The Development of Aerospace Sector in Morocco
Driss Rchid, Otmane Bouksour and Zitouni Beidouri
Laboratoire de Mécanique Productique & Génie Industriel (LMPGI), Université Hassan II Ain Chock,
Ecole Supérieure de Technologie, Km 7 Route El Jadida, Casablanca, Morocco
Keywords: Aerospace Subcontracting, Source of Knowledge, Innovation.
Abstract: Given the high barriers to enter the aerospace industry, developing countries tend to use the needs of
aerospace manufacturer leaders for a competitive cost as main attracting factor. The objective of this study
is to investigate the attracting factors of Moroccan regions and country policy measures toward the
aerospace sector. A survey applied to all aerospace
firms in Morocco is the main information source. The
existence and quality of industrial areas and labour force cost are considered as the main attraction forces by
all local subsidiaries.
1 INTRODUCTION
In the recent year there is a large consensus that the
industry is the development engine of the country.
Especially for Morocco through industries called
Morocco world metier (aerospace, automobile, off
shoring and textile). Given the profound
restructuring facing the aerospace sector
internationally, this industry booming in Morocco,
represents a major opportunity. Indeed, this sector
shows a world strong growth, with order books of
nearly one thousand planes over the next five years
and sustained growth of 5% over 20 years. It is
facing a complete overhaul of its industrial map with
the arrival of so-called "low-cost" competitors,
exerting strong pressure on prices and major
technological changes.
The battle to conquer new markets, especially in
emerging countries requires companies
subcontracting to be more competitive while
meeting safety requirements and maintaining the
high quality of manufactured parts. The constant
search for competitive niches has become a question
of survival for the whole aviation value chain.
The specific questions addressed in this paper
are: What are the main reasons for aerospace firms
for migrating to Morocco, and how they overcome
limitations of the local environment, which has a
nascent aerospace industrial infrastructure? Do
Moroccan aerospace sector presents similar
centripetal forces found in other well-known
aerospace clusters or sectors to maintain Moroccan
competitiveness in term of attracting and retaining
aerospace companies? Are there firms that might be
considered Anchor Tenants? Does Moroccan
government policy towards the sector, proposes
similar measures taken by other successful
countries? We think these questions will give us
some understanding about the potential of Morocco's
aerospace regions. A survey applied to aerospace
firms in Morocco and government publications are
the main information source for this study.
2 THE MOROCAN CONTEXT
The history of Moroccan aviation coincides with that
of the Royal Armed Forces (FAR), the Royal Air
Maroc (RAM) and Morocco Aviation (EADS).
Established in 1957, RAM develops an industrial
centre of aircraft maintenance at Casablanca airport.
The settlements of aerospace firms in 1990s
favoured labour pools around Casablanca, either
integrated into the city nearest population areas or
industrial areas. The focus was then is to move
closer to the workforce. In 1999, SNECMA and
RAM have created a joint venture, Snecma Morocco
Engine Services (SMES) for the maintenance and
repair of aircraft engines. SMES not only works for
Airbus but also for global aircraft manufacturers
such as Boeing, Embraer, Bombardier, Suiza,
Messier Buggati, Dassault Facon. In 2001, SMES
participated in a joint venture with Boeing and RAM
to give birth to Matis Aerospace, specializing in the
264
Rchid D., Bouksour O. and Beidouri Z..
The Development of Aerospace Sector in Morocco.
DOI: 10.5220/0004861302640270
In Proceedings of the 3rd International Conference on Operations Research and Enterprise Systems (ICORES-2014), pages 264-270
ISBN: 978-989-758-017-8
Copyright
c
2014 SCITEPRESS (Science and Technology Publications, Lda.)
production of wiring harnesses for aircraft engines.
Since then, the Safran group has attracted several of
its subsidiaries to Morocco (Aircelle, Teuchos,
Labinal Aerospace Morocco) and a number of
subcontractors. Each of these subsidiaries in turn
influenced the choice of location of its suppliers or
subcontractors. The Moroccan Aerospace industry is
moving towards production. It consists of tier one
and two sub-contractors that can attract their
customers and suppliers of tier three and four
(Figure 1). All Airbus partners are present in
Morocco except Latécoère which is implanted in
Tunisia through its subsidiary Latelec(Hattab-
Christmann, 2009). The number of aerospace
companies actually located in Morocco is around
100 (GIMAS, 2013). Some companies produce only
for aerospace. While others also work for the
automobile. Others are very active in the aerospace
sector when they are attached to the electronics
industry (Hattab-Christmann, 2009).
