Q&A – Exploring new horizons: Moroccan SME trades up

25 September 2012
ITC News
Morocco is steadily progressing toward greater internal modernization and globalization. Located on the Strait of Gibraltar, it is increasingly seen as a regional hub for shipping logistics, assembly, production and sales in North Africa.

Although the greatest barriers to trade in Morocco are similar to those any small- and medium-sized enterprise (SME) would face in a developing economy, the country has a dynamic economy. In the World Bank’s 2012 Doing Business Report, Morocco shot up 27 slots from its 2011 position to 94th out of 183 economies in the overall 'Ease of Doing Business' ranking. It is thus profitable to do business in Morocco and to extend business to foreign markets.

Asmàa Missa, manager of a small agro-food enterprise in Casablanca, is taking on the challenge of both local and foreign markets. Missa has managed the family business, WASSA Agro-Group, since 1995 and with increasing success. What is her secret? Does she have to struggle with non-tariff barriers like so many other SMEs? Why is it a privilege to be a business woman in Morocco? The answers to these questions can be found in exporting and understanding the needs of clients, explains Missa in an interview with International Trade Forum.

TF: What is WASSA Agro-Group?

Missa: WASSA Agro-Group goes back to the 1950s, when my father Ahmed Missa left his hometown Agadir to do business in Casablanca. In 1959, he acquired his first market stand at BAB Marrakech, where he traded in canned food and fresh produce, particularly in fresh olives. One year later, he and his brother co-founded Olives Massa, a company specializing in the treatment of olives from harvest to end product.
From 1960 to 1970, Morocco experienced an economic boom that enabled my father to acquire about 3,000 square metres of land and meet the growing demand for the company’s products. In the 1980s, he bought another 15,000 square metres and created Missa Ahmed to disassociate himself from his brother. This space allowed him to store annual purchases of olives and condiments. In 1990, a new kind of market emerged in Morocco with the first shopping centre, Marjane Bouregreg, in Rabat. To ensure that his brand of olives was represented in every supermarket, my father hired some 90 permanent merchandisers. A new design distanced his products from more traditional ones and now, during high seasons, the company employs between 90 and 150 people.
As the business grew it changed its name to WASSA Agro-Group and in 1995 my father asked for my help. I was the only member of the family who had gone to university and I felt responsible even though I had started a career as management controller at the multinational corporation Sanofi three years earlier and felt too young to take over the family business at the age of 25. But I knew that I could support my father in matters of marketing and finance, and getting the company to the next level.

TF: Was it a difficult task?

Missa: It wasn’t easy. I needed to learn each stage of production and undergo training like the rest of the staff. My experience at Sanofi helped me understand the processes and use rigor as well as courage to advance. The staff knew I would take over the family business one day, but I earned their respect and this was important to me.
Being a woman doesn’t make a lot of difference in the Arab business world, but business with external parties such as banks and insurance companies can be easier for women than men as they trust women to handle investments and money in a responsible manner. Also, Arab women are known to be credible, hard working and passionate about their work.

TF: What is your product range and where do you export to?

Missa: We concentrate on olive products, offering over 26 varieties, either loose or packed in various forms. For diversity, we also produce other goods, particularly condiments such as preserved lemons, pickles, onions, capers, pickled peppers, mixed vegetables and harissa. Production is aimed primarily at the local market, especially the retail segment that now represents about 60% of turnover. Our export turnover is just 25%, but it increased from about US$ 222 in 2007 to US$ 1,219 in 2011 despite challenging economic conditions and lower exports of Moroccan food. Most of our exports go to the European market, which is Morocco’s primary trading partner, while the rest are dispatched to Saudi Arabia, Canada and Palestine.
Interregional trade in the Maghreb region is more developed than intraregional trade because of insufficient investment and because of the similarity between some Maghreb countries, for instance Morocco and Tunisia. Export structures are inadequate for intraregional demands and priority is given to a North-South strategy.

TF: What obstacles do you face when trading?

Missa: For one, risks of competition. The traditional market represents about 80% of our annual volume, but the informal nature of this market creates unfair competition among manufacturers due to factors such as the non-application of value added tax and non-compliance with hygiene standards and food safety. Our company operates with production tools and manufacturing processes similar to those of the largest operators in the sector, which significantly reduces competition.
With regard to canned olives and international competition, the competitiveness of Moroccan products is linked to the supply cost of olives, which is based on annual crop levels and on supply costs recorded in Spain, the largest producer of olives worldwide and the number one competitor of Moroccan canned olives. Efforts made by Moroccan authorities to increase the area planted with olives will hopefully ensure adequate crop levels, and the proximity of Morocco to the Spanish market promotes correlation with costs in Spain, thus limiting gaps in competitiveness.
Supply risks can also be a problem as controlling the supply of olives and quality condiments is a key requirement for the business. Modernization, market organization and weather conditions can disrupt the regularity of supply in quantity and quality and affect local market prices. To reduce the risks, we maintain long-standing relationships with suppliers of raw materials, continuously observe tariffs on the Moroccan and Spanish markets, and make purchases of raw materials based on market opportunities.
Production risks can also be an obstacle to trade. As an industrial food enterprise, we risk non-compliance if we produce and market products that are unfit for consumption. To guard against this, we are implementing quality control throughout the manufacturing process and are training to obtain certification that will improve the hygiene and food compliance of our products. This need is accentuated by strict health regulations applied to food products sold in Europe.

TF: How is ITC helping you?

Missa: I was aware of the potential of export markets and was interested to learn more. The ITC EnACT (Enhancing Arab Capacity for Trade) programme helps us brand and market products for foreign markets. It also helped me hire an international consultant who taught me about exports and arranged a visit to the SIAL (Salon international de l’alimentation – the international food and beverage exhibition) Canada trade show in Montreal in May. At the show I met other organizations that expressed interest in our products, one of them the Canadian distributor CLIC Import Export, a specialist in food products. I don’t want to stop with Canada; we will be part of the SIAL trade show in Paris in October. I plan to expand our export share as I know the company’s success lies in exports.

TF: What are your plans for the future?

Missa: We have five key objectives. We will direct sales towards export, producing a differentiated offering that meets the requirements of the international market; we will diversify our range of olive oil and condiments; and we will invest in the branding of the company. We will also execute our investment programme covering the renewal of equipment and increased production and storage; and we will establish the HACCP/ISO 22000 quality management system to meet national and international market requirements.