AmCham Morocco Trade and Investment guide by AmCham Morocco

AmCham Morocco Trade and Investment Guide 2007 Contents

5 6 9 19 29 31 45 55 61 71 81 89 107 119 129 135 139 143

151 161 173 183 187 197 217 3

z Disclaimer

z Message from the Minister of Foreign Trade of Morocco z PART I

Morocco: A gateway to Europe, Africa, & the Middle East

z PART II Key Information

z PART III Key Sector Profiles & Infrastructure

• Tourism • Information Technology • Off-shoring • Cutting Edge Industry (Electronics-Automotive-Aeronautics) • Textiles and clothing • Agribusiness • Energy and Mining • Finance, Banking and Insurance • Pharmaceuticals • Infrastructure • Franchising • Cinematography • Urban Economic Clusters: Major Projects

z PART IV Trade and Investment Regulations z PART V

Commercial Issues

z PART VI Taxation and Investment Incentives

z PART VII Company Legal Structure and Registration

z PART VIII The Social Integration of Foreign Managers z PART IX

z Our Thanks

Key Web Sites and Email Addresses

AmCham Morocco Trade and Investment Guide 2007 The AmCham Morocco Trade and Investment Guide 2007 has been published by the American Chamber of Commerce in Morocco (AmCham) 67 boulevard Massira Al Khadra, Third Floor, Apartment 6, Casablanca, Morocco Tel (212) 22 25 07 36/37/50/56 Fax (212) 22 25 07 30 Email amcham@amcham-morocco.com AmCham Morocco web site: www.amcham-morocco.com Free Trade Agreement web site www.moroccousafta.com

Project Director Deputy Project Director Editors in Chief

Carl Dawson Rabia El Alama Jean-Luc Rizzo El Kadiri Loubna Ahmed El Hasnaoui

Advertising Sales CLE-Etudes Communication Production and Graphic Design CLE-Etudes Communication

Address: 3, rue Essouhaili, Résidence Errazi, app. 24, Agdal, Rabat, Morocco Tel. (212) 37 77 38 83 Fax (212) 37 77 38 98 Email cleetude@menara.ma Web Site www.cleetude.com Printed by Photo Credits

IMPRIMAT – Rabat ONMT, ONDA, FDIM, Managem, CRI.

This second (2007) edition of the guide had a print run of 1500 copies and is available for downloading (free of charge) as PDF files on the U.S./Morocco FTA web site (www.moroccousafta.com). Official Publication Registration Number: 2007 ISBN: 9954-9301-8-9

© Copyright 2007, American Chamber of Commerce in Morocco. Short extracts from this publication may be reproduced without prior authorization provided that they are immediately followed by this citation: (AmCham Morocco Trade and Investment Guide 2007, see www.moroccousafta and www.amcham-morocco.com). Parties wishing to reproduce longer extracts should seek prior written permission from the American Chamber of Commerce in Morocco at the address indicated above. The entire publication may be freely reproduced provided that it is not altered in any way.

Disclaimer

The American Chamber of Commerce in Morocco (AmCham) and CLE Etudes S.A.R.L. have made every effort to ensure the accuracy of the information contained in this document, but cannot accept responsibility for any errors or omissions, or for any loss or damage that may result from them. Corrections and additional information are most welcome, and should be sent to us using the contact information provided below. American Chamber of Commerce in Morocco (AmCham) 67 boulevard Massira Al Khadra Third Floor, Apartment #6 Casablanca Morocco Tel Fax Email AmCham Morocco web site Free Trade Agreement web site

(212) 22 25 07 36/37/50/56 (212) 22 25 07 30 amcham@amcham-morocco.com www.amcham-morocco.com www.moroccousafta.com

Message from the Minister of Foreign Trade of Morocco

M. MECHAHOURI As economic actors or experts, the users of this guide are certainly aware that the current intensive shift towards globalization is putting the economies of developing countries, such as Morocco, under increasing pressure and requires large scale reforms and structural adaptations.

For this reason, the Kingdom of Morocco is now engaged in huge reforms, initiatives and restructuring programs to accelerate its integration into a broad free trade zone alongside Mediterranean countries, Arab countries, the United States of America, and other nations, as part of the globalization process. Morocco is also rising to this challenge by setting an unprecedented pace for the construction of a modern and competitive country that provides visibility and confidence to investors and economic actors and mobilizes employment-generating sectors and high-growth potential industries. The Kingdom of Morocco is determined to reinforce public liberties, promote the respect of human rights and gender equality, and consolidate the Rule of Law. Morocco is modernizing its infrastructures through an ambitious road and highway program, improved airport and railway networks, the new Tangier-Med port that is now under construction, new power plants, electrification, and strengthened communication networks.

Morocco is working towards improved performance in the fields of health, education, training and housing. In this respect, the National Initiative for Human Development, launched by His Majesty the King in May 2005, is a major project that will help eradicate poverty and marginalization on a short and medium term basis.

Furthermore, as part of a comprehensive approach, Morocco has created a range of sector-based policies, particularly the Azur Plan for tourism and the Emergence Program for industry. The Emergence Program aims to promote new lines of activity, namely off-shoring, specialty electronics, aeronautics, the automotive industry, and promising traditional sectors such as textiles and clothing, handicrafts, agribusiness and seafood products. Given the need to improve access to inputs and raw materials, tariff reforms are envisaged. Morocco is also working towards encouraging the integration of pre-production channels, following the example of the textile sector (which has a very heavy presence in Morocco).

There are many business opportunities of interest to investors, and particularly American investors wishing to give more impetus to the already solid ties between Morocco and the United States of America. The two countries maintain an exceptional and privileged relationship, built up through centuries of shared history. His Majesty King Mohammed VI and His Excellency President George W. Bush are determined to consolidate, diversify and enrich this relationship, especially in the economic, commercial and financial spheres. The United States is already a preferred economic and trade partner, ranked ninth and sixth respectively among countries investing in Morocco in 2005 and 2004, and the consumer of 2.6% of Moroccan exports. The United States is our ninth largest customer, and our eighth largest supplier with nearly 3.3% of Moroccan imports. The bilateral free trade agreement (FTA) that came into effect on January 1, 2006, is one of the tools capable of revitalizing the relationship between Morocco and the United States. That is why it is important to analyze the FTA, demystify it and communicate about it to the investors and economic actors of the two countries.

This guide will contribute to achieving this goal. It also provides data that testify to the remarkable qualitative leap forward made by Moroccoâ&#x20AC;&#x2122;s economy during the last few years. It comes, therefore, at the right moment to accompany Morocco in its comprehensive and enthusiastic reform and modernization effort, and to further reinforce the network of relationships for a better future.

Morocco: A gateway to Europe, Africa, and the Middle East

Morocco: A gateway to Europe, Africa, and the Middle East A WELCOMING BUSINESS ENVIRONMENT

• Morocco offers low labor costs, a superb geographic location, and a high quality of life. • 7 hours from JFK, 3 hours from Paris and 1.5 hours from Spain • A stable socio-political environment • Sound infrastructure • A multicultural population • A fast and efficient customs service • 16 Regional Investment Centers ensure speedy company registration and business troubleshooting • Excellent tourist attractions: the imperial cities of the ancient dynasties, the desert, and beach resorts such as Agadir ONGOING ECONOMIC AND DEMOCRATIC REFORM IS A NATIONAL PRIORITY

• Strengthened intellectual property rights legislation is now in force • An improved Labor Code has been adopted • Specialized commercial courts have been established, and the training of judges is ongoing • A liberal approach to economic policy • Privatization has been ongoing since 1993 • Inflation and debt are under control A CONSTITUTIONAL MONARCHY LED BY KING MOHAMMED VI

• Social issues are a top priority for the Monarchy • Increased freedom of expression • Women’s rights have been improved by radical changes to family law • 30 Parliamentary seats out of 325 are reserved for women THE FREE TRADE AGREEMENT BETWEEN MOROCCO AND THE UNITED STATES

More than 95% of bilateral trade in consumer and industrial products became duty-free immediately upon entry into force of the agreement on 1 January 2006, with all remaining nonagricultural tariffs to be eliminated within nine years. 10

The FTA between Morocco and the United States was signed on June 15, 2004, and implemented on January 1, 2006. Its investorfriendly rules make Morocco more attractive to U.S. investors.

• American firms can benefit from both the free trade deal with the U.S. and Morocco’s free trade agreement with the European Union, using Morocco as a bridge between the two zones. • Morocco is also implementing free trade agreements with Egypt, Tunisia, Jordan, Turkey and the United Arab Emirates

Protections for U.S. investors

The FTA provides for major new protections for U.S. investors. It establishes a secure, predictable legal framework for U.S. firms in Morocco covering all forms of investment (enterprises, debt, concessions, contracts and intellectual property). U.S. investors will enjoy, in almost all circumstances, the right to establish, acquire and operate investments in Morocco on an equal footing with Moroccan investors and investors of other countries.

The FTA draws from U.S. legal principles and practices to provide U.S. investors in Morocco with a basic set of substantive protections that Moroccan investors in the United States also enjoy under the U.S. legal system. Among the rights afforded to U.S. investors are due process protections and the right to receive a fair market value for property in the event of an expropriation. The agreement removes certain restrictions and prohibits the imposition of other restrictions on U.S. investors, such as requirements to buy Moroccan rather than U.S. inputs for goods manufactured in Morocco. Rule-making and procedural protections for traders and investors Each government

• Must publish its existing laws and regulations governing trade and investment, and must publish proposed regulations in advance and provide an opportunity for public comment on them. • Commits to applying fair procedures in administrative proceedings covering trade and investment matters directly affecting companies from the other country.

Morocco: A gateway to Europe, Africa, and the Middle East • Must ensure that traders and investors from the other country can obtain prompt and fair review of final administrative decisions affecting their interests.

Combatting corruption Each government commits to fighting corruption, including the prohibition of bribery, the establishment of criminal penalties punishing violators, and the protection of whistle-blowers.

Consumer and industrial products Key U.S. export sectors gain immediate duty-free access to Morocco, such as information technologies, machinery, construction equipment and chemicals. Textiles and apparel trade will be duty-free if imports meet the agreement’s rules of origin. Agricultural products

The FTA, which covers all agricultural products, provides new opportunities for U.S. farmers and ranchers, thus increasing their competitiveness on the Moroccan market: • U.S. farmers and ranchers of poultry and beef benefit from new tariff-rate quotas that grow over time. • U.S. wheat producers will benefit from new tariff-rate quotas on durum and common wheat that could lead to a five-fold increase in exports over recent levels. • Tariffs on products such as corn and corn derivatives, sorghum, soybeans and soybean meal have been cut significantly or eliminated immediately, thereby allowing U.S. exporters to respond to Morocco’s growing need for livestock feed ingredients. • Morocco has provided immediate duty-free access on products such as breakfast cereals, frozen potatoes, whey 12

products, processed poultry products, pizza cheese, pistachios, and pecans. Tariffs on other products will be phased out in five years, including on grapes, pears, cherries, walnuts and ground turkey. Tariffs on virtually all U.S. farm exports to Morocco will be phased out within fifteen years. • The United States will phase out all agricultural tariffs under the agreement, most of them in fifteen years. An agricultural safeguard will be available in the event of significant price decreases for certain horticultural products.

Open services markets Morocco has accorded substantial market access across its entire services regime, subject to very few exceptions. The FTA uses the “negative list” approach: all sectors are covered unless specifically excluded. The FTA provides benefits for businesses wishing to supply services cross-border (e.g. by electronic means) and/or to establish a presence locally in the other country. Strong and detailed disciplines on regulatory transparency supplement the Agreement’s cross-cutting transparency provisions. Banks, insurance, securities and related services U.S. financial services will have the right to establish subsidiaries and joint ventures in Morocco (in the case of insurance and brokerage, Morocco can limit foreign equity to 51%). Banks and insurance companies will have the right to establish branches, subject to a four-year phase-in for most insurance services. Morocco will allow U.S.-based firms to supply insurance on a cross-border basis for key markets including reinsurance, reinsurance brokerage, and, subject to a two-year phase-in, in marine, aviation and transport (MAT) insurance and brokerage. Services cross-border also include areas such as financial information and data processing, and financial advisory services. Of further benefit to U.S. insurance suppliers, Morocco has phased out certain mandatory reinsurance cessions and expedited the introduction of insurance products.

Morocco: A gateway to Europe, Africa, and the Middle East Telecommunications market Each government agrees that users of the telecom network will have reasonable and non-discriminatory access to the network. U.S. phone companies will have the right to interconnect with former monopoly networks in Morocco at non-discriminatory, costbased rates. U.S. firms seeking to build a physical network in Morocco will have non-discriminatory access to key facilities, such as telephone switches and submarine cable landing stations. U.S. firms will be able to lease elements of Moroccan networks on non-discriminatory terms and to re-sell telecom services of Moroccan suppliers to build a customer base.

E-Commerce Each government commits to non-discriminatory treatment of digital products and agrees not to impose custom duties on digital products. For those digital products delivered on hard media (such as a DVD or a CD), customs duties will be based on the value of the media, not on the value of the movie, music or software contained on the disc. (Source: Office of the U.S. Trade Representative, 2004)

z EMERGENCE PLAN

The Emergence Plan is a targeted industrial strategy designed to achieve increased economic growth, integration and competitiveness by positioning Morocco in the global trade and investment environment.

The strategy will promote â&#x20AC;˘ The attractiveness of Morocco for relocating foreign companies; 14

• The development of new sectors and the widening of the industrial base; • Massive trade growth; • The benchmarking of Moroccan competitiveness.

The Moroccan industrial sector represents approximately 16% of GDP but more than 50% of exports.

The main strengths of the Moroccan market are • Free trade agreements (European Union, USA, Turkey…) and the cultural, historical and geographic proximity of the European Union. • The quality of life: including a modest cost of living, a protected environment, an attractive climate, and unique landscapes; • A qualified work force at relatively low cost.

I • STRENGTHS OF THE PLAN

There are four complementary strategic foci for the basic initiatives:

A- Pillars of growth: the sectors that will be the future motors of growth in Morocco. 1- Offshoring and Nearshoring: zones dedicated to relocated service operations (CasaShore, RabatShore, TangerShore, MarrakechShore)

2- The MED zones (industrial sub-contracting): Special zones around the Tanger Med port project to serve the European Union based on optimal logistic conditions and an integrated multimodal platform (airport, highway network, rail network, seaport) offering attractive factor costs (freight charges reduced by 40% to 50%).

3- Agribusiness: Agribusiness centers developed around 8-10 sub-sectors, among them existing sub-sectors (fruit and vegetables), emerging sub-sectors (bio, ready-to-eat dishes) and sub-sectors with long-term potential (olive oil, orange juice,…).

4- Seafood product processing: the creation of a regional fisheries transformation hub to develop the pelagic fisheries industry and the high value-added frozen products sector.

5- Textiles: based on the rapid reaction and quality service of export platforms backed up by excellent logistics, and the diversification of markets through more competitive pricing and higher value-added finished products.

6- Handicrafts: a sector restructured around 5-10 export-oriented sub-sectors (decoration, jewelry, construction, agri-ethnic) backed by production capacity, innovation, and marketing plans, plus a modernized local distribution system.

Morocco: A gateway to Europe, Africa, and the Middle East B- Pillars of Upgrading: The modernization of the entire sector, cutting across all sub-sectors, for greater competitiveness: • An overhauled sectoral assistance program focused on innovation; • General philosophy: picking the winners in the agribusiness, fisheries, handicrafts and textile sectors; • Structural reforms to ensure long-term growth; • Human development and education; • Infrastructure and land management; • Administrative reform

z AN INTEGRATED APPROACH FOR 2015

The Emergence Plan is part of an integrated set of actions that includes:

• Human development and proximity to the citizen (the INDH initiative); • Reinforced infrastructure and liberalization; • The Azur Plan: 10 million tourists per annum predicted for 2010; • GDP growth of between $10.28 billion and $11.42 billion; • The creation of between 400,000 and 500,000 jobs; • A 50% reduction in the anticipated trade deficit.

z A SELECTION OF THE MEASURES ADOPTED

1- Financing Improved access to the Business Upgrading Fund (FOMAN): • Company contribution reduced from 20% to 10%;

• FOMAN contribution raised from 30% to 40%, with a ceiling of $571,000; • Expansion to cover extra service sectors related to industry; • Interest rate: 2%.

Creation of the Financial Restructuring Guaranty Fund • Objective: The provision of an institutional guaranty for debt restructuring; • Provisions: A 50% guaranty of existing bank debt with a minimum of $57,000 and a maximum of $1.14 million; 2- Technical Assistance

A repositioning of the National Small and Medium-Sized Business Promotion Agency (ANPME) through: • Improvements in the advisory services offered to firms by the ANPME; • Capacity building for industry and professional associations; • Strengthened communication and greater proximity to clients; • The mobilization of local expertise. The funding by the ANPME of: • 80% to 90% of the upgrading actions taken by firms; • 100% of technical assistance costs; • 80% of the financial and strategic diagnostic study for the Financial Restructuring Guaranty Fund.

Key Information

Key Information z DEMOGRAPHIC PROFILE

Population: 32.7 million (2006 estimate) (37% are less than 15 years old, 56% are between 15 and 60). Population growth: 1.2 % (2005) Life expectancy: 70 years

Surface area: 710,850 square kilometers, which includes about 3000 km of Mediterranean and Atlantic coast. Population density: 41 inhabitants per square kilometer. Working population: 48%, of which 34% are employed in industry and public works.

z OFFICIAL AND BUSINESS LANGUAGE Arabic is the official language and French is the language of business; Spanish is mainly used in the North and the far South. Several Berber dialects are spoken locally. English is being spoken more and more widely. Casablanca 12 noon GMT

New York 7am GMT -5

Time zone: GMT+0h00 Los Angeles 4am GMT-8

London

12 noon GMT

Paris

1pm GMT +1

Tokyo

9pm GMT +9

z WORKING WEEK Monday to Friday, generally 8:30am-12:30pm and 2:30pm-6:30pm, with summer and Ramadan variations (9am to 3/4pm is common). Government departments and some private companies have now adopted a continuous 8:30am to 4:30pm schedule. RABAT: THE CAPITAL CITY

Direct Dial Country Code: 212 z MAIN CITIES The capital city is Rabat

Major cities include: Casablanca (3.5 million inhabitants) Rabat (1.5 million) Kenitra (994,000) Agadir (925,000) Marrakech (900,000) Settat (852,000) Nador (690,000 inhabitants) Tangier (650,000 inhabitants) Fès (555,000 inhabitants) Oujda (450,000 inhabitants)

z HOLIDAYS

Public holidays January 11: May 1: May 23: July 30: August 14: August 20: August 21: November 6: November 18:

Independence Manifesto Labor Day National Day Throne Day Oued Ed-Dahab Day Revolution of the King and the People Day Youth Day Green March Day Independence Day

Religious holidays (all dates depend on the lunar cycle): 1st of Moharrem (New Year’s Day) Aïd El Fitr Aïd Al Adha (Feast of the Sacrifice) Aïd Al Mawlid Annabaoui (the Prophet’s Birthday)

Key Information z FOREIGN TRADE

Main exports include phosphates, fertilizers, phosphoric acid, semi-conductors, fruits and vegetables, sea produce, garments and hosiery. Main imports include oil, wheat, sugar, vegetable oils and wood. Main clients France Spain Great Britain Italy Germany United States

(% of exports) 2005 30.0 20.0 6.3 5.0 3.2 2.6

Source: Foreign Exchange Office

Total exports in 2004 DH 83.70 billion or $10.2 billion (at average annual exchange rate)

Total exports in 2005 DH 99.26 billion or $11.2 billion (at average annual exchange rate)

Main suppliers France Spain Russia Saudi Arabia Italy

(% of imports) 2005 18.2 11.6 6.9 6.6 6.0

Source: Foreign Exchange Office

Total imports in 2004 DH 146.7 billion or $17.8 billion (at average annual exchange rate) Total imports in 2005 DH 184.37 billion or $20.8 billion (at average annual exchange rate)

Leading U.S Imports from Morocco 2004-2006 (in millions of USD) HS 85 25 62 20 61 27 16 15 64 08

Description TOTAL Electrical machinery Salt;sulfur;earth,stone Woven apparel Preserved food Knit apparel Mineral fuel, oil etc Prepared meat,fish,etc Fats and oils Footwear Edible fruit and nuts

2004 515.1 108.9 79.2 47.2 30.4 27.4 118.1 23.7 15.2 4.4 1.5

Leading U.S exports to Morocco 2004-2006 (in millions of USD) HS 88 10 84 12 85 39 27 23 15 98

Description TOTAL Aircraft,spacecraft Cereals Machinery Misc grain, seed, fruit Electrical machinery Plastic Mineral fuel, oil etc Food waste; animal feed Fats and oils Special other

2004 525.7 140.7 115.1 51.4 32.1 29.5 8.8 25.8 5.7 15.5 17.5

2005 445.7 107.0 97.0 36.6 22.6 19.5 45.1 22.8 13.3 7.3 6.1

2006 521.2 122.9 104.9 69.1 31.9 31.6 28.0 22.6 14.7 12.1 10.8

2005 525.0 165.7 82.2 55.0 63.3 25.3 3.8 10.2 17.1 0.1 12.4

2006 875.6 250.2 163.1 76.7 73.8 49.3 46.5 34.9 27.0 22.6 22.1

Source of data: U.S. Dept. of Commerce, Bureau of Census

Key Information z FOREIGN DIRECT INVESTMENT (FDI) IN MOROCCO TOP 5 SOURCES OF FOREIGN DIRECT INVESTMENT IN MOROCC0 2001-2005

(*)Billion $

Country France Spain Switzerland United States Germany Total (all countries)

Value* 6.52 2.43 0.25 0.25 0.24

11.1

TOP 5 BENEFICIARY SECTORS OF FDI IN MOROCC0 2001-2005

% 58 22 2 2 2

Sector Value* % Telecommunications 5.07 46 Industry 3.00 27 Property and Real Estate 1.00 9 Tourism 0.62 6 Other services 0.45 4 11.1

Total (all sectors)

Source: Foreign Exchange Office (web site), Trade Balance 2005.

z FDI IN MOROCCO BY COUNTRY OF ORIGIN (TOP 10) IN 2005 Country France Spain

Germany

Switzerland UAE

Great Britain

Saudi Arabia B.L.E.U.

United States Kuwait

TOTAL (all countries)

Millions of $

% OF TOTAL

160.1

5.4

2228.0

90.8 84.9 81.1 51.6 39.0 38.7 25.2 25.0

2972.8

74.9

3.1 2.9 2.7 1.7 1.3 1.3 0.9 0.8 Source: Foreign Exchange Office

z FDI IN MOROCCO BY SECTOR IN 2005 Telecommunications

Millions of $

% OF TOTAL

347.8

11.7

1749.8

Tourism

Real Estate

58.9

270.9

Industry

9.1

257.5

Insurance

8.7

130.8

Energy and mining

4.4

43.1

Commerce

1.4

38.8

Transport

1.3

34.3

Holding Companies

1.2

23.6

Major Public Works

0.8

18.2

Banking

0.6

5.02

Agriculture

0.2

0.72

Fisheries

0.0

0.50

Studies and Research

0.0

0.40

Other services

0.0

46.3

Miscellaneous

1.6

4.5

2972.8

TOTAL

0.1

z GROSS DOMESTIC PRODUCT (GDP) GDP in billions of USD Real GDP growth (%)

GDP per capita (USD)

(*)IMF estimate

100.0

Source: Foreign Exchange Office

2003

2004

2005*

2006*

5.2

3.5

1.0

5.9%

43.7

1 278

50.1

1302

51.6

1 711,7

54.4

1 788.1

Source: World Bank and IMF

The primary sector has a 16.7% share of GDP, the secondary sector has 29.8% and the tertiary sector 53.5%.