Figure 1: Aeronautical subcontracting pyramid (Niosi and
Zhegu, 2005).
The Moroccan aerospace sector has three levels
of sub-contracting .The aircraft and engine
manufacturer’s category represented primarily by
EADS and SMES. The first ensures the maintenance
and assembly of aircraft subassemblies and the
second the maintenance of aircraft engines. The
second level consists of components designers and
manufacturers that include the assembly of
electronic card and component manufacturers,
cables and connectors and aircraft structure
companies. And the last level is entities
subcontracting capacity or specialty that includes
90% of Moroccan’s aerospace firms. Their work
relates to the mechanical precision, machining and
sheet metal. The turnover of aerospace companies
based in Morocco is estimated at 8 billion Dirhams
in 2011. The sector potential is approximately 4
billion Dirhams additional GDP with the creation of
around 15,000 new direct jobs by 2015(AMDI,
2013). The battle is tough internationally for
Moroccan government; it is not only to attract new
investors and diversify opportunities, but also to
defend their position against Tunisia and Eastern
Europe countries, especially Romania.
3 CONCEPTUAL FRAMEWORK
3.1 Source of Knowledge and
Innovation
Knowledge sources in innovation are defined as
sources of information that the firm may seek to use
in the technological innovation process (Leiponen
and Helfat, 2005). Being able to effectively access
knowledge from external sources is increasingly
recognised as a key factor in a firm’s
competitiveness (Huggins et al., 2010). Knowledge
sourcing and the networks through which this
knowledge flows are seen as crucial to economic
success and competitiveness (Huggins et al., 2010).
In particular, proximity to key knowledge sources is
regarded as a key reason for the greater
competitiveness of some of the most successful
cities and regions in the world. While innovation is a
complex process which may require knowledge to
flow between firms and other actors (Lichtenthaler,
2005). Increasingly, this process is viewed as a
systemic undertaking - firms no longer innovate in
isolation but through a complex set of interactions
with others(Chesbrough, 2003).
3.2 Centripetal and Centrifugal Forces
Aerospace is a high value-added sector, strongly
affected by scale and timing. The industry success
depends on rapid technological progress and
government support for corporate R&D is essential.
Their activity depends on components and parts
which can be widely dispersed in terms of both
industry and location. Transportation costs of these
components are not relevant in overall aircraft costs.
Also, demand (market) is not geographically
bounded(Niosi and Zhegu, 2005).
Clustering and dispersion of industry are
submitted to opposing forces. Centripetal forces that
tend to concentrate industry in a few geographical
regions and centrifugal forces that push in the
opposite direction. Supply chain management is the
vehicle of knowledge spillovers in this industry.
TheDevelopmentofAerospaceSectorinMorocco
265
This chain is basically international and its
management includes such dimensions as technical
specifications, concurrent engineering, strategic
engineering alliances, quality control and
product(Niosi and Zhegu, 2005).
3.3 Anchor Tenant Concept
The classic anchor tenant is the large department
store in a retail shopping mall that creates demand
externalities for the other shops. (Agrawal and
Cockburn, 2003) apply the approach to large firms
within clusters, defining anchor tenant as a large
firm that is: (1) heavily engaged in R&D in general
and (2) has at least minor absorptive capacity in a
particular technology within a particular region.
Anchor tenants can be very important in both
creating and capturing externalities within local
innovation systems, are likely to be important in
stimulating both the demand and supply sides of
local markets for innovation and may be an
important channel for transmission of spill overs
(Baglieri et al., 2012). One important factor appears
to be the role of universities as sources of research
spill overs. As academic and industrial research
interests have converged in areas such as computer
science, electrical engineering and biotechnology, it
has become clear that university research plays a key
role in regional innovation performance. Second,
anchor tenants must be large firms. This makes them
likely to be large, direct consumers of university
research, but above and beyond this, their size may
have important indirect effects. Third, the anchor
tenant may also indirectly stimulate innovative
activity by enhancing both the supply and demand
sides of the market for new technologies. Anchor
tenants create externalities by thickening markets
and stimulating demand. They capture externalities
by directly and indirectly increasing the absorptive
capacity of the region for early-stage university-
based research (Agrawal and Cockburn, 2002).
