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Morocco: Offshoring Gathers Steam

Two high-profile companies recently joined the rising number of business that have chosen to outsource some or all of their business processes to Morocco, reflecting the kingdom's growing appeal as an offshoring location. This goes hand in hand with the government's strategy of developing its infrastructure to attract these types of services.

French bank BNP Paribas has decided to set up two subsidiaries at the Casablanca offshoring centre, Casashore. The two new companies, Mediha Informatique and BDSI, will specialise in the development and maintenance of IT systems, professional software and the implementation of IT systems from remote locations. Through an investment of Dh45m ($5.3m) in these two new subsidiaries at Casashore, the bank expects to create 600 jobs over the medium term.

GFI Informatique, a European leader in IT services, is creating GFI Offshore Maroc, a company focused on enterprise resource planning (ERP), mainframe technologies and on small and medium enterprises. Through an investment of Dh15m ($1.8m) this project is expected to create up to 150 jobs by 2008.

These agreements come on the heels of two other significant IT companies deciding to use the Casashore infrastructure. Logica CMG and a subsidiary of the French group Akka Technologies also recently declared their intention to use the offshoring centre. Both companies will focus their services on the francophone markets.

They join the growing number of companies that have moved at least some of their business services to Casashore. They include IT companies such as the India-based Tata, French companies Atos Origin and Unilog as well as consulting companies such as the Morocco-based Masnaoui Mazars, Swiss Capgemini and France-based Accenture. France Telecom has also located some of its services at Casashore.

Offshore services are part of a growing trend of relocating companies' business processes, most often in locations with lower costs than those in their home country.

Central component of its Emergence programme, Morocco's offshoring strategy aims to make the country more attractive for offshoring in order to increase investment in the kingdom and create new jobs. The government anticipates this program could create 91,000 jobs and contribute Dh15bn ($1.7bn) to GDP by 2013.

Today, Morocco is estimated to have 25,000 call centre seats, a majority of which are working for French clients.

The attractiveness of Morocco as an outsourcing destination is spurred by increasing demand from European companies, whose reliance on outsourcing is expected to rise by 20% of overall services provided. The industry-wide expectation is that European demand for offshoring services will rise to _30bn ($39.3bn) over the next 10 years.

This increasing demand has allowed Morocco to capitalise on its geographical and cultural proximity to the European market as well as its relatively low-cost yet highly qualified labour.

Developed as a business area for offshore services and outsourcing, construction on Casashore, located on the road linking Casablanca and the Mohammed V Airport , was begun in December 2005. Casashore represents a g investment of Dh2.8bn ($329m). The first phase of the project, when fully completed, will consist of 35,500 sqm of office space and 6,000 sqm of space for associated services. Two more phases, adding 172,000 sqm of office space and 37,500 sqm of associated service space are expected to be available by 2010.

Combined with rents as low as Dh90 ($9) per sqm, about half the current market price for such facilities, and a high performance telecom network and integrated recruitment services, the offhshoring park started by attracting IT companies and is now focusing on back-office service providers in the accounting, finance, insurance and client service sectors.

The government is also creating dedicated zones in three other large cities. These are to have high-quality infrastructure, low rents and tailor-made services. They are RabatShore, Tangershore and Marrakechshore.

Said Elhadi, chairman of the executive board of the Agence Spéciale Tanger Méditerranée (TEMSA), told OBG, We are in the process of developing a specific concept for the needs of offshoring at Tanger Free Zone . In an integrated framework, similar to that of Casashore, the new park in Tangier, adapted to BPO and ITO, will focus on the Spanish market.

© Oxford Business Group 2007