The inauguration of the Moroccan factory of French manufacturer PSA will take place today, Thursday, June 20, in Kenitra.
By Kawtar Ennaji
Rabat – French car manufacturer, PSA Group, is set to inaugurate its new Kentira plant on Thursday, June 20. The group’s industrial project in Morocco is based on the creation of a complete automotive ecosystem.
Construction work on the plant, the first PSA Peugeot Citroën industrial complex in Morocco, began in the Kenitra region in 2016. The industrial agreement for this project was signed on June 19, 2015, in Rabat by Carlos Tavares, CEO of PSA Peugeot Citroën, and Moulay Hafid Elalamy.
The plant reinforces the PSA ecosystem in Morocco and plans to produce 200,000 cars per year by 2020, exceeding the 100,000 expected in the original 2015 contract.
The PSA group has mobilized an investment of €560 million to fund the development of its projects in Morocco.
The plant in Kenitra will help to meet the growth of sales in the region and to make the Middle East & Africa a major pillar of profitable growth for the group.
The PSA Group hopes to reach a local purchase volume exceeding €1 billion by 2020 and a local integration rate of 60% as a start and 80% by the end of the project.
“We have exceeded €1 billion of local sourcing, which was planned for 2022 and we will reach €2 billion in 2023,” said the office of the Minister of Industry, Investment, Trade, and Digital Economy, Moulay Hafid Elalamy.
On the employment side, the PSA Group’s workforce in Morocco, which stood at 350 in 2017, is expected to reach 2,200 by the end of 2019 in addition to 20,000 indirect jobs.
The group expects that 90 percent of production will be directed to export markets, especially to the rest of Africa and the Middle East.
Oxford’s overview of Morocco’s economy
According to the Oxford Business Group’s overview of Morocco’s economy for 2019, the country’s economic development depends on “improving business environment and infrastructural base, the gradual liberalization of the local currency and increased investment into export-oriented industries.”
The Ministry of Industry’s plan to provide a solution to the wave of protests across Morocco in recent years included creating 500,000 new jobs in various industrial sectors including the automotive sector.
Oxford also said that industry, including the automotive sector, contributed an average of about 25 percent to Morocco’s GDP in 2017.
Similarly to PSA Group, the French group Renault had also signed six agreements with equipment manufacturers as part of a “Renault ecosystem” to be established in Morocco.
In the last 4 years, Morocco has become the largest car producer in the MENA region, and the automotive industry has become the largest exporting sector of the country, ahead of phosphates.