mardi 28 octobre 2008

Ports Share Experiences In New Agreement



A new agreement between officials of the ports of Calais, Dover, Tanger-Med and Algeciras Bay has begun after they met at Dover Port recently, aimed at the sharing of information on many topics to enhance the performance of each port.
The new agreement was signed in June and will result in the ports working closely over the next three years. The meeting in Dover was the result of several visits that have taken place to member ports giving officials knowledge of the workings of other ports.
Commenting on the member ports was Bob Goldfield, the Chief Executive of the Port of Dover who said; "The similarities between the Dover-Calais and Tanger-Algeciras routes are remarkable, both offer short sea crossings across busy straits and provide strategically important links for trade.”
The Dover meeting was preceeded by a meeting in Calais where members discussed the problems of illegal immigration. As a result of this meeting an agreement was reached and signed that will see Port of Calais staff train Tanger-Med staff in security procedures.
The Dover meeting looked at ferry operations with the Port of Tanger-Med now including ro-ro operations with Algeciras. Those members of the agreement that are operating on the Gibraltar Straits will also be looking to learn from the agreement how Dover Straits high capacity traffic processing is achieved.

jeudi 23 octobre 2008

Tanger-Med port gets $180m makeover

Morocco's Tangier Mediterranean Special Agency (TMSA) and the Arab Fund for Economic and Social Development (AFESD) have signed a loan contract worth US$180 million to expand Tanger-Med port, Maghreb Arabe Presse reported.

Under the contract conditions, a second deepwater port, Tangier Med II, will be built to meet the growing demand for containers treatment at the international level in sea transport.

The works will include two container terminals with a total length of 2,800m and a nominal capacity of five million containers.

The port expansion project will be operational by second half of 2012.

lundi 20 octobre 2008

Morocco retunes to new engines of growth

By Heba Saleh in Cairo

Moroccans seem to be programmed to welcome rain no matter its immediate impact. So even as a late-night downpour obstructs vision and big hailstones pelt cars, people smile and tell you it brings them prosperity.
In this poor north African country, agriculture is central to the economy. It accounts for 15 per cent of gross domestic product but provides a livelihood to 40 per cent of the workforce. Thanks to plentiful rain, this year's growth is expected to reach 6.5 per cent, up from 2.7 per cent last year.
In the face of Morocco's continued vulnerability to the weather, businessmen and experts say reforms driven by the government have strengthened the economy, enabling the country to absorb the shock of higher energy and cereal prices.
The only nation in the Maghreb without oil or gas and one beset by income disparities, housing shortages and an inefficient education system, Morocco nonetheless appears to have managed to maintain economic stability in the face of global inflation. The government strategy is to shift the economy away from agriculture to create jobs and find new engines of growth.
"The numbers this year are certainly showing the very great resilience of the Moroccan economy in the context of international turmoil," said Francoise Clottes, head of the World Bank office in Morocco.
This is largely due to strong revenue flows from sources outside agriculture that have enabled the government to spend far more on its food and fuel subsidy programme - described by the International Monetary Fund as the "most important policy issue facing the authorities" - while maintaining a small deficit in the region of 3 per cent.
Remittances from Morocco's 3m expatriates, mostly in Europe, have gone up 5 per cent to $3.5bn in the first six months of the year.
Increased revenue has also come from tourism, and corporate tax receipts which rose 70 per cent in the first half of the year due to higher investment and an improved collection system.
Morocco has also had help from its wealthier friends, Saudi Arabia and the United Arab Emirates, in the form of $800m (€570m) in direct budgetary support.
"From 1996 to 2004 nothing was happening in the economy," said a Moroccan investment banker. "But starting from 2005 things started to improve thanks to all the public investment in infrastructure and the private investment in real estate and tourism."
The booming construction sector - driven by a huge public works programme - has helped reduce unemployment from 11.4 per cent in 2003 to 9.1 per cent while plans to promote investment in areas such as automotive parts, offshoring, food processing and electronics have started to pay off.
The impact has been to raise foreign direct investment from $500m in 2002 to $3bn last year. The biggest single investment came from Renault, the French carmaker, which is putting $1bn into what will become its biggest factory in Africa to produce low-cost cars and vans destined for export to emerging markets.
Renault has been attracted by Tanger-Med, near Tangiers, northern Morocco's deepwater port and trans-shipping hub which when completed will be the largest in the Mediterranean.
But the issue of the growing subsidy programme remains to be tackled. It is not a long-term solution to Morocco's economic problems and the IMF in July recommended better targeting of subsidies to the needy to ensure the government could meet the costs of its economic priorities.
Though no one expects the dilemma over subsidies to be resolved soon, ministers have at least started talking openly about restructuring the system, something observers describe as a first in Morocco.

"The agreement will boost the traffic between the two Mediterranean cities"

The Port of Barcelona will have its own logistic area in the new Tangier-Med Port in Tangier, Morocco, on an area of ten hectares that will be at the disposal of companies operative in Catalonia. The concession agreement for the area, which has a duration of 25 years, will be signed by the president of the Port of Barcelona, Jordi Valls (photo), and his Moroccan counterpart responsible for the Tangier Mediterranean Special Agency Said Elhadi, this week during the official visit to Morocco of the president of the regional government of Cataloania, Jose Montilla.
According to the municipality’s sources cited by the media, the agreement will offer an advantage to the customers of the Port of Barcelona and will boost the traffic between the two Mediterranean cities.
The fast economic and industrial development of the Tangier-Tetouan Region, in the northern part of Morocco, only 14 kilometres from the Spanish coasts, favours the landing on the Moroccan territory of Spanish companies attracted by costs which are as much as ten times lower than those in South European Countries.
Montilla will lead a delegation of a high number of Catalan entrepreneurs, as well as the regional delegation which will include vice president Carod Rovira and the councillors for innovation and
for agriculture.

mardi 14 octobre 2008

Toll of Tanger Med

Spain's ports are having to seriously re-think long term strategic goals in the light of Morocco's Tanger Med success. Alex Hughes investigates
Port Strategy: APM Terminals is committed to Algeciras despite fears that Valencia will outstrip the port to become Spain's leading container port by the end of the year
APM Terminals is committed to Algeciras despite fears that Valencia will outstrip the port to become Spain's leading container port by the end of the year
Spain's two south coast ports of Málaga and Algeciras Bay are in trouble.
The former reported a 28.3% drop in traffic in the first five months of this year, while the latter saw a decline of 2.04%. Both are transhipment hubs, whose longer term viability has been put into doubt through the opening of Tanger-Med, where rock bottom labour rates are proving highly tempting to shipping lines. In contrast, the two main Spanish import-export hubs of Valencia and Barcelona continue to report growth. While the latter reported a modest 3.26% increase in the year to the end of May, the former boosted traffic by 8.23% to 1.34m teu. Astonishingly, this is just 50,000 teu fewer than Algeciras handled.
Could it be that Valencia will outstrip Algeciras to become Spain's leading container port by the end of the year?
APM Terminals shows absolutely no signs of pulling out of the concession it operates at Algeciras, despite its own major presence at Tanger-Med I and II. Nevertheless, managing director Anders Kjeldsen insists that APM Terminals and Maersk Line have to be viewed as two separate companies.
“Our customers, which include Maersk, have their own network strategy, which also includes using ports such as Málaga, Cádiz and Tanger-Med. If APM Terminals at Algeciras does a good job, it will retain its customers’ business,” he says.
Significantly, Mr Kjeldsen emphasises that the import-export market, which currently accounts for around 5% of total throughput, is one that Algeciras has to be able to compete in. The recent addition of a major rail complex to serve its Juan Carlos I terminal and the decision by the port authority to invest in two logistics activities zones outside the city limits are surely testament to this.
“We are not yet shifting a lot of containers by train, but we have done some important trials recently. It's not company policy as such to go down the import/export route; however it is something extra we want to provide,” he says.
Asked about the impact of Tanger-Med on business at Algeciras, port authority commercial director, Gerardo Landaluce, claims it is influencing developments across the whole West Mediterranean and even in the Canary Islands, where transhipment hub Las Palmas has seen growth of just 1.44% this year and import-export-based Tenerife a drop of 15.86%.
“Tanger-Med is concentrating attention on the importance of the Straits of Gibraltar as a whole,” he emphasises, noting that its impact will ultimately be similar to Port Saeed's on the Eastern Mediterranean. “While overall volumes in the Mediterranean are going to increase a lot, in the short term, there may be some overcapacity, particularly if all the proposed projects along the corridor connecting both ports come to fruition. Nevertheless, it is open to doubt as to how many of them will eventually see the light of day.”
Having noted in which direction the wind was blowing some years ago, Algeciras adopted a strategy of diversifying traffic. It is now looking at further diversification through the arrival of Hanjin as terminal operator in 2010, says Mr Landaluce. A better ratio of import/export to transhipment traffic is also being sought.
“The new Hanjin terminal will allow us to develop import-export opportunities. Inbound traffic from Asia passes by our port, although mostly enters Europe via ports in the north, which then have to send it south. This makes no sense. We therefore see an opportunity to develop Algeciras as a gateway port for the whole of southern Europe.”
One of the ways this could be achieved, he suggests, is by expanding the port's already well developed feeder network. An alternative is to use the rail link to the port, which is being extensively upgraded. The efficiency of freight-on-rails in Spain is being boosted as new, dedicated high speed rail lines open, freeing up capacity on existing lines for more cargo trains to operate.
As to how this enhanced import-export role will ultimately affect Algeciras' incumbent operators, Mr Landaluce says that Maersk Line and APM Terminals are clearly trying to diversify their interests. “Up to now, APM was solely dedicated to handling Maersk traffic, but now it appears to be looking at attracting other third-party business. In the past, the terminal couldn't spend much time on import-export traffic, because Maersk was interested mostly in transhipment traffic at Algeciras. Priorities now appear to be changing somewhat."