3.4 Research Questions and
Hypotheses
Based on the discussion of the previous sections and
the work of Martinez (Romero, 2011a); (Romero,
2011b) on Mexican aerospace’s context, we propose
empirical hypotheses regarding the questions posed
in the introduction section.
Question 1: What are the main reasons for
aerospace firms for migrating to Morocco, and how
they overcome limitations of the local environment,
which has a nascent aerospace industrial
infrastructure?
Hypothesis 1a: Stringent quality and safety
standards required for aerospace activities, including
manufacturing, firms are likely to require external
technical assistance at one point. Due to the
limitations of the Moroccan system, the more likely
source of this firm-external knowledge would be
located abroad.
Hypothesis 1b: Even though manufacturing is the
more likely activity to be transferred, some sort of
innovation will certainly be introduced at the firm
and country level, innovation at the world level will
be almost non-existent in the short and medium run.
Question 2: Do Moroccan aerospace sector presents
similar centripetal forces found in other well-known
aerospace clusters or sectors to maintain Moroccan
competitiveness in term of attracting and retaining
aerospace companies?
Hypothesis 2: Attraction forces are related with low
cost operations and the manufacturing capability of
the country. (Industrial infrastructure, the skilled
labour force, the low operation costs...Etc)
Question 3: Are there firms that might be
considered Anchor Tenants?
Hypothesis 3: Since no substantial R&D activity is
expected, it is unlikely to find an anchor tenant firm.
Question 4: Does Moroccan government policy
towards the sector, proposes similar measures taken
by other successful countries?
Hypothesis 4: The measures taken by Moroccan
government toward the sector through «National
Pact for Industrial Emergence» have encourages
foreign firms to take the risks to transfer more
complex activities to their subsidiaries in Morocco.
4 EMPIRICAL RESEARCH
4.1 Data
Given the small size of Moroccan aerospace firms,
the sampling method used is the exhaustive list. It
consists of querying all the individuals in the
population studied. The Moroccan aerospace
industries association (GIMAS, 2013) list includes
almost the majority of companies operating in the
aerospace industry in morocco. The targeted
population as a basis for this research includes 107
companies. However, companies operating in the air
service, trade service or are only a commercial
representations of their main companies were
excluded because they present no interest in our
ICORES2014-InternationalConferenceonOperationsResearchandEnterpriseSystems
266
research. Therefore, the observed population is 75
companies whose main activity is aerospace
industry, research and engineering.
Figure 2: Activities distribution of aerospace firms.
Given the low response rate (8 responses), all
companies that are installed in the Casablanca
region, Bousekoura, The questionnaire was emailed
to the observed population from January 16th to
Feb16th of 2013. Customized questionnaires were
sent to the attention companies’ director explaining
the objectives of the research. Nouacer were
approached directly while others were contacted by
phone during the period of May 1st to 30th of June
2013. This approach allowed us to have 18 answers.
4.2 Method and Results
The survey asks for general information about the
enterprise, attraction factors, local advantages,
innovation and source of knowledge. Secondary data
sources include aerospace publications of the
Moroccan Ministry of Economy and Ministry of
Industries and New Technologies.
4.2.1 Type of Activities, Innovation and
Sources of Knowledge
To check the first hypotheses (1a and 1b), there are
questions that ask firms about their external and
internal sources of knowledge than, the level of
innovation of their new products. The answers to
these questions will illustrate if these firms have
internal and external sources of knowledge that in
some way helped to develop that novelty and
achieve some level of innovation in their activities
as well.
Even if internal sources of knowledge are
important, the ability to obtain sources of knowledge
external to the firm is crucial in this high technology
sector. Table 1 shows the different sources of
knowledge external to the firm according to the
location of those sources. It is clear that headquarters
are the main sources of novel ideas for the aerospace
firms in Morocco with 66.7%. The second most
cited source of ideas are clients located outside the
country with 22.2%. Global and national suppliers
with global consultant were mentioned by 16.7% of
the firms. We can notice the low level contribution
of the research institute and university as external
source of knowledge.
Table 1: External sources of knowledge that had an impact
in the new products and processes introduced.
External sources Nb % Obs.
