Why Morocco

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They chose Morocco

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Xavier Pericas

Date : 02/27/2013

The PREMO Group is a Spanish company established in 1962, specializing in the design and manufacture of inductive components used in several industrial sectors such as automation, renewable energies, and telecommunications. The PREMO Group supplies leading multinationals such as GE Medical, Nokia, Alstom, Mercedes-Benz, Renault, Audi, and Chrysler. The company employs over 550 people and its turnover exceeds 22 million Euros.

In 2006 (six years after opening a factory in China), the PREMO Group decided to continue its activity at the international level by relocating part of its production to Morocco. The Group's CEO, Xavier Pericas, explains that in the decision phase of opening a second plant abroad, multiple destinations were on the table, such as Mexico and India, but it was ultimately Morocco that was chosen due to its many competitive advantages.
"Since the group's headquarters is in Spain and a much of our sales are in Europe, one of the key advantages is the proximity of Morocco to Spain. The very short distance separating Tarifa from Morocco makes it possible to produce components at costs six to seven times lower than in Europe; the proximity also helps us work directly with headquarters without having to deal with a big difference in time zones. Morocco’s benefits lie in its proximity and is very competitive in terms of labour force".

The case of PREMO is a perfect example of a company that manages to maintain its competitiveness while growing through collocation. In this sense, it retains much of its business in Spain, particularly in its Barcelona and Malaga development centers. These locations specialize in R&D, customer, and financial services. "We keep a large part of our R&D, marketing, management, and logistics activities in Spain as we have a highly trained team on location, who are able to develop the technology we need to sell our products.»

In 2009, after three successful years in Tangier, PREMO moved its facilities to the Tangier Free Zone to benefit from significant tax advantages such as a 5 year tax exemption and a waiving of the 8.75% corporate tax, as well as appealing pledge of customs exemptions for the following 20 years. Thanks to the free-trade agreements with the United States, the Arab League, the European Union, and several African countries, companies established in free zones have access to a market of over 1 billion consumers and benefit from an exemption of customs duties. These agreements have just allowed Morocco to become a true export hub which gives PREMO the benefit of being better able serve international customers. "What is particularly interesting in the case of Morocco is the possibility to manufacture components for the United States under an agreement that exempts exports from certain tariffs to a certain market like the US which remains one of the largest in the world. This is why both the free trade zone agreements currently in force are very useful and are one of the factors that drive companies like ours to settle in Morocco."

"We provide clients of various industrial sectors, but mainly in the European and American markets. We work for the automation industry for German and British customers who supply world-renowned brands such as Audi, Mercedes and Chrysler. We also supply our products to major French manufacturers, including Renault."

One of the most crucial aspects for PREMO is the quality of Moroccan teams. The training plans established by the government provide for the training of 70,000 people (between 2009 and 2015) who will work in the automotive sector. PREMO benefits from these training plans while its employees contribute to it thus making the group as a key player in the evolution of Moroccan personnel.

"The Moroccan government is promoting training, supporting companies based on the territory, and we believe this is a very important aspect. We believe that especially when a training process is implemented, the parties involved reap the benefits, both the country and its citizens, and companies investing in it." In this sense, the support of the Moroccan government is crucial to everyone's future.

Due to the stability of the country, the government's support, improved infrastructure, and the presence of qualified human resources, PREMO's investment is a success. This situation helps ensure our company maintains its investment in Morocco. "The process worked very well. The high stability of the country has enabled us to develop our strategy and goals and we hope to continue to invest in Morocco in the years to come. We strive to continue our growth in Morocco."

See also

Anwar Dehab

Dell Maroc - Former Head

M. Farrugia

Atlantic Free Zone - Manager of the company in charge of the Project
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