Industrial Acceleration Plan: launch of 3 ecosystems in the leather sector

Three leather sector industries are being structured in ecosystems under the 2014-2020 Accelerated Industrial Plan. During a ceremony organised on Thursday 11 February 2016 in Rabat, Moulay Hafid Elalamy, Minister of Industry, Trade, Investment and the Digital Economy, Mr. Mohammed Boussaid, Minister of Economy and Finance, Hamid Ben Rhrido, President of the Federation of Leather Industries (FEDIC), have signed 4 performance contracts to support the implementation of the launched ecosystems.

The sectors concerned are footwear, leather goods and leather clothing and tanning. The growth targets that have been set for 2020 are:

- The creation of 35,000 new permanent jobs, and
- Achievement of 5.5 billion dirhams of turnover from exports.

The structuring of these sectors in efficient ecosystems shall provide them with a new momentum for development and bring in tangible answers to the challenges and shortcomings their stakeholders are currently facing: gradual loss of competitiveness in both local and traditional markets, weak competitive advantage from upstream despite the availability of hides and raw hides of good quality, threat of substitutes to leather, dominance of informal production in the domestic market, ...

The ecosystems will strive to strengthen the structural competitiveness of businesses, ensure better integration of the leather value chain and promote the emergence of players generating high economic and social value.

By stressing the importance of the leather industry as an essential component of the consumer goods sector in Morocco, Mr. Elalamy said on this occasion that "ecosystems in place are expected to better position the sector on value generating segments for which Morocco has real valuable assets”. “Ecosystems will participate in the upselling of the sectors, he added, with the objective of constantly meeting quality and competitiveness requirements”.

The implementation of the “leather shoe” ecosystem will encourage a faster growth of the sector, through a wide restructuring of the existing industrial fabric and attracting of new investors, to better meet the needs of both local and international markets. The ecosystem will meet the challenges still facing the footwear segment including the loss of competitiveness on target markets and the mismatch between upstream supply and downstream needs.

The ecosystem "Leather goods and leather clothing" will participate in the emergence of a dense, modern and competitive industrial fabric, currently heavily dominated by craft enterprises and very small enterprises suffering from structural handicaps.

Regarding tannery, the launched ecosystem will help overcome the current shortcomings of the sector such as inadequate production infrastructure, losses during processing stages, lack of skilled workers...

The support planned for the actors of the ecosystem within the performance include is perfectly adapted to the needs and expectations of the operators and aims at:

- Support for tangible investment (land, building, plant, machinery, commercial distribution network for national brands...) and intangible investment (creativity, innovation, design, technical assistance...), through the Industrial Development Fund (FDII).
This support takes the form of direct aid up to 30% of the total amount of tangible and intangible investment.
- Strengthening the Moroccan offer via the Moroccan Investment Development Agency and Maroc Export,
- - Upgrading the regulatory framework and the creation of quality labels,
- Upstream restructuring of the sector
- Increased efforts for the integration of the informal sector (under-invoicing upon import, support for small and self-entrepreneurs...),
- The establishment of a training offer, in partnership with training institutions, including OFPPT
- Access to land at attractive prices: 96.7 Ha reserved for the sector.
- Access to bank financing through the development of an integrated offer dedicated to investment and operations funding,
- Support of small and very small enterprises and self-entrepreneurs within the contractual framework Government/ANPME 2015-2020,
- Encouraging foreign purchasers, customers of the ecosystem companies, to settle and open sourcing offices in Morocco.

Such aids will be granted in consideration of the above objectives, set for the sector by 2020 in terms of job creation and increased exports.

By virtue of the concluded performance contracts, FEDIC (Federation of Leather Industries) will work on coordinating and managing business networks forming the launched ecosystems. FEDIC is also committed to create 35,000 jobs by 2020, to launch 40 leading investment projects as part of the ecosystems and achieve additional revenue from exports of 5.5 MDHS by 2020. Furthermore, FEDIC will work on the implementation of an exchange market for leather, the first stage of which will constitute of the rehabilitation of the Ain Nokbi hide market in Fes.