Key Information z MACRO ECONOMIC AND FINANCIAL INDICATORS Key indicators

Inflation Unemployment Trade balance (billions of USD) Balance of payments (billions of USD) Long term debt (billions of USD) Gross official reserves (billions of USD) Workerâ&#x20AC;&#x2122;s remittances received (billions of USD) (*)estimate

2003 1.2 11.4 -4.5

2004 1.5 10.8 -5.5

2005 1.0 11.0 -8.0

2006 3.3 9.7 -9.6*

17.7

17.5

14*

3.6

4.2

1.8

1.4

14.3

16.3

1.8 16

5.1

1.2*

18.4*

5.2*

Source: World Bank, Moroccan Statistics Directorate

z FINANCIAL INDICATORS

Currency: The Moroccan currency is the Dirham (DH).The Central Bank sets the exchange rate for the Dirham against a basket of currencies of its principal trading partners. In April 2001, the exchange rate was effectively devalued by five percent as a result of a realignment of the currency basket. The annual average exchange rate is as follows: Annual average* 2000 2001 2002 2003 1 EURO

1 DOLLAR US

10,5641

11,5337

Interest rates (%) Deposits rates - 6 month deposits - 12 month deposits Lending rates (1) - minimum - maximum Lending rates (2) - minimum - maximum (1) Short term (2) Long term

10,6400 10,1665

10,7310

9,8570

10.936 9.0426

2004

11.02

8.2436

2005

11.03 8.87

Source: Moroccan Central Bank

2000

2001

2002

2003

2004

2005

2006

7.0 13.3

7.0 13.0

6.0 12.0

7.0 13.3

8.0 13.3

8.0 13.0

6.75 12

5.0 5.1

4.5 4.8

3.6 4.0

3.2 4.0

2.75 3.0

Source: Moroccan Central Bank

Key Sector Profiles & Infrastructure

Tourism Morocco, A New Vision of Tourism

Key Sector Profiles & Infrastructure Tourism

I- THE ATTRACTIONS Morocco is the product of 3000 years of history and is endowed with a rich cultural and architectural heritage. Its exceptional natural beauty includes two coasts running for 3500km (the Atlantic and Mediterranean coasts), desert, fertile plains, mountain ranges, and a moderate climate with an average temperature of 21°C.

Morocco is known for its strategic position: • Proximity to Europe plus direct transport links • A lengthy coastline running along the Atlantic and ending beyond the Strait of Gibraltar on the Mediterranean. • An easily accessible destination located 8 miles south of Spain and 2.5 hours by air from the major European capitals. There are 17 airports and a 930km highway network.

Morocco is situated at the crossroads of Europe, Africa, and the Middle East. This unusual location has resulted in a diversity of cultural and linguistic influences that plays no small role in the hospitality, tolerance and openness for which Morocco is famous.

II- THE VISION OF THE 2010 TOURISM STRATEGY The tourism sector was declared a national economic priority in 2001 and became the subject of an agreement between the Moroccan Employers Federation (CGEM) and the government. A strategic vision dubbed “Vision 2010” was subsequently developed and is built around precise and measurable objectives.

The objectives: • 10 million tourists, including 7 million international arrivals • 160,000 extra beds • $10.25-11.5 billion in foreign exchange earnings • Total foreign investment of $61 billion • The creation of 600,000 new jobs • A 20% share of GDP for the sector III- IMPLEMENTATION

The Vision 2010 is composed of six main initiatives: A- A BALANCED RANGE OF PRODUCTS:

Triple the number of beds and achieve a more balanced product range, through: • The Azure Plan, which involves six new integrated tourism developments on six priority sites, of which five have already been attributed: Saidia (Berkane), Lixus (Larache), Mazagan (El Jadida), Mogador (Essaouira), Taghazout (Agadir) and Plage Blanche (Guelmim). The tender for the Plage Blanche development is pending. • The Mada’In Plan (also known as the Regional Tourism Development Program), which aims to reposition existing tourism destinations such as Tangiers, Tétouan/the M’Diq coast, Rabat, Casablanca, Fès, Meknès, Ouarzazate/Zagora and Agadir. The success of both plans depends on publicprivate partnerships. • Investment in the construction of new hotels according to a coherent, well thought out, and well planned strategy.

Key Sector Profiles & Infrastructure Tourism B- HIGH QUALITY HUMAN RESOURCES Staff training is essential to the success of the plan and will be reinforced, both in terms of graduate numbers and in terms of quality.

The construction of 80,000 extra rooms by 2010 will generate 72,000 new direct jobs over the period. - 70,000 professionals will be trained in the various specializations of the hotel and tourism sector - An Integrated Development Plan for the hotel and tourism sector has been prepared to meet the challenge

C- OPEN SKIES Morocco has liberalized its airspace to ensure that new hotel beds continue to be matched by new air transport capacity. Key aspects of the liberalization include landing rights for new airlines, the creation of the Moroccan low-cost carriers Atlas Blue and Jet4You, and the creation of new routes (including routes offering priority access to tour operators). The implementation in 2006 of the Open Skies policy between Morocco and the European Union will further the objectives of the Vision 2010 by lowering airfares and boosting Internet sales, and this, in turn, should attract new categories of tourists and new European low-cost carriers such as Easyjet and Ryanair.

D- A TOURISM PROMOTION POLICY The new marketing strategy takes a more modern and targeted approach based on: • A budget increase for the Moroccan Tourism Promotion Service (ONMT) • Reform of the Tourism Promotion Tax system • The concentration of efforts on priority markets (France, Germany, United Kingdom, Italy and Spain). • The reintroduction of existing Moroccan destinations (beach resorts and cultural attractions) in the catalogs of the leading tour operators in priority markets. - This has resulted in 10 “tour operator + airline” strategic partnerships. - An e-marketing strategy has been developed for new market segments.

E- ACTIVITIES AND ENTERTAINMENT The Goal: An improved quality of service in programmed activities and entertainment. - An ambitious program of rental accommodation targeting tourists will cement the strategy and impact positively on the tourist rate of return. IV- TANGIBLE RESULTS - Tourist arrivals were up 12% in 2006 at 6.55 million. - The number of nights spent in classified hotels was up 11% in 2006 at 16.32 million. - Tourism revenue reached a record high of $6.05 billion in 2006 and was the leading source of foreign exchange.

INTERVIEW

PRESIDENT, NATIONAL TOURISM INDUSTRY FEDERATION & MANAGING DIRECTOR, TIKIDA HOTELS JALIL BENABBES TAARJI

As a regional and nationwide tourism and hotel operator, how do you see the prospects for tourism in Morocco? The economic, regulatory, fiscal and political environment very clearly favors the growth of the sector. Most of the obstacles were eliminated progressively between 2001 and 2006, be they access issues (open sky) or questions of infrastructure, marketing or taxation. The 2010 Vision (the government tourism strategy) is making a real and durable impact, large local and foreign investment projects are being implemented, and the future looks promising. Weâ&#x20AC;&#x2122;re taking full advantage of our geographic location and our rich cultural heritage.

Which aspects of destination Morocco should be developed to attract American clients and encourage more American investment in the sector? Government policy has clearly positioned tourism as a motor of economic growth that is already benefiting several hundred thousand families of all socio-economic backgrounds. Moroccans know that and appreciate it. American investors, be they large groups or funds of any size, can and should take advantage of the dynamic. Already, Kerzner International, Colony Capital and Accor have shown their faith in Morocco. American entrepreneurs can bring in capital and/or technical expertise and management capacity; what works for large European investors or operators also works for Americans. Tourism in Morocco is being revolutionized, and the changes are creating a diverse range of opportunities that may not be available forever. The Moroccan Tourist Promotion Service (ONMT) is launching a new marketing concept and campaign on the East Coast of the United States that focuses on the elites and the decision-makers: itâ&#x20AC;&#x2122;s a well thought out and targeted effort. 37

Key Sector Profiles & Infrastructure Tourism Which Moroccan destinations could be attractive to individual American tourists? Tangiers, Casablanca, Marrakech, Ouarzazate… Southern Morocco… All of these places are unique in many ways, and American tourists simply can’t find an equivalent closer to home, or anywhere else, for that matter. These destinations are also in great demand for major events and international and regional conferences: I’m especially thinking of Marrakech.

What are the prospects for the Tikida group in the tourism, hotel, and transport sectors? Tikida hotels was the first privately-held Moroccan group to sign an investment convention with the government in 1999, for a $100 million plan that has since been implemented. We have a presence in nearly all segments of the tourism sector, including air transport since the launch of the low-cost operator Jet4You.com in February 2006. We have also approved a new hotel and tourism investment program worth nearly $165 million for the period 2006/2009, mainly in Marrakech and Agadir. We’re also very interested in the Mediterranean. Can the name Marrakech, which is very well-known, especially in Morocco, have the same impact in the North American market? Absolutely! It’s a unique and magical destination! U.S. operators know that very well, and that’s what has justified the arrival of new brands such as Four Seasons and the Ritz Carlton. It’s not surprising that numerous American stars and personalities are buying secondary residences in Marrakech… and the list is highly impressive.n

THE AZURE PLAN The Azure Plan, which involves 110,000 new beds (80,000 in hotels) on 3000 hectares and an investment of $5.25 billion, is focused on the construction of six new beach resorts. Implementation of the plan appears to be running to schedule. Selected project outlines:

The Mogador resort Focused on authenticity, sport and culture, this resort entered the construction phase in October 2005 and will inaugurate its first hotel in 2007. In all, there will be 11 hotel units, 150 riad-style luxury hotels, three 18-hole golf courses, shops, and houses and apartments.

The Port Lixus resort Based on the theme of wellness, health and nature, and situated 80km south of Tangiers, construction of Port Lixus began in the first quarter of 2006. The first hotel is expected to open at the end of 2007, and will be joined by other hotels, two 18-hole golf courses, a marina and shops, a forest park, apartments, and villas.

The Mazagan resort This resort will offer four hotel units, two 18-hole golf courses, a conference center, and various entertainment and residential facilities. Work began in July 2006, and the first hotel is set to open at the end of 2007.

The Saidia resort The construction of this resort, in an excellent location on the Mediterranean coast, began in March 2004 and the first hotel is to be inaugurated in March 2007. In all, there will be 29 hotel units, a 700 berth marina, three 18hole golf courses, a 6km paseo maritimo, shops, a handicrafts center, a sports center, and residential units. The Taghazout resort Situated in the heart of the golden triangle of Moroccan tourism, the Taghazout site is 15km from Agadir, the countryâ&#x20AC;&#x2122;s leading beach resort, 300km from Marrakech, the cultural capital of Morocco, and 159km from Essaouira, a city famed for its artistic life. The Taghazout resort covers 678 hectares, with a 6km beach front that is a highlight of the site. In all, there will be 21,000 beds, including 16,000 hotel beds, and the first hotel is expected to open in 2008.

Key Sector Profiles & Infrastructure Tourism

INTERVIEW

GROUPE ROYAL AIR MAROC - ATLAS HOSPITALITY KAMAL BENSOUDA • GENERAL MANAGER

The Royal Air Maroc (RAM) group seems to have opted for the development of a fully-fledged hotel branch (AHM). How do you decide where to locate hotels? The RAM group, as part of its growth strategy, has created new poles of activity to capitalize on its expertise in addition to the airline operations. These include low cost air transport (Atlas Blue) and hotels, and both ventures fit perfectly into the Vision 2010 tourism promotion strategy. The location of hotel projects is based on market studies of the destination that precisely define the type and size of unit to be constructed. Today, we have a presence in most tourist destinations, and are developing hotels to meet domestic demand for competitively priced quality accommodation. AHM currently owns 10 units and plans to expand to 26 units by 2012 with turnover growth of 20% per annum during that period. We’re positioning ourselves as the number 2 operator in Morocco.

Is there a link between RAM air destinations and the promotion of RAM hotels? The activities of RAM and its subsidiary are completely separate, because these are different types of business. For example, RAM as a client represents only 3% of AHM turnover, which perfectly illustrates the market share that AHM has been able to attain directly in Morocco. There is a marketing synergy, but don’t forget

that AHM is not the only hotel chain and that RAM is the national carrier serving all operators.

Does increased service to North America foreshadow greater client numbers for Atlas Hospitality hotels? The North American market has extraordinary growth potential, and more intensive RAM flight schedules will open these markets up to Morocco. More flights, in conjunction with Internet based marketing technologies, will definitely boost the number of North American tourist arrivals. AHM intends to take advantage of this opportunity to stake out a long-term position in the niche. The American sales system is very open to this type of marketing, and Morocco should do more of it.

How do you see tourism flows and investment between Morocco and the U.S.? I believe Morocco should rethink its marketing approach in North America and increase the marketing budget in order to more effectively reach and attract American households. Given the reinforced flight schedules, it would be desirable to adjust our methodology with a view to boosting sales in the region.n

TOURISM: INVESTMENT FUNDS An initial sum of $343 million has been allocated to a fund for the construction of new hotels as part of the Vision 2010 strategy. The fund is financed by Attijariwafa Bank, the Banque Centrale Populaire (BCP), the Caisse de D茅p么t et de Gestion (CDG), several insurance companies, and a number of pension funds.

$343 million

Key Sector Profiles & Infrastructure Tourism

SUCCESS STORY

COLONY CAPITAL NAJI BOUTROS â&#x20AC;˘ VICE PRESIDENT

What motivated your decision to invest in Morocco? It is easy to fall in love with the country. It boasts natural beauty, a rich culture, and friendly people. I am also very impressed by the professionalism of the government and its commitment to promote Morocco as a leading tourist destination via sustainable development. We will be bringing in our know-how and expertise in the development of a leading, world class tourist destination in Taghazout.

How do you evaluate the evolution of the Moroccan business environment? Many programs initiated by the Moroccan government generate broader improvements in the business environment. The Plan Azur program launched in 2001 means increased economic growth and job creation. In addition, the liberalization of the economy and the increased privatization programs have given Morocco the opportunity to attract more and more investors. Thus, Morocco can be expected to enjoy new and improved business opportunities.

How will the Morocco/U.S. free trade agreement benefit your activities? The Morocco/U.S free trade agreement encourages the import of U.S products such as construction material and FF&E, through reduction of taxes. The agreement also provides us with a secure and protected legal framework in Morocco. It gives us the right to invest while enjoying the same benefits as Moroccan investors, thus strengthening our relationship with the government. How does your commercial activity relate to the social and economic development priorities of Morocco? Our vision for Taghazout goes hand in hand with the Moroccan government’s policy. Tourism at Taghazout will benefit sustainable, socio economic development. Firstly, instead of isolating them, the master plan for our resort aims at integrating two existing villages that border it, Tamrakht and Taghazout, and drawing tourists to them. We anticipate working with the local communities to assist them in developing products such as organic fruit, vegetables, oils, cheeses, etc…that will be much sought after by the upscale residents of the resort. Furthermore, we aim at promoting local crafts and events with the inclusion of an artisan’s medina and other activities. We anticipate creating over 40,000 direct and indirect jobs in the region.

What are your future plans in Morocco? We were awarded the development of Taghazout, a 700 hectare site near Morocco’s leading beach destination and uniquely located a stone’s throw away from the top European feeder markets. The development we are undertaking aims at making Taghazout a leading integrated coastal resort and a recognized global destination encompassing residential and tourist developments featuring world class architecture. It will include two 18-hole golf courses designed by one of the world’s top designers, David Kidd. In addition, it will contain at least four luxurious hotels such as Raffles, and Fairmont, etc…Brands that are not in Morocco yet. Taghazout will become the premier resort destination in Morocco. Is there anything else that you would like to add? I believe in Morocco’s potential as a tourist and investment destination. I also believe that we, as western institutional investors, have a unique responsibility to bring top class standards to this part of the world in terms of long term, sustainable development practices that allow the local populations to evolve while remaining loyal custodians of the traditions and culture they inherited.n

Key Sector Profiles & Infrastructure Tourism Tangiers: Destination of the Future

The Tangiers-Tetouan region is going through a genuine renaissance, with completed or planned investment projects worth $3.2 billion covering more than 1800 hectares. Leading developments include a $343 million, 64 hectare Chaâbi group tourism complex on the Atlantic coast (three hotels, two apart-hotels, a traditional-style residence, and luxury villas). Holmarcom has launched a $171 million, 60 hectare residential community including luxury hotels, known as Cap Tingis, and several projects worth a combined total of $126 million are planned for Ghandouri by Ynna Holding (Chaâbi group), Palmeraie Golf Palace de Marrakech, and a Spanish group.

Already, in 2003, redevelopment of the region had begun with a Maroc Hôtel et Villages (MHV) project worth $27 million and involving 18 hectares of forest with integrated walking trails. The same company also offers an innovative type of beach tourism, in the form of the Lac and Cap Spartel projects, the former occupying 77 hectares centered on an artificial lake and the latter covering 106 hectares when completed. Other planned developments in the region include a $297 million, 500 hectare complex on the Tetouan coast to be built by the CDG, and the Port Lixus beach resort at Larache (a consortium project led by Thomas & Piron).

Sources: Tourism Ministry, Tourism Observatory, l’Economiste newspaper; LeReporter newspaper

CONTACTS FOR TOURISM http://www.lagencedusud.gov.ma/ Gateway site for the southern regions of Morocco http://www.ilove-marrakesh.com/ Marrakech tourism gateway site http://www.golfsmaroc.com/ Golf in Morocco http://www.marrakech-cityguide.com/ A guide to Marrakech http://www.travel-in-morocco.com/ An on-line tour guide to Morocco

Information technology

Key Sector Profiles & Infrastructure Information technology

INTERVIEW

MOROCCAN UNION OF INFORMATION TECHNOLOGIES, TELECOMMUNICATIONS AND OFF-SHORING JAMAL BENHAMOU â&#x20AC;˘ GENERAL MANAGER

Morocco has implemented an IT development policy which has positioned it favorably in world markets. How can this high priority sector attract more international investment? The 2006-2012 strategic plan for the development of the IT sector was signed in September 2006 between the government and the Apebi (Union of Information Technologies, Telecommunications and Off-shoring). Apebi represents the professionals of the IT private sector.

An action plan will support this strategy by involving the various public, private and academic actors in implementing its objectives: the shared development of the information society and the closing of the digital divide, positioning Morocco in IT and off-shoring, economic growth and job creation, and the creation of a strong IT industry backed by consolidated national engineering capacity. The strategy has ambitious objectives: raising sector turnover from $2.97 billion at end 2004 to about $6.85 billion in 2012, with potential job creation of more than 33,000 positions in IT (excluding telecoms), and an increase in IT penetration to about 50,000 companies and 1.8 million Internet subscribers by 2012. Morocco is a preferred off-shoring zone for Europe (ranking 3rd as at January 31st, 2006), and is considered a regional hub in the IT

field. It offers a liberalized telecom sector, world class infrastructure, and language skills (Arabic, French, English, and Spanish). All this is being consolidated by an array of publicprivate partnerships.

Is the new "e-Morocco" strategy and the restructuring of the IT sector a positive move for the development of partnerships and inward investment, notably from the United States? This is a major priority of the 2006-2012 strategic plan. American IT operators can run platforms in Morocco and use the country as a regional hub thanks to the various free trade agreements that have been signed and the momentum of the IT development strategy.

Are there specific measures to attract the American investor to the sector? Indeed, and with the aim of capitalizing on the MoroccanAmerican FTA, a B to B mission is to be organized in Morocco in 2007 for U.S. operators looking to invest or establish partnerships. Our partner in this project is the Moroccan Embassy in the United States. Apebi is well-equipped to assist U.S. operators interested in Morocco. Three segments of the Moroccan IT market should interest American operators: the public sector, through a major egovernment program; businesses, through a dedicated promotional campaign; and individual consumers, thanks to the spread of the Internet. I would like to emphasize that today more than 50 IT multinationals are based in Morocco. This is proof of ongoing success.n INFORMATION TECHNOLOGIES AND MOROCCO Morocco has chosen the path of economic liberalization as the basis of its development strategy, and the telecommunications sector is a showcase of this approach.

An ambitious plan to develop seven sectors of the economy, dubbed the â&#x20AC;&#x153;global specializations of Moroccoâ&#x20AC;?, was launched in 2005. The information and communication technology sector is part of the plan, and with good reason: the Moroccan new technologies market has been consistently expanding, and is predicted to reach turnover of $9.2 billion in 2012. The potential for investment and partnerships in this sector is considerable. 47

Key Sector Profiles & Infrastructure Information technology IT IS AT THE CENTER OF A NATIONAL STRATEGY

- The importance of IT as a factor of competitiveness and growth has been recognized - There is a political will to structure and promote the sector - There has been a government department covering the sector since 1998 - An “e-Morocco” strategy is taking shape

SECTOR PROFILE

I – Information Technology Sector Key statistics: - Turnover of more than $3 billion - Exports worth $60 million - More than 20,000 jobs created

A HUB position, thanks to: - A strategic geographic location - Good basic infrastructure - A good supply of skilled technical employees - Liberal economic policy - A culture of entrepreneurship

II – The Internet:

A true social phenomenon - Exponential growth of around 135% (between March 2005 and March 2006) - More than 315,000 subscribers, compared to 262,000 at end 2005 - More than 3000 Internet cafés operating in the Kingdom - More than 10,000 “.ma” domain names Unrealized potential - Only 30% of businesses connected - Public and private IT spending is only 1% of GDP - Only 90,000 RTC subscribers (390,000 ADSL subscribers at end 2006, up 58% on 2005) - 30,000 households with a personal computer III – Telecommunications

Sustained growth of mobile telephony (since the liberalization of the sector in 1999) - A penetration rate of 53% in December 2006, compared to 41% in March 2005 - More than 16 million subscribers in 2006 - The number of mobile lines has increased by a factor of nearly 30 in five years Fixed telephony has declined slightly - Due to the crowding out effect of mobile services - But, new fixed telephony licenses were awarded in 2005 Other means of communication - GMPCS - VSAT

Key Sector Profiles & Infrastructure Information technology IV â&#x20AC;&#x201C; Development Plans

Continued liberalization of the sector: - Privatization of the former monopoly operator in 2004 - Introduction of competition for fixed telephony in 2005 - The liberalization of VOIP services

The mass diffusion of IT: - A major program to equip schools with computers and network access - Promotion of IT to help upgrade company performance - Awareness-raising on the impact and potential of the technology

Launch of the E-gov (e-government) project: - Many services already available (social security, justice, Finance Ministry, Customs Service, Infrastructure Ministry, Intellectual Property Officeâ&#x20AC;Ś) - A national e-gov gateway site is being developed (to bring government closer to the citizens) - A government intranet (for greater efficiency in State services) GOALS FOR 2012 IT turnover of approximately $9.1 billion in 2012, including 25% in export markets.

The composition by sector is as follows: - Telecommunications: $4.3 billion - Local IT industry: $2.4 billion - Off-shoring: $2.4 billion

The creation of 123,000 new jobs: - 33,000 jobs in the IT industry - 90,000 jobs in off-shoring activities

CASABLANCA TECHNOPARK

THE CONCEPT The Casablanca Technopark was envisaged as • The basis for a national strategy • A permanent link between the public and private sectors • A catalyst for the sector • A framework for the emergence of technology start-ups PROFILE The Casablanca Technopark is • A limited liability company based on a public/private partnership (35% State-owned, 65% owned by institutional investors) • A strategic location in the heart of the economic capital

The key role of the Casablanca Technopark • A nurturing environment for new business projects • A force for regional development • An IT showcase and a focal point for international linkages SERVICES A range of support services allows start-up firms to develop into fully-fledged businesses: • Reception and referral of visitors • Office space for start-ups • Support and advisory services • Coordination of joint activities • High-tech infrastructure • Networking

Key Sector Profiles & Infrastructure Information technology MOROCCO IS N° 1 IN AFRICA

Morocco has been ranked N° 1 in Africa for telecommunications and IT by the International Telecommunications Union. Morocco was also ranked 3rd most popular off-shoring destination among Frenchspeaking countries. Morocco has successfully liberalized the telecom sector, reaching near total network coverage with a wide range of access options. Another reason for the award was success in attracting investment to the IT sector through the e-Morocco strategy.

AMERICAN FIRM NETONOMY SUPPLIES CLIENT SERVICE SOFTWARE TO MAROC TELECOM

Maroc Telecom has chosen U.S firm Netonomy to supply it with client management systems that save time and money in the activation of voice and data services, and allow its agencies to order and activate accounts and services.

Sources: • APEBI (the industry association) • Technopark of Casablanca • ANRT ( the telecom regulatory agency, in its most recent report on the ICT sector) • Le Matin newspaper • Reporter newspaper

SUCCESS STORY

CISCO SYSTEMS MOUNIR ABDERAHMAN â&#x20AC;˘GENERAL MANAGER

What prompted your decision to invest in Morocco? Morocco is experiencing rapid growth and change in the IT sector. Our decision to open an office was largely motivated by the substantial growth potential right across the sector, but also by the solid commitment of Cisco Systems to participate in the current boom of economic and social development in Morocco. What are your trading relationships with the United States? Cisco Systems offers IT solutions based on high value-added networks requiring the importation of both products and services from the United States.

