Private Sector Invests in Construction Industry Fundamentals in Morocco

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Researched by Industrial Info Resources (Sugar Land, Texas)--Morocco's government has a four-year infrastructure project plan, beginning in 2012, with an estimated investment value of nearly $50 billion. A shortage of about 1 million housing units drove construction sector growth to 3.4% in 2010.

To meet local demand for construction industry fundamentals, Morocco established steel and cement production lines with the aid of domestic and foreign companies, such as Ynna Holding and Lafarge (PA:LAFP) (Paris, France).

Ynna Holding, a private-sector conglomerate founded in 1948, reported aggregate revenues of $900 million in 2007, with total employment of 18,000 staff and more than 48 affiliated companies in Morocco, in addition to business interests in Egypt, the Gulf Cooperation Council, Tunisia, Jordan and Sub-Saharan Africa. Ynna Holding's strategy seems to be crystallizing around three major sectors: real estate, the building materials industry, and tourism (hotels) and retail.

Ynna Holding has opened a steel plant and ceramic factory at a total cost of $233.4 million. The plants are in the town of Berrechid, in the Chaouia Ouardigha region outside of Casablanca. The steel plant has a capacity of 400,000 tones per year and cost of $186.8 million. The ceramic factory was built at the cost of $47 million to produce 7 million square meters of tiles annually. The company has planned to double the output capacity of the steel factory next year and to expand the ceramic factory to 15 million square meters of tiles a year.

Lafarge Ciments (LAC), a 50% subsidiary of Lafarge, is held in partnership with Morocco's Société Nationale d'Investissement (SNI). The Franco-Moroccan company already has four cement plants in Bouskoura, Tangiers, Meknes and Tetouan, with a total capacity of 5 million tonnes.

In 2010, Lafarge Ciments was mulling over building a new cement plant in the southern Souss region, where the company saw growth opportunities. The company reveals that without such a project in Souss, moving cement there would hurt profits, as transport accounts for about 25% of cement costs. The project was undergoing a feasibility study, but further details were not given.

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