MEDZ: Moroccan Gold - Abellatif Hadj Hamou
Offshoring may be an increasingly popular way to cut capital costs but there are a number of hurdles to finding a good-quality service provider. Different languages, time zones and telecoms networks can make offshoring an unpalatable option. Hence the success of nearshoring: outsourcing activities to a nearby country that has competitive running costs. It has all the cost benefits of offshoring with none of the inconvenience.
The concept has been warmly embraced by MEDZ, a subsidiary of CDG Developments. Its nearshoring arm, CasaNearShore, opened its first park in 2008 near Casablanca to serve IT and business process outsourcing.
The largest build of its kind in North Africa, it is 20 minutes away from an international airport, offers over 25ha of office space and welcomed 8,000 workers in its first two years. Construction of another MEDZ project, Technopolis, in Rabat, started in 2009. Over 3,000 people now work there.
A third park, south of Casablanca in Jorf Lasfar, will open this year in an area covering almost 500ha. It is dedicated to heavy industry, represents an investment of AED14bn and will house around 200 companies upon completion.
Strength to strength
For MEDZ president Abellatif Hadj Hamou, Morocco is the ideal destination for nearshoring. "More organisations are seeking lean and cost-effective labour," he says, "and the growth of this service is due to a number of factors." Most important, he believes, is the quality of the country's human resources. The workers are skilled and it is common for Moroccan employees to be bilingual, if not trilingual. Arabic and French are spoken throughout and English and Spanish are also popular.
Secondly, the country's telecoms structure has gone from strength to strength and its connection to Europe is particularly strong. The fact that Morocco runs on Greenwich Mean Time makes it a convenient location for companies that serve Western Europe.
Lastly, there are fiscal and tax incentives for companies that develop their activity in Morocco. There are also subsidies linked to job creation and on-the-job training. Corporate tax is set at 0% for the first five years.
Hadj Hamou is confident that Morocco offers value and stability to nearshore operations. "The Moroccan economy has shown good growth recently," he says, "even with the global turmoil. In the last two years the economy has grown over 5%, and it's expected to maintain that rate this year." The country has a reasonable level of debt and inflation rates are under control. The telecoms infrastructure is developing rapidly and internet consumption has grown by 8% in the last decade.
MEDZ's first project was to support the country's Vision 2010 plan for tourism. In 2003 the company realised this by designing and building integrated areas for the tourist industry. It was the first Moroccan enterprise to build nearshore business parks.
In 2005 MEDZ diversified into land use and planning solutions, with the goal of boosting national economic performance. It enjoys a close relationship with the Moroccan Government and has undertaken several public works.
Hadj Hamou plans to lead the company into logistics and commercial services in the future, and admits that it is challenging for his company to have diversified its activities so widely and so quickly. "It's challenging but it's also interesting," he says. "Everyone in the company is motivated to help our country develop."
Given CasaNearShore's confident approach to nearshoring, all bets are on Hadj Hamou and his team to lead Morocco to the forefront of the industry.