How do you evaluate business environment trends in Morocco? Our assessment of the Moroccan market is that it is very promising, based on the fact that we have been experiencing rising turnover locally for several consecutive years. Where does your sector stand relative to the social and economic development priorities of Morocco? Our approach to the Moroccan market is to create synergies with the various public or private operators by working with them on top priority missions and projects. We position ourselves as their catalyst and partner in each economic sector, contributing our experience and know-how. Economic and social development requires upgraded IT networks, and it goes without saying that Cisco Systems, as the world leader in the field, will play a major role in improving the IT capacity of the various economic operators - thereby making Morocco more attractive to foreign investors. What does the future hold for you in Morocco? Cisco activities in Morocco are not limited to commercial services. We are also pursuing training initiatives through our Network Academy program.n 53

Key Sector Profiles & Infrastructure Information technology

CONTACTS

http://www.apebi.org.ma/ Association of IT professionals

http://www.mmsp.gov.ma/egov/index.asp E-government web site http://www.maroctelecommerce.com/ On-line purchasing service provider http://www.casablanca-technopark.ma/ Casablanca Technopark http://www.itmaroc.com/ IT news in Morocco

http://www.infomagazine.ma/ Directory to the computer industry in Morocco

http://www.anrt.net.ma/ Moroccan Telecommunications Regulatory Agency

http://www.septi.gov.ma/ Government department responsible for postal services, telecommunications and IT

Offshoring

Key Sector Profiles & Infrastructure Offshoring

INTERVIEW

SICCAM (Moroccan International Call Center Trade Show) EL OUAHDOUDI MOHAMED • PRESIDENT

Morocco has invested heavily in infrastructure and training in response to rising demand from European commercial partners. The Emergence Plan, the Moroccan government’s industrial development strategy, has made offshoring a top priority sector at precisely the moment that the Morocco/United States free trade agreement is being implemented…

Given these auspicious circumstances, do you think the American market will be attracted by Moroccan offshoring services? Why not? It all depends on the Moroccan services catalog, which will have to be precise and well-adapted to the borderless American IT and client relations markets. In the globalized world of today, the American leaders in the sector are actually already present in Morocco through their European subsidiaries. When the American parent companies are approached regarding a direct relationship with Moroccan providers, they always respond favorably, and sometimes more favorably than they do to European pitches. In the American market, there are niches in which Moroccan BPO and client relations operators can succeed. And I would add that Moroccan firms should be taking advantage of the Moroccan call centers to begin testing the U.S. market for their products or

services. That’s how the Moroccan sector can raise its profile in the vast North American market and become both buyer and seller in that market.

Do American investors come up against obstacles in the offshoring sector? And if so, how can they be overcome? If there are obstacles, they’re of a cultural variety. The Moroccan image of America is inevitably influenced by current events, by the conflicts of the day… And in America, lack of awareness of Moroccan market potential is very widespread. But when businesspeople from the two countries meet, they immediately find opportunities to do business. That’s why it’s important to organize more trade missions in both directions: only first-hand experience on the ground can influence the commercial decision. And the success of those contacts requires faultless planning, starting with the mastery of English, a skill that needs considerable strengthening. The reinforced teaching of English is one of the most urgent investments that private companies and the government need to be making in Morocco, in my view. The basics can be learned in Morocco, and fluency attained through extra training in North America, that’s the best way to go. Is there potential for American investments in the sector in Morocco? When you start from scratch in targeting a new market, there’s nothing but potential to be realized. And that’s the case of the BPO and client relations fields. In the IT and client relations fields, there’s enormous growth potential, although Morocco isn’t starting from nothing, we already play host to the leading North American companies in the sector (Dell, AOL, SITEL, Clientlogic…). We need to take advantage of these success stories in approaching American operators with business proposals. The first player to seriously target Morocco will pave the way for the others. The geostrategic location of Morocco makes it an ideal partner for American firms interested in the African, Arab and European markets. As President of SICCAM, tell us about what the show can do to deepen trade with the United States…and how you see the show developing in the coming years? The SICCAM is in its 4th year, with the next edition scheduled for 2007 in Casablanca. It’s an internationally recognized event, and last year the visitors included the CEO of a large American call center group who was impressed by the range of services on offer in Morocco and by the potential for growth. We’ve also begun working with Canadian professionals in the client relations sub-sector.

Key Sector Profiles & Infrastructure Offshoring This global focus has inspired us to launch an international call center section, as part of the fourth SICCAM, to bring together representatives of every continent in the field of client relations and BPO. We’re planning several visits to North America to promote SICCAM, as well as a trade mission that will allow North American businesspeople to discover the Moroccan sector. The official languages of SICCAM already include Arabic, French and Spanish, and now we’re adding English.n MAJOR PLAYERS IN THE MOROCCAN CALL CENTER INDUSTRY

Clientlogic • Sitel • Dell • Accolade • Webhelp Phone Assistance • Strategy Call • Outsourcia Transcom WW • CRM Value • B2S • Phonéo • Atento Grupo Connecta • Euro Call ….

OFF-SHORING: A SUCCESS STORY OF THE MOROCCAN ECONOMY

Call center off-shoring in Morocco has grown spectacularly in recent years, making the Kingdom the leading base for French-speaking call centers in Africa. Nearly 150 centers employing 15,000 operators on multiple sites manage the client relations needs of local and international entities, including banks, government agencies, and large corporations. Cities such as Marrakech and Fès, and soon Oujda to the East, are emerging as call center destinations, in addition to established sites such as Casablanca, Rabat, and Tangiers/Tetouan.

Morocco is set apart from the competition by its presence in the Spanish market, based on geographic proximity and a substantial Spanish-speaking population in the north. Advanced telecommunications infrastructure is another factor in Moroccan competitiveness and the successes already achieved in the global marketplace. Morocco is committed to improving its strong market position by continuing to expand and deepen the range of services on offer.

A HIGHLY COMPETITIVE RANGE OF SERVICES AND A TOPSHELF OFF-SHORING ENVIRONMENT • World class infrastructure and services

- Four specialized off-shoring zones targeting rapid growth through top quality services and infrastructure in compliance with international standards (CasaShore, RabatShore, TangerShore, MarrakechShore). Rent is no more than $10.12/m2/month. - A top-notch range of telecom services: guaranteed commercial and technical SLA and a cost structure matching the most competitive destinations - Pre-equipped “ready for output” offices, plus business support services provided on-site by renowned international operators

• Qualified staff and tailored training

- The government is committed to training 100,000 engineers and managers and 8000 Spanish speaking graduates by 2013-2015. - A sum of approximately $5748 will be allocated to firms for the training of each new recruit

• Sectoral incentives and first-mover advantages

- Dramatic and exceptional income tax (IR) relief with a flat rate, a special deal for expatriates, and tax exemption for the first hire - Company tax (IS) reduced to 0% and a maximum customs duty of 2.5% - Simplification of administrative procedures through the creation of a government service office in each zone; full support for each operator from the day of arrival, and provision of a company registration service. Source: Ministry of Commerce and Industry, SICCAM, La Vie Economique newspaper

Key Sector Profiles & Infrastructure Offshoring

THE SICCAM TRADE SHOW

The 4th edition will take place on May 17-20, 2007, in Casablanca.

INSET

The show is four exhibitions in one: call centers - BPO borderless data processing direct marketing.

150 exhibitors and partner organizations 5000 professional visitors 25 conferences and workshops Web site: www.siccam.com

CONTACTS OFFSHORING

http://www.siccam.com/ Moroccan Call Center Trade Show

http://www.maroc-callcenters.com/ Information on call centers in Morocco http://www.itmaroc.com/ IT news in Morocco

http://www.apebi.org.ma/ Association of IT professionals

Cutting Edge Industry

Key Sector Profiles & Infrastructure Cutting Edge Industry

THE AUTOMOBILE INDUSTRY: REAL POTENTIAL

The automobile industry accounts for 5% of GDP, 14% of industrial exports, and 300 companies with a combined turnover of $2.3 billion. The assembly of private and light utility vehicles is carried out by SOMACA, which currently processes the CitroĂŤn and Renault brands of utility vehicles as well as Renault private vehicles. Heavy vehicle assembly also takes place at brand facilities based in Morocco (DAF, Usuzu, MAN, Iveco, Mercedes, Mitsubishi, Nissan, Volvo and Renault). Bodywork services are offered by local operators in partnership with international firms such as Marrel, AYATS, Caetano, Hispano and Irizar. Investment in the sector surged 348% between 1996 and 2003, rising to $114 million, compared to $25 million in 1996. The growth was fueled by the launch of the low-cost car project, tax reform, and the spread of quality certification procedures.

Automobile Parts Manufacturers: Export growth in the 2015 timeframe

The automobile sub-contracting sector comprises 60 firms and 28,000 employees, concentrated primarily in the Casablanca-Rabat area and in the Tangiers Free Zone. The strategic geographic location of the Moroccan parts manufacturers allows them to supply 28 client assembly lines in France, Spain and Portugal (all less than three days from Tangiers) for an annual production of 6.7 million

vehicles. Some $69 billion of parts and raw materials is consumed annually by these 28 sites, and the potential Moroccan share is as much as $18 billion by 2015. The domestic market represents 65% of sector sales and is characterized by rising production that is highly correlated to exports. SOMACA

The development of the Moroccan automobile industry began with the creation in 1959 of a private and light utility vehicle assembly company: the Société Marocaine de Constructions Automobiles (SOMACA). With a total capacity of 60,000 vehicles per annum, SOMACA has been turning out between 15,000 and 20,000 units annually over the last decade. THE LOGAN PROJECT

The Logan will be the cheapest private car on the market ($8250 tax included), and the assembly line required an investment of $38 million. The sales target is 30,000 units par annum, including 50% exported to the Arab countries (vehicle exports are covered by the “quad” free trade agreement between Morocco, Tunisia, Egypt and Jordan). The Strengths and Opportunities of the Sector

- Flexibility in adapting to new markets - Improved management techniques have been adopted by 20 firms through the Euro-Maroc Entreprises program - Eligibility for Hassan II Fund subsidies for land purchase and construction. - Increased awareness of the importance of standardization and quality management, and of geographic and cultural proximity to Europe. - The growth of the domestic automobile market - The desire of European Union parts manufacturers to relocate (to cut costs) - The short-term compensation agreement that protects margins - Tariff elimination over the long term and its role as an incentive for business upgrading. - The privatization of SOMACA

The well-established vehicle assembly and parts industries, servicing both domestic and export markets, offer considerable potential for growth. This growth potential is backed by a strong 63

Key Sector Profiles & Infrastructure Cutting Edge Industry vision for the sector based on three main priorities: the long-term success of the assembly industry, the upgrading of the parts and sub-contracting industry, and the development of upstream research and development.

Sources: • AMICA (the industry association) • Ministry of Finance and Privatization • Economic Section of the French Embassy • Emergence Plan • CGEM (the Moroccan Employers Federation) CONTACTS AUTOMOBILE INDUSTRY

http://www.amica.org.ma/ Moroccan Automobile Industry Association http://www.tomobile.net/ Leading Moroccan automobile gateway

THE ELECTRONICS INDUSTRY: A COMPETITIVE SECTOR

The Electrical and Electronics Industry (EEI)

The EEI is focused on six main sub-sectors: wiring and cables, electronic components, electrical distribution equipment, electrical batteries and storage devices, electric devices and lamps, and electric transformers and generators. The sector has been increasing production, investment and exports (nearly 80% of production is exported), and the potential for future growth is obvious, fueled by the spectacular worldwide spread of information technologies that rely on electronic components. New investment is attracted by the high growth potential of the sector, a highly qualified workforce, a resolutely export-oriented approach, diversified upstream industries, and the presence of major international players (ABB, ST Microelectronics, Nexans, Ingelec, Thales, Alstom, etc.).

The confidence shown in Morocco by these multinationals is testimony to the importance of the sector in the Moroccan economy and its competitiveness.

Excellent Prospects

The electrical and electronics sector will continue to grow thanks to: - The growth of the automobile sector, which will generate increased demand for electrical batteries and storage devices and automotive wiring; - The investment incentives offered by the State, especially via the Hassan II Fund for Economic and Social Development; - The expansion of electronic component sub-contracting, in which Morocco is becoming a global hub. - A standardization program intended to bring even more Moroccan firms into compliance with international quality norms, thereby enhancing their penetration of world markets. Source: Fenelec (the industry association)

Key Sector Profiles & Infrastructure Cutting Edge Industry

AIR TRANSPORT

Morocco has 15 domestic and international airports with a combined traffic of seven million passengers annually and considerable freight traffic. Airport infrastructure: quality improvements and expansion in response to growth

An ambitious Airport Authority (ONDA) five-year development plan aims to prepare the aeronautics sector for changes in its commercial environment and the challenges of the next decade. The plan also forms part of the national tourism promotion strategy, which has set an objective of 10 million tourists by 2010.

In all, $365 million is being invested in the development of airport capacity, the quality management program, and the air transport safety program. Highlights: - Extended radar coverage - Radio navigation - Radiocommunication and telecommunication - Fire risk prevention measures and rescue procedures - Other equipment and major works

The Open Skies agreement with the European Union: Morocco is the first non-European signatory

The Open Skies agreement between Morocco and the European Union has opened Morocco up to European carriers as part of the plan to reach 10 million tourists by 2010. American carrier Delta Airlines already offers a New York (JFK)/Casablanca service operated under a code-share arrangement by Royal Air Maroc. The Moroccan policy of airspace liberalization that began in 2004 has seen air traffic grow by 15% (national) and 22% (international) between 2004 and 2005. A FAST-GROWING AIRCRAFT COMPONENT INDUSTRY

A new 10,800 m2 aeronautic cabling factory built by the French company Labinal (Safran group) near Rabat was inaugurated in June 2006. The companyâ&#x20AC;&#x2122;s first unit is located in Tangiers, and it is also a partner with Boeing and Royal Air Maroc in Matis Aerospace, a producer of electrical cabling harnesses.

Another Safran group subsidiary, Aircelle (aircraft engine mountings and composite techniques), recently created a Moroccan entity, Aircelle Maroc, which is to invest $15 million over five years in its facility at the Nouaceur Technopark (near the Casablanca international airport). The six-hectare complex will have a staff of 350 engineers and technicians.

Safran, a giant of the global high technology market, is active in aeronautic and spatial propulsion, aeronautic equipment, defense and security, and communications. The group employs a workforce of 58,000 in more than 30 countries for a turnover in excess of $13 billion. The Nouaceur Technopark also plays host to a 38,000 m2, $12.6 million project of the French group Creuzet AĂŠronautique. The project comprises two units producing high technology components for aircraft and helicopter engines, and has generated 250 jobs.

Key Sector Profiles & Infrastructure Cutting Edge Industry MOROCCAN LOW-COST CARRIERS

JET4YOU, a new phase of expansion

The first private Moroccan low-cost airline, Jet4You, has been using the NewSkies reservation system (developed by U.S. firm Navitaire and adopted by the largest low-cost operators worldwide) to market its flights since September 2006. Tickets can be purchased on-line (www.jet4you.com), at airport sales offices, affiliated travel agencies, and via a call center. Jet 4You serves a number of destinations in Europe and Morocco with three Boeing B737-400 aircraft. Jet4You is the eighth airline (and the first outside Europe) affiliated with TUI fly-team. The TUI group is the fifth largest European tour operator, and its affiliated airlines remain independent within the group and are managed either directly or by TUI partners. Synergies are maximized by the use of common management systems: fleet management, handling, air operations, engineering, maintenance, logistics and spare parts.

Atlas Blue, a newcomer to the skies

Atlas Blue, a Royal Air Maroc subsidiary and the first Moroccan low-cost airline, was created in May 2004 to reinforce the Vision 2010 tourism strategy. The company serves France, Italy, Belgium, Switzerland, England and Spain with nine Boeing 737400 and Airbus A321 aircraft, and new destinations will be added shortly. It has already served more than two million clients and grown from 19 scheduled flights per week to 94, thanks largely to state-of-the-art performance-based management and the introduction to Morocco of web-based and call center ticket sales, e-tickets, direct flights and promotional fares. Atlas Blue primarily serves Marrakech, but is expanding to cover Agadir, Tangiers, FĂ¨s and Oujda.

Textiles and Clothing

Key Sector Profiles & Infrastructure Textiles and Clothing

TEXTILES AND CLOTHING: A GROWTH SECTOR

The textile and clothing industry is of central importance to the Moroccan economy. Its investment potential is considerable, and it is both the leading source of industrial employment and the top export sector. Some 1673 firms employ approximately 43% of the industrial workforce and produce output worth $2.763 billion. The European Union is the main trading partner for Morocco in textiles and clothing, with 96% of exports and 78% of imports, although 2006 saw breakthroughs in the United States and other non-European markets. The sector covers five types of activity : • Warp and woof • Knitted fabric • Jeans • Sportswear • Household textiles

Increased Asian competition and the need for greater productivity have led to a package of strategic reforms aimed at repositioning and rejuvenating the sector while helping individual firms to adapt to changing market conditions. THE STRATEGIC REFORM PLAN :

• STREAMLINED CUSTOMS PROCEDURES - To ensure rapid supply by Moroccan firms and encourage creativity and competitiveness. • TARIFF REFORM - A package of measures to promote: • The establishment of supply platforms, • Access to raw materials and inputs, • Simplified procedures and competitive sourcing.

• TECHNICAL ASSISTANCE - A joint program of AMITH (the industry association) and ANPME (the small and medium-sized business promotion agency) to improve company management and provide support services. • FINANCE OPTIONS - Two approaches: • A restructuring of commercial debt, • Funding for company upgrading investment projects.

The budget for these initiatives is $569,000 per business.

• A PROMOTIONAL FUND FOR THE SECTOR - The industry association, AMITH, has been allocated an annual promotional budget of $2.27 million for a three-year period. A series of export promotion measures have been taken: • A marketing campaign, • The promotion of joint ventures and investments, • The development of sourcing operations. • INVESTMENT INCENTIVES - The creation of the Hassan II Fund for Economic and Social Development and its allocation of $38.3 million in support of industrial investment. The fund has supported the creation or expansion of a number of textile and clothing production facilities.

- New investment incentives for sector input production: the spinning, weaving, and finishing processes. Sources: Ministry of Commerce and Industry, Amith, le Matin newspaper, l’Economiste newspaper, BMCE Bank

Key Sector Profiles & Infrastructure Textiles and Clothing TWO TEXTILE MEGA-PROJECTS: LEGLER AND FRUIT OF THE LOOM

Two large-scale textile projects by major international operators are currently being implemented in the SkhiratTĂŠmara region of Morocco (between Rabat and Casablanca). The two internationals, the Italian group Legler and its Moroccan partner Atlantic Confection, and American firm Fruit of the Loom, have been granted the use of State land and have received financial support from the Hassan II Fund.

The Legler project, which began operations in September 2006, centers on a denim weaving unit with a capacity of 24 million meters per annum. A spinning unit with a capacity of 9000 tons per annum is also planned. The $85.29 million project will be the largest integrated textile unit in the Arab world and the Mediterranean basin.

Fruit of the Loom (FOL) has set July 2007 as the inauguration date for its new spinning, weaving and dying unit at Skhirat (near Rabat), which will have an estimated export turnover of $170 million from 2008-2009. FOL is also planning to expand its assembly unit at Bouknadel at a cost of $159.2 million.

SUCCESS STORY

FRUIT OF THE LOOM BRIAN KENNEDY â&#x20AC;˘ OPERATIONS DIRECTOR

What motivated your decision to invest in Morocco? - Proximity to the European market - Positive experience of the Moroccan workforce - Economic, social and political stability - Opportunities offered by trade agreements with EU and USA - Governmentâ&#x20AC;&#x2122;s economic policies

What commercial relationships (import, export, production facility) do you have in the United States? All the production from our Moroccan sewing plants is exported to the European market. We currently import a small number of machine parts and accessories from the USA.

How do you evaluate the evolution of the Moroccan business environment? Government economic policy is having a positive impact on the business environment. There is a focused strategy for the textile sector and this is starting to bear fruit. How will the Morocco/U.S. free trade agreement benefit your activities? The FTA has opened the prospect of us exporting a portion of our production from Morocco to the USA. This was a factor in our choice of Morocco as the location for our investment project. If we were to export to the US, it would lead to an expansion of our sewing operation in Morocco. How does your commercial activity relate to the social and economic development priorities of Morocco? Our investment project will make a considerable contribution to

Key Sector Profiles & Infrastructure Textiles and Clothing the Moroccan economy. It will assist the government’s efforts to encourage the establishment of upstream activities in the textile sector and will generate employment for highly trained technical staff. We will continue to operate with the same high ethical standards that have made us an employer of choice in Salé. What are your future plans in Morocco? We are investing $166.7 million in a state of the art textile facility at Skhirat. This investment project will consolidate our position in Morocco and will lead to a significant increase in the number of people we employ.n CONTACTS FOR TEXTILES

http://www.amith.org.ma/ Moroccan Textile and Clothing Industry Association http://www.asmex.org.ma/ Moroccan Exporters Association http://www.ccg.ma Textile Restructuring Fund

http://www.umaq.ma/ Moroccan Quality Association

http://ofppt.org.ma/ Employment Promotion and Professional Training Office http://www.ctth.ma/ Clothing and Textile Technical Center EXPOSITIONS

The “Maroc in Mode” show (the international textile week in Morocco) The “Maroc sourcing” show.

For more information, consult Amith or the Casablanca International Trade Fair Agency (OFEC) at: www.ofec.co.ma

Agribusiness

Key Sector Profiles & Infrastructure Agribusiness

FOOD PROCESSING: A DYNAMIC AND ATTRACTIVE SECTOR

The food processing industry is the second largest processing industry in Morocco after the chemicals and para-chemicals sector. It includes 1952 companies, and generates output of $6.78 billion, value-added of $2.07 billion (31% of GDP), and exports worth $1.14 billion.

The sector covers nearly all branches of agricultural production: meat, fish, fruit and vegetables, fats, milk products, cereals, flour and grits processing, other food industries (coffee, tea, chocolate, spices), beverages, and tobacco. I- ASSETS AND OPPORTUNITIES:

- A temperate climate, good soil quality, and an allocation of water resources that favors agriculture, - A special program to make State-owned agricultural land available to private entrepreneurs (with the goal of ensuring crop supply locally and raising exports) - Cheap labor in abundant supply,

- Strong growth potential in the domestic market (especially for milk products and beverages), - Government support for certain sub-sectors, especially cereals and fruit and vegetables,

- Proximity to Europe (8 miles) and a close partnership between Morocco and the European Union. Europe has been involved in the Moroccan food processing sector for many years.

- A number of free trade agreements with partners such as the European Union, the USA, and the Arab countries that ensure duty-free access to these markets for various agri-food products

- The presence in Morocco of large multinationals such as NestlĂŠ, Kraft Food, Coca Cola, and Danone. 82

II- A DIVERSIFIED INDUSTRY:

• The Seafood Processing Sub-Sector: Morocco has 3500km of coastline that is reputed to be among the richest fisheries in the world, and 1.2 million square kilometers of territorial waters. Its production capacity has been estimated by the FAO at nearly 1.5 million tons annually, and it is the largest fish producer in Africa. - This sub-sector generates 50% of processed food exports and 12% of total Moroccan exports, - There is a $90 million coastal and small-scale fisheries upgrading plan scheduled for 2005-2009. • The Canned Food Industry - A leading sub-sector in the socio-economic development process, - Production is diversified and export-oriented, - There are real opportunities for foreign investors.

• The Milk Products Industry - This sub-sector is characterized by the strong and longstanding presence of foreign investors and its considerable growth potential, - Milk production has been increasing in both quantity and quality, and a 20-year Milk Production Plan (2000-2020) aims to further raise standards.

• The Beverages Industry - This sub-sector with high growth potential has output worth approximately $564 million (8.3% of the agri-food products sector), and the beverages market is currently growing by 6% annually. Foreign investors are attracted as much by the prospect of producing locally as by the distribution of imported products. “ AGRAM INVEST ” : SUPPORTING THE FOOD PROCESSING INDUSTRY

One of Morocco’s leading private banks, Attijariwafa Bank, and the French cereals group Unigrains are working with six other partners to boost the food processing industry. The Agram fund, initially worth $23 million, aims to increase the added-value of Moroccan products and to support the food processing industry by offering commercial and management advice, financial engineering, and the brokering of partnerships.

Source: Ministry of Commerce and Industry, la Vie Economique newspaper.

