Textiles in Marrakech: Small and Medium Companies

Interview with Michelle Duperrin, President of Rectangle

Give us a small presentation of Morocco’s textile industry, especially the Marrakesh industry since the city is not the best known in that field of expertise. What does Marrakesh offer the European companies to convince them to come do business here?

We have the advantage of not being in a large city. Therefore, we have fewer transportation problems at the port and the airport. There is less staff turnover and we have no competition problems as in Casablanca where the companies will poach their neighbours when they reach their peak production. In addition, we are at less than three hours of flight from most European countries and it is very easy to come and go. Not to mention all the advantages of the region such as the climate and the fact that Morocco is a French-speaking country. Marrakech is known for its lifestyle and its quality of life and it is much nicer to work in Marrakesh than in Casablanca.

What is the history of the company? Why choose Marrakesh?

At first, my approach was opportunistic. I have not made the choice to leave France to come and settle precisely in Marrakech. I first came in Marrakech for vacation, I stayed, and then after a year I started my business.

Does that mean that Frenchmen can come and start their business here? Before it was possible, but what about now?

I think it’s still quite doable. When you come into a country and not only in Morocco, it’s important to be professional. From there, it is possible to settle in Morocco, to start a business, two things that become increasingly difficult in France. Morocco is a host country, but there is also a real desire to welcome people and investors in the region. There is a real government support.

Can you tell us what happened with the textile industry following the global crisis?

The textile sector has been relocated from Western Europe more than twenty years ago: on one hand, to all the countries close to Western Europe (Tunisia, Morocco, Turkey, and Eastern Europe) where the local workforce is much more affordable than Europe’s and on the other hand, to Asia where both end products and manpower were purchased. The Asian countries’ production costs were once more interesting than ours. However, several other issues such as the rising cost of fuel, natural gas, and transportation, great distances and delays have had a direct impact on the cost price. So, the companies returned to nearby countries like ours. There are fewer and fewer raw materials manufacturers in Europe and that brings us a dilemma: buying our raw materials in Asia, manufacturing in Morocco, and shipping our end products in Europe would entail significant costs. The Moroccan government organizes round tables and tries to understand how to face the return of the textile market in Morocco.

How do you see the future? What is the role of the textile industry in Morocco in the years to come? What initiatives should be taken?

I think there is a future for the textile industry in Morocco, because I don’t believe that Europe can resurrect its own industry, since the price of manpower on its territory does not allow it anymore. The only possibility for Europe is to trust countries like ours.

Do you think Europe could relocate in China or in Turkey?

Turkey is a major producer of textiles and I think they are already saturated, while China is trying to develop its own industry. I think Europe needs Morocco, Tunisia and nearby countries. We are slowly becoming the suburbs of Europe.

What are the benefits for European companies? Why come to you?

We are already working with many other companies, including Etam and Princess Tamtam, two companies specialized in lingerie. A new customer will always check with which companies we work to evaluate our skill level. Many companies already work with us, trust us: it proves that we have a great expertise. In addition, we make efforts to create partnerships with France’s governmental institutions and professional orders to meet the investors’ needs.

What kind of customers are you targeting? Are there specific companies that interest you?

Not really. Every brand has its own suppliers and its own supply chains and we are not looking for multiple clients, we are more interested in developing partnerships with one or two customers. For example, with Etam, we are co-contracting: we supply some products with their help. Etam will also call their suppliers, tell them that Rectangle, our company, is working with them and that they must apply with us the same terms than those negotiated with Etam’s headquarters. Take the example of a firm located in Turkey; if we contact them through a company such as Etam, things are much simpler: Etam will create bridges between us, whereas normally it would be difficult for us to establish links with this company. For a company that is entirely Moroccan, it is difficult to make ourselves known, although there are trade shows. We suffer from a lack of confidence on the part of the other companies and that’s damaging for us.

In your opinion, does the Moroccan textile industry’s future seem positive?

It should be positive. The biggest problem we face is the staff shortage. That’s what is keeping us from moving forward. If we want to develop the sector we will need to train new workers again and again. I think it’s a national problem and that Casablanca and Tangier are also suffering from this shortage of manpower. There are about 20,000 vacancies in the textile industry and in a country where there are so many unemployed workers it is unfortunate that there is no balance between supply and demand.

The government has a green plan for agriculture. Is there an equivalent for the textile industry?

Yes, but that plan has medium-term objectives, while the industry’s needs are immediate. The industry will have to find alternatives in the meantime, but the workforce shortage remains a problem. So I fear we might lose some significant orders if we cannot supply. I think the economic crisis is partly responsible for this situation. In 2008, 2009 and early 2010, the industry could not hire and now that we are hiring we cannot find qualified workers.

Are you looking for investors? Do you need investors to realize specific projects?

I think the major projects will pass through agreements or partnerships. It’s very difficult for a company or an SME to grow alone. At some point we need a partner either for funding or for commercial and technical expertise. Nowadays, to go from 250 employees to almost 1000 employees is almost impossible.

Do you wish to expand your business with a major investor?

Of course because I think the textile sector is set to expand in Morocco so we have to grow in order to be ready to meet the European enterprises’ requests. A small business like ours saturates at 100,000 pieces per month and we feel that some French and Spanish companies might soon request larger orders. So, if we want to be sure that they will do business here in Morocco, we must be prepared to meet their standards.

Can you tell us a little about the city? What might be of interest to foreigners?

Marrakesh has shops, industries, and a pleasant lifestyle; there are people who develop, consume, and create; the industrial area is changing, we see a lot of novelty, consumption grows, which creates interesting business opportunities. Marrakech has much more to offer besides its tourist district.