTEM
APPROACH
12THROUGH ITS INDUSTRY POLICY, THE GOVERNMENT OBJECTIVE IS TO FURTHER
DEVELOP THE AUTOMOTIVE ECOSYSTEM, TO REACH TOP 7 IN THE WORLD BY 2020
A whole set of support measures... ...to develop competitive clusters
Dedicated industrial parks
Tier 3
Tier 2
Industrial fund: 20 bn MAD (~2 bn USD)
Tier 1
OEM
Specific strategies for each segment to complete
sectorial industrial maps
Coordinated and subsidized training programs
Ecosystem-wide ripple effect
Targeted programs of cooperation to accellerate local integration and
industrialization
Long-term supply contracts and technological
transfers
Source: MIICEN, AMDIE
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 134 AEROSPACE ECOSYSTEMS
Motors
+ 3,400 job creations
Engineering
+ $ 0.1 Bn additional sales
Onboard electronics
+ 4,900 job creations
EWIS
+ $ 0.3 Bn additional sales
+ 8,700 job creations
Assembly
+ $ 1.0 Bn additional sales
Ambitious
Three new ecosystems
targets MRO
+ 6,000 job creations
+ $ 0.2 Bn additional sales
underway
by 2020
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 14BOEING SUCCESSFUL SOURCING ECOSYSTEM IN MOROCCO
Long-term relationship between Morocco and
Boeing
• 2001: joint-venture with Safran in Casablanca We have witnessed the unique
• 2016: launch of Boeing sourcing ecosystem opportunities that Morocco offers
to aerospace subcontractors to
Convergence reduce their cost while producing
Between operational and quality requirement of Boeing and high quality aerospace products
Morocco unique subcontractors ecosystem
120 $1bn 8,700 0 Ray Conner
President of Boeing Commercial Airplanes
suppliers economic impact1 jobs2 offset3
1. Yearly expected exports, in-country direct and indirect revenues 2. Expected number of direct jobs created 3. No replacement of existing industries
Sources: Institutional sites, AMDIE
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 15MOROCCO, A STABLE
AND ATTRACTIVE
COUNTRY
16MOST ATTRACTIVE AFRICAN COUNTRY FOR FOREIGN INVESTORS
WORLD BANK EASE OF DOING BUSINESS
2010-2018
Africa Global Rank
Rank 2018 2018 vs. 2010
Morocco 2 69 +59
1st Most attractive African
country for foreign investors
China - 78 +11
South Africa 5 82 -48
Tunisia 7 88 -19
India - 100 +33 1st Most attractive economy for
Brazil - 125 +4
investments in Africa
Source: World Bank, Doing Business Report 2018, Ernst & Young Africa Attractiveness Survey 2017, Quantum Global Research Lab Africa Investment Index 2018
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 17MOROCCO IS A STABLE COUNTRY...
Countries by Standard & Poor's foreign rating (February 2018)
1 of the 2 countries in
Africa with investment
grade rating
AAA AA A BBB BB B CCC CC
Source: Standard & Poor's
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 18... WITH STRONG MACRO-ECONOMIC FUNDAMENTALS
Steady GDP growth Low inflation Decreasing unemployment Sustainable public debt
Real GDP growth, IMF Inflation rate, IMF Unemployment rate, IMF General government gross debt,
IMF
1.8% 1.9%
4.7% 4.1% 10.7% 57.4% 60.7% 59.7%
3.7% 1.2% 9.3% 8.9%
2000-2010 2011-2017 2018-2022 2000-2010 2011-2017 2018-2022 2000-2010 2011-2017 2018-2022 2000-2010 2011-2017 2018-2022
Medium-term macroeconomic Inflation is low and well-anchored Raising potential growth and Public debt is sustainable
prospects are stable IMF Article IV, November 2017 reducing unemployment are top IMF Article IV, November 2017
Fitch, March 2018 priorities for the government
IMF, March 2018
Source: IMF, UNCTAD, Fitch, BCG Analysis
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 19A "LOW SECURITY RISK", AT THE SAME LEVEL AS SPAIN OR FRANCE
Examples
Low security
risk
Morocco USA France UK Portugal Spain
Medium
security risk
South Africa Romania Tunisia Turkey Mexico Brazil
High security
risk
Algeria Mauritania Egypt Nigeria Mali Venezuela
Source: ControlRisks, Risk Map 2018
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 20PROTECTION OFFERED TO INVESTORS
No restriction on investment Free repatriation of profits and Protection of foreign
in local companies for non- capital for foreign investment investment agreements and
residents double taxation treaties with
more than 60 countries
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 21AN ATTRACTIVE SET OF GOVERNMENT INCENTIVES
Government Subsidies Tax Free Zones Special Economic Zones Government support
Investment: tailor-made 5 year tax exemption Land, office space, and industrial Meetings and direct line with
participation to investment ...then 8.75% tax for the next 20 plants in main cities Minister of Industry, Trade and
costs years Exemption from export fees Investment
Recruitment & Training: direct 20% flat fee for individual tax for Financial support for building Support from AMDIE (Moroccan
financial incentives to cover employees and equipment Investment and Export
costs Development Agency): end-to-
end assistance for investors and
exporters
Source: AMDIE, MIICEN
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 22A LARGE AND INCREASING NUMBER OF JAPANESE COMPANIES TRUST MOROCCO
CONFIDENTIAL INFORMATION AND PROPERTY OF ADMIE. MOROCCO NOW. DO NOT DISTRIBUTE WITHOUT AGREEMENT. 23You can also read