Key Sector Profiles & Infrastructure Agribusiness

SUCCESS STORIES -US WHEAT ASSOCIATES GEORGE GALASSO • REGIONAL VICE PRESIDENT FOR EUROPE AND NORTH AFRICA

What prompted your decision to invest in Morocco? The decision was made in the early 1970s, based on the marketing practices and the air transport options prevailing at that time. What are your trading relationships with the United States? US Wheat Associates (USW) is an independent, non-profit professional association, managed by farmers, which works with the U.S. Department of Agriculture to promote American wheat sales around the world. How do you evaluate business environment trends in Morocco? The free trade agreement has transformed wheat trade between the United States and Morocco by making it more competitive compared to the other exporters.

Where does your sector stand relative to the social and economic development priorities of Morocco? USW supported the decision to place wheat in the “sensitive products” category during the FTA negotiations. USW did not demand duty-free access to the Moroccan market, because of the critical importance of wheat in the economy and the Moroccan agricultural community.

USW continues to strongly support the Milling Industry Training Institute (IFIM), thereby ensuring a high level of training for the future of wheat and ground durum wheat in Morocco. What does the future hold for you in Morocco? USW will continue to supply quality services to cereal traders in the Moroccan market.

CONTACTS AGRIFOOD PRODUCTS

http://www.madrpm.gov.ma/ Ministry of Agriculture, Rural Development and Fisheries Email: fenagri_2@menara.ma FENAGRI (National Agrifood Products Federation)

http://www.ficopam.ma/ FICOPAM (Moroccoâ&#x20AC;&#x2122;s Preserved Agrifood Products Association)

http://www.apefel.com/ APEFEL (Fruits and Vegetables Producers and Exporters Association) ASPAM (Moroccan Citrus Fruit Producers Association): Tel: +(212) 22 36 39 46

Energy and Mining

Key Sector Profiles & Infrastructure Energy and Mining

INTERVIEW

MOROCCAN CENTER FOR RENEWABLE ENERGIES (CDER) AMAL HADDOUCH â&#x20AC;˘ DIRECTOR GENERAL

Morocco has built up considerable know-how in the field of renewable energies and is making real progress in solar and wind power. How will the Morocco/United States free trade agreement impact the sector? Morocco has taken a close interest in renewable energies since the first energy crises of the 1970s. The Center for Renewable Energies (CDER) was created in 1982, and since then Morocco has accumulated substantial technical resources and expertise and has launched major projects for rural electrification and energy-efficient electricity production.

Today, given rising oil and coal prices, and our near total dependence on energy imports (more than 97%), there is a strong political will to raise the share of renewable energies to 20% of electricity production by 2012 (including hydraulic) and 10% of total energy production. Moroccan-American cooperation in renewable energies dates back to the beginning of the 1980s. The cooperation program, implemented with the support of USAID, was focused on institutional capacity building and technical assistance, and coincided with the creation of the CDER in 1982. The program also funded the first renewable energies pilot projects implemented in Morocco.

Today, cooperation focuses more on strengthened trade relations and public-private partnerships, and the Morocco/United States free trade agreement aims to reinforce these trends. The current and future renewable energies and energy efficiency programs offer real business opportunities for American companies.

What actions has the CDER taken to attract U.S. investment in the sector? The implementation of a much more aggressive strategic action plan will allow the public and private sectors to invest more heavily in the sector, and the CDER and its partners have begun drafting a specialized Renewable Energies and Energy Efficiency Code to clarify the institutional and regulatory environment of the sector and encourage private investment.

Does the CDER already have project partnerships with U.S. public agencies, industry associations or companies? The CDER has been working with American institutions such as NREL and USAID for years, and the CDER Training Center obtained accreditation from the American entity ISPQ under the supervision of the U.S. Department of Energy. In addition, the CDER is a member of the Partnership for Clean Indoor Air (PCIA), administered by the U.S. Environmental Protection Agency, which focuses on rural health risks in developing countries caused by the pollution of traditional sources of cooking and heating energy. How is Moroccan-American cooperation in renewable energy research and development likely to take shape? It could focus on the creation of new research and development platforms, such as: biofuels, the use of waste material as fuel, decentralized solar powered refrigeration, hydrogen production and the use of fuel cells, decision-making tools, and energy optimization tools for decentralized production. There is great potential for partnership, and our challenge is to realize that potential in the context of the free trade agreement.n

Key Sector Profiles & Infrastructure Energy and Mining

THE GROWTH OF RENEWABLE ENERGIES IN MOROCCO

In 2005, Moroccan crude oil imports reached nearly seven million tons, up 13% from 2004, at a cost of $2.6 billion (up more than 60%). The average purchase price of crude oil, which rose from $36.21 per barrel to $55, was a leading factor in the oil bill. The overall petroleum bill (crude oil and petroleum product imports) was $3.75 billion. Renewable energies are a major component of the Moroccan national energy policy and impact on all the key objectives set out in the policy: Guaranteed supply of energy products; The right to energy; n An optimal cost structure; n The diversification of energy sources; n Environmental protection and energy efficiency. n n

The goal of the Moroccan government is to raise the renewable energies share of national electricity production (including hydraulic) to 20% by 2012. The National Renewable Energies Development Center (CDER), which is responsible for the promotion of renewable energies, aims to achieve this objective through the following strategies:

• Boost private investment and partnerships • Strengthen the CDER role in applied research and the monitoring of technological innovations • Promote the use of renewable energy sources • Preserve natural resources and protect the environment • Consolidate current programs and develop new initiatives • Implement innovative CDER action plans • Create information networks to disseminate knowledge of renewable energies and related technologies as well as energy efficiency.

Key projects already underway include decentralized rural electrification, electricity production and energy efficiency to improve living conditions (especially in rural areas, through electrification and water supply), reduce national energy dependency and preserve natural resources (especially forests). ENERGY EFFICIENCY: Solar water heating An ambitious solar water heater program (PROMASOL) has been implemented with the aim of: 1- Increasing supply to reduce equipment costs, 2- Improving the quality of solar-powered equipment and related services, 3- Ensuring the large-scale adoption of solar water heaters through sectoral demonstration programs and mass media campaigns.

The objective is to double solar water heating capacity in three years to 40,000 m2/year.

Wood energy: This program aims to improve the energy efficiency of traditional heating systems, and has two components: an urban component based mainly in Casablanca and other cities, and a rural component targeting certain provinces for firewood consumption profiles. Optimization of energy use in buildings: The projects currently in the pipeline deal with the optimization of energy use in buildings. Other initiatives cover: • Training for technical staff; • Equipment monitoring; • Communication and awareness raising.

Key Sector Profiles & Infrastructure Energy and Mining Driving forces behind the growth of renewable energies in Morocco:

• The immediate production potential for these forms of energy in Morocco, which has virtually no other resources (Morocco is not yet a producer of oil, gas or coal, although the processing of oil shale may be viable in the medium and long term); • In the current environment of high and volatile oil and gas prices, renewable energies reduce exposure to such risk; • A large potential market, especially for electricity production, hot water or desalinization. The latter niche represents new opportunities for wind powered electricity generation, given limited fresh water resources in some areas. In addition to the local market, Morocco is near other potential markets, including Spain, Mauritania and Algeria; • The government decision to develop renewable energies based on an aggressive and ambitious national strategy; • The successes already achieved (especially wind power farms) that will add momentum to renewable energies across all sectors of the economy; • The increasing tendency to harmonize standards globally; • NGO pressure for environmental protection and socially responsible consumption.

Future prospects for renewable energies in Morocco

The main sectors able to make a significant contribution to renewable energies growth are:

• The energy sector, as the focal point for growth; • The housing sector, as a consumer of equipment (solar water heaters, solar air conditioning) but also due to its potential for energy efficiency; • The tourism sector, since the Azure Plan includes the infrastructure needed to attract 10 million tourists by 2010; • The agriculture sector as an energy consumer for pumping, irrigation, heating, etc. • The industrial sector, as a consumer and producer of energy; 94

â&#x20AC;˘ The drinking water distribution and waste treatment sector, as a consumer and producer of energy; â&#x20AC;˘ The transport sector, as a major oil products consumer. Source: The Renewable Energies Development Center (CDER)

DEAL SIGNED BETWEEN THE MOROCCAN PHOSPHATE CORPORATION (OCP) AND MOSAIC (UNITED STATES)

Sales of Moroccan phosphates and phosphate derivatives leapt 37% to $1 billion in 2006, and one of the major deals contributing to this performance was inked between the Moroccan Phosphates Corporation (OCP) and Mosaic of Minneapolis (a leading producer of phosphate-based fertilizers). Mosaic is closing several of its U.S. granular triple superphosphate factories and will source up to 200,000 tons per annum of this product from OCP subsidiary Maroc Phosphate SA under an exclusive North American marketing agreement.

OIL: A MOVE TOWARD LIBERALIZATION

A series of infrastructure projects in the energy sector are set to raise Moroccan oil storage capacity and facilitate both market supply and oil sector liberalization (scheduled for 2009). New storage units with a total capacity of 300,000m3 have been constructed by the distribution companies of the Jorf Lasfar and Mohammedia ports, and the TangiersMediterranean Special Agency (TMSA) recently approved the construction of a new, 308,000m3 storage facility at the Tangiers-Mediterranean port. In addition, an investment agreement between SAMIR (oil refining) and the Moroccan government provides for nearly $600 million in expenditure for the modernization of the Mohammedia refinery.

Key Sector Profiles & Infrastructure Energy and Mining THE RENEWABLE ENERGIES DEVELOPMENT CENTER (CDER)

The mission of the Renewable Energies Development Center (CDER) is to undertake research on the promotion, development, and marketing of renewable energies; to design relevant procedures and technologies; to demonstrate the economic, social and technical advantages of renewable energies; and to offer technical training. Morocco has substantial renewable energy potential, including extensive sunshine and air power generation capacity. The CDER strategic plan for 2002-2020 sets out a number of measures intended to make the sector more dynamic, as well as the following objectives:

- Raise the market share of renewable energies from 0.24% currently to 10% in 2011 and nearly 20% in 2020 - Reduce energy imports from the more than 22 million TOE (tons of oil equivalent) predicted for 2020 to less than 18 million TOE - Reduce the energy dependency rate from 97% currently to less than 80% - Connect 300,000 isolated rural households to the national electricity grid - Attract $2.17 billion in investment by 2011 - Generate 11,500 jobs by 2011, especially in rural areas - Generate primary energy savings of two million TOE, worth nearly $308 million, by 2011

In terms of environmental issues, the development plan offers new funding possibilities under the Non-Polluting Development Mechanism (MDP), the Carbon Fund, and the World Environment Fund. It will also eliminate 30 million tons of carbon emissions annually. Sources: Le Matin newspaper, Le Reporter newspaper, Environment and Energy Institute of the Francophone Nations (IEPF), Ministry of Energy and Mines, Renewable Energies Development Center (CDER) Strategic Plan.

INTERVIEW

MIHAD MARKET MOHAMED AOURID â&#x20AC;˘ CEO

What are your trade links with the United States? The Mihad Group operates in four different fields: energy, distribution, media, and real-estate development. We are convinced that the quality of American products and know-how can greatly assist our group in facing global competition.

How do you perceive the evolution of the business environment in Morocco? After five years in business, we have noticed big improvements in administrative processes and the justice system. This improvement has positioned Morocco as a platform of opportunities for large companies and other potential investors.

How does the free trade agreement impact your business? The American market represents 300 million consumers and imports of $1.5 trillion annually. This is both a great opportunity and a challenge for Moroccan companies. Although the U.S. market is very demanding in terms of quality, we remain very confident that our group is capable of finding niches. How does your activity relate to Moroccan economic and social development priorities? Our group has always tried to maintain a culture in which the watchword is economic and social development. Our North American experience allowed us to offer a healthy and attractive environment to all our employees, and later, to encourage our subsidiaries to sponsor cultural and social activities. Today, the Mihad Group is working to make the Desert Music Festival into an event of international standing. We are also participating in the launch of the Ksar El Fida Museum in the desert at Rissani, helping promote artists from southern Morocco at the international level, and sponsoring other activities in regions such as MĂ¨knes, Ouarzazate, and Agadir.n

I. AN OVERVIEW OF THE MINING SECTOR

1. KEY STATISTICS: - 75% of world phosphate reserves - 3rd largest raw phosphate producer worldwide (20% of global production) - Top world phosphate exporter across all product categories (28% of the global market) - Top silver producer in Africa and 14th worldwide - Top lead producer in Africa and 11th worldwide - 2nd largest zinc producer in Africa and 16th worldwide - 4th largest barium producer worldwide - 6% of GDP (including processed derivatives) - 18.6% of total Moroccan exports by value and 72.8% by volume (2004 figures) - In 2005, Morocco produced 27,254 million tons of phosphates and 5895 million tons of phosphate derivatives The mining sector represents:

• Turnover of $2.7 billion in 2005, including $2.17 billion in exports • $343 million in investments (2005)

• 35,000 employees and an estimated $571 million in salaries (2005) • 70% of rail and road traffic • 75% of maritime traffic

• 20% of energy consumption 2. MAIN PRODUCTS:

Morocco is first and foremost a major producer of phosphates and phosphate derivatives, and holds half of the global phosphoric acid market. The OCP (the National Phosphate Corporation) has been actively partnering with international groups in the last few years. Morocco also produces various minerals (such as gold, silver, cobalt, fluorine, salt, barium, and manganese…) and processes part of its output.

Onhym

3. REFORMS AND ACTION PLANS

The authorities have modernized the regulatory framework of the mining sector through the following initiatives:

a) The launch (in 1997) of a National Geological Cartography Plan (PNCG) that aims for complete geological coverage at the scales of 1/100,000 and 1/50,000. b) The adaptation of the legislative and regulatory framework through a new draft Mining Code that is attractive to investors. c) A new legal status for miners based on the new Labor Code. d) Greater promotion of the mining industry and the encouragement of joint ventures and partnerships.

Mineral Production Substances

2005 (t)

Metal and Metal Derivative Production Substances 2005 (t)

Zinc

151,270

Silver

Lead Iron

59,920 8130

Copper

12,650

Manganese

11,270

Cobalt

13,030

Barium

475,575

Salt

319,900

Fluorine Bentonite

Fullers’ earth Ghassoul Feldspar

114,740 64,350

Lead Gold

Copper matte

54460

185,735

1,786 714

Cathode cobalt

2165

Copper sulfate

192

Zinc oxide

Nickel sulfate Arsenic

29,060

2110 499

8939

Source: Ministry of Energy and Mines.

1010

27,795

Source: Ministry of Energy and Mines.

A few highlights of the Mining Code

• The inclusion in the mines category of certain mineral substances considered to be of industrial usage (except for construction materials) • Streamlined administrative procedures; • Mining investment guarantees;

101

Key Sector Profiles & Infrastructure Energy and Mining • Authorization to explore on large land areas prior to the issuing of the exploration permit; • The awarding of permits to mining companies regardless of the number of permits or the land area involved (subject to adequate technical and financial capacity) • Environmental protection to ensure sustainable development. A Profile of the National Hydrocarbon and Mines Agency (ONHYM) www.onhym.com

The National Hydrocarbon and Mines Agency (ONHYM), created in 2003, is a public body that took over the missions of two previous agencies, BRPM and ONAREP, with respect to oil and mineral exploration and the exploitation of all oil and mineral reserves except phosphates. The two disestablished agencies played a key role in developing mines across Morocco and attracting numerous international oil exploration firms with on-shore and offshore interests. The mining exploration activities of ONHYM have three main foci: • Precious metals (Gold): This is the single largest activity of the agency and covers numerous promising exploration areas. • In addition to existing veins, new sites have been identified (in the provinces of Tiznit and Tata, Ouarzazate, Taroudant, Bouarfa, and the southern provinces)

• Base metals: Priority is given to exploration for multi-metal deposits. Exploration is also underway for lead, zinc and copper. A multi-metal deposit discovered by ONHYM in the Marrakech region is currently being developed with local and foreign partners. • Industrial rocks and minerals: Exploration has focused on the bentonite of the tertiary basins of Nador and on the kaolin, K-feldspar and mica of the Oulmès region (near Rabat).

102

â&#x20AC;˘ Sector promotion and partnerships Sector promotion and joint ventures are strategic priorities for ONHYM, and mineral exploration is conducted in partnership with a number of local and international operators, including American (MI Drilling), French, Spanish, and Senegalese entities.

INTERVIEW

ONHYM AMINA BENKHADRA â&#x20AC;˘ GENERAL MANAGER

The international context of the sector is quite turbulent and characterized by high energy prices. What is the state of oil exploration in Morocco? Morocco has sizeable sedimentary basins that are unfortunately under-explored, both onshore and offshore. Most of the limited number of onshore drillings took place in the 1960s and 1970s based on surface structures or poor-quality seismic work. The offshore Atlantic and Mediterranean basins, with their thick sedimentation and great geological diversity, have only 32 wells, of which most are situated in relatively shallow water.

103

Key Sector Profiles & Infrastructure Energy and Mining A period of considerable exploration and drilling in the 1980s gave way to a sharp reduction in activity in the 1990s, in Morocco as elsewhere, due to consistently falling oil prices. ONHYM is convinced of the potential of Moroccan geological formations and has intensified its program of basin evaluation. Over the last five years, these geological, geo-chemical and seismic studies have demonstrated the potential for the accumulation of hydrocarbons in the Moroccan substructure. The various studies conducted have been widely distributed around the world, and this sustained promotional effort has led to the resumption of onshore and offshore oil exploration in Morocco. There are currently 21 companies undertaking oil exploration in Morocco.

Recent amendments to the Hydrocarbon Code make the Moroccan legal framework one of the most attractive and competitive in the world, offering advantageous tax provisions and an improved balance between risk, profitability and competitiveness. This is especially true for deep-sea exploration, which is increasingly regarded as a priority by multinationals.

Is the free trade agreement between Morocco and the United States increasing American investment and bilateral trade?

The Morocco/U.S. free trade agreement covers almost every sector of commercial activity, and offers Moroccan firms access to a market of more than 300 million consumers. It can only further strengthen bilateral trade relations, provided that our companies adapt to non-tariff market entry requirements (sanitary and phytosanitary norms, legal norms, etc). Already, 120 American firms are operating in the main branches of Moroccan industry, including a number of multinationals. The strategic location of Morocco, at the crossroads of Africa, Europe, and the Near East, offers American investors an ideal platform to access larger markets.

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What priority does Morocco give to gas exploration and the promotion of gas consumption, especially for industrial uses?

We make no distinction between oil exploration and gas exploration. Currently, our gas production is sourced from two fields. In exploring the Gharb gas field, ONHYM has developed a body of expertise based on new technologies such as amplitude versus offset analysis (AVO). The analysis of the resulting seismic data and the application of new exploration methods to the various bright spots identified has increased the success rate and therefore the output of the field, which is entirely consumed by local industry. The biogenic gas produced is transported by pipeline to the Sidi Kacem refinery and to the bottling facility. The Essaouira field, for its part, produces gas condensate that is piped to the Moroccan Phosphate Corporation (OCP) for use in drying phosphates. ONHYM has just launched its first 3D seismic imaging campaign in this zone to improve the productivity of what is potentially a sizeable field, following the decision of its sole regional client, OCP, to adopt a new strategy based on modern technologies and double its gas consumption. Apart from energy, which mining products are of interest to American investors? Morocco has great mining potential. In addition to phosphates, of which Morocco has 75% of world reserves and is top-ranked exporter and third-ranked producer worldwide, other products include lead, zinc and copper ore, precious metals such as silver (top producer in Africa), and numerous industrial substances.

ONHYM conducts exploration activity independently or in partnership with other operators. We are open to any possibility of cooperation with American investors in the field of mining exploration, since much remains to be done. Moreover, there are many opportunities for joint ventures with private Moroccan operators for products in demand on the U.S. Market.n

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Key Sector Profiles & Infrastructure Energy and Mining CONTACTS ENERGY AND MINES

http://www.one.org.ma/ Moroccan Electricity Corporation

http://www.mem.gov.ma/ Moroccan Ministry of Energy and Mining http://www.ocpgroup.ma/ Moroccan Phosphate Corporation http://www.marphocean.com/ Phosphoric Acid Shipping Company

http://www.cerphos.com/ Mineral Phosphates Research Center http://www.fdim.ma/ Mining Industry Federation

http://www.onhym.com/ National Hydrocarbon and Mines Agency http://www.cder.org.ma/ Moroccan Renewable Energy Center http://www.mem.gov.ma/ Moroccan Ministry of Energy

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Finance, Banking and Insurance

Key Sector Profiles & Infrastructure Finance, Banking and Insurance INTERVIEW

ATTIJARIWAFA BANK INVESTMENT AND FOREIGN TRADE PROMOTION UNIT ABDESLAM TAADI â&#x20AC;˘ DIRECTOR

What are the prospects for increased foreign trade and investment, especially with the United States? Attijariwafa Bank considers the United States to be a priority market offering considerable potential for growth. In line with this vision, Attijariwafa Bank recently signed a strategic partnership with U.S. Eximbank that will facilitate a joint, targeted approach to North and West Africa for infrastructure project financing, small and medium-sized business financing, and, above all, increased bilateral and regional trade under the FTA. How does Attijariwafa Bank service international investment in general and American investment in particular? Attijariwafa Bank offers a wide range of products and services to foreign investors: sectoral investment funds (tourism, agribusiness, infrastructure), regional investment funds (the Igrane fund for the Souss-Massa-Draa region), classic financing options (leasing, real estate, etc.), structured financing, risk capital and development capital, and dedicated structures like our offshore bank in Tangiers, our European subsidiary, our corporate desks in Madrid, Paris, Milano, Brussels, etc., and our operation in China. In addition, Attijariwafa Bank is the only Moroccan financial institution with a dedicated assistance unit for foreign investors.

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This unit offers services such as customized economic and regulatory information, briefings on the Investment Charter and investment incentives, company registration assistance, business matchmaking, creditworthiness evaluations, financing advice, and the opening of resident and non-resident bank accounts.

Above and beyond these universal products and services, American investors get the extra benefit of services offered through our strategic partnership with U.S. Eximbank.

Are there products specific to certain sectors or priority development zones? Yes, there are. In addition to the products and branches already mentioned, we have subsidiaries in Tunisia and Senegal (and soon Algeria), and we are about to open new corporate desks in Istanbul and Dubai.

Are there special benefits for American investors apart from banking products? In addition to our partnership with U.S. Eximbank and our close relationship with the large U.S. banks such as BONY, Citigroup, Wachovia, etc., we have an Investment and Foreign Trade Promotion Unit focused on advice and high value-added services for foreign investors.

How is the FTA affecting bilateral trade and investment? Weâ&#x20AC;&#x2122;re expecting a very positive impact: strong growth in bilateral trade, especially Moroccan exports, and the FTA will bring jobs and investment to both countries. The financial sector will play a key role in increasing trade, notably by offering a greater range of products and services. Financial and insurance services will also grow considerably, particularly in the area of e-commerce and ebanking. Partnerships like that between Attijariwafa and U.S. Eximbank will become more common in the future.n A MODERN AND EFFECTIVE FINANCIAL SYSTEM

The Moroccan financial sector has developed rapidly over the last 15 years and is now an efficient provider of business finance, thanks to inter-bank competition that has reduced transaction costs. An ambitious regulatory and institutional reform process has resulted in: - One of the most modern financial systems in North Africa - Well-capitalized and healthy private commercial banks with a limited exposure to risk. 109

Key Sector Profiles & Infrastructure Finance, Banking and Insurance - Rapid adjustment to an open, volatile and competitive environment. - Ongoing improvements to the regulatory framework, and a monitoring system that is in step with the needs of society and business as well as international standards. - Strict enforcement of transparency and the monitoring of accounts and funds transfers, plus continually upgraded information systems and financial reporting requirements.

Moroccan banking sector overview There are approximately 20 banking institutions in Morocco. The State owns a considerable holding in two commercial banks (Attijariwafa and Crédit Populaire du Maroc [CPM]) and two specialized banks (Crédit Immobilier and Hotelier [CIH]; and Caisse Nationale de Crédit Agricole [CNCA]). Foreign banks are majority shareholders in five local banks, including: • Société Générale of France, which owns 52% of Société Générale Marocaine de Banques (SGMB), • BNP Paribas of France, which owns 53% of Banque Marocaine du Commerce et de l’Industrie (BMCI), and • Crédit Lyonnais of France, which owns 51% of Crédit du Maroc (CDM).