APM Terminals Opens New Container Terminal in Tangier,

Morocco - New deepwater Container Terminal on Straits of Gibraltar promises to create new trade gateway, investment, shipping hub


APM Terminals Tangier, S.A. and the Akwa Group, a Casablanca, Morocco-based partner have announced the opening of Morocco’s newest container terminal to serve the global trade in Morocco and the Western Mediterranean market.
Strategically-located on one of the world’s most important shipping arteries, the terminal will offer importers and exporters a new gateway to world markets. Over 200 vessels a day pass through the Straits of Gibraltar as they transit on north-south and east-west liner trade routes. Shipping lines will benefit from Tangier’s direct access to the main shipping lane, a deepwater port capable of handling the largest container ships in the world, the newest, most advanced container handling equipment and APM Terminals global best operational practices.

Kim Fejfer, CEO, APM Terminals International, based in The Hague, Netherlands stated “Our vision is to offer our customers more options and solutions in the Straits of Gibraltar giving them a competitive edge in world markets. The new terminal expands our global terminal portfolio in one of the world’s most important shipping lanes.” Martin Poulsen, Vice President, APM Terminals Europe Region, based in Rotterdam stated “Morocco’s proximity to Europe’s 400 million consumer market will create a new gateway to trade. Etienne Rocher, Managing Director, APM Terminals Tangier added “We have worked closely with the Government of Morocco through the Tangier Mediterranean Special Agency (TMSA) - established in order to secure interest from the world’s leading operators and fast track Tanger-Med’s overall project timeline - and with our partner, the Akwa Group to build and deliver on time this new container terminal. We are creating new jobs and opportunities, bringing in foreign investment and starting a new chapter in the West Mediterranean market.” 300 jobs have already been created and 700 are expected to be created by the end of 2007. 98% of all jobs are expected to be held by Moroccan nationals. The port project is tied to the largest ever infrastructure project in Morocco that includes new highways, railway lines and other infrastructures.

Said Elhadi, Chairman of the Executive Board of TMSA, commented: “The opening of Tanger Med port’s first container terminal according to the timeline display’s Morocco’s capacity to implement large scale infrastructural projects in a due manner. It also highlights the quality of the partnership between Tanger Med Port Authority and its world class partner APM Terminals. Our vision is to take advantage of Tanger Med port’s key location at the crossroads of East-West and North-South maritime routes while partnering with leaders in the field to benefit from their world-class services and international best operational practices. The launch of the activities of the first container terminal is setting the ground for Tanger Med port to become an important container hub leading to the development of a successful large scale logistic and industrial platform in the North of Morocco”.


Country:
Morocco
Contact:
Martin Poulsen
Email:
EURAPMTMNG@apmterminals.com
Telephone:
+31-10-714-3901
Website:
www.apmterminals.com

APM Terminals Opens New Container Terminal in Tangier, Morocco

    New deepwater Container Terminal on Straits of Gibraltar promises to create new trade gateway, investment, shipping hub
Tangier, Morocco – APM Terminals Tangier, S.A. and the Akwa Group, a Casablanca, Morocco-based partner have announced the opening of Morocco’s newest container terminal to serve the global trade in Morocco and the Western Mediterranean market.
Strategically-located on one of the world’s most important shipping arteries, the terminal will offer importers and exporters a new gateway to world markets.
Over 200 vessels a day pass through the Straits of Gibraltar as they transit on north-south and east-west liner trade routes. Shipping lines will benefit from Tangier’s direct access to the main shipping lane, a deepwater port capable of handling the largest container ships in the world, the newest, most advanced container handling equipment and APM Terminals global best operational practices.
Kim Fejfer, CEO, APM Terminals International, based in The Hague, Netherlands stated "Our vision is to offer our customers more options and solutions in the Straits of Gibraltar giving them a competitive edge in world markets. The new terminal expands our global terminal portfolio in one of the world’s most important shipping lanes."
Martin Poulsen, Vice President, APM Terminals Europe Region, based in Rotterdam stated "Morocco’s proximity to Europe’s 400 million consumer market will create a new gateway to trade. Etienne Rocher, Managing Director, APM Terminals Tangier added "We have worked closely with the Government of Morocco through the Tangier Mediterranean Special Agency (TMSA) - established in order to secure interest from the world’s leading operators and fast track Tanger-Med’s overall project timeline - and with our partner, the Akwa Group to build and deliver on time this new container terminal. We are creating new jobs and opportunities, bringing in foreign investment and starting a new chapter in the West Mediterranean market." 300 jobs have already been created and 700 are expected to be created by the end of 2007. 98% of all jobs are
1
expected to be held by Moroccan nationals. The port project is tied to the largest ever infrastructure project in Morocco that includes new highways, railway lines and other infrastructures.
Said Elhadi, Chairman of the Executive Board of TMSA, commented: "The opening of Tanger Med port’s first container terminal according to the timeline display’s Morocco’s capacity to implement large scale infrastructural projects in a due manner. It also highlights the quality of the partnership between Tanger Med Port Authority and its world class partner APM Terminals. Our vision is to take advantage of Tanger Med port’s key location at the crossroads of East-West and North-South maritime routes while partnering with leaders in the field to benefit from their world-class services and international best operational practices. The launch of the activities of the first container terminal is setting the ground for Tanger Med port to become an important container hub leading to the development of a successful large scale logistic and industrial platform in the North of Morocco".
______________

Special Report: North Africa - Tangiers' global bid

The city's new port is set to become one of the largest in the world - tranforming the region into a competitive hub.
Tangiers looks Spain squarely in the eye. Poised on the Gibraltar Strait, with a mere 14 km separating the two countries at the narrowest point, the city in northern Morocco is at the crossroads between Europe and Africa, and the new port of Tanger-Mediterranean (Tanger-Med), scheduled to start operating in July, is set to become one of the largest in the world. After years of neglect - northern Morocco had fallen out of favour with the old king after rebel groups were involved in an assassination attempt - Tangiers is finally enjoying something of a renaissance and Tanger-Med is at the heart of it. The project was instigated by the new king, Mohamed VI, who came to power after the death of his father, Hassan II, in 1999; he sees the region's strategic location as central to the country's development.

The aim is that Tanger-Med will increase Morocco's competitiveness by attracting foreign investments and boosting the country's industries (textile and manufacturing). The port's container activities will be complemented by a series of free zones, which will develop the country's import and export capacity. "The philosophy is to take advantage of our geographical location, but the objective is to fuel the development of a real industrial platform for Europe, North America and West Africa," says Said Elhadi, chairman of Tanger Mediterrannee Special Agency (TMSA), the governing body overseeing the development of Tanger-Med. "This is something new for Morocco."

