Introduction

    The Moroccan industry of the leather covers diversified activities. It consists of a branch tannery of exporting base partially but working especially for needs of local market, a leather industry and leather clothes and a shoe industry oriented almost exclusively to export. Considered as a historic sector anchored in the Moroccan culture, the leather sector continues to represent one of the sectors with great potential to the export for the Moroccan industry.

    Differentiation and upgrading, co-contracting and finished product with higher added, innovation and creativity, responsiveness and service, constitute the framework on which the current and future strategy of the Moroccan leather sector .

    Industry association:

    The Federation of Moroccan Leather Industries "FEDIC"



Ecosystems of the sector

    Three leather sector industries were structured in ecosystems on 11 February 2016:

    • Footwear
    • leather clothing and tanning.
    • leather goods

    The growth targets that have been set for 2020 are:

    • The creation of 35,000 new permanent jobs
    • 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.

Assistance and support

    1. Support for the Sector’s Ecosystems

    For leather ecosystems, the planned support perfectly fits the needs and expectations of operators and aims at :

    • Support for material investment (property, construction, installations, machines, commercial networks for national brands…) and immaterial investment (creativity, innovation, design, technical assistance…), through the Industrial Development and Investment Fund (FDII). This support takes the form of direct aids, financing up to 30% of the overall tangible and intangible investment.
    • Strengthening the Morocco offer through the Moroccan Investment Development Agency and Maroc Export.
    • Upgrading the regulatory framework and the introduction of quality labels,
    • Structuring the upstream sector,
    • The deployment of best efforts for the integration of the informal sector (under-invoicing on imports, support for small business and self-entrepreneurs ...),
    • The establishment of a training scheme, in partnership with training institutions, including OFPPT,
    • Access to property at an attractive price (96,7 hectares reserved for the sector).
    • Access to bank financing through the development of an integrated offer dedicated to investment and operating funding,
    • Backing of the sector’s SME’s and self-entrepreneurs as part of the Government/ANPME (National Agency for the Promotion of Small and Medium-sized Enterprises) agreement 2015-20120
    • Encouraging foreign clients, the customers of the ecosystem’ of companies, to settle down and open sourcing offices in Morocco.

    2. Investment Promotion Fund (FPI)

    Under the Investment Charter, the FPI offers partial coverage by the Government of certain expenses related to the acquisition of property (up to 20% of the cost of land), external infrastructure (up to 5% of the total amount of the investment programme, or 10% in the case of an investment in the sector of spinning, weaving or finishing) and vocational training (up to 20% of the cost of the training).

    These contributions may be combined as long as the total contribution of the state does not exceed 5% of the total investment programme; or 10% in the case of investment in the sector of spinning, weaving or finishing; or when the investment project is located in a suburban or rural area.

    Eligibility criteria:

    The investment project must meet at least one of the following five criteria:

    • Represent an amount of 200 million dirhams or more over a 3-year period;

    To be located in one of the provinces or prefectures mentioned in Decree No. 2-98-520 dated 5 Rabii I 1419 (30 June 1998);

    • Create a minimum of 250 stable jobs over 3 years;
    • Provide technology transfer;
    • Contribute to the protection of the environment.

    4. Tax incentives

    Tax incentives are provided for by article 123-22°-a) of the General Tax Code and Article 7.1 of finance law No. 12-98 for the 1998/9 budget year as amended and supplemented by the following:

    • The exemption from import duty on capital equipment, materials and tools necessary for the implementation of an investment project with a total cost greater than 200 million dirhams during 36 months after the signing of the investment agreement; this exemption is extended to parts, replacement parts and accessories imported at the same time as the aforementioned equipment;
    • The exemption from VAT on imports of capital equipment, materials and tools necessary for the implementation of an investment project with a total cost greater than 200 million dirhams until 36 months after the start of activity by the company or from the date of issuance of the building permit, and which may be extended by six months in the event of force majeure (renewable once); this exemption is extended to parts, replacement parts and accessories imported at the same time as the aforementioned equipment.

    5. Support for SMEs

    SMEs in the sector may benefit from special support within the programmes developed by Maroc PME:

  1. IMTIAZ CROISSANCE
  2. ISTITMAR CROISSANCE
  3. AUTO-ENTREPRENEUR
  4. 5. Free zone status

    A free trade zone (ZFE) is a specified area of land devoted to export activities for industrial purposes and related service activities. Each free zone is created and delimited by a decree that determines the nature and business activities that can be established there.

    The operational free trade zones are located at Tangier (Tanger Free Zone – TFZ and Tanger Automotive City – TAC), at Kenitra (Atlantic Free Zone – AFZ), at Casablanca (Midparc), at Rabat (Technopolis) and at Oujda (Technopole d’Oujda).

    To obtain free zone status under law No. 19-94, companies must have obtained authorization from the local commission of the free export zone, which is presided over by the wali or governor of the region, and must make at least 70% of their turnover from exports.

    Free zone status allows for the exemption of foreign trade and exchange controls, as well as access to the following state aid:

    Tax incentives resulting in:

    • Exemption from income tax (IR) during the first 5 years, and then a reduction of 80% of tax on gross earned income during the following 20 years;
    • Exemption from corporation tax (IS) for the first 5 years, and then a rate of 8.75% for the following 20 years;
    • Exemption from professional tax for the first 15 years;
    • Exemption from urban tax for the first 15 years;
    • Exemption from participation in national solidarity;
    • Exemption from tax on income from corporate rights, dividends and similar income for non-residents and a reduction in tax to 7.5% for residents;

    Customs benefits:

    • Exemption from import duties, and simplified customs procedures;
    • Unlimited exemption from value added tax in respect of products delivered and services supplied to the free export zones and from the subjected territory;

    Administrative facilitations:

    • Exemption from registration fees and stamp duty on instruments of incorporation or increases in the capital of the company, as well as on land acquisitions;
    • The establishment of a one-stop service to the investor.

Training

    The training of human resources is a strategic activity of the Industrial Acceleration Plan 2014-2020. The availability and quality of human resources determine the attractiveness of Morocco as a destination, and increase the productivity and competitiveness of the companies.

    Amongst other things the strategy aims at providing the ecosystems in place with skilled profiles.

    The detailed mapping of training needs - with a quantification of the human resource requirements by sector, profile, region and year - and the identification of training opportunities available in Morocco are ongoing, which will enable the development of a national training plan.

    As for textiles and leather, a training scheme for fashion design aimed at the international market is provided by the Casa Moda Academy (CMA) at Sidi Maarouf in Casablanca, the first public higher education establishment of fashion design in Morocco.

    Details of the CMA:

    • Types of training: initial and continuing;
    • Method of governance: public-private partnership (delegated management);
    • Capacity: 90 places;
    • Starting date: October 2010.

Reception infrastructure

    In the framework of the Industrial Acceleration Plan, the Ministry plans for the mobilization of 1,000 hectares to create Integrated Industrial Rental Parks (PIL) with turnkey premises: each park will include a one stop shop for administration, a local job pool, ad hoc services and a training programme.

    In parallel, general and sectoral Integrated Industrial Platforms (P2I), possibly benefiting from the free zone status, guarantee the availability of property at an attractive price, comprehensive and diverse real-estate and logistics options conforming to the best international standards, as well as on-site services and a one stop shop for administration.