Direct foreign subsidiaries include the U.S. bank Citibank Maghreb and the Jordanian bank Arab Bank Maroc.

The top three banks - Attijariwafa, CPM, and BMCE - control 70% of the sector’s assets, 74% of all banking deposits, and 66% of sector loans. Commercial banks enjoy a comfortable position in terms of deposits obtained at very low cost and have the lowest rate of non-performing loans (NPLs), whereas specialized banks are unable to raise funds for project financing at cheap rates and have higher NPL ratios.

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Key Sector Profiles & Infrastructure Finance, Banking and Insurance Local underwriting institutions Several underwriting institutions, such as Dar Ad-Damane and Caisse Centrale de Garantie (CCG), work closely with banks to facilitate small and medium-sized enterprise (SME) financing.

â&#x20AC;˘ Dar Ad-Damane recently launched two new credit lines for sectoral restructuring, RENOVOTEL for hotel renovation and FORTEX for the upgrading of firms in the textile and garment manufacturing industry. For more information, please consult: www.dardamane.ma â&#x20AC;˘ The Caisse Centrale de Garantie (CCG) can guarantee up to 50% of new project financing for companies that cannot obtain surety bonds through regular commercial banks; it also guarantees exports (up to 50%) and company restructuring loans (up to 60%). For more information, please consult: www.ccg.ma

A partnership with the European Union and the World Bank The close and multifaceted partnership between Morocco and the European Union has resulted in intense economic and financial cooperation (the EU is the leading client, supplier and economic partner of Morocco). Further, the Moroccan financial system is the focus of a World Bank assistance program designed to promote efficiency through an improved regulatory framework governing banks, insurance companies, and financial intermediation and risk management. Ultimately, all these measures are expected to increase the attractiveness of Morocco for foreign direct investment.

What the sector offers to foreign investors 1- Guaranteed repatriation of non-invested funds, subject to providing the Foreign Exchange Office with details of the financing procedures adopted and the final status of the investment project. This information can either be sent directly to the Foreign Exchange Office or indirectly through a bank, lawyer, or notary. 2- Unrestricted currency exchange when importing merchandise, even when the importation itself requires prior approval of the Foreign Trade Ministry.

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Key Sector Profiles & Infrastructure Finance, Banking and Insurance 3- A completely liberalized goods and services export system requiring no prior approval from the Foreign Exchange Office.

Export promotion expenses (business trips, trade shows, trade fairs, advertising…) can be freely transferred abroad by debiting a convertible (foreign/local currency) bank account. Such accounts are credited with: • 20% of foreign currency proceeds from merchandise exports, • 10% of foreign currency proceeds from services exports.

Investment Guarantees Morocco has signed agreements with numerous countries to protect foreign investment against the risk of nationalization or expropriation, and such provisions are included in the Morocco/United States free trade agreement. Non-double taxation treaties have also been signed with a number of countries, including the United States.

Sources:Commerce, Industry and Economic Upgrading Ministry, Le Journal newspaper, Le Reporter newspaper,

CASABLANCA STOCK EXCHANGE

The main index, MASI® Float, increased by 122.58% since 31 October 2003, reaching 8431.06 points.

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The market capitalisation has skyrocketed, reaching DH 384 billion, compared to DH 111 billion three years earlier, an increase of 246%.

The traded value has significantly increased, reaching DH 110 billion, compared to DH 41 billion three years earlier, an increase of 166%.

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Key Sector Profiles & Infrastructure Finance, Banking and Insurance CONTACTS BANKING AND FINANCE

http://www.finances.gov.ma/ Moroccan Ministry of Finance and Privatization http://www.casablanca-bourse.com/ Casablanca Stock Exchange

http://www.cdg.ma/ Caisse de D茅p么t et de Gestion (CDG) group

http://www.fnam.ma/ Moroccan Federation of Microcredit Associations http://www.oc.gov.ma/ Foreign Exchange Office

http://www.bam.net.ma/ Barid Al Maghreb (Moroccan postal service) http://www.maroc-finance.com/ Moroccan finance gateway

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Pharmaceuticals

Key Sector Profiles & Infrastructure Pharmaceutical Industry

INTERVIEW

MOROCCAN PHARMACEUTICAL INDUSTRY ASSOCIATION (AMIP) MR. ALI GHANDI • DIRECTOR GENERAL

“The free trade agreements are generating many opportunities for Morocco”

The structure of the sector has been reinforced by the new Pharmaceutical Code. How can Morocco now benefit from the opportunities generated by the various free trade agreements, especially the FTA with the United States? In 2003, more than 612 tons of Moroccan pharmaceuticals in all therapeutic classes were exported to the European Union, and particularly France, Belgium, the Netherlands, and Italy, for turnover of $6.3 million, which represents some 37% of total exports. Moroccan exports to the Maghreb Arab Union countries, mainly Algeria, were worth $5.6 million. Overall, the Moroccan pharmaceutical industry exports around 10% of output, a proportion that is considered very low, but the existence of underutilized production capacity means that much larger export flows are possible. Furthermore, industry marketing skills are tried and tested, and product quality is undisputed. There are clearly major opportunities due to the new Pharmaceuticals Code and the free trade agreements, so long as these developments are backed by institutional support for marketing efforts. Morocco has significant know-how, recognized by the World Health Organization, and that has allowed the pharmaceutical industry to take a share of the European market. Internationally, Moroccan 120

products are certified by numerous European, Asian and African nations. The free trade agreements have the potential to play a decisive role in export growth, particularly for the American market, which alone represents half of world pharmaceutical sales. Nevertheless, the Moroccan industry will have to invest very heavily to raise production capacity and develop its marketing tools in the face of strong American and international demand. Thanks to the new Pharmaceuticals Code and its innovations, these investments should become a reality. In which niches of the pharmaceutical sector is Morocco competitive and able to draw on recognized know-how? As I said, Morocco has significant know-how in pharmaceutical production. The multidisciplinary nature of the Moroccan pharmaceutical industry has carried it to the number two ranking in Africa after South Africa. Still, to become even more competitive, the industry needs to enter into synthetics partnerships with raw materials producers. Such partnerships may take the form of an equity stake in Moroccan laboratories and will allow local firms to benefit from preferential raw material prices, reduced unit costs, and increased value-added on finished products, which will then be more competitive in world markets. Can access to the American market promote pharmaceutical exports to the United States? Obviously. However, laboratories need to take two fundamental questions into account: first, the need to greatly increase production capacity given heavy demand, and to invest colossal sums in marketing to ensure satisfactory sales. Second, the fact that access to the American market requires FDA accreditation, and that the protectionist procedures of the FDA can be considered restrictive. Moroccan laboratories seeking to launch their products in the U.S. market have to spend a long time conforming to the standards before filing their FDA authorization papers.

How can American investments benefit the Moroccan pharmaceutical sector in the areas of production, product range expansion, and research? American investors have been present in Morocco for a number of years. Regarding the FTA, I donâ&#x20AC;&#x2122;t think American investors are interested by the Moroccan market. They believe that domestic demand is largely satisfied by the 30 existing laboratories and that any investment aiming to meet that demand wouldnâ&#x20AC;&#x2122;t be profitable. On the other hand, Americans can invest in Morocco as a launching pad for other markets, including the American market. Theyâ&#x20AC;&#x2122;re more oriented towards relocation than creating subsidiaries.n 121

Key Sector Profiles & Infrastructure Pharmaceutical Industry SUCCESS STORY

SOTHEMA OMAR TAZI • PRESIDENT • GENERAL MANAGER

What are your trade relationships with the United States?

Sothema works in partnership with several American pharmaceutical laboratories, most notably Eli Lilly, the thirdranked biotechnology company worldwide, and MSD, one of the world’s leading pharmaceutical groups. Sothema produces Eli Lilly pharmaceuticals under license, including insulin, importing both the raw materials and the technology from Eli Lilly. Sothema is also a sub-contractor for MSD, importing raw materials and exporting finished MSD products. The firm is planning to introduce certain medicines to the United States market, and is preparing for certification of its production units by the U.S. Food and Drug Administration. In February 2006, Sothema was visited by U.S. Ambassador Thomas T. Riley, who was impressed by our size, production quality and technological advancement, and expressed the hope that the company would expand its U.S. market activity under the FTA.

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How do you evaluate the evolution of the Moroccan business environment? Moroccan economic growth is relatively average, but business opportunities are growing fast thanks to relocations, offshoring, and tertiary sector activities. Although the Moroccan industrial sector has a number of problems, the government has approved a new industrial policy (the Emergence Plan) designed to achieve across the board improvements in quality, social development, and productivity. Morocco is benchmarking itself against industrial best practice, such as Latin American industrial zones, and is creating industrial clusters as part of the Emergence Plan. How will you benefit from the Moroccan-American free trade agreement? The United States is the biggest pharmaceutical market in the world with 50% of sales. Our mastery of the international quality norms GMP and BPF, as well as our specialization in cutting edge treatments such as self-injectable syringes, cephalosporins, and injectables, enables us to capitalize on American market opportunities and achieve a large turnover sufficient to fund our expansion. The free trade agreement will accelerate progress towards our objectives.n

Web site (English/French): www.sothema.com Sub-contracted processing web site (English/French): www.sothema-tollmanufacturing.com

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Key Sector Profiles & Infrastructure Pharmaceutical Industry The Moroccan Pharmaceutical Industry Association (AMIP) Address Phone: Fax: Email: Web:

Boulevard Abderrahim Bouabid, Place Division Leclerc, Residence Amir, BP 8112, Oasis, Casablanca. (212) 22 23-44-45/23-36-90. (212) 22 23-40-90 amip@iam.net.ma www.amip.ma

KEY FIGURES 2004 Number of laboratories Turnover Direct employment Indirect employment Investments since 1998 Local production Imports Exports Number of units produced Consumption Quality

30 $540 million 7000 (20% at management level) 30,000 $35 million per annum covers 70% of demand cover 30% of demand 8% to 10% of production 185 million per annum $23 per person per annum (approximately) International norms prevail

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THE PHARMACEUTICAL INDUSTRY IN MOROCCO

The Moroccan pharmaceutical industry is a dynamic sector of the economy, and stands to gain from recent developments in the world pharmaceutical market and international trade (WTO agreements, the Morocco/European Union FTA). The local industry offers quality products, regularity of supply, stable pricing, and ongoing investment programs. Moroccan pharmaceutical legislation establishes the obligations and procedures for the manufacture, sale, promotion, and pricing of medicines. The sector includes both major international players and local companies operating 30 production sites across the full range of therapeutic products. In 2004, production exceeded 185 million units or nearly 70% of local demand, and in 2005, an average 10% of production was exported to European, Arab, Asian and African countries, taking advantage of the strategic geographic position of Morocco. The number of production facilities has risen from 22 to 30 since the year 2000, while annual output has increased from 178 million units to 185 million, and direct employment from 6000 to 7000 people. In 2004, the pharmaceutical industry achieved overall turnover of $540 million, up from $470 million in 2000 (source: IMS Health).

Prices The determination of pharmaceutical prices follows a rigorous procedure managed by the Health Ministry that distinguishes between imported and locally manufactured medicines. The government encourages moderate pricing in certain therapeutic classes. Quality There are four levels of quality control in pharmaceutical production : • By the National Medicinal Testing Laboratory (LNCM), which conducts multiple tests before granting permission to market a product. • By the manufacturing laboratory during the production process. • By the Ministry of Health, which can inspect a facility at any time. • By the supplier of a multiple demand license. The distribution of pharmaceuticals The distribution of medicine is undertaken by the manufacturing laboratories, wholesalers (distributors), and retailers (pharmacists). In 2004, there were 40 wholesalers and approximately 7500 pharmacies in Morocco. Approximately 90% of products follow the laboratory/wholesaler/ pharmacy/consumer circuit, although laboratories do directly supply about 10% of production to pharmacies. The same proportion is distributed to semi-public clinics and to hospitals.

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Key Sector Profiles & Infrastructure Pharmaceutical Industry The Compulsory Health Insurance scheme A Compulsory Health Insurance scheme introduced in 2006 will greatly expand demand for pharmaceuticals, since a much larger proportion of Moroccans will be able to cover medical expenses. TURNOVER OF SELECTED MEMBER LABORATORIES OF THE MOROCCAN PHARMACEUTICALS ASSOCIATION (AMIP) 2004 / In millions of Dollars Laboratories Maphar

Foreign

Laprophan

Moroccan

Cooper Maroc

Moroccan

Sothema

Moroccan

Galenica

Moroccan

Promopharm

Moroccan

Aventis Pharma GSK Maroc Pfizer SA Bottu

Foreign Foreign Foreign

Moroccan

Turnover *

Market Share (%)

9.4

74 48 46 45 35 26 23 22 22

13.3

8.5 8.3 8.0 6.3 4.7 4.1 3.9 3.8

(*) Listed turnover excludes export and tender sales. Source: IMS / AMIP- 16/06/2005

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SUCCESS STORY

PFIZER M. KARL LINTEL â&#x20AC;˘ GENERAL MANAGER (until February 2007)

What prompted your decision to invest in Morocco? Pfizer chose Morocco as its regional hub for French-speaking Africa, and among the key factors in that decision were the high quality of both the infrastructure (such as data transmission networks and flight connections) and the human resources. Since then, a number of policy improvements affecting the business environment have confirmed the wisdom of our choice of Morocco. These include the signing of several free trade agreements, an ongoing tariff elimination program, tougher and better-enforced intellectual property rights laws, and the development of the social security system (for example, the new compulsory health insurance scheme). What are your trading relationships with the United States? Pfizer is headquartered in the United States, but since we have a production facility in Morocco, our trade with the United States is relatively limited. Still, the Morocco/United States FTA has opened up the possibility of importing and exporting finished products in the medium term.

How do you evaluate business environment trends in Morocco? Generally favorable. There are ongoing moves to liberalize the economy, sign various FTAs, update investment-related legislation, and prioritize human development in general, and these initiatives should progressively improve the business environment. How will the free trade agreement benefit you? The FTA has led to the enactment of sound intellectual property rights legislation in line with the international IPR agreements ratified by Morocco. That legal protection is essential for an economy that seeks to encourage innovation and make R&D a motor of economic growth. 127

Key Sector Profiles & Infrastructure Pharmaceutical Industry Where does your sector stand relative to the social and economic development priorities of Morocco? Health care has an important place in the human development of the country. The innovative medicines developed through our research program offer not only better treatment of some illnesses that were previously untreatable or only partially treatable, but also effective management of certain risk factors and therefore a big reduction in the frequency of serious diseases. Researchbased medicine is a high value-added industry that not only invests in the in-service training of the medical and pharmaceutical professions but also recruits and trains its own top managers.

What does the future hold for you in Morocco? The outlook is generally positive. Weâ&#x20AC;&#x2122;re counting on economic growth consistently above 5% per annum, a rate that would allow Morocco to progressively close the gap with the developed world.n

CONTACTS PHARMACEUTICALS

http://www.sante.gov.ma/ Moroccan Ministry of Health

http://www.amip.ma/ Moroccan Pharmaceutical Industry Association

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Infrastructure

Key Sector Profiles & Infrastructure Infrastructure

A TRANSPORT NETWORK TO MATCH NATIONAL ECONOMIC AMBITIONS

The transport sector generates 6% of GDP and 9% of tertiary valueadded, and accounts for 34% of total energy consumption. Large sums are currently being invested in expanding and modernizing road, rail, port and airport networks across the country.

I- ROAD TRANSPORT

HIGHWAY NETWORK

The road network accounts for 90% of passenger transport and 75% of merchandise transport (excluding phosphates) via 57,500 km of roading (of which 32,100 km are sealed). 160 km of new highways are to be constructed annually until 2010

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The 2005-2010 highway program involves the construction of 160km of highway per annum for a total network of 1500km by 2010. Key milestones:

• Completion of the Casablanca-El Jadida highway, • Construction of several link highways: Tétouan-Fnideq (28km), Settat-Marrakech (145km), access to the TangiersMediterranean port (54km), Marrakech-Agadir (233 km) and Fès-Taza-Oujda (320km).

The program is funded by the Moroccan Highway Authority (Autoroutes du Maroc)($309 million) and a number of commercial banks and international donors.

II- RAIL TRANSPORT

RAILWAY NETWORK

A 2000km rail network carries more than 34 million tons of merchandise and 21 million passengers annually (2005). A strategy has been developed to make rail transport more competitive and efficient by 2010, assuring it a leadership role in the sector. 131

Key Sector Profiles & Infrastructure Infrastructure Quality management and infrastructure modernization The Railways Corporation (ONCF) has adopted an integrated sectoral development policy that prioritizes quality of service and customer security based on human resources, infrastructure, and technology. • Quality management - Optimization of human resources and training programs - Top-quality monitoring and evaluation processes - Management techniques and information technologies

The standardization of work methods and the development of procedures common to all operating units will result in a new style of management, and, more specifically, ISO 9004 (version 2000) quality certification. • Infrastructure projects under construction - Access to the new Tangiers-Mediterranean port: 45 km - The new Taourirt-Nador line: 117 km - The Sidi Yahia-Mechraa Bel Ksiri by-pass: 47 km - The doubling of several existing lines (Meknès-Fès, Sidi El Aidi-Settat, Nouasser-Jorf Lasfar) • The 2005-2009 investment program Highlights of the $1.77 billion program include equipment and track (3%), rolling stock (24%) (including the acquisition of 24 double-decker motorized railcars and 20 traction locomotives), and stations (73%) (including shopping and entertainment zones: these are high value-added platforms). III- MARITIME TRANSPORT

Morocco has 3500 kilometers of coastline on the Atlantic and the Mediterranean, and operates 28 ports: 12 handle international trade in addition to fishing activity, 12 are exclusively devoted to fishing, and four are marinas. A massive new international container port, the Tangiers-Mediterranean Port, will open in June 2007. In 2005, total port traffic was 67.5 million tons and passenger numbers reached 4.15 million.

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The Tangiers-Mediterranean Port : Morocco joins the major maritime transport networks

The Tangiers-Mediterranean Port is a strategic priority in the development of northern Morocco and a spearhead of the new national economic strategy focused on eight clearly-defined export sectors and the free trade agreements with the European Union and the United States. The port, once operating, will have a major impact in terms of employment creation, productivity and foreign investment, and its construction alone will generate significant foreign investment, both directly and through the operation of the free zones.

The unrivalled location of the new port on the Strait of Gibraltar, at the intersection of two major shipping routes and just 8 miles south of Europe, will allow it to service a market of hundreds of millions of consumers. The customs free zones that are an integral part of the project design, operated by renowned private managers, will further strengthen its capacity. The ultimate goal is to capture a share of the container transshipment market and become the first cereals transshipment hub in the region. 133

Key Sector Profiles & Infrastructure Infrastructure The project is managed by the Tangiers Mediterranean Special Agency (TMSA), a private company vested with certain governmental powers under a joint agreement with the Moroccan State and based on a close working relationship with the various Ministries. A TOTAL INVESTMENT OF $1 BILLION

• The construction and equipping of the new port: $390 million • The construction of the customs free zones: $210 million • Transport infrastructure: $310 million (road and rail links to the rest of Morocco) • Related services (water, electricity, telephone): $90 million Sources: www.transportmaroc.ma, www.odep.ma, www.transportmaroc.com

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Franchising

Key Sector Profiles & Infrastructure Franchising

INTERVIEW

THE MOROCCAN FRANCHISE OBSERVATORY MEKOUAR KHADIJA • MANAGER

Moroccan economic strategy has encouraged the spread of franchises. Is the country well positioned compared to similar nations or other parts of the region? The growth of franchising in Morocco is certainly a direct result of the economic policy options pursued by the authorities, but you also need to take into account the strong desire of private entrepreneurs to join networks that have already proven their adaptability to a variety of countries and cultures. The growth of franchising is not just a passing fashion, it’s a genuine business strategy with its own commercial rules and context. Morocco has become a priority for many international franchisers because of its geographic location, its economic and political stability, and the growing purchasing power of its citizens. This is a country that is no longer seen as an opportunity but as a priority. Is the number of American franchises in Morocco rising, and will the free trade agreements attract more of them?

The number of American franchises is growing a lot less rapidly than the number of franchises from some European countries. There’s a reason for that, and it’s the geographic distance between the two nations. Nevertheless, this factor is becoming less important, because many American brands have understood 136

the need for proximity to foreign markets and have opened regional offices and distribution platforms outside the United States. The increased presence of American service franchises should be emphasized. The free trade agreements will play a decisive role in the growth of American franchises in Morocco, not so much through their actual provisions, but by drawing attention to the opportunities of the Moroccan market. American franchisers will no longer regard Morocco as being similar to the Middle Eastern countries they already know well, but rather as a distinct market with its own characteristics.

Which sectors and franchises, both American and in general, are growing fastest at the moment? In general, service franchises are growing fastest. From 2002 to 2005 there was significant growth in ready-to-wear fashion franchises, but that trend is now subsiding in favor of services brands. And there again, there’s an explanation for the change: the desire of services companies (many of them already established) to be part of worldwide networks giving rapid access to expertise, brand recognition and international clients. That’s the case for certain communication agencies, public works contractors, industrial franchises, IT franchises, and real estate agencies…

Moroccan franchises seem to be more and more common. Are they likely to spread to other countries in the medium to long-term?

The Moroccan franchises are currently preparing themselves for the export market. These are brands that have realized that they have real know-how that can be capitalized on overseas. Nevertheless, given that exporting is a specialized activity, they’re taking the time to establish the necessary procedures before launching in new markets. CONTACTS FRANCHISING

http://www.observatoiredelafranchise.ma/ Moroccan Franchising Observatory http://www.mcinet.gov.ma/ Moroccan Ministry of Commerce and Industry

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Cinematography

Key Sector Profiles & Infrastructure Cinematography

MOROCCO: A LEADING DESTINATION FOR WORLD CINEMA PRODUCTION

The Moroccan film industry has gone into overdrive, with funds allocated to partial production subsidies rising from $3.75 million to $6.25 million in 2006.

Moroccan films have never been so sought after at major festivals (Cannes, the Washington Arab Film Festival, San Sebastien, Brussels, Cairo, Valencia, Namurâ&#x20AC;Ś), nor have they ever won so many prizes: in 2005, Moroccan films were selected for 38 festivals and received 34 prestigious awards. Every year, Morocco plays host to the most famous stars and major national and international cinema events. THE FILM INDUSTRY

The Moroccan film industry produces 10 full length feature films per year, and its infrastructure and technical facilities attract numerous foreign productions, both feature length and shorts. Some 1228 authorizations for foreign productions were delivered in 2005. In addition to their artistic merit, and direct economic benefits, these films make an important contribution to Moroccan tourism promotion efforts. SOME PRESTIGIOUS FILMS SHOT IN MOROCCO

Lawrence of Arabia Black Hawk Down Alexander the Great Kingdom of Heaven The Exorcist 1 and 2 Hidalgo Babel

Gladiator The Mummy 1 and 2 Kundun Wochen angst The 10 Commandments The Hills Have Eyes IndigĂ¨nes 140

MOROCCO: A FILM LOCATION OF GREAT NATURAL BEAUTY

Morocco, and especially the southern regions of Ouarzazate and Marrakech, is a highly attractive destination for film production thanks to exquisite locations, extraordinary light, contrasting geography and climate, and the generosity and friendliness of the locals.

