LOCAL ECONOMIC DEVELOPMENT STRATEGY

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LOCAL ECONOMIC DEVELOPMENT STRATEGY
United Nations Industrial Development Organisation

• Amman, 28-30 April 2008

Ali BERRADA, expert ONUDI
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Structure of the presentation

• General background information on the leather
  industry in Morocco and Fez
• The leather cluster in Fez
• The UNIDO leather cluster project some
  achievements
• Conclusions

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• I General background information
• The leather sector experienced over the last
  years some structural changes at the
  international level. These changes have been
  caused by 
• Markets and Exchange liberalization
• Chinas entry into WTO
• Fast-growing competition from Asian countries
  (China, India and Vietnam)
• Important depreciation of the dollar compared to
  the euro
• Decision makers moving towards co-contracting
  and finished product.
• Nevertheless, the Moroccan leather sector kept
  the path with an average increase in exports of
  7.

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• II The leather industry in Morocco
• Important component of the national processing
  industries.
• Sector spread throughout several regions
  Casablanca, Fès Meknes, Tanger and Marrakech.
• Leather sector in numbers (2006)

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• III The leather industry in Fez
• SMEs overtaken by a large number of craft unit
  (traditional work)
• 2 160 units and an average of 11 044 employees.
• Formal sector 133 enterprises (mostly working
  for the local market).
• Overall the sector accounts for more than 3 000
  units and 25 000 employees (formal, informal and
  craft companies / workshops).

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Distribution by operational areas

• Entreprises small entities, poorly equipped
  with traditional
  
• working methods.
• Important need to
• Modernise the sector in order to make it
  competitive
• Strengthen the training of the operators and
  technicians.
  
  
  
  

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IV THE LEATHER CLUSTER IN FES

• In this framework, in 2001 UNIDO, in
  collaboration with the Ministry of Industry,
  launched a project to strengthen the leather
  industry in Fez and enhance the companies
  competitiveness.
• The project  Support to leather cluster in Fez 
  aims at promoting the local industrial
  development through a cluster approach.
• 3 main objectives for the project
• To improve the technology and overcome the
  inherent difficulties particularly in
  infrastructures 
• To strengthen the associative structure of the
  sector
• To stimulate products marketing and promotion.

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10 Project Achievements

• Feasibility study of an industrial park dedicated
  to the leather industry, (committing to the
  environmental norms and sectors restructuring)
   
• Launch of the set up and layout of the Industrial
  Park 
• Establishment of a local Association bringing
  together the different sub-sectors (shoes,
  leather goods and tanneries)
• Set up of a workshop for training in model-making
  and style
• Development of a project for the establishment of
  a professional training center for all the
  sectors 

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10 Project Achievements

• 6. Stylistic assistance for 6 enterprises (Shoes
  and leather goods) and implementation of two
  joint collections
• Assistance in the promotion of the products at
  the international level
• Training course of a leading group of enterprises
  in the field of management 
• Increasing the awareness of the enterprises at
  developping and modernizing competitiveness (ex.
  Implementation of a pilot action to audit 5
  tanneries) 
• Development of a pilot export consortium.

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• 1 Feasibility study of an industrial park
  dedicated to the leather industry
• Analysis of technical and financial aspects for
  the implementation of the zone (based on the
  Italian experience in industrial districts).
• 2 Launch of the layout operation for the
  Industrial Park
• Acquisition of a 50 ht land by the Ministry of
  Industry
• Appointment of the contracting authority
• Financial contribution of the Hassan II fund in
  favor of the industrial Park ( lowering the price
  of the land)
• Association of the leather industries in Fez
  Main counterpart in the implementation of the
  Park , member of the follow-up committee .

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• 3 - Development of a sectoral association at the
  local level
• Important initiative
• Promotes the success of the other projects
  components,
• Enables the interaction between an interlocutor
  representing all the players and institutional
  partners at the national and local level.
• The Association of Leather Industries in Fez
  (AICF) was established officially in Mars 2007.
• It consists of 3 operation areas (Tannery, Shoes,
  Craft Clothing), and 3 centers
• Training Technical Assistance,
• Promotion Communication
• Competitive Modernization.

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Organisational structure of the AICF
PRESIDENT
General Secrétariat
Tannery
Shoes
Craft/Clothing
Promotion and Communication Internal Market export
Training and Technical Assistance
Competitive Modernisation
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4 Set up of a training workshop in model-making

• Recruitment of 2 trainers and workshop equipment
• Elaboration of training modules in collaboration
  with the Association
• Launch of training courses (32 students in 2007)
• Introducing the students to the most structured
  leather companies (Casablanca)
• Forecast on fashion trends.
• 5 Launch of the project establishment of a
  professional training center (OFPPT)
• Involvement of the Association in all the
  projects phases identification of training
  requirements, recruitment of trainers,
  development of programs, communication targeting
  high- school students, admission of candidates...
• The Center should be operational in September
  2008

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6 Assistance in the creativity and design
 Made in Fès 

• Stylistic assistance for the implementation of
  two joint collections
• Development of the brand
• Official presentation of the collection at the
  national level (04th February 2008)
• 7 Assistance in products promotion at the
  international level (2007)
• Implementation of a prospecting mission in Italy
  (Dec. 2007)
• Connecting the enterprises with the national
  institutions in charge of the export promotion.

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8 Development of a leading group of entreprises
in the field of management (GTZ)

• Objectives of the training
• To enable managers and middle managers to
  strengthen the enterprises through an operational
  restructuring and by promoting competitive
  improvements
• To serve as an example for other managers willing
  to take the same training.
• 9 Competitive modernization
• Modernization program is being developed (ANPME)
• Diagnostic of 5 tanneries to improve their
  organization, productivity and products quality.

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10 Establishment of a pilot export consortium

• Target group companies that have participated
  in the stylistic assistance project
• Main objectives
• Improvement of the companies competitiveness in
  terms of industrial organization and mutual
  purchases
• Moving from subcontracting to co-contracting and,
  on the long term, to the finished products.
  (joint collection capitalizing on the  Made in
  Fez )
• Exports development and market diversification.

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Critical Issues

• Traditional sector lack of entrepreneurial
  skills
• Lack of linkages among the different sub sectors
  (tanneries, leather goods producers and shoes
  producers)
• Lack of training centres
• Informal sector
• Handicraft ? Industry

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CONCLUSIONS

• Pioneer initiative in Morocco and especially in
  Fez
• Increasing participation of the industrial
  players (AICF) follow up of the activities,
  active involvement, etc. (sustainability)
• Increasing involvement of public institutions
  providing assistance to the development of the
  leather industry in Fez
• Implementation of an Industrial Development
  Program at the Regional level (PDRI) which is
  part of the Plan Emergence, having clear goals
  in terms of employment, GDP and performance
  indicators.

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Establishment of a leather industrial zone
OFPPT Délégation provinciale OFPPT ONUDI AICF MFP,
GTZ
Vocational Training

• MCINT , Wilaya
• Délégation régionale du MCINT
• MEDZ
• AICF

Cluster Leather sector
Modernisation
Products promotion
ANPME Délégation régionale du MCINT FEDIC
ONUDI CMPE ASMEX SMAEX
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Thank you for your attention