Morocco’s textile industry rebounds, as demand spikes from Northern Europe

Orders of Moroccan-made garments are on the rise again this year after a drop in demand at the end of 2022, with new interest from Northern Europe for corporate apparel and knitwear, according to Fatima-Zohra Alaoui, director general of the Association Marocaine des Industries du Textile et de l'Habillement (AMITH), Morocco’s textile association.

AMITH represents the North African country’s whole textile industry, which is made up of more than 1,200 companies employing around 200,000 people.

Inditex, the Spanish company that owns brands such as Zara and Bershka, makes up a sizeable chunk of Morocco’s textile imports. Some 60% of the North African country’s exports go to Spain, and most of those exports go to Inditex.

But in the last quarter of 2022, Inditex as well as H&M and other major clothing brands reduced their orders. Inflation was high so spending power was low. Global warming meant that the winter was warmer than usual, so customers were buying less new seasonal wear. Many of the large brands and retailers had large inventories so they slowed down on orders, Alaoui said.

“The slowing down of customer demand led to a slowdown of orders from the buyers in order to wait and see what was going on and what was going to happen. But starting from January, orders started coming up again,” she told Al-Monitor.

“I guess the privilege of Morocco being so close to Europe makes it easier for our brands and retailers to take smaller orders, more flexible orders in Morocco and adjust to the demand depending on how customers react,” she said.

MIM, the international textile festival that AMITH organizes every year, took place May 10-12 in Morocco's northern city of Casablanca. Alaoui said MIM allowed foreign companies to attend the festival to learn more about the capabilities of Moroccan textile manufacturing and discuss new business opportunities and partnerships. 

The maturity and know-how of Morocco’s textile market, coupled with its useful location and proximity to Europe, Africa and the Middle East, is the main reason why the orders have been rebounding quickly this year, Alaoui said. “So things within Inditex are getting back to normal, but we also have solicitations from other brands from Spain and the rest of Europe and Northern Europe."

Two major trends she sees now are increasing demand for knitwear and corporate apparel from the Moroccan market, especially from Northern European and Scandinavian buyers. The demand for knitwear shot up during the pandemic, with many consumers wanting something comfortable to wear while working from home or spending more leisure time there. She has seen demand from Europe for tailored suits, knitwear and woven pants. 

“They're coming to try to find partners here in Morocco to start sourcing what was traditionally sourced from Asia. So what they're trying to do is switch part of that production to neighboring countries, and Morocco is one of the countries that they're looking at,” Alaoui said.

Sustainability drive

A few months after Alaoui joined AMITH in 2016, the industry made significant investments in ozone, laser and eFlow technology to reduce water consumption in garment production. But much more needs to be done to improve the industry’s sustainability. AMITH and Moroccan authorities are working to make the industry’s upstream value chain — which gets the materials to the manufacturers — greener.

“The fact that Morocco doesn't have a strong yarn and fabric industry in Morocco is a problem because we've been importing, let's say, 80% of our inputs from abroad,” Alaoui said. “That's not good in terms of carbon footprint, for example. So the idea is to build these industries in Morocco in a sustainable way, so we are working with the Moroccan government to set up eco-friendly industrial zones where this investment will take place.”

The country is also one of the world leaders in renewable energy production, and the textile industry is working to capitalize on that to power the zones that intend to help reduce water usage and recycle water and textile waste. Such an ecosystem would allow Morocco’s textile industry to differentiate itself from others, Alaoui said.

Foreign capital and know-how

The textile industry is one of Morocco's largest sectors. The North African country exported the equivalent of around $4.06 billion in textiles in 2022, according to government data. Much of those exports went to Europe and the United States. 

That said, there is not much foreign direct investment (FDI) in the industry, with about 98% of its capital being Moroccan, according to AMITH. But Alaoui said the country does not discriminate against FDI in Morocco and is looking to attract more of it. 

“The idea is to encourage investment, both from Moroccan and foreign investors, ideally in the form of joint ventures, because what we're looking for also is a transfer of knowledge,” she said.

Alaoui added, “We're working together in order to attract more investments — more foreign investments in the upstream of the value chain where we need foreign investment and foreign know-how to rebuild that part of the value chain.”

She said that FDI and foreign expertise could help develop printing, dyeing and finishing in Morocco’s textile industry in order to increase its value.

“And that's an expertise that is not readily available in Morocco and where other countries such as Portugal, for example, have very strong expertise,” she added.

🔴 This Week: Portuguese group Valérius Têxteis to launch $100 million textile recycling project in Morocco, creating 1,500 direct jobs. pic.twitter.com/kuODtkcYkL

— Le Maroc moderne (@Lemarocmoderne) May 14, 2023

In mid-May, Portuguese textile company Valerius Texteis signed a memorandum of understanding worth 1 billion Moroccan dirhams ($97.98 million) with the Moroccan government to strengthen and sustainably develop the country’s textile sector. Valerius Texteis is launching a new textile recycling project in Morocco that will create 1,500 jobs, Moroccan media reported.

Alaoui said the investment in that project was going to start “very soon.”

“It falls exactly in the overall textile strategy that we have in Morocco, which is to build a more sustainable industry. And it starts with the fibers that you use in the waste that you're generating and how you valorize this waste and transform them in order to reintroduce them into the production process.”