The ochre city casts its spell thanks to an immense palm grove, extraordinary landscapes, palaces, landscaped gardens, and â&#x20AC;&#x153;souksâ&#x20AC;? (traditional markets). Marrakech was the first imperial capital of Morocco and is now the venue for the Marrakech International Film Festival, a truly global event that brings together the cinema of the West and of the Orient. The Marrakech Film Studios (SCM), with state of the art equipment, will open soon. 141

Key Sector Profiles & Infrastructure Cinematography

OUARZAZATE: “HOLLYWOOD IN THE DESERT” This extraordinary city and region is attracting more and more film makers for its landscapes, desert, mountains, oases and palm trees, and caves. It also boasts extraordinary production facilities, most notably the Atlas Studios, CLA, Kansamane, and Cinecitta. A film school inaugurated in Ouarzazate in December 2006 will take advantage of existing film production facilities and the constant stream of foreign productions. The 1752m2 school will offer two types of training: specialties such as production management, special effects and décor, on the one hand, and skills such as hair dressing, make up, studio equipment operating and costumes, on the other. Ouarzazate and Hollywood became sister cities in March 2005, and the new partnership promises to further boost Morocco as a global film production destination. CONTACTS CINEMA

Sources: Moroccan Film Center, Aujourd’hui le Maroc newspaper , Le Reporter newspaper , Le Matin newspaper.

http://www.ccm.ma/ Moroccan Film Center

http://www.festivalmarrakech.com/ Marrakech International Film Festival

http://www.mincom.gov.ma/ Moroccan Ministry of Communication 142

Urban Economic Clusters: Major Projects

Key Sector Profiles & Infrastructure Urban Economic Clusters: Major Projects

THE BOUREGREG VALLEY PROJECT

The development of the banks of the Bouregreg river, which separates the capital, Rabat, from its sister city, SalĂŠ, will encompass the Bouregreg Valley in its entirety for a total of 6000 hectares (including 600 hectares suitable for construction). Construction work has been divided into six stages, of which the second stage, known as Amwaj, is a joint venture with DubaĂŻ International Properties (DIP). The project, while contemporary in its design, is intended to blend into the surrounding environment and will respect the historical and ecological heritage of the valley. CONSTRUCTION SCHEDULE

There are three high priority projects: - The consolidation of the Kasbah des Oudayas cliffs and the wharves of the left and right banks - The construction of new bridges - The creation of the Oudayas Tunnel to facilitate traffic flow - A tramway system. The six stages of the project:

1. Bab Al Bahr (Ocean Gate): The construction of two ports, and various restaurants and bed and breakfasts, as well as the development of walking trails and sites.

2. Amwaj (Al Sahat Al Kabira) (the Great Square): The construction of an artificial island, of a national museum, and of a luxury residential zone near cultural venues. 3. Kasbat Abi Raqraq: The protection and improvement of the visual appeal of the Chellah archaeological site, a 100 hectare artificial lake, a 40 hectare amusement park, and a technological park for services. 4. Sahrij El Oued (the River Basin): The creation of a river basin.

5. Al Menzeh Al Kebir: A luxury tourism, ecological and wellbeing zone (equestrian center, golf course)

6. Bouhairat As Souhoul (the Great Garden): Based on a theme of water, symbol of life. 144

KEY INFORMATION Total land area

6000 ha

Length of the valley

15 km

Amwaj investment

$2.06 billion

Shops and restaurants

15,000m2

Bab Al Bahr investment Housing units

Shops and restaurants plus business centers and offices Parking places

$371 million

1500

25,000m2

4000

DEFINING FEATURES

Respect for Historic Monuments and the Environment

The architecture of the project will preserve historic monuments, the surrounding environment, and the heritage that makes the Rabat/SalĂŠ area a cultural destination. Natural aspects of the site will be integrated into the project. Community Involvement

The provision of training, and security of employment, will allow residents to play an active role in urban development and improve their quality of life. Transport

An 18km tramway between Rabat and SalĂŠ will facilitate traffic and improve passenger comfort and security. The construction of a bridge on the river and of a tunnel will also improve traffic flow.

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Key Sector Profiles & Infrastructure Urban Economic Clusters: Major ProjectS MEGAPROJECT: THE RABAT WATERFRONT

The Rabat Waterfront project, which will transform the capital, is an integral part of the wider coastal development running from Bouknadel to Skhirat. It will be implemented by Emaar, a world renowned financial group from the United Arab Emirates, and will make 13km of waterfront into a major urban center. The Saphira project, another major undertaking in parallel to the Bouregreg Valley project, will cover 330 hectares running from Bab Al Bahr, near the Kasbah des Oudaya, to Harhoura (Skhirat-Témara prefecture). Under the Saphira initiative, which involves an investment of $3.4 billion expected to generate 7800 direct jobs, Emaar will construct tourist, residential, shopping and entertainment zones the length of the waterfront area. These will include a hotel near Dar Soltane, cinemas, cafés, restaurants, fashion boutiques, bazaars, housing, a public park, a 45,000m2 shopping center, luxury villas, a hospital with a capacity of 250 patients, a marina, various cultural and social facilities, and a 50 story corporate office tower. The Moroccan capital is making good on its strategic position on the Atlantic coast. Source: Bouregreg Valley Development Agency, L’Economiste newspaper

THE RABAT TECHNOPARK PROJECT

Rabat, the capital city of Morocco, is to play host to the country’s first smart village, a massive 300 hectare development worth $343 million. Located at Sala El Jadida, the new technopark will be a platform for IT research and development and for top-flight training programs. It is expected to generate 12,000 jobs and will attract local and foreign investors by forming partnerships with innovative IT firms. Construction began in 2006, and the first office space should be on the market in 2007. The Rabat technopark will be organized into three clusters: - Front desk/reception, and support services and conferences, including an IT information center and an innovative business incubator.

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- IT activities, such as multimedia and audiovisual products, call centers (more than 20 are already based in Rabat), service firms (including offshoring), and R&D units. - Academic activities, such as a university, and IT training centers and institutes.

All three clusters will be serviced by residential zones, shops, restaurants, and sports facilities. Source: L’économiste newspaper

FES: A NEW DYNAMIC

The city of Fès, an ancient Imperial capital at the heart of the architectural, historical and cultural heritage of the Kingdom, has always been a major tourism draw-card. One of the most appreciated destinations in Morocco, Fès is the birthplace of the Moroccan State, the site of one of the oldest universities in the world, and a community in which handicrafts are both a matter of technical precision and the expression of a way of life. It is a city with an extraordinary capacity to preserve its past, live its present, and anticipate its future.

All of these qualities form the basis for a restructuring of the Fès region focused on industrial, tourism and cultural projects. The Bensouda Industrial Zone has been renovated at a cost of $8 million, and natural resources are another key regional attraction. There are major thermal bathing sites and mineral springs, including the Sidi Ali, Sidi Harazem, Moulay Yacoub, and Ain Saiss springs, and the water resources of the region irrigate 33,500 hectares of the 150,000 hectares of agricultural land. Consideration is being given to diverting water from the Sebou river to the Saiss plain, which is a prime agricultural zone.

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Key Sector Profiles & Infrastructure Urban Economic Clusters Major Project The skills of the traditional artisans are playing a key role in the restoration of the Old City of Fès, a UNESCO world heritage site, and its strategic geographic position at the intersection of two major roads (north/south and east/west) reinforces its vocation as a trading city.

THE RIAD TREND

The emergence of bed and breakfast style hotels in renovated traditional Moorish houses (riads) in Fès over the last six years has widened the range of accommodation available locally. In the process, the restoration of traditional dwellings with a unique architectural and historical pedigree has saved a rich heritage that was otherwise doomed to extinction. Today, there are nearly 50 riads in Fès, mainly owned by foreigners who purchase and restore dilapidated old houses as luxury hotels. Initial purchase prices may range from $34,000 to $80,000, but the bulk of the expenditure often lies in the painstaking restoration work.

Source: L’Economiste newspaper

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TANGER CITY CENTER The Tanger City Center project, one of many tourism developments already underway or planned in this fast-growing hub region, is a $103 million, five hectare zone located on the Bay of Tangiers. Key features include a five-star hotel, a four-star hotel, a 36,000m2 recreation and shopping center, 10,000m2 of office space, and 93,000m2 devoted to residential accommodation. The project is being constructed by the Spanish groups Fadesa and Anjoca.

Source: Lâ&#x20AC;&#x2122;Economiste newspaper

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Trade and Investment Regulations

Trade and Investment Regulations INTERNATIONAL AGREEMENTS

Morocco is a member of the World Trade Organization (WTO) and has several bilateral trade and investment agreements with Islamic countries, a free trade agreement with the European Union, and a recently-concluded free trade agreement with the United States. Morocco benefits from the General System of Preferences (GSP) in its trade with countries such as Canada, Japan, New Zealand, Australia, Poland and Hungary. The GSP confers total or partial exemption from customs duties on products such as handicrafts, semi-processed products and agricultural and fisheries products. Morocco has a relatively complete regulatory and legislative system covering trade, including competition law, pricing, and standardization. Intellectual property rights laws are in compliance with international obligations, since Morocco is a member of the World Intellectual Property Organization (WIPO) and is a party to the key international agreements for the protection of intellectual property. However, enforcement of the rules (although rapidly improving) is sub-optimal, and counterfeiting and contraband remains a problem in Morocco, as in many similar economies. The authorities and the private sector are actively working on improved IPR enforcement, and real progress is being made, notably the new power of seizure for customs agents with respect to counterfeit goods, and the new requirement to seek public submissions on trademark registration filings. Morocco is a signatory of several international agreements which regulate trade, investment and the environment in general. Morocco has ratified agreements on: bio diversity, climate change, desertification, endangered species, hazardous wastes, marine dumping, the nuclear test ban, ozone layer protection, ship pollution, wetlands and whaling. Morocco has also signed, but not yet ratified, the environmental modification agreement and the Law of the Sea.

LABOR LAWS A new labor code took effect on June 8, 2004, although some issues remain under discussion. The new law aims at protecting workers and employers, modernizing professional relationships, and improving company management.

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LABOR ISSUES AND THE US/MOROCCO FTA

The U.S./Morocco free trade agreement (FTA) meets the labor objectives set out by the U.S. Congress in the Trade Promotion Authority Act, the legislation authorizing the negotiation of trade agreements on an expedited basis. Labor obligations are part of the core text of the agreement. Each government reaffirms its obligations as a member of the ILO and commits to ensuring that its domestic laws respect internationally recognized labor principles. Procedural guarantees in the FTA require each government to provide access for workers and employers to fair, equitable and transparent labor tribunals or courts. The FTA also includes a cooperative mechanism to promote respect for the principles embodied in the ILO Declaration on Fundamental Principles and Rights at Work, and compliance with ILO Convention 182 on the Worst Forms of Child Labor.

Source: Office of the U.S Trade Representative

1. THE APPLICABILITY OF THE NEW LABOR CODE All parties to a work contract are covered by the law, with the exception of employees of the public sector, employees of mining companies, employees of the movie industry, sailors, professional journalists, and apartment building managers. Specific laws will determine the working conditions of domestic employees and of employees belonging to traditional sectors (such as handicrafts).

2. UNIVERSAL PRINCIPLES The new code is inspired by the eight fundamental ILO (International Labor Organization) conventions, seven of which have been ratified by Morocco.

Among them are the conventions on: • The prohibition of discrimination in employment and professional matters. • The prohibition of forced labor. • The prohibition of child labor (teenagers under 15 are not entitled to work, and this limit rises to 18 in the case of dangerous work). • The reinforcement of the right to negotiate and organize.

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Trade and Investment Regulations 3. EMPLOYMENT CONTRACTS

The law provides for three types of contract: • The “Contrat à Durée Indeterminée” (CDI): a permanent contract. • The “Contrat à Durée Déterminée” (CDD): a fixed-term contract. • The “contrat de travail temporaire”: a temporary (short term) work contract.

4. A RE-ENGINEERED DISMISSAL PROCESS

• Dismissal for poor performance. • Dismissal for gross misconduct. • Dismissal for economic, technological or structural reasons (downsizing). This requires: - Proof of economic difficulties preventing the normal functioning of the company - An authorization from the provincial governor - The partial or total dismissal of the workforce.

Dismissal authorization requests under this provision are considered by a tripartite commission.

5. A CLEARLY-DEFINED SCALE OF DISMISSAL COMPENSATION

Compensation is due in the case of downsizing or unjustified dismissal. The compensation scale is determined according to the length of service, and the calculation of the amount must be based on a salary greater than or equal to the SMIG (minimum wage). 6. DAMAGES

A scale of punitive damages has been created, including an upper limit on pay-outs. 7. A STRENGTHENING OF THE RIGHT TO NEGOTIATE

The right to negotiate is conferred exclusively on the most representative trade union organizations, and on one or several employers and their organizations. This right has been reinforced by a

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clearly-defined collective negotiation procedure under which the negotiation cycle cannot last more than 15 days from the initially agreed start date. 8. REORGANIZED AND MORE FLEXIBLE WORKING HOURS

Four major innovations: • The working week has been reduced to 44 hours without a concomitant wage cut • The annualization of working hours (2288h/per annum) • Daily working hours have been limited to 10 hours per day • A reduction of working hours is possible in the case of a temporary crisis. In the case of the agriculture sector, daily working hours are fixed by regulation according to the requirements of the crop. The annual duration of work is 2496 hours. 9. PROTECTION OF TRADE UNION ACTIVITIES

A strengthening of worker freedoms and the role of the trade union inside and outside the company, in addition to the rights to organize established since 1957.

Trade and Investment Regulations 10. NEW RECOGNIZED AND PROTECTED REPRESENTATIVE INSTITUTIONS • Workplace councils (for companies with at least 50 employees) • Trade union representatives • Security and hygiene committees • Staff representatives 11. MANAGEMENT OF THE LABOR MARKET

The public employment agency monopoly on labor market management has been ended, and the role of private agencies has now been recognized. Based on a legal framework that has recently been instituted, every employment agency must have: • An authorization from the Ministry of Employment • A minimum capital of $11,912 • A deposit, at the CDG, equivalent to at least 50 times the total annual value of the SMIG (minimum wage).

Temporary work: new provisions strictly define the conditions applying to this type of work. 12. DISPUTE RESOLUTION

The labor code creates a new dispute resolution procedure involving two steps: conciliation and arbitration. In order to give more credibility and authority to this procedure, the law stipulates that conciliation agreements and definitive arbitration rulings are binding and must be executed.

Source: Ministry of Employment and Training

INVESTMENT REGULATIONS AND PROCEDURES

The Moroccan government introduced a unified investment charter for both local and foreign investors in 1995, and has signed treaties with major countries to protect and guarantee investments and avoid double taxation. 156

Foreign investment has been encouraged by a privatization program, and by the creation of 16 regional investment centers (one for each province) that act as one-stop shops for company registration and investment project trouble shooting. Foreign ownership is permitted in most sectors except phosphate mining and agricultural land. NORMS AND STANDARDS

Morocco is a member of the International Standards Organization (ISO). At the national level, there is a special entity affiliated with the Ministry of Commerce and Industry called SNIMA (Service National de Normalisation de lâ&#x20AC;&#x2122;Industrie Marocaine) which coordinates more than 500 national norms applied mainly in metallurgy, construction and packaging. There is also a special entity that coordinates packaging and conditioning standards: IMEC (Institut Marocain de lâ&#x20AC;&#x2122;Emballage et du Conditionnement). Sanitary regulations are coordinated jointly by the Ministry of Agriculture and the Ministry of Health and apply to both local and imported products. LABELING REQUIREMENTS FOR SHIPPING CONTAINERS

No special regulations apply to the exterior marking of containers for shipments to Morocco. However, an indication on the exterior of containers of the net weight in kilograms, together with other identification markings, will assist in locating goods on arrival and speed their clearance through customs. FOOD PRODUCTS

Food labels should be in Arabic and, optionally, in other languages and must show the country of origin. There is a requirement for both local and imported canned foods and beverages to display the date of production and the expiration date. The date format should be (dd/mm/yy) instead of (mm/dd/yy). MEASUREMENTS

Metric measurement is compulsory and this applies to both local and imported products. Moroccans are not familiar with U.S. measurements and standards such as ounces, pounds, miles, etc.

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Trade and Investment Regulations PATENTS, TRADEMARKS AND INDUSTRIAL DESIGNS

In order to ensure protection at the national level, it is mandatory to register intellectual property with the Intellectual Property Office (OMPIC: Office Marocain de la Propriété Intellectuelle et Commerciale). The period of protection for an industrial design is 25 years, beginning on the registration date. This can be extended for an additional period of 25 years, so the maximum duration of protection is 50 years. The U.S./Morocco free trade agreement (FTA) specifies that each government commits to protect copyrighted works, including phonograms, for extended terms (e.g., the life of the author plus 70 years), consistent with U.S. standards and international trends. A patent is an industrial property title granting its holder a temporary exclusive right of use of the invention it refers to. This exclusivity of exploitation is guaranteed to the inventor by a given patents law for a limited period (generally 20 years maximum), but only in the country or the territory subject to the law. The FTA provides for an expanded protection concerning patents and trade secrets. A trademark is a distinctive symbol which identifies certain goods or services as being those produced or provided by a certain legal entity or natural person.

A trademark is protected for a period of 20 years, renewable indefinitely. The FTA requires each government to maintain a system to resolve disputes involving trademarks used in Internet domain names, to establish transparent procedures for the registration of trademarks, including geographical indications, and to develop an online system for the registration and maintenance of trademarks, as well as a searchable database. The FTA applies the principle of “firstin-time, first-in-right” to trademarks and geographical indications. IMPORT AND EXPORT REQUIREMENTS

For all imports into Morocco, the import certificate must be registered with an authorized bank, which may make the necessary payments upon submission of the required documents. Foreign 158

exchange is administered by the Foreign Exchange Office (Office des Changes). Certain foreign exchange procedures have been delegated to authorized banks. Imports are unrestricted except for a few items, such as explosives, used tires, and used clothes, which require an import license issued by the Ministry of Foreign Trade. FOREIGN EXCHANGE

The Moroccan Dirham is convertible for all current transactions and for some capital transactions, notably capital repatriation by foreign investors, if the original investment is registered with the Foreign Exchange Office. Foreign exchange regulations now allow expatriate employees to repatriate 100% of their salaries. Foreign currency is routinely available through the commercial banks upon presentation of the necessary documents for the repatriation of dividends and capital by foreign investors, for remittances by foreign residents, and for payments for foreign technical assistance, royalties and licenses. (For more details, visit the Foreign Exchange Office site: www.oc.gov.ma) CUSTOMS AND IMPORT DUTIES

The Moroccan customs tariff schedule is based on the Harmonized Commodity Description and Coding System (HS). Duties are calculated ad valorem on the CIF value of the merchandise. There are six customs base rates: 2.5%; 10%; 17.5%; 25%; 35% and 45%. The average rate is 23.5%; the highest rates apply to finished products. Other import duties

Besides customs duties, there are two taxes applied to imported merchandise: • The Import Tax (Prélèvement Fiscal d’Importation) or PFI: the general rate is 15% on the customs value of the merchandise, with the exception of agricultural products (7.5%) and pharmaceuticals (12.5%). • The Para-Fiscal Import Tax: 0.25% of the value of the import.

The Morocco/U.S FTA requires transparency and efficiency in customs administration, including the publication of relevant laws and regulations on the Internet, as well as procedural certainty

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Trade and Investment Regulations and fairness. The Moroccan customs service has already made enormous efficiency gains in recent years, and is often cited as a success story of the Moroccan business environment. The FTA also commits both governments to share information to combat illegal trans-shipment of goods. Rules of origin will ensure that only Moroccan and American goods benefit from the Agreement. DISPUTE RESOLUTION

Disputes involving the State are generally resolved in collaboration with the relevant government agency, while major conflicts are taken to a specialized court. Morocco is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the 1965 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States. Most national chambers of commerce have established an arbitration committee to help with commercial disputes, as has the International Chamber of Commerce in Casablanca. The Morocco/U.S. FTA requires that investor rights be backed up by an effective, impartial and fully transparent procedure for dispute settlement. Submissions to dispute panels and panel hearings will be open to the public, and interested parties will have the opportunity to submit their views. (Source: Office of the U.S. Trade Representative, 2004)

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Commercial Issues

Commercial Issues INPUT COSTS ELECTRICITY The general rate is composed of an annual fixed base rate and an invoice according to the consumption and the time of use. The amount of the fixed base rate is DH 325.55/year (USD 37.2)

Period

Rate in DH/kwh 14% VAT included

USD

High-load hours

0.7649

0.09

Peak hours

Low-load hours

1.0408

0.5135

0.12 0.06

Source: National Electricity Authority (ONE), March 22, 2006

Other optional rates are available according to the voltage chosen and the duration of use (see web site: www.one.org.ma). Winter Oct 1 to 31 March

Summer April 1 to 30 Sep

Peak hours

5.00 pm to 10.00 pm

6.00 pm to 11.00 pm

Low-load hours

10.00 pm to 7.00 am

11.00 pm to 7.00 am

High-load hours

7.00 am to 5.00 pm

7.00 am to 6.00 pm

Source: National Electricity Authority (ONE), 2006

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WATER There are several contracted distributors dealing with the main water supplier (ONEP), such as Lydec (Casablanca), Redal (Rabat) and Amendis (in Tangiers and Tetouan). Here are prices for industrial consumption in some main cities: Water rates City

Agadir

Casablanca (Lydec)

6.23

Fez

5.32

Kenitra

4.46

Larache

3.57

Marrakech

5.40

Meknes

2.23

Mohammedia (Lydec)

6.54

Nador

5.23

Oujda

10.13

Rabat (Redal)

6.56

Safi

7.14

Settat

5.56

Tangiers (Amendis)

5.19

Taza

5.58 5.19

Tetouan (Amendis) Petroleum products Premium Gas (Petrol) Ordinary Gas (Petrol)

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0.81

4.41

El Jadida

Industrial Fuel

7.05 7.55

Chefchaouen

Diesel Oil

USD

5.77

Beni Mellal

Lamp Oil

Price of water in DH/m3

0.66 0.86 0.50 0.71 0.61 0.51 0.41 0.62 0.25 0.75 0.60 1.16 0.75 0.82 0.64 0.59 0.64 0.59

Source: ONEP, March 2006

Price per liter in DH

USD

Price per gallon in USD

9.36

1.06

4.0

9.36

10.53

7.48

2301.56 per ton

1.06

4.0

1.20

4.53

263.03

0.85

3.21

Commercial Issues Telecommunications costs (20% VAT not included) Fixed line

1) Installation charge (none) 2) Minimum Monthly fee Individuals: DH 90/USD 10.28 Companies: DH 120/USD 13.71 3) Communication rates Local calls: first minute DH 0.83/USD 0.09 DH 0.16/USD 0.018 per 30 seconds National calls: first minute DH 1/USD 0.11 DH 0.60/USD 0.068 per 30 seconds 50% reduction from Monday to Friday from 8.00pm to 8.00am, and all weekend International calls: USA, Canada DH 5.0/USD 0.57 per minute France, Spain DH 3.30/USD 0.38 per minute Portugal DH 4.7/USD 0.54 per minute Japan, India DH 14.86/USD 1.70 per minute Tunisia DH 4.2/USD 0.48 per minute Algeria DH 4.2/USD 0.48 per minute 20% reduction on Saturday and Sunday, from Monday to Friday from 8.00pm to 8.00am and on official holidays.

Cellular phone

1) Monthly fee: DH 125/USD 14.28

(GSM standard)

2) Roaming: no service charge, cost of calls is standard operator rate plus a 20% surcharge. 3) Communication rates: National calls: DH 2.2/USD 0.25 per minute 50% reduction on national calls on Saturday and Sunday, from Monday to Friday from 8.00pm to 8.00am, and on official holidays

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International calls: Zone 1 (Western Europe, Maghreb, USA and Canada): DH 5.40/USD 0.62 per minute Zone 2 (Eastern Europe, Russia, Middle East, Egypt and Turkey): DH 7.43/USD 0.85 per minute Zone 3 (Africa, Latin and Central America, Asia and Far East (India, China), Australia : DH 15.00/USD 1.71 per minute Zone 4 (Anywhere else): DH 21.00/USD 2.4 per minute Internet

Minimum Monthly fee: DH 300/USD 34.28 or annual fee : DH 1600/USD 182.85 Number of hours of connection: unlimited Calling rates: Local calling rates apply Leased line (DSL): the price depends on the speed (64 kilo to 2 mega), the price is from DH 4500/USD 514.28 to DH 50,000/USD 5714.28 per year. ADSL: the price depends on the speed (128 Kbps to 20 mb), it varies from DH 149/ USD 17.02 to DH 833/USD 95.2 per month. Installation fees (comprising the ADSL modem and the ADSL support line): DH 180/USD 20.57 (all taxes included).