It comes at a good time. Morocco's trade with the EU is booming: exports rose from $7.1 billion in 2001 to $11.3 billion in 2006, while imports soared from $11 billion to $22.4 billion. Trade between Africa and Europe is also rising: African exports to the EU doubled between 1999 and 2006 to $113 billion. The country also signed a free trade agreement with the US in January 2006 that is expected to lead to an increase in exports to North America. One in five container ships transits through the Mediterranean, so the increase in traffic is likely to be significant. As Tanger-Med sits on both the east-west and north-south shipping routes, and represents only a small detour for passing ships, it will focus on transhipment where containers are transferred from one ship to another for different legs of their journey.
As a deep-sea port, it will comfortably accommodate the latest generation of super container ships. "Experts forecast that container shipping will reach 60 million TEU (twenty-foot equivalent unit) by 2030-35 (current capacity stands at 25-26 million TEU)," says Elmostafa Almouzani, director of Tanger-Med. "Yet, the container capacity in the Mediterranean is small. Gioia Tauro is 2 million TEU, Cagliari 1 million, Port Said 1 million and a bit. The only ports that have significant growth potential are Algeciras and us."
Under current plans, the port will have a capacity of 3.5 million TEU by 2010; a possible extension could add 5 million TEU, although plans have not been finalised. With a total capacity approaching 9 million, Tanger-Med would be among the 15 largest ports in the world (see box). In his office overlooking the port, Almouzani points at a large world map and a ranking of the world's container ports. "When we're up there," he says, indicating the top of the table, "it will be great."
Morocco's northern coast is stunning: rugged and undeveloped. Tanger-Med, currently a vast building site, contrasts with the beautiful beaches nearby, but for the locals this is the first piece of good news to reach them in years. The port and the free zones will employ 150,000 people in the long run, a godsend for an area that has adjusted to its neglect by developing an extensive drug-trafficking industry. Morocco is the largest exporter of marijuana to Europe and most of it is grown in the northern Rif region. "There was a lot of thinking about how to preserve the coast," says Jamal Mikou, director of the Tangiers Free Zone (TFZ). "But we had to make a choice: we couldn't have the port without the concrete. Life was hard here for so long and drug money is easy. We have to win people's trust back and give them a reason to stay."
The TFZ is a pioneer of what is set to become a crucial part of Tanger-Med's success. Started in 1999, the TFZ was designed to attract foreign investors to Morocco through a comprehensive package of incentives: no import tax, no benefit tax for the first five years (8.75% thereafter), no custom duty, business conducted in home currency (no exchange rate) and state subsidies for industrial estates in priority industries such as automotives, aeronautics and electronics.
TFZ also pioneered the management concept of 'facilitator' that TMSA now uses: it is a private company with state prerogatives. In other words, companies wishing to set up shop in the TFZ are able to avoid all the usual bureaucratic and red tape obstacles. In a country such as Morocco, ranked 115 out of 175 on the World Bank's index on ease of doing business, this is a major selling point. "Investors usually allow a year to get everything off the ground," explains Mikou. "Here, we can deliver building permits, so we give them the parameters. If their architect works fast, it can be done in a week. I then get the plans; the next morning it's signed."
There are now 254 companies in the TFZ, mostly from southern Europe (although a couple of large Japanese investors use TFZ as their European hub), with a strong emphasis on automotive and aeronautics: they have generated $330 million worth of investment and created 28,000 jobs. "Some EU companies now come here so that they can sell their products to the US without being affected by the WTO restrictions between the EU and US," says the director. "If it's produced here, the product becomes 'made in Morocco' and can go through under the free trade agreement."
TFZ provides a number of high-end services to its clients, such as running errands (anything from paying a phone bill to picking up visitors at the airport) or cleaning premises. Mikou would also like to develop offshoring activities. Many Tangerois speak Spanish; the area would therefore be an ideal back-office platform for Spain's booming finance sector.
TMSA is now a shareholder of TFZ and is likely to capitalise on this to develop two more industrial free zones in the port's hinterland. Tanger-Med will also benefit from a logistics free zone, Medhub: located behind the container terminals, it will focus on light, value-added activities and process container goods in transit. Third-party logistics companies that specialise in distribution, such as TNT or UPS, will use the zone as a distribution platform.
The concept was tried and tested in Dubai with immense success and it was a logical step for the parent company Jebel Ali Free Zone (Jafza) to run Medhub. "Dubai was built around the port and its free zone," says M'bouirik Mouilek, general manager of Medhub. "Jafza brings 20 years' experience to Medhub, so Morocco is buying itself time. There's no point in reinventing the wheel; it just needs to be customised."
As with TFZ, Medhub clients will benefit from a worry-free environment, proximity to large markets, low-cost logistics and cheap labour. But Mouilek says that it is the possibility of working 'just-in-time' with Europe that constitutes the biggest draw. "Take a retail business such as a consumer goods supermarket chain. It consolidates orders at Shanghai out of products originated from China and neighbouring Asian countries. The order preparation is labour-intensive. If you ordered directly from China, it would be cheap, but it would take a month. If you did it from here, you could have your order sent directly to the supermarkets at a competitive labour cost. We can deliver anywhere in Europe within 12 to 48 hours."
Medhub already has 11 clients, with another 30-40 ready to book, and plans to start operating at the end of the year. The first container terminal will be operated by APM Terminals Tangier, part of the AP Moller-Maersk Group, and the second by EuroGate Tangier, a consortium comprising leading terminal operator Eurogate, Italian shipping line Contship Italia, Moroccan shipping line Comanav, and MSC and CMA CGM, two of the world's biggest shipping lines. Maersk, MSC and CMA-CGM alone could fill the port's capacity.
Almouzani says that it took a while for people to take the port seriously, even though it had serious financial backing and all the right support. TMSA was given $200 million by the Hassan II Fund, which promotes socio-economic projects in Morocco. The company also received a $100 million grant from the Abu Dhabi Fund, a UAE development fund that finances major infrastructure projects with strong social impacts in the Middle East, and a further $200 million loan at a subsidised rate. This capital of $500 million paid for the port's main infrastructure. "At first, we didn't want to promote the port. We just wanted to build the infrastructure regardless of concessions. But as soon as we got Bouygues Construction (which built the port's main sea defences) on board, things moved fast," says Almouzani.
Terminal 1 is set to start operating in July this year and is due to reach full capacity by October. Terminal 2 will open in 2008 and the hydrocarbon terminal at the end of that year. All terminals will be multi-user facilities (although Terminals 1 and 2 are likely to see most of their business come from their shareholders) and will reserve part of their capacity for import and export activities. Tanger-Med also features a dry bulk and general cargo terminal, and a passenger and a roll-on roll-off terminal for trucks and trains, capable of handling 6 million passengers a year. Construction has just started and if all goes to plan, it will be ready by summer 2009.
A remarkable fact is indeed that things have gone so well. Most of the ports' sections will finish more or less on schedule, a testimony to TMSA's efficiency. Everyone involved agrees that had it not been for TMSA's unusual status - a private company with public prerogatives - it would have taken at least 10 years to complete the project. Outside of this framework, Morocco is still chaotic to navigate. "There is TMSA and then there is the rest of Morocco," observes Domenico Bagala, director of EuroGate Tangier.
Corruption and bribery are still rife and attitudes will be difficult to shift. On the beaches of Tangiers, couples stroll and tourists go on camel rides. The seafront is an eclectic mix of beautiful old buildings, apartment blocks and sad-looking discotheques: it's impossible to tell what is being built and what has fallen into disrepair. But it will soon change. Tanger-Med will be able to absorb the entire container and passenger traffic currently using the old port in Tangiers, and so the city is looking forward to a major facelift.
Tangiers is already the third biggest tourist destination in Morocco, and a number of projects will increase the hotel capacity from its current 15,000 beds to 40,000 by the end of the decade. Market research firm Euromonitor International predicts that the number of tourists will rise steadily from 5.1 million in 2006 to 5.8 million in 2009, a figure boosted by low-cost flights and cheaper crossings. Tangiers is also bidding for the International Exhibition of 2012 (see box), an event that would significantly boost the city's infrastructure and strengthen its appeal as a tourist destination.
A number of challenges remain, but Elhadi is realistic: "We have shown that we can implement this project in a due manner. Now we have to show that we are as efficient in operating it." First on the list is the workforce: the local population is poorly educated, even by Morocco's low standards. The literacy rate was just 53.5% in 2005, and many of the workers on site are from the better educated south. Finding the required level of skills for the 150,000 or so jobs will be difficult; Sylvain Gimenez, project director for Bouygues Construction, says that it's at supervisor level that skills are lacking.
TMSA and the port's contractors have been investing heavily in training. TMSA has developed mobile training units with the local university and the Office de Formation Professionnelle (the centre for professional training) to train people in remote areas. It is also planning to open a maritime institute to train personnel on all port-related activities. Terminal operators APM Terminals Tangier and EuroGate Tangier have both developed training programmes for system and equipment operators in their existing facilities across Europe. "We'll have 700 people by the end of the year and 90%-95% will be Moroccan," says Etienne Rocher, managing director of APM Terminals Tangier. "Transhipment is a new activity in Morocco and we'll have an important responsibility in terms of training the people we hire."
Another key factor will be security: drug trafficking is a problem because of the site's proximity to the cannabis- producing region, and illegal immigrants are also a concern, but TMSA's security system is ISPS-compliant (the standard required to trade with the US). However, many of the perpetrators of the recent bombings in Casablanca were Tangerois, and several of the Madrid and 9/11 bombers had connections with the Tangiers-Tetouan region. But TMSA dismisses the idea that Tanger-Med might be any more vulnerable than any other strategic site in the world.
Tanger-Med has to live up to its billing. "There is a strong understanding that you never get a second chance to make a good impression," says Rocher. This is Morocco's chance to boost its global credentials.
TANGIER EXPO 2012
Tangiers' candidacy for the 2012 International Exhibition (Expo) is highly political. It is the first application from an African country, and an Arab Muslim one at that. Its symbolism is high. "It would crown everything we have been working on," says Souad Hassoun, who is leading Tangiers' bid.
The $6.42 million project, including post-exhibition conversion costs to turn the facilities into a convention centre, has been designed to be integrated into the city. The theme, Routes of the world; cultures connecting for a more united world, draws on the city's history of mixed influences and its ambitions as a geopolitical centre.
Hassoun says that her team has worked hard to ensure that the technical aspects of their bid are bullet-proof. "We have the best expertise in each field. So if people don't vote for us, it will be for other reasons than the feasibility of the project."
Tangiers is up against Wroclaw in Poland and Yeosu in South Korea. If selected, the event is forecast to attract 6 million visitors and significantly boost Tangiers' reputation. "I think we will gain 15 years in terms of development," says Hassoun.

THE WORLD'S TOP CONTAINER PORTS

dimanche 12 octobre 2008

Making Money in the Med

When one thinks about the history of the Mediterranean region any number of images can come to mind. Great civilizations like the Egyptians, the Greeks, the Romans, the Ottomans have all left their mark on the region and the world. So it might have sounded a bit patronizing when the The Economist entitled one of its articles "The Med's moment comes" [12 July 2008 print edition]. To be fair, it has been a while since any littoral country in the region has demonstrated the greatness of the past. The region's rich history has continued to make it desirable destination for tourists, but not investors. According to The Economist, that has changed.


