June 18, 2012 - 11:55 AM
MONTREAL - Bombardier says it has bought land in Casablanca's tax-free zone near the airport for its new manufacturing facility that is set to open next year.
The Montreal-based aircraft manufacturer said it signed a deal with Moroccan property holding and management company Midparc Investment S.A. for the land in a free zone in Nouaceur.
Bombardier Aerospace president Guy Hachey said the selection of the site for the manufacturing facility is "an important first step" in establishing the world's third-largest aircraft manufacturer in the North African country.
"The site met our stringent requirements and high standards and we look forward to the start of the construction and production of the first Moroccan-built Bombardier aircraft components," he stated in a news release.
Hachey said he hopes the long-term relationship will serve as a catalyst for the industry in Morocco.
Bombardier joins other aerospace manufacturers in setting up shop in Morocco, which has established an aerospace training program and offers tax incentives to attract companies. The company will pay no taxes for five years and have reduced taxes for 20 years by setting up free zones, including the one owned by Midparc.
Bombardier didn't disclose the purchase price for the land, but said it plans to invest about US$200 million in equipment, buildings and start-up costs over the next eight years.
Construction of the facility will take place in phases starting in 2012. Capabilities at the new plant, which will complement Bombardier Aerospace's existing manufacturing sites, will initially include sub-assembly for simple structures. Details on the type of components to be manufactured are being finalized.
By the end of 2020, employment at the Morocco facility is expected to reach about 850.
Bombardier said it selected Morocco because of competitive manufacturing costs, low shipping and transportation costs and proximity to Europe.
On the Toronto Stock Exchange, Bombardier shares gained three cents at C$3.94 in midday trading.
News from © The Canadian Press, 2012