Regional Trade for Global Gains - ITC’s EnACT Programme Connects Moroccan Leather Goods to European Buyers

13 July 2011
ITC News

An ITC technical assistance programme in the Middle East and North Africa is developing links to European fashion markets and at the same time building skills and employment opportunities for women and youth. In Morocco, the EnACT programme is focusing on creating links between Moroccan leather suppliers and European brands.

Launched in July 2009, the Enhancing Arab Capacity for Trade (EnACT) programme aims to develop an integrated, competitive and diversified export sector across Algeria, Egypt, Jordan, Morocco and Tunisia with a particular focus on streamlining the role of women and youth in export-related activities.

Funded in large part by the Canadian International Development Agency (CIDA), EnACT works in countries characterized by young populations, endowed with industrial potential and benefiting from relative proximity to markets in Europe.

With the support of ITC technical advisers, EnACT addresses non-tariff barrier type challenges for the target countries through seeking to:

  • Enhance producer capability by increasing the range and quality of goods and services on offer for world markets;
  • Develop market links to professional buyers by securing access to both new markets and final purchasing managers of brand merchandise rather than brokers; and
  • Improve the environment for trade by creat- ing a business environment that assists enter- prises in creating and profitably developing their export businesses by helping to increase the capacity of trade and sectoral institutions whose work is to support exporters.

EnACT pays particular attention to skill-building, which can lead to the creation of export-related employment and helps women and young people to be better equipped to secure and sustain their jobs in a competitive export sector. Environmental concerns, which are of interest to professional buyers, will also be systematically addressed in the design and implementation of EnACT’s activities.  

ITC technical advisers have started work in key areas including market analysis and research, networking with trade support institutions and regional trade information bodies, as well as product and market development.

An Approach to Creating Market Linkages

The programme presents an opportunity for luxury fashion brands to engage with a new set of producers, located close to European markets and design centres and with a strong manufacturing base. The EnACT approach to making trade work is led by expert advisers with excellent contacts with both European and international fashion and luxury goods sectors. These advisers:

  • Conduct a market study to assess the capacity of producers and develop an understanding of their ability to serve luxury fashion brands;
  • Assess specific demand-led opportunities for producers, based on knowledge of particular brands in European and international markets and their potential interest in sourcing from the target countries; and
  • Develop an action plan based on supply and demand analyses, including introducing specific buyers to specific production possibilities in the target markets, based on opportunities for valuable business relationships.

The Moroccan Opportunity

In Morocco, EnACT has selected the leather sector for specific focus because the majority of the workers are women and youth. Although EnACT found the leather sector in Morocco capable of producing quality merchandise, there was a need to connect suppliers to professional purchasing managers of branded products and then follow up on clients.

ITC has completed its supply survey of the leather sector and begun to identify potential clients who may benefit from the Moroccan leather sector’s offerings. The supply survey pointed out Morocco’s strengths:

  • Trust: Many Moroccan companies manu-facture leather goods and shoes to high-quality, European standards at competitive prices. In addition, some manufacturers offer a range of leather worked with vegetable dyes, which are environmentally friendly. Established brands already trust the expertise of Morocco, and continue to do so.
  • Proximity: Fashion brands increasingly seek responsiveness and flexibility from producers. Geographical proximity is therefore an important asset. Mediterranean countries such as Morocco benefit from both cultural and geographical proximity to Europe.
  • Flexibility of production quantity: The manu-facturers of Morocco have specialized in what the Italians call the pronto moda or ‘fast fashion’ by focusing on responsiveness, shorter manufacturing lead times and acceptance of a low minimum order.
  • Know-how: Morocco is recognized for its customary expertise in the treatment of lea-ther goods.
  • Tax advantages: The strategic position of Morocco as a genuine platform of business and industrial partnership has been reinforced by the signing of several agreements of association and free exchange, including some trade agreements that allow the Mediterranean area to expand business opportunities in the United States. The free trade agreement between Morocco and the US represents not only significant development potential for Morocco – Tangiers is only five days by ship from New York – but also for European brands wishing to set up in Morocco and enjoy the opportunities of the vast US market.

The survey also identified a number of weaknesses that need to be addressed by the programme including a lack of trained and dedicated client relationship management personnel, client follow-up and marketing skills.

Next Steps

With these findings in mind and in order to create links between international buyers and Moroccan leather enterprises, ITC has facilitated a series of visits by European and Japanese fashion brands (including Dinos (Japan), Gaspard Yurkievich, Range Ton Pyjama, Les Mouettes Vertes, LARARE - Paris and Hankyu) to Marrakech and Casablanca. These visits sought to:

  • Link buyers with pre-selected leather producers based on the buyers’ specific requirements, in order to see first hand the quality of product and service delivery on offer; and
  • Allow buyers to liaise with government representatives to discuss import–export processes and potential advantages stemming from trade and other agreements.

EnACT advisers have also conducted targeted training programmes on quality, design and marketing with Moroccan producers to enhance their capability – and, by working with local partners, EnACT ensures that they will be able to continue capacity building after the programme ends in 2012.

EnACT is already yielding results. As a result of its capacity and skill-building programmes in quality and design, producers are already perceived more favourably by buyers and are able to move into the higher-end market. This was demonstrated by one Moroccan producer who is now exporting handbags at three times the price he was previously selling them for. In 2011, EnACT and its partners foresee relationships expanding, resulting in larger transactions.

Jamal Bahhar, Director General of the Moroccan Federation of Leather Industries, said recently: ‘Contrary to other programmes […] EnACT is more focused and has rapidly given results as it has attracted new clients within a very short period of time.’

For more information about the EnACT programme, visit www.intracen.org/enact/.