"Look southward from the southern tip of Spain, across the strait of Gibraltar. There, only 14km (nine miles) away through the slight sea haze, arises the vast construction works of a new seaport to the east of Tangier in northern Morocco. Tanger Med opened its first docks [in] July [2008]. Handling 3.5m containers a year, it is already as big as Felixstowe, Britain's biggest port. A second terminal opens this summer, and within seven years its annual capacity will rise to 8.5m. It will be the largest container port in the Mediterranean, not far behind Europe's biggest, Rotterdam (although merely one-third the size of the Asian giants of Singapore, Shanghai and Hong Kong). Similar ports are being finished in Algeria, Egypt, Malta and Tunisia."
The Mediterranean Sea has always been an important regional shipping route. The completion of the Suez Canal in 1869 made it an important part of the global maritime system as well. Even so, one might wonder where all the goods being unladed in Morocco are going.
"One-third of the world's container traffic already passes through the Mediterranean, bringing manufactured goods from China and South-East Asia to Europe and the east coast of America. The Moroccans, spending some €3.5 billion ($5.5 billion) on Tanger Med, and others along the coast hope that if they build, a big slice of global commerce will come to their shores. Goods will arrive to be broken down into smaller loads and sent around Europe. Manufacturers will set up factories in tax-free zones planned around the docks, bring in components for assembly and serve the huge market across the water."
Without globalization, these Moroccan dreams would never have been more than that. The dreams, however, are already becoming reality.
"The Mediterranean's southern and eastern coasts are pulling in huge quantities of foreign direct investment, on a scale second only to China among emerging economies. The wave started about five years ago, and now private-equity groups and large investment funds from the oil-rich Gulf states are joining in. Tanger Med is but one mighty symbol that something is stirring along the coastline."
The fact that investment flows began before oil prices began rising sharply means that those investments remain risky. In an earlier post [Changing Supply Lines], I focused on the fact that high oil prices are affecting globalization and on the extended supply lines that support it. That could put a big crimp in Morocco's plans. The good news is that if bad times are coming, the evidence of the dark clouds is not yet on the horizon. It's important that globalization takes hold in an area more commonly referred to as part of an arc of crisis than an arc of opportunity. The article explains why development is so important.
"The MEDA ten (a group of southern and eastern economies) have an average income per head of only $6,200, putting them roughly where western Europe was in 1950 and Romania was in 1975. Even though the gap in GDP per head has been closing, thanks to falling fertility rates as well as relatively faster economic growth, at today’s pace it would take almost 160 years for the MEDA ten to catch up with the European Union average. Unemployment is probably between 20% and 30%, even though official figures say it is around 12%. This last figure helps to explain why Europeans have tended to see the other side of the sea as more of a threat than an opportunity: a source of immigrants, often young and illegal, mainly Muslim and frequently unwelcome. In Italy, Spain and tiny Malta, illegal arrivals are of especial concern. Another reason is nervousness about the region's political health."
The article eventually admits that region is not historically unfamiliar with commerce and that the Mediterranean has enjoyed a glorious history.
"Commerce is scarcely a novelty in the Mediterranean. Centuries ago, the Middle Sea was a hub of world trade: to the Romans, it became mare nostrum 'our sea'—surrounded by the empire. Now the inflow of foreign direct investment may be reversing a long relative decline in the fortunes of the southern and eastern shores. The MEDA economies have managed to step up their growth rates to 4.4% since the turn of the century. ... Tanger Med is a point of arrival for foreign investors. The leading shipping and port companies, such as Maersk and DP World will have terminals there. This February Renault and Nissan started preparing the ground for a huge car factory costing €600m. The Franco-Japanese alliance aims to build low-cost cars and vans not just for Europe but for markets around the world, mostly in emerging economies where the basic Renault Logan has already proved a winner. Annual output will start at 200,000 vehicles, but will double within a few years."
Once again the high cost of oil may put a damper on some those plans. If the plans do continue, it will mean that globalization will have gained a crucial foothold on the African continent.
"Twenty years ago, Europe's car industry stopped building new factories in low-wage Spain and Portugal, and turned to eastern Europe, including Turkey. The step across the Med, to a country where wages are one-fifth of what they are on the northern shore, is of great significance. Competitors will watch and may follow. Morocco has already attracted car-parts firms such as Leoni (from Germany), Valeo (France) and Clarcor (America). For 50 years Europe’s car factories have shipped in labour from Turkey and north Africa to their factories in Germany and France, and invested little to the south. Now the capital is moving to the labour: the mountain is moving to Muhammad, if you will."
Southern European countries are interested in seeing a prosperous Levant for the same reason that the U.S. would like to see a prosperous Mexico -- to reduce illegal immigration. As a result, the EU has been considering the benefits of a free trade area in the Mediterranean for over decade. Known as the Barcelona Process, it has been mired in politics since 1995.
"On taking office last year the president of France, Nicolas Sarkozy, launched his own plan for a Union for the Mediterranean. This was sold as a way of resuscitating the Barcelona Process—although its true purpose may have been to offer Turkey a consolation prize instead of membership of the EU. At first Germany’s chancellor, Angela Merkel, took a dislike to it, seeing in it a new club without the EU's northern members but paid for with EU (ie, mainly German) money. Now it is within the purview of the EU, Ms Merkel seems more at ease with Mr Sarkozy's scheme, which has been diplomatically renamed 'The Barcelona Process: Union for the Mediterranean'. ... The EU's clout and money are probably necessary to get the new union going. But there is a risk that European governments will concentrate on immediate questions of security and migration rather than on measures to boost the economies of their southern neighbours (which in turn may improve security and limit northward migration)."
Although the same kinds of protests against free trade agreements that are currently plaguing U.S. politics could derail the Barcelona Process, bilateral agreements and private investments are keeping economic interest in the Mediterranean region alive.
"There is a groundswell of foreign direct investment in the region. According to figures collated by ANIMA, the southern and eastern shores of the Mediterranean are now attracting more investment than other emerging economies such as India, Mercosur or southern Africa; only China catches more. That raises three questions: where is it coming from; where is it going; and who is investing? For the first time the MEDA countries as a whole are punching their weight in terms of inward investment: they have about 4% of the world's population and are now getting a slightly higher share of investment flows. Inward investment has grown sixfold in six years. The leading recipients have been Turkey, Israel and Egypt. The prospect of entry into the EU has fuelled Turkey's five-year inward investment boom, though political difficulties and the slow pace of adhesion to Europe may explain a recent slowdown. Israel, with its hyper-educated technical workforce, boosted by arrivals from the former Soviet Union, has been a happy, high-tech hunting ground for American investors. Renault have moved in too, to make electric cars. Egypt's political stability and economic reforms since 2004 have attracted investment too—notably the €12.9 billion purchase in December last year of Orascom Cement by Lafarge of France, paid for in Lafarge shares. Behind these leaders, Algeria and Morocco have each seen inward investment grow tenfold since 2002."
The article notes that there have been economic peaks and valleys over the past few years, but peaks have been higher than the valleys have been deep.
"Behind this groundswell lie several factors. The boom in energy and raw materials has brought in oil and gas explorers but also investors in petrochemicals, fertilisers and cement. The maturity and saturation of European markets is another reason to look south. Privatisation of banks and telecoms firms has also attracted investors, notably from the Gulf. The recent strength of the euro against the dollar should help too. Safran, a French aeronautical firm, is directing investment to Morocco to escape the pain of the strong euro. It is a big supplier to Airbus, which has made it clear that it expects its suppliers to price in dollars. EADS Socata, another subsidiary of Airbus's parent company, has also invested directly in Morocco for the same reason. The source of the funds has changed in the past five years. Europe still accounts for about 40%, but North America’s share has shrunk from 25% to around 10%. Meanwhile the portion coming from the oil-rich Gulf states has risen from 16% to over 30%. More intriguingly, the share of emerging economies such as Brazil and India has climbed from 8% to around 20%."
In addition to building seaports, like Tanger Med, investors have been drawn to other sectors as well.
"Energy is an important draw for investors, [but] it accounts for less than one-sixth of the whole. Banking (led by European banks) has not been far behind. Industries such as telecoms, chemicals, metalworking, tourism and car parts continue to attract dozens of deals a year across the region. Europeans have been buying homes by the thousand. Many are long-term residents rather than tourists."
A major part of the article describes what kinds of investors are risking their funds in the Mediterranean region and where those investors are from.
"The inward investors can be grouped into four types, according to Mr de Saint-Laurent. The first might be called 'offshore' investors. These are firms attracted by deposits of oil and gas in places such Algeria, Libya, Morocco and Tunisia. They are offshore in that they ship in all their labour, equipment and supplies. They pay the state for the resources they extract, but have little further effect on the local economy. The second group consists of European companies, led by the French but also including the Spanish and Italians. Reflecting their colonial histories, the French and Spanish tend to be found in the west, the Italians farther east. These investors usually form joint ventures or buy local small and medium enterprises, if only because such partners are needed in the Islamic Arab cultures of the region. Third comes a new group, the Gulf funds. Their billions tend to go to the huge resorts springing up along the coast. Investors from Dubai have a €10 billion project in southern Tunis, a €3 billion development in Algeria and €600m site in Morocco. With them come Spanish builders, such as Sacyr Vallehermoso, which see on the southern shores of the Mediterranean an opportunity to recreate the old boom on the Costas back home. These investors have something in common with the offshore oil-and-gas brigade: often, not much spills over into the local economy besides low-paid jobs for cleaners and waiters. The fourth group, also newcomers, are perhaps the most interesting: investors from emerging markets. Several Indian companies have set up shop in the region. Tata has invested in motor manufacturing and outsourced information-technology work in Morocco. Wipro Technologies, a computer-services firm, also does IT work in the region. Ranbaxy Laboratories, a drugmaker, has factories there. Gujarat State Fertilisers and Coromandel Fertilisers from India are investing in a Tunisian factory to make phosphoric acid from the rich local reserves of phosphorus. South Korean investors also pop up, for instance with a car-parts factory in Tunisia and hotels in Syria. These industrial investors have no qualms about taking over local companies with thousands of employees—meaning that they are thoroughly integrated into the local economy, and their activities have a big knock-on effect."
The article goes on to discuss one final group of investors that regional authorities would like to attract.
"The region's boosters would also like to attract more money from a fifth group of increasingly interested investors: private-equity funds. The rapid increase in foreign direct investment flows is encouraging, because they indicate the region's attractiveness to international capital: the export markets it can serve, wage costs and so forth. Increased interest from private-equity groups in small and medium enterprises would be a measure of these investors’ confidence in the entrepreneurship on offer around the Mediterranean."
The proof that globalization has taken hold in an area comes when local entrepreneurs are able to attract funding and help the local economy thrive. For one thing, the rise of entrepreneurs helps sluff off stereotypical notions that certain societies are lazy or uninspired. Given the tools needed to succeed, entrepreneurs in every society can provide an impetus that can underwrite broader economic success. Entrepreneurs provide jobs and are optimistic about the future. They provide the hope upon which dreams are built. For too long there has been little hope in many littoral countries around the Mediterranean.
"The falling away of the countries on the Mediterranean's southern and eastern shores from their European neighbours has been sad and wasteful. Algeria once was the breadbasket of the Roman empire; today it is the biggest wheat importer in Africa. Many things hold the region back, not least bad infrastructure, poor education and dysfunctional politics. The new economic hope is not evenly spread: foreign direct investment is swallowed disproportionately by Egypt, Israel and Turkey. The boom in energy and raw materials should give many countries a start in building their economies up. If foreign investors do no more than harvest the oil and gas and leave, the region may simply stall again. What is needed is more of the joint-ventures and industrial projects represented by firms such as Safran and Renault-Nissan. But the real test will be whether the region's economy can be broadened and deepened. Then clearer shapes may emerge through the haze across the strait."
Although high oil prices may have slowed the pace of globalization, the Mediterranean region is a good reminder that it has not been stopped. Millions of impoverished people living in the region are waiting for benefits of globalization to reach them. If they do, then maybe the Med's modern moment will truly have come.