Headquarters 12 66,7%
Global companies 4 22,2%
Global consultants 3 16,7%
Global suppliers 3 16,7%
Local suppliers 3 16,7%
National customers 2 11,1%
Local Businesses 2 11,1%
Local consultants 2 11,1%
Local research Institutes 2 11,1%
Global competitors 1 5,6%
National research institutes 1 5,6%
Research institutes worldwide 0 0,0%
Local universities 0 0,0%
World Universities 0 0,0%
Total 18 *
*Sum of percentages is different from 100 due to multiple responses and
suppressions
Thus we have a situation in which knowledge
external to the firm comes from agents located
outside the region, or for that matter outside the
country. The only local sources of knowledge with
some relevance were the local research institutes.
Table 2 shows which part of the firms were the
most important to tackle the obstacles that new
products represent. In a scale of 1 to 5, firms were
asked to evaluate the importance of these four firms'
departments in their contribution to undertaking new
products. The Management followed by engineering
departments were considered by almost all firms as
very important. This is consistent with the idea that
most of these firms have to manage and tackle
engineering problems to manufacturing processes
for products made elsewhere. It is important to note
that the low values of R&D and Marketing are due
to the fact that a lot of firms gave a value of zero to
that question. Thus we can say that the hypothesis 1a
TheDevelopmentofAerospaceSectorinMorocco
267
is true.
Table 2: Internal sources of knowledge that had an impact
in the new products and processes introduced.
Firm’s departments Average contribution
Management 32,2%
Production Engineering 26,4%
Marketing 20,7%
R & D unit 20,7%
Total 100,0%
Table 3: Novelty degree of new product or process.
Degree of novelty introduced
Nb % Cit.
World level
10 58,80%
Firm level
4 23,50%
Country level
3 17,60%
Total
17
100%
Table 3 shows that almost all firms produced at
least one new product. 58.8% of the firms declared
that the new product they manufactured was a world
novelty. Thus we can say that the hypothesis 1b is
false and the Moroccan based aerospace firms
contribute to the world novelty by a new products
and processes.
4.2.2 Regions' Advantages and Interaction
among Firms
There are two pieces of information in the survey
that are relevant to answer research question 2 about
the centripetal forces of aerospace region in
Morocco. First, there is a question that lists possible
local advantages, and asks firms if they benefit from
those advantages or not. Second, there is an open
question about why the firm chose that specific
region to establish in the first place, and then the
diverse reasons given by the respondents were
compared and grouped.
Table 4 captures the local advantages that firms
consider they have by being located in a Morocco
aerospace region. The local advantage most cited
with 87.5% of positive answers is the existence and
quality of industrial areas. The second most cited
advantage was the labour force with 82.4%. The
infrastructure, financial and clients’ proximity were
cited advantages by over 50%. While proximity to
suppliers and being close to other aerospace firms
have received less positive answers. Also we can
notice that local incentives receive only 27.3 % of
positive answer and are not considered as key factor
to the choice of being installed in a specific region.
Table 5 shows the original attraction factors that
firms took in account before establishing in
Morocco. All surveyed firms, declared that the low
cost of the labour force was the main attraction
factor flowed by Europe proximity with 88.2 % and
Low operation costs with 61.5%. Thus we can say
that the hypothesis 2 is true and the main attraction
factors are labour cost and proximity to the Europe.
Table 4: Local advantages.
Advantages
Yes No
Nb % Cit Nb % Cit
Labour
14 82,40% 3 17,60%
Industrial Areas
14 87,50% 2 12,50%
Suppliers proximity
1 9,10% 10 90,90%
Clients proximity
7 58,30% 5 41,70%
Co-location
2 20,00% 8 80,00%
Infrastructure
9 64,30% 5 35,70%
Universities and
Research Centres
2 22,20% 7 77,80%
Financial advantages
8 61,50% 5 38,50%
locales Incentives
3 27,30% 8 72,70%
Table 5: Former attraction factors.
Attraction factors
Yes No
Nb % Cit Nb % Cit
Europe proximity
15 88,2% 2 11,8%
Low labour costs
18 100,0% 0 0,0%
Experience in
industrial sectors
5 41,7% 7 58,3%
Low operation costs
8 61,5% 5 38,5%
4.2.3 Anchor Tenant
There is also information about the inputs and
outputs flows of the firms, which will be very useful
to explore their degree of connectedness to the local
environment. 54.2% of the firms declared that the
France was one of their sources of specialized
inputs. The next is Europe and USA with 16.7% of
the firms. Few firms sourced inputs from Morocco
and Asia. Tables (
Table 6-*Sum of percentages is different from
100 due to multiple responses and suppressions.
Table 8) show the countries to which Moroccan
firms send their exports or source their inputs, while
other firms mentioned more than one country.
