RABAT (Reuters) - China’s Citic Dicastal will invest 350 million euros in building two aluminum car wheel factories in northern Morocco, Morocco’s industry, trade and investments ministry said, joining a string of foreign car component-makers setting up in the country.
The first factory will be built in the Atlantic Free Zone in Kenitra and operate from 2019, while the second will be established later in Tangier Tech city, the two parties agreed.
Citic Dicastal aims to produce 6 million units annually, most of which will be exported, the ministry said.
Investment incentives in industrial free zones and proximity to Europe as well as African markets are luring car component makers to invest in Morocco. French car makers Renault (RENA.PA) and Peugeot PSA (PEUP.PA) set up factories in Tangier and Kenitra respectively.
The government plans to bring the local sourcing rate of cars made in Morocco to 80 percent by 2020.
“Through this project, Dicastal expands its international investments and contributes to Morocco’s industrial development and Moroccan-Chinese trade,” Chairman of Citic Dicastal Xu Zuo said at the signing ceremony.
Last April, South Korea’s Hands Corp (143210.KS) began building an aluminum wheel plant in Tangier at a total cost of 4.33 billion dirhams ($472 million), with an annual production capacity of 8 million units.
The automotive sector was the country’s largest industrial exporting sector last year, with exports worth 70 billion dirhams. Up to June of this year, the sector led Morocco’s exports with a rise of 19.1 percent to 35.973 billion dirhams compared to the same period a year earlier.
Reporting by Ahmed Eljechtimi; Editing by Alexandra Hudson