PASSENGER TERMINAL TANGIER

Odile Decq Benoît Cornette – Khalid Molato



The Tanger Med is a passengers harbour, dimensioned for traffic increasing up to 10 million passengers/year by 2020. It is inside a general harbour masterplan for the first harbour of the mediteranean area, containing equipments and amenities for all categories of passengers and trafic.



The project is founded on the very rich and strong economic and cultural interactivity linking both sides of the Street of Gilbraltar and is the occasion to assert and experiment a new and uncomplexed form of relationship between them, translated in an ultramodern terminal. The project proposes to turn the symbolic value of its subject and site into a strong but friendly architecture, concerned by its environment as well as by the confort of its different categories of users.



The project has to deal with powerfull natural elements†: sea, wind, sun†; and is inserted in a site that is radical both for the bold natural beauty of its surroundings as for the violent presence of human genius†; a harbour gained on the sea and the mountains.



Therefore the architectural project is gentle†: expressing in its shape the complex flux of travellers, cars, trucks and trains, protecting by its curves the migration movements from the elements. Curves of the main terminal, offering a bright and efficient shelter for queeing, check in and control†; curves of the boarding lounge, detached from the former to shorten distances and enhaunce psychological confort†; curves of the passerelles, linking amenities and ships, allowing a total protected and horizontal passengers parcours in confortable conditions.



The choice of construction materials is guided by environment constraints†: sea atmosphere obliges to concrete construction. Then, the building process, based on precise geometrical definition, allows generalization of precasting on site. Waterproof is realized with high resistant concrete topping, combining local craftmanship’s know-how and technology transfer.
The terminal and boarding lounge are conceived with a double shell, allowing dynamic insulation through fresh air circulation between the outer concrete shell and the inner plaster shell.



The vast parking areas easily allow to install geothermic pipes.
These two elements combined delete needs for airconditioning, assuring larger part of climate inside the building by passive ressources. Complementary energy is partly produced by the wind through equipments installed for the needs of the harbour area.
The clear interior spaces limit articial lighting. The exterior lighting deals with the presence of bird migration†: uplights are strictly avoided†; the different areas are enlightened in colours choosen in the spectrum of sun dawn†; light is always close to the ground, the different colours allow easy identification of each area.

Special Report: North Africa - Tangiers' global bid

The city's new port is set to become one of the largest in the world - tranforming the region into a competitive hub.
Tangiers looks Spain squarely in the eye. Poised on the Gibraltar Strait, with a mere 14 km separating the two countries at the narrowest point, the city in northern Morocco is at the crossroads between Europe and Africa, and the new port of Tanger-Mediterranean (Tanger-Med), scheduled to start operating in July, is set to become one of the largest in the world. After years of neglect - northern Morocco had fallen out of favour with the old king after rebel groups were involved in an assassination attempt - Tangiers is finally enjoying something of a renaissance and Tanger-Med is at the heart of it. The project was instigated by the new king, Mohamed VI, who came to power after the death of his father, Hassan II, in 1999; he sees the region's strategic location as central to the country's development.
The aim is that Tanger-Med will increase Morocco's competitiveness by attracting foreign investments and boosting the country's industries (textile and manufacturing). The port's container activities will be complemented by a series of free zones, which will develop the country's import and export capacity. "The philosophy is to take advantage of our geographical location, but the objective is to fuel the development of a real industrial platform for Europe, North America and West Africa," says Said Elhadi, chairman of Tanger Mediterrannee Special Agency (TMSA), the governing body overseeing the development of Tanger-Med. "This is something new for Morocco."

It comes at a good time. Morocco's trade with the EU is booming: exports rose from $7.1 billion in 2001 to $11.3 billion in 2006, while imports soared from $11 billion to $22.4 billion. Trade between Africa and Europe is also rising: African exports to the EU doubled between 1999 and 2006 to $113 billion. The country also signed a free trade agreement with the US in January 2006 that is expected to lead to an increase in exports to North America. One in five container ships transits through the Mediterranean, so the increase in traffic is likely to be significant. As Tanger-Med sits on both the east-west and north-south shipping routes, and represents only a small detour for passing ships, it will focus on transhipment where containers are transferred from one ship to another for different legs of their journey.
As a deep-sea port, it will comfortably accommodate the latest generation of super container ships. "Experts forecast that container shipping will reach 60 million TEU (twenty-foot equivalent unit) by 2030-35 (current capacity stands at 25-26 million TEU)," says Elmostafa Almouzani, director of Tanger-Med. "Yet, the container capacity in the Mediterranean is small. Gioia Tauro is 2 million TEU, Cagliari 1 million, Port Said 1 million and a bit. The only ports that have significant growth potential are Algeciras and us."
Under current plans, the port will have a capacity of 3.5 million TEU by 2010; a possible extension could add 5 million TEU, although plans have not been finalised. With a total capacity approaching 9 million, Tanger-Med would be among the 15 largest ports in the world (see box). In his office overlooking the port, Almouzani points at a large world map and a ranking of the world's container ports. "When we're up there," he says, indicating the top of the table, "it will be great."
Morocco's northern coast is stunning: rugged and undeveloped. Tanger-Med, currently a vast building site, contrasts with the beautiful beaches nearby, but for the locals this is the first piece of good news to reach them in years. The port and the free zones will employ 150,000 people in the long run, a godsend for an area that has adjusted to its neglect by developing an extensive drug-trafficking industry. Morocco is the largest exporter of marijuana to Europe and most of it is grown in the northern Rif region. "There was a lot of thinking about how to preserve the coast," says Jamal Mikou, director of the Tangiers Free Zone (TFZ). "But we had to make a choice: we couldn't have the port without the concrete. Life was hard here for so long and drug money is easy. We have to win people's trust back and give them a reason to stay."
The TFZ is a pioneer of what is set to become a crucial part of Tanger-Med's success. Started in 1999, the TFZ was designed to attract foreign investors to Morocco through a comprehensive package of incentives: no import tax, no benefit tax for the first five years (8.75% thereafter), no custom duty, business conducted in home currency (no exchange rate) and state subsidies for industrial estates in priority industries such as automotives, aeronautics and electronics.
TFZ also pioneered the management concept of 'facilitator' that TMSA now uses: it is a private company with state prerogatives. In other words, companies wishing to set up shop in the TFZ are able to avoid all the usual bureaucratic and red tape obstacles. In a country such as Morocco, ranked 115 out of 175 on the World Bank's index on ease of doing business, this is a major selling point. "Investors usually allow a year to get everything off the ground," explains Mikou. "Here, we can deliver building permits, so we give them the parameters. If their architect works fast, it can be done in a week. I then get the plans; the next morning it's signed."
There are now 254 companies in the TFZ, mostly from southern Europe (although a couple of large Japanese investors use TFZ as their European hub), with a strong emphasis on automotive and aeronautics: they have generated $330 million worth of investment and created 28,000 jobs. "Some EU companies now come here so that they can sell their products to the US without being affected by the WTO restrictions between the EU and US," says the director. "If it's produced here, the product becomes 'made in Morocco' and can go through under the free trade agreement."
TFZ provides a number of high-end services to its clients, such as running errands (anything from paying a phone bill to picking up visitors at the airport) or cleaning premises. Mikou would also like to develop offshoring activities. Many Tangerois speak Spanish; the area would therefore be an ideal back-office platform for Spain's booming finance sector.
TMSA is now a shareholder of TFZ and is likely to capitalise on this to develop two more industrial free zones in the port's hinterland. Tanger-Med will also benefit from a logistics free zone, Medhub: located behind the container terminals, it will focus on light, value-added activities and process container goods in transit. Third-party logistics companies that specialise in distribution, such as TNT or UPS, will use the zone as a distribution platform.
The concept was tried and tested in Dubai with immense success and it was a logical step for the parent company Jebel Ali Free Zone (Jafza) to run Medhub. "Dubai was built around the port and its free zone," says M'bouirik Mouilek, general manager of Medhub. "Jafza brings 20 years' experience to Medhub, so Morocco is buying itself time. There's no point in reinventing the wheel; it just needs to be customised."
As with TFZ, Medhub clients will benefit from a worry-free environment, proximity to large markets, low-cost logistics and cheap labour. But Mouilek says that it is the possibility of working 'just-in-time' with Europe that constitutes the biggest draw. "Take a retail business such as a consumer goods supermarket chain. It consolidates orders at Shanghai out of products originated from China and neighbouring Asian countries. The order preparation is labour-intensive. If you ordered directly from China, it would be cheap, but it would take a month. If you did it from here, you could have your order sent directly to the supermarkets at a competitive labour cost. We can deliver anywhere in Europe within 12 to 48 hours."
Medhub already has 11 clients, with another 30-40 ready to book, and plans to start operating at the end of the year. The first container terminal will be operated by APM Terminals Tangier, part of the AP Moller-Maersk Group, and the second by EuroGate Tangier, a consortium comprising leading terminal operator Eurogate, Italian shipping line Contship Italia, Moroccan shipping line Comanav, and MSC and CMA CGM, two of the world's biggest shipping lines. Maersk, MSC and CMA-CGM alone could fill the port's capacity.
Almouzani says that it took a while for people to take the port seriously, even though it had serious financial backing and all the right support. TMSA was given $200 million by the Hassan II Fund, which promotes socio-economic projects in Morocco. The company also received a $100 million grant from the Abu Dhabi Fund, a UAE development fund that finances major infrastructure projects with strong social impacts in the Middle East, and a further $200 million loan at a subsidised rate. This capital of $500 million paid for the port's main infrastructure. "At first, we didn't want to promote the port. We just wanted to build the infrastructure regardless of concessions. But as soon as we got Bouygues Construction (which built the port's main sea defences) on board, things moved fast," says Almouzani.
Terminal 1 is set to start operating in July this year and is due to reach full capacity by October. Terminal 2 will open in 2008 and the hydrocarbon terminal at the end of that year. All terminals will be multi-user facilities (although Terminals 1 and 2 are likely to see most of their business come from their shareholders) and will reserve part of their capacity for import and export activities. Tanger-Med also features a dry bulk and general cargo terminal, and a passenger and a roll-on roll-off terminal for trucks and trains, capable of handling 6 million passengers a year. Construction has just started and if all goes to plan, it will be ready by summer 2009.
A remarkable fact is indeed that things have gone so well. Most of the ports' sections will finish more or less on schedule, a testimony to TMSA's efficiency. Everyone involved agrees that had it not been for TMSA's unusual status - a private company with public prerogatives - it would have taken at least 10 years to complete the project. Outside of this framework, Morocco is still chaotic to navigate. "There is TMSA and then there is the rest of Morocco," observes Domenico Bagala, director of EuroGate Tangier.
Corruption and bribery are still rife and attitudes will be difficult to shift. On the beaches of Tangiers, couples stroll and tourists go on camel rides. The seafront is an eclectic mix of beautiful old buildings, apartment blocks and sad-looking discotheques: it's impossible to tell what is being built and what has fallen into disrepair. But it will soon change. Tanger-Med will be able to absorb the entire container and passenger traffic currently using the old port in Tangiers, and so the city is looking forward to a major facelift.
Tangiers is already the third biggest tourist destination in Morocco, and a number of projects will increase the hotel capacity from its current 15,000 beds to 40,000 by the end of the decade. Market research firm Euromonitor International predicts that the number of tourists will rise steadily from 5.1 million in 2006 to 5.8 million in 2009, a figure boosted by low-cost flights and cheaper crossings. Tangiers is also bidding for the International Exhibition of 2012 (see box), an event that would significantly boost the city's infrastructure and strengthen its appeal as a tourist destination.
A number of challenges remain, but Elhadi is realistic: "We have shown that we can implement this project in a due manner. Now we have to show that we are as efficient in operating it." First on the list is the workforce: the local population is poorly educated, even by Morocco's low standards. The literacy rate was just 53.5% in 2005, and many of the workers on site are from the better educated south. Finding the required level of skills for the 150,000 or so jobs will be difficult; Sylvain Gimenez, project director for Bouygues Construction, says that it's at supervisor level that skills are lacking.
TMSA and the port's contractors have been investing heavily in training. TMSA has developed mobile training units with the local university and the Office de Formation Professionnelle (the centre for professional training) to train people in remote areas. It is also planning to open a maritime institute to train personnel on all port-related activities. Terminal operators APM Terminals Tangier and EuroGate Tangier have both developed training programmes for system and equipment operators in their existing facilities across Europe. "We'll have 700 people by the end of the year and 90%-95% will be Moroccan," says Etienne Rocher, managing director of APM Terminals Tangier. "Transhipment is a new activity in Morocco and we'll have an important responsibility in terms of training the people we hire."
Another key factor will be security: drug trafficking is a problem because of the site's proximity to the cannabis- producing region, and illegal immigrants are also a concern, but TMSA's security system is ISPS-compliant (the standard required to trade with the US). However, many of the perpetrators of the recent bombings in Casablanca were Tangerois, and several of the Madrid and 9/11 bombers had connections with the Tangiers-Tetouan region. But TMSA dismisses the idea that Tanger-Med might be any more vulnerable than any other strategic site in the world.
Tanger-Med has to live up to its billing. "There is a strong understanding that you never get a second chance to make a good impression," says Rocher. This is Morocco's chance to boost its global credentials.
TANGIER EXPO 2012
Tangiers' candidacy for the 2012 International Exhibition (Expo) is highly political. It is the first application from an African country, and an Arab Muslim one at that. Its symbolism is high. "It would crown everything we have been working on," says Souad Hassoun, who is leading Tangiers' bid.
The $6.42 million project, including post-exhibition conversion costs to turn the facilities into a convention centre, has been designed to be integrated into the city. The theme, Routes of the world; cultures connecting for a more united world, draws on the city's history of mixed influences and its ambitions as a geopolitical centre.
Hassoun says that her team has worked hard to ensure that the technical aspects of their bid are bullet-proof. "We have the best expertise in each field. So if people don't vote for us, it will be for other reasons than the feasibility of the project."
Tangiers is up against Wroclaw in Poland and Yeosu in South Korea. If selected, the event is forecast to attract 6 million visitors and significantly boost Tangiers' reputation. "I think we will gain 15 years in terms of development," says Hassoun.

