Sitting on the edge of the African continent facing Europe, Morocco has by its very nature a foot in two camps. The country, whose Arabic name translates to ‘western kingdom’ and which gained independence from France in 1956, has long benefited from close ties with Europe.
The development of Tanger has been a means to capitalise on this strategic position at the crossroads of Europe and Africa. Situated on the Strait of Gibraltar, one of the world’s most important maritime trade passages, around 40km from the city of Tangier in northern Morocco, it achieved impressive growth in 2022.
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Work began on the major development project which was to become Tanger Med in the early 2000s. Thanks to its top-down approach, the public-private partnership has grown to encompass a port complex connected to more than 180 ports worldwide and an industrial platform spanning 20 square kilometres (sq km). Everything falls under the management of the Tanger Med Special Agency.
Unique experience
The experience of Tanger Med since its opening in 2007 has been “unique”, says Bruno Delsalle, general manager of Association Internationale Villes et Ports, a non-governmental organisation that brings together urban and port stakeholders.
“At this scale, the success of the port complex has set it apart. What has made the [port complex] work is its visionary strategy to attract international businesses into the industrial zone coupled with building out port capacity,” he says.
The complex itself includes three ports: Tanger Med Port, which is made up of two container terminals, a rail terminal, a hydrocarbon terminal, a general cargo terminal and a vehicle terminal; Tanger Med Port Passengers, which has eight berths dedicated to the transit of passengers, vehicles and freight units; and Tanger Med 2 Port, which is composed of two other container terminals. Overall, the port area spans 10 sq km. In and around the port complex lie six activity zones where more than 1200 companies operate in sectors including automotive, aeronautics, logistics and textiles.
The four container terminals are operated by APM Terminals, part of Danish shipping and logistics company Maersk, Bremen-based Eurogate and Tanger Alliance (co-owned by Moroccan port operator Marsa Maroc, Italian terminal operator Contship Italia, Eurogate and German shipping company Hapag Lloyd).
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Now in its sixteenth year, Tanger Med has a nominal processing capacity of 9 million 20-foot equivalent units (TEU) and in 2022 handled 7.6 million TEU, a 6% rise from the previous year, according to Tanger Med figures. It also ranked fourth in the World Bank’s Container Port Performance Index 2022, which measures a port’s capacity to handle containers for export, import and transshipment, up two places from 2021.
Compared with other major deep-sea ports like Jebel Ali in the UAE or the port of Shanghai, which recorded a container throughput of 14 million and 47.3 million TEU respectively in 2022, Tanger Med operates on a smaller scale, but its growth trajectory has been steep by any standard.
Take Jebel Ali, another greenfield project, which came online in 1979. Even by its 25th year, combined with neighbouring Port Rashid, it had only reached a total handling capacity of 6.5 million TEU.
Having more than trebled traffic in a decade, Tanger Med was the “only port among the Mediterranean’s top five to increase its TEU total in 2022”, says Lloyd’s List Intelligence, a specialist shipping information provider. The port’s location on the Strait of Gibraltar, before the Alboran Sea flows into the Atlantic, means that it is often classified as a Mediterranean port.
Roughly 35% of African trade with the rest of the world passes through Tanger Med, which is connected to about 40 African ports, according to Unctad. “For European companies, particularly, it is a win-win, because Tanger Med gives them a base in a stable country to export back to Europe and to extend their reach further into sub-Saharan Africa,” says Mr Delsalle.
Nearshoring
Now, in an age of supply chain constraints and customer demands for nearshoring, the country, and Tanger Med more specifically, have benefited from more global businesses recognising the value of having their operations based there.
On account of its location coupled with having preferential trade agreements with 62 countries, according to the US International Trade Administration, Morocco has positioned itself, most notably, as a regional hub for the automotive sector.
“Morocco has really leapfrogged to not only being on an automotive map but to being a primary target for most companies wanting to supply to Europe,” says Julianne Furman, general manager of Polydesign Systems, which makes and designs interior trim and seating components for cars.
“What Mexico is to the US, Morocco has now become to the EU,” she says. In the early days, many customers would not expect her company to be based to Morocco, she explains. Now, they are well aware of the country’s importance.
In 2022, foreign investment flows into Morocco increased by a factor of five compared with the previous year, according to fDi Markets, with the lion’s share of this in manufacturing. Notably, out of Tanger Med’s free zones, Tanger Automotive City stood out as a beneficiary of this with six new greenfield projects in 2022.
Even without Total Eren’s $10bn investment in a green hydrogen and ammonia project, the recorded foreign direct investment figure for 2022 stands at $5bn, a 33.8% increase on 2021.
Tanger Med’s industrial platform includes Tanger Free Zone, Tanger Automotive City, Renault Tanger Med, Tetouan Park, Tetouan Shore and a zone dedicated to retail and services.
Physical and digital infrastructure
Key to Tanger Med’s success, both before the Covid-19 pandemic and in a context of increased supply chain disruptions, has been its transportation networks — both road and rail — and digital infrastructure.
“The fact that the Tanger Med [port] is really well connected with the industrial areas is a big advantage,” says M’Hamed Chraibi, German logistics multinational Dachser’s regional manager of the Maghreb. “The operations in Tanger Med are really smooth,” he adds, referring to the digitised processes that benefit companies like Dachser.
In 2021, Tanger Med scrapped the use of paper in the import and export port passage for container and truck activities during an initial test phase. The total digitisation of the port passage became mandatory in February 2022.
Elsewhere, Tanger Med has announced that it aims to be completely zero carbon by 2030. Its sustainable development initiatives range from using renewable energy to power its operations and those of its customers, to energy efficiency and waste and wastewater management.
In 2020, it became the first African port to obtain the certification of ‘Ecoport’ issued by the European Sea Ports Organisation. On September 28, the IMF’s executive board approved a $1.3bn loan under its Resilience and Sustainability Facility to help Morocco manage its green transition and help it fend off climate-related disasters.
Roberto Cardarelli, IMF mission chief for Morocco, says that one of the biggest environmental issues the country faces is water scarcity following the droughts it has experienced over the past few years. Meanwhile, from a macroeconomic perspective, Morocco’s main issues remain developing the private sector and strengthening human capital, he continues.
But so far Tanger Med has been “very much instrumental”, Mr Cardarelli says, to the government’s strategy of promoting private sector investment. He adds that there are clear advantages for international investors.
“Investors can reach Europe easily and relatively fast,” he says. “Labour is still cheap on a relative basis, and there’s good infrastructure and tax incentives. So there’s an opportunity for Morocco to attract more investment and within this potential for [growth] Tanger Med plays a big role.”
This article is part of the Special Report:
Tanger Med’s rise as a nearshoring hub