European automobile manufacturers and parts makers are setting up and spreading their operations across North Africa, leading local suppliers to improve their performance.
Renault is now in talks to open a manufacturing plant in Algeria and the launch in Morocco of Renault Tangiers in January has caused other producers to look into the low-cost manufacturing capacity that North Africa can provide.
Renault has been in talks with the Algerian government since it requested that the company set up operations in 2010.
The two sides have not agreed on where the plant should be located, but signed an accord in July that should soon lead to a final agreement.
A lodgy start
Six years after the project’s announcement by chief executive Carlos Ghosn, Renault’s large low- cost Moroccan factory began its operations early this year with more than 3,000 workers at the site at Melloussa, some 25km from Tangiers.
It cost the French group $1.5bn and should produce 340,000 vehicles per year from 2014. The plant is now producing the Lodgy, a minivan based on the Dacia Logan.
The Moroccan government has made the automobile sector one of the pillars of its industrial development plan.
The sector already accounts for €1.5bn in annual turnover, some six times higher than in 2002.
With the new Renault plant, the Association Marocaine pour l’Industrie et le Commerce de l’Automobile (AMICA) predicts that the industry’s turnover will grow by 35% per year.
Even if Renault Tangiers boasts about buying the majority of its non-mechanical parts from Morocco for the Lodgy, it is essentially the big international groups and their Moroccan subsidiaries that have benefited.
Spain’s Antolin and France’s Treroc were already subcontractors for the Logan assembly plant in Casablanca before being chosen for the Lodgy.
“But others have set up for the first time for the start-up of Renault Tangiers,” adds Eric Buchot, the purchasing manager for Renault Morocco.
He says that there are 17 suppliers for Renault Tangiers in Morocco, but only two founded with Moroccan capital, Tuyauto and Socafix.
“After Renault chose to set up in Tangiers, we all had the hope of winning market share,” recalls Adil Rais, who leads the Moroccan equipment manufacturers Plastex and Siprof.
“I produce brake parts. I naturally proposed my products to Renault. A team of buyers for the manufacturer came to visit our factory.
“They did not make any remarks and then never gave any further news,” says Adil, who is also AMICA’s vice president.
Suppliers must be patient
Larbi Belarbi, AMICA president and adviser to the Europe and North Africa director of Renault, is more patient: “One does not become an automobile supplier from one day to the next.
An equipment provider has a smaller margin of error working with Renault Tangiers, which works on the just-in-time model and has to produce 400,000 vehicles per year, than with the Casablanca plant, which assembles 70,000.”
Adel Ben-Khaled, director of the Moroccan subsidiary of German company Leoni, is more confident: “In Spain or in Turkey, it was the German and French equipment suppliers that trained their local subcontractors.
With that experience, certain companies raised their performance and became their rivals. In Morocco, it is the same process that is underway.”
Tunisia already hosts a robust network of suppliers, especially in the automobile wiring sector, but it has been shaken by protests in the wake of the country’s political turmoil.
Tunisia’s 29 cable manufacturers account for 5% of global production and employ 25,000 people.
Coficab, the market leader, was among the quickest to respond to calls for improved working conditions.
Japan’s Yakazi suffered a wave of strikes and shut down its Om Larayes plant in December 2011 due to lower orders from Toyota●