THE WORLD'S TOP CONTAINER PORTS

APM Terminals Opens New Container Terminal in Tangier, Morocco

  1. -
  2. New deepwater Container Terminal on Straits of Gibraltar promises to create new trade gateway, investment, shipping hub 
     
Tangier, Morocco – APM Terminals Tangier, S.A. and the Akwa Group, a Casablanca, Morocco-based partner have announced the opening of Morocco’s newest container terminal to serve the global trade in Morocco and the Western Mediterranean market.
Strategically-located on one of the world’s most important shipping arteries, the terminal will offer importers and exporters a new gateway to world markets.
Over 200 vessels a day pass through the Straits of Gibraltar as they transit on north-south and east-west liner trade routes. Shipping lines will benefit from Tangier’s direct access to the main shipping lane, a deepwater port capable of handling the largest container ships in the world, the newest, most advanced container handling equipment and APM Terminals global best operational practices.
Kim Fejfer, CEO, APM Terminals International, based in The Hague, Netherlands stated "Our vision is to offer our customers more options and solutions in the Straits of Gibraltar giving them a competitive edge in world markets. The new terminal expands our global terminal portfolio in one of the world’s most important shipping lanes."
Martin Poulsen, Vice President, APM Terminals Europe Region, based in Rotterdam stated "Morocco’s proximity to Europe’s 400 million consumer market will create a new gateway to trade. Etienne Rocher, Managing Director, APM Terminals Tangier added "We have worked closely with the Government of Morocco through the Tangier Mediterranean Special Agency (TMSA) - established in order to secure interest from the world’s leading operators and fast track Tanger-Med’s overall project timeline - and with our partner, the Akwa Group to build and deliver on time this new container terminal. We are creating new jobs and opportunities, bringing in foreign investment and starting a new chapter in the West Mediterranean market." 300 jobs have already been created and 700 are expected to be created by the end of 2007. 98% of all jobs are
1
expected to be held by Moroccan nationals. The port project is tied to the largest ever infrastructure project in Morocco that includes new highways, railway lines and other infrastructures.
Said Elhadi, Chairman of the Executive Board of TMSA, commented: "The opening of Tanger Med port’s first container terminal according to the timeline display’s Morocco’s capacity to implement large scale infrastructural projects in a due manner. It also highlights the quality of the partnership between Tanger Med Port Authority and its world class partner APM Terminals. Our vision is to take advantage of Tanger Med port’s key location at the crossroads of East-West and North-South maritime routes while partnering with leaders in the field to benefit from their world-class services and international best operational practices. The launch of the activities of the first container terminal is setting the ground for Tanger Med port to become an important container hub leading to the development of a successful large scale logistic and industrial platform in the North of Morocco".

samedi 11 octobre 2008

TangerMed/USA : La liaison opérationnelle fin novembre

Nouvelle ligne directe pour TangerMed vers les Etats-Unis. Il s’agit du service Amerigo Express lancé il y a quelques années par la CMA-CGM qui s’offre une escale sur le port de TangerMed à partir de fin novembre. « Ce service assure des liaisons entre la Méditerranée et la côte est des Etats-Unis, Miami et Savannah, entre autres ports », selon Domenico Bagala, président du directoire d’Eurogate Tanger, en charge du deuxième quai à conteneurs de TangerMed.

La connexion, longtemps attendue, permettra en effet de donner un coup de fouet aux exportations marocaines vers le marché US et un second souffle à l’ALE avec les USA. Actuellement, un feeder de la CMA-CGM assure une liaison vers le marché US, mais via le port de Malte. « A partir de fin novembre, le service se fera directement, sans changer de navire », déclare Bagala. C’est un navire d’une capacité de 8500 conteneurs qui assurera le transport dans un premier temps. Au besoin, d’autres porte-conteneurs seront affrétés.
Eurogate devrait lui aussi lancer un autre service, Delmas. Ce dernier, qui dessert l’Afrique de l’Ouest et l’Europe, fera désormais escale à TangerMed et ce, dès la mi-octobre. Il s’agit pour les opérateurs du deuxième quai de TangerMed d’assurer un volume d’activité conséquent pour la montée en charge des installations portuaires tangéroises. Le deuxième quai a démarré ses activités de transbordement en août dernier avec deux bateaux par semaine. Le quai devrait recevoir les trois derniers portiques de quai en janvier 2009, date à partir de laquelle il sera pleinement opérationnel. Rappelons qu’Eurogate a reçu ses premiers équipements en avril dernier. L’investissement total prévu est de 140 millions d’euros, dont une bonne partie, 67 millions d’euros, a servi à l’acquisition des équipements. Le quai (identique au premier exploité par APM Terminals Tangier) s’étend sur 812 mètres. Il disposera d’une aire de stockage de 40 hectares en cours d’aménagement.
La capacité totale prévue, selon Eurogate, est comprise entre 1,3 et 1,5 million de conteneurs par an. L’activité transbordement devant représenter plus de 90% dans un premier temps. Après avoir démarré en 2007 avec 18 personnes, Eurogate emploie aujourd’hui plus de 350 personnes. A terme, près de 600 emplois sont prévus.
Rappelons enfin que le deuxième quai à conteneurs du port TangerMed a été attribué au groupement piloté par l’opérateur portuaire Eurogate, Contship, MSC, CMA-CGM et sa filiale Comanav, avec chacun 20% de participation.
Source : L’Economiste - Ali Abjiou

vendredi 10 octobre 2008

Tangier Med Port welcomes first containers

The new Moroccan container terminal, 30km outside Tangier, Eurogate Tanger on Wednesday handled its first containership ahead of the start of regular liner services next month.