Source: Maroc Telecom

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Commercial Issues TRANSPORTATION

RAIL TRANSPORT Rates vary depending on the merchandise and the delivery dates. Here are the different scales in DH per ton/kilometer: Scale 1 Scale 2 Scale 3

Scale 4 to 6

Price in DH

Price in USD

0,382

0,042

0,424 0,328 0,282

0,047 0,036 0,031

Source: ONCF 2004

There is a fixed fee of DH 13.40 per ton for shipments in full wagonload and DH 26.80 per ton for partial-load consignment (plus Value Added Tax of 10%). (see www.oncf.ma)

SHIPPING Rates depend on the type of merchandise and the destination. The following are prices for a 20-foot container for some European destinations, the United States and Canada. Destination United States Canada Spain France Italy Netherlands, Belgium Rotterdam, Antwerp and Hamburg Tunisia

Export USD 1550 to 2200 USD 1550 to 2895 USD 510 to 970 EURO 305 to 534 USD 550 EURO 605 to 840

Import

USD 900 to 1000

EURO 656 to 915 USD 700

Source: ONCF 2004

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AIR FREIGHT Departing from Casablanca, rates vary depending upon the type, weight and destination of merchandise. Here is the general price schedule in DH/Kilo for selected destinations: 0-45 kilos

45-250 kilos

26.30

25.05

New York

26.30

Paris

14.75

Montreal

Amsterdam London

Barcelona Rome

16.20 16.20

8.80

16.20

25.05 13.80 15.20 15.20

7.60

14.05

45-250 500 kilos kilos & above 24.05

24.05

12.80

24.05 14.05 14.05

6.90

14.05

24.05 14.05 14.05

6.90

14.05

Source: RAM Cargo, 2006

Reduced rates apply to garments, yarn, handicrafts, and perishable goods such as fish, fruits, vegetables, etc. Specific rates can be obtained by calling (within Morocco): 082 00 82 82 LAND PURCHASE & RENTAL

The renting of industrial land: prices vary from one industrial zone to another depending on proximity to infrastructure and can range from DH 5 per square meter to DH 120 (USD 0.58 to 14.1). The cost of construction of an industrial facility is estimated at DH 3000/sq. meter (USD 352/sq. meter). Private foreign ownership is permitted in all but a few sectors that are specifically reserved for the State or Moroccan nationals; the latter include agricultural land and the phosphate and mining sector. Apart from these exceptions, private entities may freely establish, acquire, and dispose of real estate assets in business projects.

OFFICE RENT The monthly rent per square meter of office space varies from DH 50 ($5.80) to DH 150 ($17.6), depending on the location, the furnishing, and the equipment provided. The tendency is to build offices fully equipped with Internet, computer infrastructure, security, etc. Casablanca has seen many firms migrate from the downtown central business district to new areas to avoid the crowds and the tra fic. Large multinationals that have moved their offices to new business sites on the outskirts of Casablanca include HP, Mobil, Shell, Citibank, Xerox, DHL, IBM, and Johnson & Johnson.

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Commercial Issues A few contacts

• Casablanca Techno Park Tel: 212 22 50 78 71 - Fax: 212 22 50 78 06 E-mail: a.hanouf@casablanca-technopark.ma • Zenith Millennium Tel: 212 22 20 33 20 – Fax: 212 22 27 84 30 Contact: Rachid LAZRAK • Regus Casablanca Tel: 212 22 95 84 84 - Fax: 212 22 95 80 23 Contact: Kawtar MORENO E-mail: kawtar.moreno@regus.com • Loca Bureau Tel: 212 22 36 33 17 / 21 Fax: 212 22 36 33 32 Contact: Fatima BELKAR E-mail: locabureau@marocnet.net.ma

LABOR COSTS

WAGES Wages are freely negotiated but cannot be lower than the minimum wage (S.M.I.G.) of DH 8.78 / USD 1.03 per hour. This minimum wage is DH 45.50/ USD 5.35 per day for the agricultural sector. The number of working hours is 8 per day or 44 hours per week. The minimum weekly rest period is 24 consecutive hours. The minimum age for employees is 15 years (and 18 for dangerous work).

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PAID HOLIDAYS Every employee is entitled to a vacation after six months of unbroken service. Entitlements are calculated on the basis of 1.5 days per month of service. SOCIAL SECURITY Social security fees are composed of: • 6.50% of the gross salary for the family allowance, paid entirely by the employer; • 12.89% for social benefits (4.29 % for the employee and 8.6% for the employer) with a maximum monthly salary of DH 6000/USD 705 for the purpose of the calculation; • 1.6% for the vocational training tax on the gross salary.

HEALTH INSURANCE Premiums range between 2% and 4% of gross salaries. These premiums can be either fully paid by the employer or equally shared between the employee and the employer. A compulsory health insurance scheme (AMO) was adopted in 2005 and is managed by the National Social Security Agency (CNSS).The current premium rate is set at 4%, plus an administrative fee of 1% of gross salary. PRODUCT DISTRIBUTION Modern product distribution networks emerged in Morocco in the 1990s. Big chains opened in main cities such as Casablanca, Rabat, Marrakesh, Fez, Tangiers, Tetouan, Agadir and El Jadida. Specialty stores also developed in the fields of home appliances, interior design and furnishing, and fashion wear. This has led to remarkable improvement and innovation in production, packaging and delivery as well as communication and marketing. Several international brands are represented through agents, importers/distributors or franchises.

Food product distribution is undertaken by family-owned wholesale chains, mainly based in Casablanca and other big cities. Retail distribution is very diverse and is also dominated by family-owned shops.

The formerly State-owned tobacco distribution company was sold to the French and Spanish firm Altadis as part of the privatization program, and cement is distributed by a number of private companies. In general, distribution networks suffer from the number of intermediaries and the competition of the informal sector.

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Commercial Issues MARKETING AND ADVERTISING The advent of modern distribution networks has enhanced options for communication and marketing. New forms of publicity have been introduced, such as point-of-sale advertising, roadside billboards, mobile publicity, and others. Morocco has become a hub for call centers, most of them specialized in telemarketing. Catalogs have been introduced by big chains and specialty stores, and mail ordering has also been introduced, although it is not yet well patronized.

INTELLECTUAL AND INDUSTRIAL PROPERTY ISSUES A new anti-counterfeiting law was adopted in 2006 to enhance legal recourse against counterfeiters. A copy of the law is available at: www.ompic.org.ma PROJECT FINANCING OPTIONS

LOCAL FINANCING OPTIONS • Foman (a Moroccan business upgrading fund) • European MLT Loans • Others INTERNATIONAL FINANCING OPTIONS

The Export-Import Bank of the United States (Ex-Im Bank) Ex-Im Bank is the official export credit agency of the United States. Its mission is to assist in financing the export of U.S. goods and services to international markets. Ex-Im Bank provides export financing products that fill gaps in trade financing, and assumes credit and country risks that the private sector is unable or unwilling to accept. It also helps to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters. Ex-Im Bank provides working capital guarantees (preexport financing); export credit insurance (post-export financing); and loan guarantees and direct loans (buyer financing).

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No transaction is too large or too small. On average, 85% of transactions directly benefit U.S. small businesses. With nearly 70 years of experience, Ex-Im Bank has supported more than $400 billion of U.S. exports, primarily to developing markets, worldwide. For further information, please consult the web site: www.exim.gov The U.S. Trade and Development Agency (USTDA) USTDA advances economic development and U.S. commercial interests in developing and middle income countries. The agency funds various forms of technical assistance, feasibility studies, training, orientation visits and business workshops that support the development of a modern infrastructure and a fair and open trading environment.

Operating at the nexus of foreign policy and commerce, USTDA is uniquely positioned to work with U.S. firms and host countries in achieving the agency’s trade and development goals. In carrying out its mission, USTDA gives emphasis to economic sectors that may benefit from U.S. exports of goods and services. USTDA activities cover a wide range of sectors of high priority to host governments and international development efforts. They include, but are not limited to the following : • Telecommunications • Industry

• Energy Development

• Food Production

• Minerals Development • Transportation

• Air Traffic Control

• Waste Management

Each year, USTDA reviews numerous requests for funding for early project planning activities. Many proposals have resulted in USTDA-funded Feasibility Studies (FS), Technical Assistance (TA), Training Grants (TR), Technical Symposiums (“conferences”) (TS), and Orientation "reverse trade" Visits (OV). For more information, please consult: www.ustda.gov The Overseas Private Investment Corporation (OPIC) OPIC is a government development agency whose mission is to mobilize and facilitate the participation of United States private capital and skills in the economic and social development of less developed countries and areas, and countries in transition from non market to market economies. It carries out this mission by:

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Commercial Issues • providing political risk insurance to help U.S companies manage risk ; • providing financing through direct loans and loan guaranties ; • and leveraging private capital through OPIC-supported funds.

OPIC programs are available for new and expanding business enterprises in more than 150 countries. As part of its overall mission, OPIC also advocates on behalf of U.S. business clients that have made long-term investments in emerging markets and developing nations. Finally, OPIC works with host country governments to help create economic climates that attract U.S. investment, facilitating the entry of hundreds of U.S. businesses into new markets abroad. For more information, please consult: www.opic.gov

International Finance Corporation (IFC) IFC is a member of the World Bank Group that provides assistance and financing for SMEs. IFC recently began targeting the financing, through equity investment, of major projects such as the activities of Morocco’s second mobile telephony operator, Meditel. For more information, please consult: www.ifc.org

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Taxation and Investment Incentives

Taxation and Investment Incentives TAXATION

CORPORATE TAX (IS)

The current rate of corporate tax (IS) is 35% (39.6% for credit institutions with the exception of hire-purchase operations). Reduced rates of IS apply as follows: • 10% for income earned by non-resident foreign companies; • 8% for contract work revenues earned by companies that choose the lump sum basis of tax assessment; • 17.5% for the export sector; • 17.5% for the tourism sector. PERSONAL INCOME TAX (IR)

Personal income tax (IR) is applicable to professional income, salaries, rent, equity investment income and agricultural income. The IR scale applies as follows: Annual salary

IR Rate

Deductions

24,001 to DH 30,000

15%

DH 3600

45,001 to DH 60,000

35%

DH 11,100

0 to DH 24,000

30,001 to DH 45,000

25%

60,001 to DH 120,000

More than DH 120,000

40% 42%

DH 6600

DH 14,100 DH 16,500

Sources: Ministry of Finance and Privatisation

Reduced rates of IR apply as follows:

• 10% for the income earned by non-resident foreign companies ; • 10% for net profits resulting from the sale of shares or other debt or equity securities; • 17% for salaries paid by vocational training institutions to non-permanent professors; • 20% for fixed-interest investment income, and for profits resulting from the sale of bonds, debt securities and shares in mutual funds; • 30% for remuneration paid to non-permanent staff members and honoraria paid to doctors. 174

VALUE ADDED TAX (TVA) The standard rate is 20%. Reduced rates apply as follows: • 0% on agricultural products and certain drugs; • 10% on foodstuffs and certain drugs; • 14% on real estate, electricity, and interest payments.

OTHER TAXES Urban tax (TU): is applicable to real estate and to machinery and equipment used in professional activities at the rate of 13.50% of the rental value. Commercial license tax (la patente): is applicable to all commercial or industrial activities at an average rate of 3% of the rental value, with a ceiling of DH 50 million ($5.88 million). TAX TREATIES Morocco has signed non-double taxation treaties with the United States, Canada, Spain, France, Italy, Belgium, the UK, Finland, Germany, the Netherlands, Norway, Romania, Sweden, Tunisia, Luxembourg, Switzerland, and Denmark.

Copies are available in French at www.finances.gov.ma/fiscalite/ convention/convention.htm, and the U.S./Morocco treaty is available in English at www.irs.gov/pub/irs-trty/morocco.pdf. INVESTMENT INCENTIVES

GENERAL INVESTMENT INCENTIVES • An exemption from commercial license tax for all commercial or industrial activities during the first five years of activity, and on land, new construction, continuing construction, and equipment acquired during the operation. • An exemption from urban tax for new construction, continuing construction, and equipment related to the operation for the first five years. • An exemption from value added tax on machinery, equipment and parts for the first few years of activity. • Hassan II Fund Subsidy: Projects dealing with car products manufacturing, leather, the environment, recycling and waste management are eligible for a Hassan II Fund subsidy consisting of: - 50% of the cost of the land, calculated on a maximum price of DH 250 /sq. meter (USD 29.4/sq. meter) - 30% of the cost of construction, calculated on a maximum price of DH 1500/sq. meter (USD 176.4/sq. meter)

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Taxation and Investment Incentives This subsidy is 100% if it is claimed for the acquisition of the land only, calculated on a maximum price of DH 250 sq/meter (USD 28.5/sq. meter). The Hassan II Fund subsidy has now been extended to additional sectors, such as textiles, clothing, and electronics for projects worth more than DH 1 million (approximately USD 117.647).

SECTORAL INVESTMENT INCENTIVES In addition to the general investment incentives that apply to all sectors, certain priority sectors enjoy special advantages or are subject to a development agreement with the government. Among these sectors are the following: • Construction Construction companies are exempt from corporate tax (IS) for the construction of low-cost housing. • Mining Mining companies that sell their products to other firms for export processing are eligible for a 50% reduction in IS during the first five years of exporting. Mining companies are authorized to create a depletion allowance of 50% of the profit before tax. 20% of this amount can be used as a social fund (e.g. to cover dismissal compensation for surplus workers).

• Exporting companies Companies exporting products and services are exempt from corporate tax (IS) for a period of five years. Thereafter, firms pay 50% of the standard 35% IS rate. • Agriculture Companies dealing in agriculture or stock breeding, and agricultural cooperatives, are exempt from corporate tax until December 2010. Agricultural equipment and products are exempt from value-added tax (TVA).

• Hotel companies Hotel companies are eligible for an exemption from corporate tax (IS) for the first five years of operation with respect to that part of the turnover generated in foreign currency. Thereafter, firms pay 50% of the standard 35% IS rate.

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• Handicraft companies Companies dealing in traditional arts and handicrafts are eligible for a 50% reduction in corporate tax (IS).

• Textiles Textile companies are exempt from the corporate tax and commercial license tax for the first five years. Thereafter, firms pay 50% of the standard 35% IS rate. Among other incentives, textile companies are entitled to a rebate of 20 cents/KWH on electricity costs, and a 50% refund of their social security premiums. • Hydrocarbons Oil companies enjoy a total exemption from corporate tax (IS) for a ten-year period, beginning from the start date of regular production for each license area. All equipment, materials, products and services necessary for reconnaissance, exploration and extraction operations are exempt from customs duties and value-added tax (TVA). The holders of an extraction license are exempt from commercial license tax and urban tax. The profits and dividends of the holders of an extraction license and the shareholders of subcontracting companies are exempt from the tax on income from shares, dividends and similar revenues, and are freely transferable out of Morocco (without limitation) for foreign entities.

Geographic investment incentives (industrial zones, free zones) Companies situated in the following economic zones benefit from a 50% reduction in corporate tax (IS) and income tax (IR) for the first five years of operation: Al Hoceima, Berkane, Boujdour, Chefchaouen, Es-Smara, Guelmim, Jerada, Laayoune, Larache, Nador, Oued eddahab, Oujda-Angad, Tangiers, Assilah, Fahs- Beni Makada,Tan-Tan, Taounate, Taourirt, Tata, Tetouan. Companies and other enterprises operating in Tangiers, Assilah, and Fahs-Beni Makada benefit permanently from a 50% reduction in IS and IR. • Industrial zones There are 70 industrial zones in Morocco, and the private sector is playing a key role in equipping, promoting and managing them. For more information (in French), please consult: www.mcinet.gov.ma.

• Free Zones Morocco has a customs free zone in Tangiers. Several U.S. and international companies are already operating in the Tangiers Free Zone, such as Automotive Wiring Systems, Polydesign, Yazaki and others. 177

Taxation and Investment Incentives THE TANGIERS-MEDITERRANEAN PORT AND THE TANGIERS FREE ZONE (TFZ) :

Two key vehicles for the development of the north Two major infrastructure projects in the north, the TangiersMediterranean Port and the Tangiers Free Zone (TFZ), are proof positive of the region’s intention to take a larger share of its surrounding market.

The Tangiers Free Zone, now in its second phase, has attracted considerable investment: as of July 2006, 234 companies were based there. Some 143 firms are currently in operation, generating 18,765 jobs and $368 million in cumulated investment.

The second phase of the zone (a $12 million extension) will accommodate 140 units and create 16,000 jobs, while allowing TFZ to diversify its range of services and pursue specialized clusters such as Tangershore (IT, offshoring, call centers), Automotive City, Electronic City, and Media City.

The Tangiers Free Zone (TFZ) is located near the international airport of Tangiers, the highway leading to Rabat and Casablanca, and the port of Tangiers. The port handles 73% of the country’s IRT traffic and is connected by an extensive daily ferry schedule to the European continent, only 8 miles away.

INCENTIVES : • The city of Tangiers is the third-largest industrial center in Morocco. Investors benefit from a plentiful and well-qualified labor force and the presence of vocational training institutes with which they can conclude training contracts suited to their projects. 178

• The Tangiers Free Zone is not subject to the foreign trade and exchange control scheme; it is exempted from all duties levied on the import, circulation, consumption, production and/or export of goods. Among the fiscal advantages: • An exemption from registration tax and stamp duty for both company registration and capital increases and for the acquisition of land; • An exemption from commercial license tax for 15 years; • An exemption from urban tax for 15 years; • An exemption from corporate tax (IS) for 5 years and a rate reduction to 8.75% thereafter; • An exemption from capital gains tax and the tax on assimilated revenues for non-residents; • An exemption from value added tax (TVA) on goods.

TFZ includes a logistics zone, a recreational zone, and a special zone for services, customs offices and security posts.

For more information, please consult the Tangiers Free Zone site: www.tangerfreezone.com The Tangiers Industrial Zone, which is independent of the Tangiers Free Zone, also provides investors with management services, a set of equipped offices for hire, warehouse space (for hire), a medical center, and canteens. THE TANGIERS MEDITERRANEAN PORT PROJECT

Located on the Strait of Gibraltar, 22 miles East of Tangiers and 8 miles from Europe, the Tangiers-Mediterranean (TangerMed) project is a 500km Special Economic Zone at the crossroads of major shipping lanes. When completed, it will include a multipurpose harbor, several customs free zones, and modern transport and service infrastructure. The principal TangerMed project components are :

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Taxation and Investment Incentives A deep sea port • Draught : -16m • Port entrance channel : 300m in width • Turning basin diameter : 600m

Port terminals • A container terminal will operate for both transshipment (hub and spoke and interlining) and import-export traffic (quay length: 1610m); • An international roll-on/roll-off terminal that will allow the region to respond to the needs of both passenger and International Road Transport (IRT) traffic, as well as alleviate congestion at the existing port of Tangiers; • A bulk and general cargo terminal; • A hydrocarbon terminal, including storage capacity for refined products and the development of bunkering activity. The free zones • A Logistic Free Zone adjacent to the port (100 ha) • An Industrial Free Zone (600 ha) • A Commercial Free Zone (200 ha)

Phase II: quays and open areas (March 2004 to 1Q 2007) Transport infrastructure work

Starting

Ending

Highway

Aug. 2004

June 2007

Expressway (Port-Fnideq)

Dec. 2004

May 2007

Railway

Aug. 2004

June 2007

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BOUSKOURA INDUSTRIAL ESTATE The Bouskoura Industrial Estate (Casablanca), managed by SOGEPIB, has been a clear success since marketing of the plots began in late 2002. Just two years after launching, 80% of the land area was allocated and 75% was subject to finalized contracts. The majority of tenants are foreign companies, mostly specialized in the industrial fittings sector (PVC, aluminum) and in construction and public works equipment. A second industrial estate covering 40,000 hectares is being planned to meet continued strong demand, and the original zone is being enlarged by the addition of 1800m2 of service lots suitable for banks, restaurants, grocery stores, shops and offices. The estate is a joint venture of the French Chamber of Commerce, SOGEPIB, and the Moroccan government. The advantages of the Bouskoura Industrial Estate are obvious: a rent of DH 5 ($0.58) per square meter that allows investors to avoid tying up capital in land and building acquisition, on-site services funded by the estate (security, lighting, cleaning, etc), and a strategic location 20km from the port, 17km from the airport, and 4km from the railway network. The management company also provides assistance with feasibility studies, administrative procedures, and permit applications. The management company plays the role of a one-stop shop for estate services, thus facilitating the investorâ&#x20AC;&#x2122;s establishment. The formula offered to investors is long-term rental for an 18-year period, renewable for 9-year periods. THE NOUACEUR TECHNOPARK

Some 43 firms employing more than 3250 staff are already established at the Nouaceur Technopark (Mohammed V International Airport, Casablanca) in sectors ranging from telecommunications, aeronautics, electronics, and IT to biotechnology, pharmaceuticals, and agri-food products. The combined value of the investments is estimated at $114 million. The Nouaceur Technopark, run by a management company (Sapino), lies between two major roads in a strategic position near the airport and the rail network; it includes a hotel, an international trucking zone, and a service station. Prospective tenants in the sectors of leather, textiles and clothing, automobile components and wiring, or aeronautics will find that this new generation technopark meets international standards. It is equipped with low and medium tension electricity supply, top quality lighting, a secure drinking water supply with a dedicated reservoir, and a modern telecom network (fiber optic cabling and high speed 181

Taxation and Investment Incentives Internet and satellite connections). Available lots include four story and six story packages ranging from 1000m2 to 10,000m2 in area and from 14m to 20m in height, backed up by management company services : site maintenance, security, road works, lighting, and gardening. Polluting activities are prohibited, and the Hassan II Fund will subsidize land acquisition for investment projects worth more than DH 1 million ($117,647) in capital goods (excluding customs duties and taxes). Source: National Airport Authority (ONDA), Lâ&#x20AC;&#x2122;Economiste newspaper, Aujourdâ&#x20AC;&#x2122;hui le Maroc newspaper

182

Company Legal Structure and Registration

Company Legal Structure and Registration COMPANY LEGAL STRUCTURE The two most common legal structures are the Société Anonyme (SA) (Corporation) and the Société à Responsabilité Limitée (SARL) (Limited Liability Company).

The Société Anonyme (SA) • Minimum Share Capital: DH 300,000 ($35,294) or DH 3,000,000 ($352,941) for companies to be listed on the Casablanca Stock Exchange. • Minimum Nominal Share Value: DH 100. • Shareholders: A minimum of 5 shareholders. Shareholders’ liability is limited to the total amount of their subscriptions. • Administration: Either a Board of Directors (comprised of 5-12 shareholders) or a management committee (comprised of 1-5 members, who are not necessarily shareholders) and a Supervisory Board (comprised of 5-12 shareholders). The Société à Responsabilité Limitée (SARL) • Number of partners: from 1 to 50. • Minimum Share Capital: DH 10,000 ($1176) divided into shares of equal value. • Minimum Nominal Share Value: DH 100 ($11) • Management: An appointed managing partner (or more than one) who can be, but is not required to be, a shareholder. Branch of foreign parent company Foreign companies can operate through a branch when their operations are limited or temporary. AN IMPROVED BUSINESS ENVIRONMENT

Morocco has implemented a strategy to assist investment projects as follows: • Simplified procedures ; • Freedom to transfer profits and capital gains without restrictions; • Treaties with major countries to protect and guarantee investments and to avoid double taxation ; • Specialized commercial courts and international arbitration ; • Laws on intellectual property rights, pricing and competition, and the environment. • Special advantages for projects exceeding DH 200 million (approximately USD 23 million). 184

ASSISTANCE TO INVESTMENT PROJECTS

Morocco has created several entities to assist investment projects, such as the Regional Investment Centers (one-stop shops for company registration and investment assistance), the Investment Division of the Ministry of Economic and General Affairs, and an Inter-ministerial Investment Commission.

