Electrical and Electronic Industries
31 March 2006
Read by 2076 persons
The future of the sector will be played out internationally
In 2005, exports of electrical and electronic products did not exceed 8 billion DH. However, the potential exists and international opportunities abound. The market for relocation alone offers 38 billion dollars, a portion of which Morocco could benefit from.
Approximately 1%: This is the level at which the electrical and electronics sector contributes to GDP. And yet, it has been designated by the Emergence report as one of the priority sectors of the Moroccan economy. Indeed, today significant opportunities are offered internationally, where turnover is estimated at around 215 billion dollars. A large market where 18% is achieved through a relocation system. In this great opportunity, Morocco has a small hope, that of succeeding in capturing even 1% of this turnover achieved through the subcontracting system. What is important to know is that this 1% would represent a lot for Morocco: "This will radically transform the configuration of the sector," comments Abdelaziz Tâarji, president of FENELEC (National Federation of Electrical and Electronic Industries). However, to position itself on the international chessboard, a lot of work remains to be done, especially since Morocco is not on the list of 14 favorite countries. It is not on the waiting list. To reverse the trend, it will have to compete with fierce operators such as Singapore, Malaysia, Japan, China, not to mention Mexico which is positioning itself through its famous maquiladoras.
A race against time
Opposite a positive scenario described by the McKinsey report, there is another, catastrophic one where Morocco would miss the boat and fail to get on track.
Everything will depend on its ability to implement a worthy relaunch strategy on time. The contract-program that the profession is currently preparing in this regard.
Indeed, Fenelec has just signed an agreement with GTZ and ANPME. An expert has been appointed to follow the file with a view to presenting the contract-program in June 2006. The objective of this document is essentially to imagine scenarios capable of facilitating investment in Morocco and abroad.
In this strategy, STMicroelectronics is considered the locomotive of this sector, which is almost exclusively made up of SMEs. However, even this locomotive is not immune to problems. With great capacity, the company is only operating at 30% of its potential. "The advantages granted by the State are not in line with what is done internationally in terms of billing and customs, which does not allow it to truly flourish," emphasizes Mr. Tâarji. For the moment, "negotiations are underway to allow the company to enjoy more advantages," says a source close to the file. Information neither confirmed nor denied by the ministry in charge. But one thing is certain: if there are privileges, they will surely allow the company to develop its activity internationally. This is a sector on which the entire profession is counting to improve its performance. One of the opportunities that are recurring in France in the statements of operators relates to the new law allowing bosses at the end of their careers to sell their companies without paying taxes on capital gains. "The purchase of these companies will allow a large part of the production to be relocated to Morocco," explains an observer who also specifies that "this will completely change the situation in relations between Morocco and international clients. Thus, we will no longer continue to sell work minutes, but a finished product, our added value will be more visible. However, the Office des changes is resisting this issue."
Indeed, the regulations are clear. To avoid capital flight, the Office des changes does not hesitate to impose many constraints on any outflow of funds from Morocco. It is this same regulation that risks forcing around sixty companies specializing in the electrical field to disappear by 2010.
Currently benefiting from projects underway, particularly in housing or within the framework of the PERG (Generalized Rural Electrification Program), this market will shrink, particularly in West Africa where electrification does not exceed 20% in the best cases. But for this case, companies must establish themselves on site and once again, the problem of money transfer to buy businesses or seal partnerships in the countries concerned arises. Will the proposal made by Fenelec to set up a specialized fund to accommodate the requests of these operators be favorably received? No positive sign has been given by Mohamed Bougroum's department.
CHALLENGE HEBDO No. 90 from Saturday, March 18 to Friday, March 24, 2006
In 2005, exports of electrical and electronic products did not exceed 8 billion DH. However, the potential exists and international opportunities abound. The market for relocation alone offers 38 billion dollars, a portion of which Morocco could benefit from.
Approximately 1%: This is the level at which the electrical and electronics sector contributes to GDP. And yet, it has been designated by the Emergence report as one of the priority sectors of the Moroccan economy. Indeed, today significant opportunities are offered internationally, where turnover is estimated at around 215 billion dollars. A large market where 18% is achieved through a relocation system. In this great opportunity, Morocco has a small hope, that of succeeding in capturing even 1% of this turnover achieved through the subcontracting system. What is important to know is that this 1% would represent a lot for Morocco: "This will radically transform the configuration of the sector," comments Abdelaziz Tâarji, president of FENELEC (National Federation of Electrical and Electronic Industries). However, to position itself on the international chessboard, a lot of work remains to be done, especially since Morocco is not on the list of 14 favorite countries. It is not on the waiting list. To reverse the trend, it will have to compete with fierce operators such as Singapore, Malaysia, Japan, China, not to mention Mexico which is positioning itself through its famous maquiladoras.
A race against time
Opposite a positive scenario described by the McKinsey report, there is another, catastrophic one where Morocco would miss the boat and fail to get on track.
Everything will depend on its ability to implement a worthy relaunch strategy on time. The contract-program that the profession is currently preparing in this regard.
Indeed, Fenelec has just signed an agreement with GTZ and ANPME. An expert has been appointed to follow the file with a view to presenting the contract-program in June 2006. The objective of this document is essentially to imagine scenarios capable of facilitating investment in Morocco and abroad.
In this strategy, STMicroelectronics is considered the locomotive of this sector, which is almost exclusively made up of SMEs. However, even this locomotive is not immune to problems. With great capacity, the company is only operating at 30% of its potential. "The advantages granted by the State are not in line with what is done internationally in terms of billing and customs, which does not allow it to truly flourish," emphasizes Mr. Tâarji. For the moment, "negotiations are underway to allow the company to enjoy more advantages," says a source close to the file. Information neither confirmed nor denied by the ministry in charge. But one thing is certain: if there are privileges, they will surely allow the company to develop its activity internationally. This is a sector on which the entire profession is counting to improve its performance. One of the opportunities that are recurring in France in the statements of operators relates to the new law allowing bosses at the end of their careers to sell their companies without paying taxes on capital gains. "The purchase of these companies will allow a large part of the production to be relocated to Morocco," explains an observer who also specifies that "this will completely change the situation in relations between Morocco and international clients. Thus, we will no longer continue to sell work minutes, but a finished product, our added value will be more visible. However, the Office des changes is resisting this issue."
Indeed, the regulations are clear. To avoid capital flight, the Office des changes does not hesitate to impose many constraints on any outflow of funds from Morocco. It is this same regulation that risks forcing around sixty companies specializing in the electrical field to disappear by 2010.
Currently benefiting from projects underway, particularly in housing or within the framework of the PERG (Generalized Rural Electrification Program), this market will shrink, particularly in West Africa where electrification does not exceed 20% in the best cases. But for this case, companies must establish themselves on site and once again, the problem of money transfer to buy businesses or seal partnerships in the countries concerned arises. Will the proposal made by Fenelec to set up a specialized fund to accommodate the requests of these operators be favorably received? No positive sign has been given by Mohamed Bougroum's department.
CHALLENGE HEBDO No. 90 from Saturday, March 18 to Friday, March 24, 2006