The first ship at the facility was the massive 8,488-TEU CMA CGM Otello, which discharged five disassembled Kalmar rubber-tired gantry cranes (RTGs).
The first regular service to call at Eurogate Tanger will be kicking off on Oct. 8 2008 with CMA CGM La Traviata, another 8,488-TEU ship. The terminal has 450 meters of quayside and five container gantry cranes. By the end of the year, the quay length will be extended to 810 meters and three more container gantry cranes will arrive in January 2009.
“Although the official opening ceremony of Eurogate Tanger will not be until spring next year, we will be fully operational by the end of this year. We are now starting to handle ocean carriers and will soon increase the number of services,” said Domenico Bagalà, president of the management board of Eurogate Tanger.
Eurogate Tanger is a joint development between German container terminal operator Eurogate and major European shipping lines Mediterranean Shipping Co., Zim and CMA CGM, together with its Moroccan subsidiary Comanav. It will be the major engine for economic growth in the Tangier region and is estimated to create over 100,000 new jobs directly and many more indirectly. Several new large scale manufacturing concerns have already moved to the area to take advantage of the port facilities and the adjacent Free Trade Zone (which allows import and export without tarriffs) including Nissan Renault and Airbus Industries.
Michael Kent of Moroccan Sands added ” The new port will revolutionise Tangier and inject much needed wealth into the local economy. This will undoubtedly have an upward impact on Tangier property prices as expats and middle class Moroccans enter the market. Indeed, in our opinion, this is what makes Tangier such a geat investment - not only are you investing in a city with caché but the growth is based on real economic factors and not reliant on the holiday rental market.”

jeudi 9 octobre 2008

The Biggest Port in Africa and the Mediterranean sea

The «Tangier-Mediterranean» project is a strategic priority for the economic and social development of the North Morocco region.
It is part of the economic policy orienting Morocco towards exports, based on eight clearly identified export sectors, with particular emphasis on the free trade agreement with the European Union to be implemented between 2000 and 2012 ;
Completion of the «Tangier-Mediterranean» project will have important economic effects in terms of jobs, creation of added value and foreign investment.
Its particular position on the Straits of Gibraltar, at the crossing of two major maritime routes, and 15km from the European Union will enable it to serve a market of hundreds of millions of consumers through the industrial and commercial free zones which will be run by well-known private operators.
It will also win part of the strong growth market of container transshipment and become the leading hub for cereal transshipment, a facility which is non-existent in the north-west African region at present.
The project will be implemented, coordinated and managed by TMSA, a private company with public prerogatives, operating under an agreement with the State and interacting with the different ministries involved.
The port complex will have important economic effects in terms of jobs, creation of added value and foreign investment.
In addition to the economic effects of the operation of the port, there will be important effects resulting from its construction, particularly through foreign investments, and others from the operation of the free zones (direct and indirect added value, direct gains, jobs and foreign investment).











Toll of Tanger Med

Spain's ports are having to seriously re-think long term strategic goals in the light of Morocco's Tanger Med success. Alex Hughes investigates
Port Strategy: APM Terminals is committed to Algeciras despite fears that Valencia will outstrip the port to become Spain's leading container port by the end of the year
APM Terminals is committed to Algeciras despite fears that Valencia will outstrip the port to become Spain's leading container port by the end of the year
Spain's two south coast ports of Málaga and Algeciras Bay are in trouble.
The former reported a 28.3% drop in traffic in the first five months of this year, while the latter saw a decline of 2.04%. Both are transhipment hubs, whose longer term viability has been put into doubt through the opening of Tanger-Med, where rock bottom labour rates are proving highly tempting to shipping lines. In contrast, the two main Spanish import-export hubs of Valencia and Barcelona continue to report growth. While the latter reported a modest 3.26% increase in the year to the end of May, the former boosted traffic by 8.23% to 1.34m teu. Astonishingly, this is just 50,000 teu fewer than Algeciras handled.
Could it be that Valencia will outstrip Algeciras to become Spain's leading container port by the end of the year?
APM Terminals shows absolutely no signs of pulling out of the concession it operates at Algeciras, despite its own major presence at Tanger-Med I and II. Nevertheless, managing director Anders Kjeldsen insists that APM Terminals and Maersk Line have to be viewed as two separate companies.
“Our customers, which include Maersk, have their own network strategy, which also includes using ports such as Málaga, Cádiz and Tanger-Med. If APM Terminals at Algeciras does a good job, it will retain its customers’ business,” he says.
Significantly, Mr Kjeldsen emphasises that the import-export market, which currently accounts for around 5% of total throughput, is one that Algeciras has to be able to compete in. The recent addition of a major rail complex to serve its Juan Carlos I terminal and the decision by the port authority to invest in two logistics activities zones outside the city limits are surely testament to this.
“We are not yet shifting a lot of containers by train, but we have done some important trials recently. It's not company policy as such to go down the import/export route; however it is something extra we want to provide,” he says.
Asked about the impact of Tanger-Med on business at Algeciras, port authority commercial director, Gerardo Landaluce, claims it is influencing developments across the whole West Mediterranean and even in the Canary Islands, where transhipment hub Las Palmas has seen growth of just 1.44% this year and import-export-based Tenerife a drop of 15.86%.
“Tanger-Med is concentrating attention on the importance of the Straits of Gibraltar as a whole,” he emphasises, noting that its impact will ultimately be similar to Port Saeed's on the Eastern Mediterranean. “While overall volumes in the Mediterranean are going to increase a lot, in the short term, there may be some overcapacity, particularly if all the proposed projects along the corridor connecting both ports come to fruition. Nevertheless, it is open to doubt as to how many of them will eventually see the light of day.”
Having noted in which direction the wind was blowing some years ago, Algeciras adopted a strategy of diversifying traffic. It is now looking at further diversification through the arrival of Hanjin as terminal operator in 2010, says Mr Landaluce. A better ratio of import/export to transhipment traffic is also being sought.
“The new Hanjin terminal will allow us to develop import-export opportunities. Inbound traffic from Asia passes by our port, although mostly enters Europe via ports in the north, which then have to send it south. This makes no sense. We therefore see an opportunity to develop Algeciras as a gateway port for the whole of southern Europe.”
One of the ways this could be achieved, he suggests, is by expanding the port's already well developed feeder network. An alternative is to use the rail link to the port, which is being extensively upgraded. The efficiency of freight-on-rails in Spain is being boosted as new, dedicated high speed rail lines open, freeing up capacity on existing lines for more cargo trains to operate.
As to how this enhanced import-export role will ultimately affect Algeciras' incumbent operators, Mr Landaluce says that Maersk Line and APM Terminals are clearly trying to diversify their interests. “Up to now, APM was solely dedicated to handling Maersk traffic, but now it appears to be looking at attracting other third-party business. In the past, the terminal couldn't spend much time on import-export traffic, because Maersk was interested mostly in transhipment traffic at Algeciras. Priorities now appear to be changing somewhat."

mercredi 8 octobre 2008

The Med’s moment comes

Globalisation is bringing a wave of money to the Mediterranean
 
Look southward from the southern tip of Spain, across the strait of Gibraltar. There, only 14km (nine miles) away through the slight sea haze, arises the vast construction works of a new seaport to the east of Tangier in northern Morocco. Tanger Med (pictured) opened its first docks last July. Handling 3.5m containers a year, it is already as big as Felixstowe, Britain’s biggest port. A second terminal opens this summer, and within seven years its annual capacity will rise to 8.5m. It will be the largest container port in the Mediterranean, not far behind Europe’s biggest, Rotterdam (although merely one-third the size of the Asian giants of Singapore, Shanghai and Hong Kong). Similar ports are being finished in Algeria, Egypt, Malta and Tunisia.
One-third of the world’s container traffic already passes through the Mediterranean, bringing manufactured goods from China and South-East Asia to Europe and the east coast of America. The Moroccans, spending some €3.5 billion ($5.5 billion) on Tanger Med, and others along the coast hope that if they build, a big slice of global commerce will come to their shores. Goods will arrive to be broken down into smaller loads and sent around Europe. Manufacturers will set up factories in tax-free zones planned around the docks, bring in components for assembly and serve the huge market across the water.
Already there is substance in the haze. The Mediterranean’s southern and eastern coasts are pulling in huge quantities of foreign direct investment, on a scale second only to China among emerging economies (see chart 1). The wave started about five years ago, and now private-equity groups and large investment funds from the oil-rich Gulf states are joining in. Tanger Med is but one mighty symbol that something is stirring along the coastline.
This is not the story usually told about the Mediterranean’s poorer coasts. The MEDA ten (a group of southern and eastern economies) have an average income per head of only $6,200, putting them roughly where western Europe was in 1950 and Romania was in 1975. Even though the gap in GDP per head has been closing, thanks to falling fertility rates as well as relatively faster economic growth, at today’s pace it would take almost 160 years for the MEDA ten to catch up with the European Union average. Unemployment is probably between 20% and 30%, even though official figures say it is around 12%.
This last figure helps to explain why Europeans have tended to see the other side of the sea as more of a threat than an opportunity: a source of immigrants, often young and illegal, mainly Muslim and frequently unwelcome. In Italy, Spain and tiny Malta, illegal arrivals are of especial concern. Another reason is nervousness about the region’s political health. Work your way around the map below and you will find few true democracies and much instability, actual or potential.