Regional Investment Centers The mission of the regional investment centers is the simplification of administrative procedures, the enhancement of communication with investors, and the promotion of investment in the respective regions. There are 16 centers in Morocco, as follows: • Agadir / Karim Lahlou Tel: 212 48 82 69 77 - Fax: 212 48 82 69 80 contact@cri_agadir.ma • Al Hoceima / Othman Badich Tel: 212 39 39 98 39 - Fax: 212 39 98 39 88 othman.badich@caramail.com • Casablanca / Abdelhamid Benelafdil Tel: 212 22 48 18 88/ 22 48 21 15/ 22 48 18 54 - Fax: 212 48 21 15 hbenelafdil@casainvest.ma - www.casablancainvest.ma • Dakhla / Mamay Bahiya Tel: 212 48 89 85 35 - Fax: 212 48 89 79 12 www.cridakhlainvest.ma - www.dakhlainvest.ma • Fez / Fouad Ouzzine Tel: 212 55 65 20 57 - Fax: 212 55 65 16 46 ouzzine@crifes.ma • Guelmim-Essmara / Bari Bourqqia Tel: 212 48 77 17 77 - Fax: 212 48 77 14 44 bourqqia@netcourrier.com • Kenitra / Jamal Attari Tel: 212 37 37 46 27 - Fax: 212 37 37 45 36 info@kenitrainvesti.ma • Laayoune / Ech Charki Ritab Tel:212 48 99 12 01 - Fax: 212 48 89 11 79 echarkiritab@hotmail.com • Marrakesh / Abderrazaq Moumni Tel: 212 44 42 04 93/44 42 04 92 - Fax: 212 44 31 01 34 moumni@crimarrakech.ma 185

Company Legal Structure and Registration • Meknes/Tafilalt / Hassan Bahi Tel: 212 55 51 18 46/55 51 19 63 - Fax: 212 55 51 39 22 crimt@iam.net.ma • Oujda / Farid Chourak Tel: 212 56 68 28 27/56 68 57 45 - Fax: 212 56 69 06 81 chourak.farid@caramail.com • Rabat / Nabil Kharoubi Tel: 212 37 73 13 07 - Fax: 212 37 70 25 94 info@rabatinvest.ma - www.rabatinvest.ma • Oujda / Farid Chourak Tel: 212 56 68 28 27/56 68 57 45 - Fax: 212 56 69 06 81 chourak.farid@caramail.com • Safi/Doukalla/Abda / Mohamed Lemrabet Tel: 212 44 61 01 54/ 44 61 21 40/ 44 61 21 39 - Fax: 212 44 61 01 58 cri@safi-invest.com - lemrabet@safi-invest.com • Settat / Jelloul Samsseme Tel: 212 23 72 37 61 - Fax: 212 23 72 36 81 jsamsseme@hotmail.com • Tadla/Azilal / Ahmed El Haouti Tel: 212 23 48 20 72 - Fax: 212 23 48 23 13 criazitad@yahoo.fr - www.tadlazilalinvest.ma • Tangiers/Tetouan / Mohamed Yacoubi Tel: 212 39 94 68 24 - Fax: 212 39 94 33 14 www.tanger-tetouaninvest.ma The Investment Division: The Investment Division’s mission is to assist investors by providing information on the legal framework and administrative requirements, land acquisition and industrial zones. For more information, you can consult www.invest-in-morocco.gov.ma The Inter-ministerial Investment Commission: Chaired by the Prime Minister, this commission plays a key role in implementing measures to improve the business climate and addressing impediments pertaining to investment projects. It also approves incentive packages for major investment projects.

186

The Social Integration of Foreign Managers

Moroccan society has always been open to other countries, cultures, and peoples, and has for centuries played host to communities of different ethnic origins and nationalities. Morocco has gained strength from its diversity, and today its population is a harmonious mixture of Arab and Berber, with a small Jewish community. Morocco is multicultural, multiethnic, and a land of tolerance and cohabitation. Many religions are represented in Morocco. Besides Islam, which is the religion of State, there are synagogues for the Jewish community and churches for the Catholic and Protestant faiths in many cities. Morocco is known for the generosity and hospitality of its people, so donâ&#x20AC;&#x2122;t be surprised if you quickly find yourself treated like a member of the family. EDUCATION, AND SOCIAL GROUPS

The broad horizons of Moroccan society are exemplified by a diverse education system, a wide range of cultural activities, and the number of foreign languages spoken. The Moroccan education system offers Arabic language instruction complemented by a strong emphasis on Berber and on foreign languages, including French. Other educational systems available in Morocco â&#x20AC;˘ An extensive network of French institutions, spanning 10 different cities, including many primary schools, 10 junior high schools, six high schools, and nine cultural centers.

189

CLE Etudes

• A network of Jewish community schools and high schools that are open to members of other communities. • Spanish language instruction is provided for in a few primary schools and five high schools, notably in the northern part of the Kingdom. There is also a network of eight Spanish cultural centers. • An Italian school system in Casablanca and Tangiers. • A wide range of cultural centers representing different nations: Germany, Portugal, Italy, France, Russia, Brazil, Egypt... The main anglophone institutions are as follows • The American Schools (Rabat, Casablanca, Tangiers, Marrakech) • The American-style Al Akhawayn University (Ifrane) • The George Washington Academy (Casablanca) • The American School Academy (Casablanca) • Private undergraduate institutions offering English language instruction • The British Council (Rabat, Casablanca) • The American Language Centers (Rabat, Casablanca, Agadir, Tangiers, Fès, Marrakech, Mohammedia...) • The American cultural centers: Dar America (Casablanca) and the Public Affairs Section of the U.S. embassy (Rabat) • The Fulbright Commission (Moroccan-American Commission for Educational and Cultural Exchange) • Amideast (Rabat and Casablanca) • Numerous private English language schools THE PRINT MEDIA IN MOROCCO

DIVERSITY AND OPENNESS Morocco has a diverse and dynamic print media scene characterized by a boldness that is rare in the Arab world. It also recently experienced a phase of restructuring that involved equipment upgrading, new hires, content changes and new design concepts. The Moroccan print media have successfully attracted private capital: new publications are launched on a regular basis and veritable newspaper groups and publishing companies have emerged.

In addition to generalist publications and newspapers aligned with political parties, specialized titles cover themes like the economy, finance, women, IT, cars, sport, art, decoration, medicine and youth. Nearly 650 publications are currently on the market, mainly in Arabic, but also in French, Tamazight (Berber), and to a lesser extent, Spanish and English.

191

The Social Integration of Foreign Managers MUSIC, MOVIES AND THEATER Morocco plays host to a number of festivals celebrating both local and foreign cultural treasures, including: • The International Sacred Music Festival (Fès) • The Gnawa Music Festival (Essaouira) • The Marrakesh Film Festival • Mawazines: a World Music Festival (Rabat) • The Desert Symphonies Festival (Ouarzazate) • Several jazz festivals (Rabat, Tangiers) • The Essaouira Classical Music Festival

Foreign movies screened in cinemas are dubbed in French, while concerts and live theater productions are generally in French or Arabic. A number of digital satellite TV movie channels offer the original English sound track where applicable, and news channels include CNN, CNBC, BBC World, and Euro News. There is an English language theater group, the Casablanca Amateur Dramatic Society, which presents plays at the Churchill Club. SPORTS ACTIVITIES Morocco’s diverse landscape, wonderful climate, and 3500km of coastline allow you to enjoy a range of recreational activities, such as swimming, skiing, sailing and windsurfing, fishing, and hunting.

Golfing Morocco is known for its golf courses, most of which are 18 or 27 hole courses. For more information, contact the Royal Moroccan Golfing Federation at Royal Dar Es-Salam Golf Course (Rabat): Tel: (212) 37 75 59 60 / 37 75 56 36 - Fax: (212) 37 75 10 26. 192

Surfing In Morocco, those who love to surf can endlessly indulge their pleasure. They can be carried along by the Atlantic waves or the trade winds, and slide on the snowy slopes of the Atlas mountains or the dunes of the south. For more information, contact the Royal Moroccan Surfing Federation at: (212) 22 25 95 30, Fax: (212) 22 23 63 85.

Hiking and Trekking In Morocco, the four mountain ranges, including the Atlas and the Rif, provide an excellent opportunity for those who enjoy trekking, hiking and climbing. All of them are accessible to people in good physical condition. Perhaps the most popular is the Deren, in the High Atlas. Certain peaks of the High Atlas remain snow-capped throughout the year. Of all the mountain sports practiced in Morocco, trekking (on foot or by ski) is one of the best ways to appreciate these vast and little-visited regions. The mountains are beautiful and wild, yet they are well organized for hikers with qualified guides, and there is a good network of refuges for night stopovers and the option of hiring mountain bikes. A list of refuges can be obtained from the Moroccan National Tourist Office (ONMT) or the Club Alpin Français: Tel: (212) 22 27 00 90, Fax: (212) 22 29 72 92.

Skiing The ski season runs from December to April, and the cities of Marrakech and Ifrane offer skiing opportunities as well as many other activities. For more information, please contact: • The Royal Moroccan Ski and Mountaineering Federation. Tel: (212) 22 20 37 98, Fax: (212) 22 47 49 79 • The Club Alpin Français at (212) 22 27 90 00.

195

The Social Integration of Foreign Managers Aeronautics Options include flying, parachuting, parascending, wind flying, parapente, hang gliding, microlite, and hot air ballooning. For more information, contact the Royal Moroccan Federation for Recreational Light Aviation: Tel: (212) 37 70 83 47, Fax: (212) 37 70 69 58.

OTHER DISTRACTIONS All of Morocco’s big cities offer a wide range of places to unwind, including numerous restaurants, pubs and night clubs. The greatest variety is to be found in Casablanca, Marrakech, Agadir, Rabat, and Tangiers. Restaurants and Fast Food Moroccan cuisine is one of the best in the world, it is simply delicious! But if you do need a change, there is a variety of international fare, such as French, Italian, Lebanese, Spanish or Asian... American brands including McDonalds, Pizza Hut, TexMex, and Häagen Dazs ice cream are also available, mainly in Casablanca, Rabat, Tangiers, Agadir, and Marrakech. Travel Morocco is an endlessly fascinating and diverse landscape that offers wonderful travel opportunities, and it is just eight miles south of Spain. All of Europe and its vacation opportunities are a stone’s throw away.

Guide Books on Morocco • Lonely Planet Morocco (4th Ed), by Frances Linzee Gordon, Dorinda Talbot, and Damien Simonis. Publisher: Lonely Planet. • The Rough Guide to Morocco (Rough Guides), by Mark Ellingham, Shaun McVeigh, Don Grisbrook. Publisher: Rough Guides. • Blue Guide Morocco, by Jane Holliday. Publisher: W.W. Norton & Company.

• Culture Shock!: Morocco, by Orin Hargraves. Publisher: Graphic Arts Center Publishing Co. • Knopf Guide: Morocco, by Knopf Guides. Publisher: Knopf.

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Key Web Sites and Email Addresses

Key Web Sites and Email Addresses INVESTING IN AND TRADING WITH MOROCCO • American Chamber of Commerce in Morocco www.amcham-morocco.com • www.moroccousafta.com • U.S. Embassy www.usembassy.ma

• Moroccan Embassy, Washington D.C. E-mail: embassy@embassyofmorocco.us • FTA website www.moroccousafta.com

• U.S. Commercial Service www.buyusa.gov/morocco/en

• Investment Division, Moroccan Economic And General Affairs Ministry www.invest-in-morocco.gov.ma

• A list of the 16 Regional Investment Centers (CRI): see Part 7 of this guide • Caisse Centrale de Garantie http://www.ccg.ma • Bouskoura Industrial Estate http://www.gepib.ma/ • Tangiers Free Zone www.tangerfreezone.com

• Tangiers Mediterranean Special Agency www.tmsa.ma

• CGEM (Moroccan Employers Federation) www.cgem.ma • ONA Group www.ona.co.ma

• Moroccan Clothing and Textile Association www.amith.org.ma • Moroccan Exporters Association www.asmex.org

• Moroccan Export Promotion Center www.cmpe.org.ma • Moroccan Foreign Trade Council www.cnce.org.ma • Maroc Export Site www.maroc-export.com/

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Key Web Sites and Email Addresses TRADE SHOW CALENDARS

• Casablanca International Trade Fair Agency www.ofec.co.ma • Morocco gateway site www.maroc.ma/PortailInst/An/home DIRECTORIES TO MOROCCO • Telecontact www.telecontact.ma

• Casanet www.casanet.net.ma/pj/index.asp • Le Guide www.leguide.ma

• Marweb www.marweb.com/maroc/ BANKING

• Citigroup www.citigroup.com

• Arab Bank www.arabbank.com

• BMCE Bank www.e-bmcebank.ma

• Export information from BMCE bank www.interexmaroc.com • Attijariwafa Bank http://www.attijariwafabank.com/

• Société Générale Marocaine de Banques (SGMB) www.sgmb.ma

• Banque Marocaine du Commerce et de l’Industrie (BMCI) www.bmcinet.com • Credit du Maroc www.cdm.co.ma

• Banque Centrale Populaire www.cpm.co.ma

• Moroccan Central Bank www.bkam.ma/Anglais/Menu/Anex.asp • Crédit Immobilier et Hôtelier (CIH) www.cih.co.ma • International Finance Corporation www.ifc.org

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Key Web Sites and Email Addresses • Overseas Private Investment Corporation www.opic.gov • The Export-Import Bank of the U.S. www.exim.gov THE STOCK EXCHANGE

• Casablanca Stock Exchange www.casablanca-bourse.com

TELECOMMUNICATIONS AND IT

• Maroc Telecom (mobile and fixed telephony) www.iam.ma • Meditel (mobile telephony) www.meditel.ma

• Morocco Trade and Development Services (MTDS) www.mtds.com • Information Technology Industry Association www.apebi.org.ma MOROCCAN GOVERNMENT AGENCIES • Foreign Exchange Office www.oc.gov.ma • Statistics Department www.statistic-hcp.ma

• Telecommunications Regulatory Agency (ANRT) www.anrt.net.ma • Customs Service www.douane.gov.ma

• Ministry of Finance http://www.finances.gov.ma

• Fisheries Corporation (ONP) www.onp.co.ma

• National Potable Water Authority (ONEP) www.onep.ma/onep.htm • Railways Corporation (ONCF) www.oncf.ma

• Intellectual Property Service (OMPIC) www.ompic.org.ma • Airport Authority (ONDA) www.onda.org.ma/onda/indexflash.htm

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Key Web Sites and Email Addresses • Port Authority (ODEP) www.odep.org.ma/

• Export Control and Product Analysis Institute (EACCE) www.eacce.org.ma/Home.html • Renewable Energy Agency (CDER) www.cder.org.ma/ • Electricity Corporation (ONE) www.one.org.ma

• Hydrocarbons and Mining Agency (ONHYM) www.onhym.com

• National Employment Promotion Agency (ANAPEC) www.anapec.org

• Employment Promotion and Professional Training Office (OFPPT) www.ofppt.org.ma • Small and Medium Sized Entreprises Agency (ANPME) www.anpme.ma • OCP Group (phosphates) www.ocpgroup.ma • CDG Group www.cdg.ma

TRANSPORTATION

• Railways Corporation (ONCF) www.oncf.org.ma/ • Royal Air Maroc (RAM) www.royalairmaroc.com

• Maersk Logistics www.maersk-logistics.com

• Compagnie marocaine de navigation (COMANAV) www.comanav.co.ma • CTM (passenger and freight bus services) www.ctm.co.ma/ • COMARIT www.comarit.com

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Key Web Sites and Email Addresses NATIONAL CHAMBERS OF COMMERCE, INDUSTRY AND SERVICES

• Casablanca 98, Boulevard Mohamed V, Casablanca Phone: (212) 22 26 43 27 - Fax: (212) 22 26 84 36 www.ccisc.gov.ma • Rabat 1, rue Ghandi, Rabat Phone: (212) 37 70 64 42 - Fax: (212) 37 70 64 66 • Tangiers Angle rue Hariri et Ibn Tagmia BP 411, Tanger Phone: (212) 39 94 63 80 - Fax: (212) 39 94 63 88 • Marrakesh Jnan El Harti, Gueliz BP 529, Marrakech Phone: (212) 44 43 61 91 - Fax: (212) 44 43 52 56 ccismar@menara.ma • Agadir Avenue Hassan II, BP 240, Agadir Phone: (212) 48 84 71 24 - Fax: (212) 48 84 54 55 www.ccis-agadir.com • Fez Boulevard Abdellah Chefchaouni, BP 2032, Fès Phone: (212) 55 62 28 32 - Fax: (212) 55 62 68 84 REGIONAL TOURISM CENTERS (CRT)

• Agadir Said SCALLY (President) Address: Immeuble Chambre de Commerce et d’Industrie, Avenue Hassan II, BP 1014, Agadir. Phone: (212) 48 84 26 29 / 37 75 40 97 - Fax: (212) 48 84 25 95 / 37 75 80 51 Email: crt@menara.ma - www.tourisme-agadir.com • Fez Driss FACEH (President) Address: Objectif Maroc, 9 rue de Turquie, Fès Phone: (212) 55 65 28 16 - Fax: (212) 55 62 17 76 / 62 49 93 • Marrakesh Kamal BENSOUDA (President) Address: Place Youssef Ibn Tachfine , Medina, Marrakech Phone: (212) 44 38 52 61 - Fax: (212) 44 38 52 49

•Tangiers-Tetouan Mohammed EL HITMI (President) Address: 4, rue Moussa Ibn Noussair, Tanger. Phone: (212) 39 93 35 36 - Fax: (212) 39 93 35 26/93 44 38 • Casablanca Omar KABBAJ (President) Address: 60 bis, Avenue Hassan II, Casablanca. Phone: (212) 22 20 62 06 - Fax: (212) 22 20 54 05 E.mail: crt.Casablanca@menara.ma

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Key Web Sites and Email Addresses • Meknes-Tafilalet Driss ALAMI (President) Address: Hôtel Palace, 11, rue de Ghana Nouvelle ville, Meknès. Phone: (212) 55 65 28 16 / 52 04 07 / 51 12 60 - Fax: (212) 55 51 07 41 Hôtel Palace: (212) 55 62 17 76 / 40 14 31 • Ouarzazate (Provincial tourism committee): Address: Délégation régionale du tourisme, Avenue Mohammed V, .BP 297, Ouarzazate. Phone: (212) 44 88 24 85

• Dakhla Mohammed LAKHTOUR (President) Address: Hôtel Doumes-Sahara Regency, Avenue El Walae, Dakhla. Phone: (212) 48 89 80 46/47 Cell phone: (212 ) 61 18 85 23 - Fax: (212) 48 89 80 45

• Laayoune-Boujdour-Sakia Al Hamra Hamdi OULD ERRACHID (President) Address: Chambre de Commerce et d’Industrie de Laâyoune, Avenue Zerktouni, Hay My Rachid, Laâyoune. Phone: (212) 48 99 61 05 - Fax: (212) 48 99 61 04 E-mail: crtlaay@-lmenara.ma • Guelmim-Smara Slama HAOUINE (President) Simon HAOUINE (Vice President) Cell phone: (212) 61 44 16 43 - Fax: (212) 48 80 24 08 Address: Délégation régionale du tourisme, Résidence du Sahara n°3, Boulevard Med VI, Guelmim. Phone: (212) 48 87 29 11 - Fax: (212) 48 87 31 85 KEY MOROCCAN GOVERNMENT MINISTRIES • Prime Minister’s Department www.pm.gov.ma

• Ministry of Foreign Affairs & Cooperation www.maec.gov.ma • Ministry of Communication www.mincom.gov.ma

• Ministry of Finance and Privatization www.finances.gov.ma

• Ministry of Tourism, Handicrafts & Socio-Economics www.tourisme-marocain.com • www.artesnet.gov.ma

• Ministry of Commerce, Industry and Economic Upgrading www.mcinet.gov.ma/ • Ministry of Justice www.justice.gov.ma • Ministry of Health www.sante.gov.ma

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Key Web Sites and Email Addresses • Ministry of Agriculture, Rural Development, and Fisheries www.madrpm.gov.ma

• Ministry of Education, Higher Education, and Scientific Research www.enssup.gov.ma • www.men.gov.ma • Information Technology and Postal Services Department www.septi.gov.ma/ • Ministry of Energy and Mining www.mem.gov.ma • Ministry of Foreign Trade www.mce.gov.ma

• Ministry of Housing & Urbanism www.mhu.gov.ma

• Ministry of Town and Country Planning, Water, and Environment www.minenv.gov.ma ECONOMIC INFORMATION ON MOROCCO (FRENCH) • Economic policy department, Ministry of Finance www.finances.gov.ma/dpeg • Moroccan Employers Federation (CGEM) www.cgem.ma • Moroccan Economic Observatory (CMC) www.lecmc.ma • Foreign Exchange Office www.oc.gov.ma

ECONOMIC INFORMATION ON MOROCCO (ENGLISH) • Oxford Business Group www.oxfordbusinessgroup.com/

• International Monetary Fund http://www.imf.org/external/country/MAR/index.htm • Official Moroccan Press Agency www.map.co.ma/ PRESS (FRENCH)

• L’Economiste www.leconomiste.com

• Tel Quel www.telquel-online.com • La Vie Economique www.lavieeco.com

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Key Web Sites and Email Addresses • Le Matin www.lematin.ma

• Official Moroccan Press Agency www.map.co.ma/ • L’Opinion www.lopinion.ma

• Le Journal Hebdomadaire www.lejournal-hebdo.com • Liberation www.liberation.press.ma

• The North Africa Journal www.north-africa.com

CULTURE AND EDUCATION

• MACECE (Fulbright Commission) www.macece.org • Amideast www.amideast.org

• The Rabat American School www.ras.edu.ac.ma

• The Casablanca American School www.cas.ac.ma • The Tangiers American School E-mail: ast@mtds.com

• The George Washington Academy www.gwa.ac.ma • The American School Academy www.americanacademy.ma

• American Cultural Association (language centers) www.aca.org.ma

• American International Women’s Club (Casablanca) E-mail: webwoman@fawco.org • Al Akhawayn University www.alakhawayn.ma

• Business Professional English Center www.etudiant.ma/bpec_lang.htm

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Advertisers Guide 2007 BRINK’S MAROC GSCM CRI LAAYOUNE

CRI KÉNITRA CRI SETTAT DHL CRI SAFI SHERATON BRITISH AIRWAYS LUFTHANSA ARYAN'S CRI DAKHLA CRI SOUSS MASSA DRAA FROMAGERIE DES DOUKKALAS MIHAD MARKET DARI COUSPATE CMS ENERGY/ JLEC INOV PETROLE ONHYM ATTIJARI WAFABANK SCET-SCOM BMCE BANK GBP CRI FEZ CRI MEKNÈS PRICE WATERHOUSE COOPERS AMERICAN SCHOOL RABAT ANNONCE PRESSE IFRANE IIHEM AL AKHAWAYN UNIVERSITY BOURSE DE CASA ANAPEC CABINET LAZRAK SOTHEMA MAERSK LOGISTICS NMCI CITIGROUP LES ATELIERS DE LINGERIE TIKIDA GARDEN UNIVERS-MOTORS CLE CONCEPT AMCHAM

2ème de couverture 3ème de couverture 4ème de couverture p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p

8 18 23 24 30 65 66 72 74 79 80 83 84 88 97 100 111 112 113 115 138 150 155 188 190 193 194 199 200 201 203 205 207 209 211 213 215 219 220

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Our thanks

Our Thanks We would like to express our gratitude to all those who have contributed to the publication of this guide, be they advertisers or sources of information. We would like to thank the following:

Ministry of Foreign Trade: Mr. Mustapha Mechahouri Atlas Hospitality: Mr.Kamal Bensouda Autoroutes du Maroc: Al Omrane AMITH (Moroccan Textile and Clothing Industry Association) AMICA (Moroccan Automobile Industry Association) AMIP (Moroccan Pharmaceutical Industry Association): Mr. Ali Ghandi ANRT (National Telecommunications Regulatory Agency); APEBI (Morocco’s association of ICT firms): Mr Jamal Benhamou Attijariwafa Bank: Mr. Abdeslam Taadi Bouregreg Valley Development Agency Brink’s: Jean-Christophe Chwat CDER (Renewable Energies Development Center): Mrs. Amal Haddouch Cisco Systems, Mounir Abderahman Citigroup Bank, Nuhad Saliba CFCIM (French Chamber of Commerce and Industry in Morocco); Colony Capital: Mr. Naji Boutros COMANAV FDIM (Mining Industry Federation) FENELEC (Electrical and Electronics Industry association) Fruit of the Loom: Mr. Brian Kennedy Moroccan Franchise Observatory: Khadija Mekouar Moroccan Ministry of Agriculture, Rural Development and Fisheries Moroccan Ministry of Commerce, Industry and Economic Upgrading; Moroccan Ministry of Equipment and Transport; Moroccan Ministry of Tourism; ODEP (Moroccan Port Authority); ONCF (Moroccan Railways Corporation); ONDA (Moroccan Airport Authority); ONE (Moroccan National Electricity Authority) ONHYM (National Hydrocarbon and Mines Agency): Amal Haddouch Pfizer: Mr. Karl Lintel SICCAM (International Exhibition of offshoring in Morocco): Mr Mohamed El Ouahdoudi Sothema: Mr. Omar Tazi Tanger Free Zone Tikida Garden Hotel (Marrakech): Mr. Benabess Taarji Jalil Tangiers Mediterranean Special Agency (TMSA) US Wheat Associates: Mr. Georges Galasso

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Clé Concept alias CLE-Etudes - Rabat Tél. : 037 77 38 83/99 • Fax : 037 77 38 98

Through the interpretation,

the idea becomes concrete…