Morocco must demonstrate commitment to CSR

Recent market changes mean Moroccan companies must demonstrate a commitment to corporate social responsibility initiatives if they are to stave off new entrants


At 18 years of age, Moroccan-born Miloud Chaabi founded his first business YNNA Holding, then a modest start-up specialising in construction and real estate, though one that would later play host to 20,000 employees and rank among the region’s largest economic contributors to date. Boasting over a half-century’s worth of experience, the group has since diversified its operations to encompass four major divisions, which each align with the conglomerate’s ethos of social commitment.

Spanning industry and construction, property development and hospitality, retail, food and renewables, YNNA’s constituents represent a spread of sectors and specialties united by a distinct sense of social responsibility in all they do. Far from the short-termism that so often typifies major emerging market players, Chaabi has instilled YNNA with a culture of responsibility in order to improve upon the business’s chances of long-term success.

We can no longer focus only on economic performance without paying attention to what is happening around us. It is our responsibility to become involved in social and societal lives by promoting equal opportunities

“We can no longer focus only on economic performance without paying attention to what is happening around us. It is our responsibility to become involved in social and societal lives by promoting equal opportunities, and we have been encouraging that for more than 65 years now,” says Chaabi.

“Our group’s operations are supported by the development of society as a whole, so proceeding with our growth strategy and expanding our business requires consideration of our impact on the global environment and community. By tapping into the kingdom’s immense potential, our group is contributing to a bright and prosperous future for Morocco through its diverse investments.”

Business philosophy
Chaabi is among Morocco’s richest men, second only to Othman Benjelloun, and remains one of Africa’s brightest business minds. However, despite what appearances may suggest, his focus is far from confined to moneymaking, and extends to a great many philanthropic causes.

The 84-year-old, whose fortune stands at $1.9bn, according to Forbes, heads the Miloud Chaabi Foundation, which remains one of the region’s largest and most forward-thinking charitable organisations to date, and one that typifies YNNA’s philosophy of how to do business.

Since its creation a half century ago, the foundation has fought for equal opportunities in Morocco, this being an objective that has grown in both complexity and stature over the years. Historically, the majority of businesses in Morocco have been family-owned enterprises, though the recent introduction of international competition and a higher degree of professionalism has brought with it a need to advance the country’s business landscape beyond what it once was.

For this reason, one of the main aims of the foundation is to improve upon Morocco’s local workforce, particularly in southern regions, where there are very few opportunities for education and training.

The foundation supports approximately 7,000 Moroccan families with subsidies, and in this way affords an acceptable standard of living to those who would otherwise live under threat of poverty. In addition, Chaabi has dedicated 10 percent of his personal fortune to building an American-style university in Morocco. These plans are being conducted in partnership with Indiana State University (ISU) and will see Chaabi contributing financial support, as well as technical assistance and administrative leadership, to the project’s continued development.

Chaabi’s focus on education is one that dates back to 1995, at which time the foundation founded Al Qalam, an educational institution authorised by the Ministry of National Education, Higher Education Staff Training and Scientific Research. The institution exists primarily to prepare future engineers, managers and executives, and to better the overall standard of education in the region, being a cause that remains integral to Morocco’s workforce development.

Although Chaabi’s philanthropic work at first glance appears entirely isolated from the wider dealings of YNNA, the two are in fact linked by a desire to advance the region’s broader economic prospects.

At the dawn of the 21st century, new strategies and styles of management came to the fore, and companies such as family-owned YNNA were believed to be under threat from global players. However, YNNA in particular has since demonstrated a capacity to advance alongside the best in international business, due in no small part to the group’s focus on social development.

A changing landscape
Morocco’s economy has been quite resilient in recent years, with the country’s GDP having expanded 3.2 percent in 2012 and forecast to expand a further 4.6 percent in 2013, according to the African Development Bank Group. Although the country has been impacted by the slowdown in Europe, which remains its primary trading partner, Morocco’s economy is expected to grow further still, driven by internal demand and structural reforms.

Morocco’s market overhaul has seen the gates opened to global players who previously found it nigh on impossible to enter the region. The influx of experienced international players quite clearly poses a threat to local companies, which is why existing players must seek to demonstrate how it is they can benefit the Moroccan economy ahead of new market entrants.

With an impressive portfolio of companies in a number of key industries, YNNA looks likely to spur a series of sizeable improvements to the national economy. “We genuinely strive to accommodate for excellence in everything we do. Our group is ceaselessly contributing to a bright and prosperous future for Morocco through its diverse investments, with the ultimate goal of offering Moroccans quality and wisely priced products,” says Chaabi.

The recent introduction of international competition… has brought with it a need to advance [Morocco’s] business landscape beyond what it once was

One of the key ways in which YNNA has adapted to recent changes is by growing its business overseas and extending its reach to nations as far afield as the UAE, Jordan, Egypt and Tunisia, to name a few. However, YNNA’s efforts go beyond the simple fix of expanding abroad and extend to matters of sustainability.

The group’s focus on this facet has aligned its practices alongside those of the very best in international business. Understanding that sustainability is central to the long-term success of a business, YNNA ensures that each of its holding companies factor this same ethos into their company cultures in keeping pace with wider advances in the Moroccan economy.

Among Morocco’s major domestic contributors is YNNA Bio Power, a clean energy company that is attempting to offset the monumental costs of importing energy from abroad and lessen the environmental implications of dirty energy. The company began construction of two wind-powered parks in 2007, which will produce 70MW of power when they are fully completed.

The plants jointly equate to a MAD 1bn investment in clean energy. The first of the two parks was set up in Essaouria in 2009, will produce 20MW of power and cost MAD 300m, while the second was established in Tangier in 2011, will produce 50 MW and cost MAD 700m in total. The energy produced will be used to power numerous YNNA subsidiaries and also underlines the group’s broader commitment to matters of sustainability.

In keeping with this same commitment is YNNA’s environmental charter, which was first introduced in April 2009 and distributed among employees a year later in order to raise awareness of the group’s environmental aims and initiatives.

However, YNNA Bio Power is not alone in incorporating sustainability into its operations. First opened in 1999, Mogador Hotels is another subsidiary whose approach is representative of the group’s commitment to social development.

The hotel’s strategy, termed the ‘3 Es’, is a three-pronged approach pertaining to energy, water and energy efficiency and is in large part inspired by YNNA’s business philosophy. By using solar and thermal energy to heat water, the hotel effectively does away with 150 tonnes of CO2 emissions each year; furthermore, conventional lighting has been replaced with LED lamps, which has cut CO2 emissions by a further 480 tonnes; and finally, aerators have been installed on faucets in order to reduce water flow by 30 percent, in effect saving energy equivalent to the cost of heating 8,000 cubic metres of water.

Granted, initiatives of this sort can often appear tokenistic, but when implemented across the entirety of a company’s dealings, as is the case with YNNA, they amount to quite a considerable economic contribution. Given local companies’ somewhat precarious position in Moroccan markets, it is important that companies such as YNNA exhibit how it is they can contribute to the country’s social development in a way that new market entrants cannot compete with.