Yet commerce is scarcely a novelty in the Mediterranean. Centuries ago, the Middle Sea was a hub of world trade: to the Romans, it became mare nostrum—“our sea”—surrounded by the empire. Now the inflow of foreign direct investment may be reversing a long relative decline in the fortunes of the southern and eastern shores. The MEDA economies have managed to step up their growth rates to 4.4% since the turn of the century. A summit to be held in Paris this weekend may give the Mediterranean’s revival a further push.
Tanger Med is a point of arrival for foreign investors. The leading shipping and port companies, such as Maersk and DP World will have terminals there. This February Renault and Nissan started preparing the ground for a huge car factory costing €600m. The Franco-Japanese alliance aims to build low-cost cars and vans not just for Europe but for markets around the world, mostly in emerging economies where the basic Renault Logan has already proved a winner. Annual output will start at 200,000 vehicles, but will double within a few years.
Twenty years ago, Europe’s car industry stopped building new factories in low-wage Spain and Portugal, and turned to eastern Europe, including Turkey. The step across the Med, to a country where wages are one-fifth of what they are on the northern shore, is of great significance. Competitors will watch and may follow. Morocco has already attracted car-parts firms such as Leoni (from Germany), Valeo (France) and Clarcor (America). For 50 years Europe’s car factories have shipped in labour from Turkey and north Africa to their factories in Germany and France, and invested little to the south. Now the capital is moving to the labour: the mountain is moving to Muhammad, if you will


Things have been stirring on the poor side of the sea since 2000, albeit painfully slowly. In 1995 the EU started what is known as the Barcelona Process, intended to forge a Mediterranean free-trade area by 2010. By and large, that is happening through bilateral agreements between the southern countries and the EU. Sadly, the southerners’ political conflicts and lack of will to act in concert—they do not even trade much with each other—meant that each country was dealing alone with the Europeans. That has cost them. For example, industrial products can move across the sea tariff-free, but agricultural products from countries such as Morocco are still subject to EU tariffs
Piecemeal as it is, the political and economic partnership offered by the EU has prompted change to the south. According to Bénédict de Saint-Laurent, director of ANIMA, a network of inward investment agencies for the MEDA countries, it has prompted economic, financial and fiscal reforms which have made their economies much more open and more transparent. Inflation has come down from an average above 20% to around 5%. Debt has come down from 80% of GDP to around 60%, budget deficits from 5% to 3%. This has been fuelled by rises in receipts from tourism and remittances from migrant workers in Europe, as well as oil and gas revenues. The fiscal squeeze may not have done much for the region’s poor, but for the first time governments have the means to build better roads and houses, which are much needed.
Europe has also injected capital into the MEDA countries: around €8.7 billion between 1995 and 2006, plus loans worth €15 billion from the European Investment Bank and partners such as the World Bank under a programme known as FEMIP (Facility for Euro-Mediterranean Investment and Partnership). Between 2007 and 2013 another €14.9 billion is due to be sent as EU aid, with €8.7 billion from FEMIP. If that seems generous, an analysis by ANIMA suggests that at €8.30 per person up to 2006 and €12 up to 2013, it is minuscule compared with the hundreds of euros per person showered every year on eastern European countries before they joined the EU, and tinier still next to the structural funds lavished on Ireland, Greece and Portugal. But the EU’s involvement could be about to rise.
On taking office last year the president of France, Nicolas Sarkozy, launched his own plan for a Union for the Mediterranean. This was sold as a way of resuscitating the Barcelona Process—although its true purpose may have been to offer Turkey a consolation prize instead of membership of the EU. At first Germany’s chancellor, Angela Merkel, took a dislike to it, seeing in it a new club without the EU’s northern members but paid for with EU (ie, mainly German) money. Now it is within the purview of the EU, Ms Merkel seems more at ease with Mr Sarkozy’s scheme, which has been diplomatically renamed “The Barcelona Process: Union for the Mediterranean”. This weekend in Paris Mr Sarkozy, whose country now holds the European presidency, will hope to put more flesh on his idea.
The EU’s clout and money are probably necessary to get the new union going. But there is a risk that European governments will concentrate on immediate questions of security and migration rather than on measures to boost the economies of their southern neighbours (which in turn may improve security and limit northward migration). In June Benita Ferrero-Waldner, the EU’s commissioner for external relations, told the European Parliament that real projects were needed to bring about economic solidarity. But she could cite only the promotion of fast sea-routes and a motorway linking the Maghreb (in the west) with the Mashrek (Egypt and the eastern shore). This weekend’s meeting, however, may produce a plan for closer integration. Despite the Franco-German row, observers such as Mr de Saint-Laurent credit Mr Sarkozy with breathing life into the flagging Barcelona Process.

Follow the money
Whatever happens at a political level, the economic signs are encouraging. There is a groundswell of foreign direct investment in the region. According to figures collated by ANIMA, the southern and eastern shores of the Mediterranean are now attracting more investment than other emerging economies such as India, Mercosur or southern Africa; only China catches more. That raises three questions: where is it coming from; where is it going; and who is investing?
For the first time the MEDA countries as a whole are punching their weight in terms of inward investment: they have about 4% of the world’s population and are now getting a slightly higher share of investment flows. Inward investment has grown sixfold in six years.
The leading recipients have been Turkey, Israel and Egypt. The prospect of entry into the EU has fuelled Turkey’s five-year inward investment boom, though political difficulties and the slow pace of adhesion to Europe may explain a recent slowdown. Israel, with its hyper-educated technical workforce, boosted by arrivals from the former Soviet Union, has been a happy, high-tech hunting ground for American investors. Renault have moved in too, to make electric cars. Egypt’s political stability and economic reforms since 2004 have attracted investment too—notably the €12.9 billion purchase in December last year of Orascom Cement by Lafarge of France, paid for in Lafarge shares. Behind these leaders, Algeria and Morocco have each seen inward investment grow tenfold since 2002.
To be sure, there are downs as well as ups: the dotcom bust curbed American investment in Israeli technology; and first estimates for 2007 show a fall of about $8 billion across the region, caused by fewer mega-projects in tourism and property, a slowing of privatisation and fewer purchases of Israeli firms by American ones. A plan by Agrium, a Canadian company, to build a $1.2 billion fertiliser factory in Egypt was halted by local business rivals and environmental protests. Even so, says ANIMA, the number of investment projects is still running at around 800 a year.
Behind this groundswell lie several factors. The boom in energy and raw materials has brought in oil and gas explorers but also investors in petrochemicals, fertilisers and cement. The maturity and saturation of European markets is another reason to look south. Privatisation of banks and telecoms firms has also attracted investors, notably from the Gulf. The recent strength of the euro against the dollar should help too. Safran, a French aeronautical firm, is directing investment to Morocco to escape the pain of the strong euro. It is a big supplier to Airbus, which has made it clear that it expects its suppliers to price in dollars. EADS Socata, another subsidiary of Airbus’s parent company, has also invested directly in Morocco for the same reason.
The source of the funds has changed in the past five years (see chart 2). Europe still accounts for about 40%, but North America’s share has shrunk from 25% to around 10%. Meanwhile the portion coming from the oil-rich Gulf states has risen from 16% to over 30%. More intriguingly, the share of emerging economies such as Brazil and India has climbed from 8% to around 20%.
Although energy is an important draw for investors, it accounts for less than one-sixth of the whole (see chart 3). Banking (led by European banks) has not been far behind. Industries such as telecoms, chemicals, metalworking, tourism and car parts continue to attract dozens of deals a year across the region. Europeans have been buying homes by the thousand. Many are long-term residents rather than tourists.

The inward investors can be grouped into four types, according to Mr de Saint-Laurent. The first might be called “offshore” investors. These are firms attracted by deposits of oil and gas in places such Algeria, Libya, Morocco and Tunisia. They are offshore in that they ship in all their labour, equipment and supplies. They pay the state for the resources they extract, but have little further effect on the local economy. The second group consists of European companies, led by the French but also including the Spanish and Italians. Reflecting their colonial histories, the French and Spanish tend to be found in the west, the Italians farther east. These investors usually form joint ventures or buy local small and medium enterprises, if only because such partners are needed in the Islamic Arab cultures of the region.
Third comes a new group, the Gulf funds. Their billions tend to go to the huge resorts springing up along the coast. Investors from Dubai have a €10 billion project in southern Tunis, a €3 billion development in Algeria and €600m site in Morocco. With them come Spanish builders, such as Sacyr Vallehermoso, which see on the southern shores of the Mediterranean an opportunity to recreate the old boom on the Costas back home. These investors have something in common with the offshore oil-and-gas brigade: often, not much spills over into the local economy besides low-paid jobs for cleaners and waiters.
The fourth group, also newcomers, are perhaps the most interesting: investors from emerging markets. Several Indian companies have set up shop in the region. Tata has invested in motor manufacturing and outsourced information-technology work in Morocco. Wipro Technologies, a computer-services firm, also does IT work in the region. Ranbaxy Laboratories, a drugmaker, has factories there. Gujarat State Fertilisers and Coromandel Fertilisers from India are investing in a Tunisian factory to make phosphoric acid from the rich local reserves of phosphorus. South Korean investors also pop up, for instance with a car-parts factory in Tunisia and hotels in Syria. These industrial investors have no qualms about taking over local companies with thousands of employees—meaning that they are thoroughly integrated into the local economy, and their activities have a big knock-on effect.
The region’s boosters would also like to attract more money from a fifth group of increasingly interested investors: private-equity funds. The rapid increase in foreign direct investment flows is encouraging, because they indicate the region’s attractiveness to international capital: the export markets it can serve, wage costs and so forth. Increased interest from private-equity groups in small and medium enterprises would be a measure of these investors’ confidence in the entrepreneurship on offer around the Mediterranean.
In 2007 private-equity funds had a remarkable year in emerging markets, with 204 funds raising $59 billion, about 80% more than in 2006. Around 140 funds are reckoned to operate in the south and east of the Mediterranean, plus another 181 in Israel (which is a case apart, because of the virtual integration of its economy with America in general and Silicon Valley in particular). But the funds are starting to spread throughout the region, with 18 in Morocco ($846m invested), ten in Egypt ($611m), nine in Tunisia ($64m) and nine in Turkey ($1.2 billion). The trend, however, has been to go for project finance rather than investments in smallish companies.

Med revival
The falling away of the countries on the Mediterranean’s southern and eastern shores from their European neighbours has been sad and wasteful. Algeria once was the breadbasket of the Roman empire; today it is the biggest wheat importer in Africa. Many things hold the region back, not least bad infrastructure, poor education and dysfunctional politics. The new economic hope is not evenly spread: foreign direct investment is swallowed disproportionately by Egypt, Israel and Turkey.
The boom in energy and raw materials should give many countries a start in building their economies up. If foreign investors do no more than harvest the oil and gas and leave, the region may simply stall again. What is needed is more of the joint-ventures and industrial projects represented by firms such as Safran and Renault-Nissan. But the real test will be whether the region’s economy can be broadened and deepened. Then clearer shapes may emerge through the haze across the strait.
The Economist - le 13 juillet 2008