Table 6: Morocco’s aerospace firms' inputs origin.
Inputs origin Nb % cit.
France 13 54,20%
USA 4 16,70%
Europe 4 16,70%
Morocco 2 8,30%
Asia 1 4,20%
Total 24 100,00%
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268
Table 7: Morocco's aerospace firms' sales (outputs)
destinations.
Sales destinations Nb % Cit.
Europe 18 100,0%
North America 2 11,1%
Others destinations 6 33,3%
T ot a l 18 *
*Sum of percentages is different from 100 due to multiple responses and
suppressions.
Table 8: Others Morocco's aerospace firms' sales
destinations.
Sales destinations Nb % Cit.
Middle East 1 14,3%
Morocco 4 57,1%
Africa 2 28,6%
Total 18 *
*Sum of percentages is different from 100 due to multiple responses and
suppressions
As we have seen in section 3 that an anchor
tenant should be heavily engaged in R&D and has
absorptive capacity in a particular technology within
a particular region. Although world innovations exist
(Table 3) there is no major system integrator located
in Morocco, and most inputs are imported, it is
difficult to claim that a firm can act as an anchor
tenant. As we have seen, the majority of the
subsidiaries do not carry on R&D activities. These
firms are concentrated in manufacturing. Perhaps a
first step to consolidate an anchor tenant firm will be
precisely to strengthen the manufacturing capacity.
Policy measures should be taken to build a
technological infrastructure and to deliver a set of
incentives able to encourage firms to carry on R&D
activities. Thus we can say that the hypothesis 3 is
true.
4.2.4 Government Vision and Policy
Measures
With the emergence strategy (NPIE, 2009);
(ProgEmer, 2006), Morocco has focused its efforts
on industrial recovery pathways for which the
country has clear competitive advantages and usable
through development programs dedicated. Also, in
order to capture the full potential of Morocco in the
Aerospace, the government decided to support the
development of the sector through the
implementation measures to build a platform for
targeted businesses. These measures relate in
particular to(NPIE, 2009):
• The development of special offer for the
aerospace sector investors.
• The establishment of a training program tailored
to the Aerospace sector
• The establishment of integrated industrial
platforms,
The estimated potential of these measures is
approximately 4 billion Dirham of additional GDP
and would result in the creation of approximately
15,000 new direct jobs by 2015. To achieve this goal
an Institute of Aeronautical Metiers (IAM) opened
in 2011 in the vicinity of main Casablanca airport
and aerospace Zone. Its mission is to provide local
aerospace firms with pre-employment training
operators, technicians and middle managers as well
as refresher courses on the job in order to meet the
needed skills (GIMAS, 2013). There is also the
establishment recently (September 2013) in the same
area the Institute of Specialized Aeronautical
Professions and Airport Logistics (ISMALA)
providing training in aeronautical metiers. Next to
Casablanca aeropole was created a Free Zone called
Midparc. The Midparc industrial zone offers long-
term leases to industrialists working in various fields
such as aerospace and electronics.
Table 9: Government's incentives for aerospace sector.
Main National Pact measures %
Training and recruitment 28,6%
Training adapted to needs 25,8%
Free Zone status 23,9%
Real estate offer 21,6%
Total
100,0%
Table 9 shows the incentives that government
offers through “National Pact for Industrial
Emergence 2009-2015”. The most mentioned
incentives were training and recruitment and training
adapted to needs with 28.6 % and 25.8%
respectively. It seems that hypothesis 4 is confirmed
and the Pacts measures contribute to attract,
maintain and help aerospace subsidiaries to develop
their activities in Morocco.
5 CONCLUSIONS
The Moroccan aerospace firms consist mainly of
French subsidiaries looking for local advantages in
morocco regions. The surveyed firms considered
that, beside Europe proximity, the existence and
quality of industrial areas and labour force cost are
the main attraction forces. Even though these firms
shared the same locality there is no interaction
between them, and the main source of knowledge
comes outside the region, especially from
headquarters.
TheDevelopmentofAerospaceSectorinMorocco
269
The subsidiaries localisation in morocco may be
considered as an experiences to get access to
aerospace technologies and to be upgraded in Global
value chain from elements production and
subsystem assembly manufacturing to modular
integration (Benhar et al., 2007). As (DEPF, 2012)
requested, there is a need to foster cooperation
between Moroccan engineering schools and
universities to pool their resources and establish
joint laboratories with the aerospace industry.
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