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Morocco’s railway operator ONCF back on track with freight

By Fahd Iraqi
Posted on Thursday, 16 September 2021 08:34

ONCF - Office National des Chemins de Fer

Threatened by its dependence on the OCP group (Office Chérifien des Phosphates), which has diversified its modes of phosphate transport, the Moroccan National Railways Office (ONCF) has managed to rebound by positioning itself as an indispensable logistical player for many industries, the automobile industry in particular.

Casablanca-Tangier in two hours and 10 minutes on the High-Speed Line (LGV) is not ONCF’s only triumph. With 24.5m tonnes of goods transported annually, the railway company’s network has always played a crucial role in the kingdom’s logistics activities, beyond passenger transport.

Viable business model

“We have built a viable economic model by progressively integrating the main components of the logistics chain,” says Mohamed Rabie Khlie, general manager of the company that has been publicly traded since 2004.

ONCF has positioned itself as a provider of global ‘door-to-door’ logistics solutions including, in addition to its core business as a rail carrier, the management of container terminals and logistics warehouses as well as road distribution to or from the station.

The operator also lends its expertise to support its clients with their projects, as it did with car manufacturers Renault and Stellantis (the result of the Fiat-PSA merger), both of whom have set up industrial production in Morocco.

High capacity

Every day, the railway company runs six trains for Renault with a total capacity of 1,500 cars on the 30km link between the French multinational’s automobile factory in Melloussa and the port of Tangier Med. Two other daily trains, each carrying 560 cars, make a much longer journey – 245 km – for the Stellantis group, between Kénitra, where its factory is located, and Tangier Med.

“The railway services agreement signed, in 2016, deals with the transport of cars by train both to the port of Tangier Med and to the future port of Kénitra Atlantique,” says the ONCF chief. “The rail facilities built at the Kénitra plant have been designed to ensure the transport of cars to this future port without any difficulty.”

Large contracts secured

If the company is trying to lock down its contracts, it is because its whole freight business almost derailed back in 2012, when its first client, OCP Group, launched work on its ‘mineroduct’ (a pipeline designed to transport minerals) for the transport of phosphates between the mines in the Khouribga region and the industrial and port facilities at Jorf Lasfar. Many were even betting on the extinction of rail freight.

The ONCF has nevertheless retained two phosphate transport routes, notably the one between the Benguerir mine and the Safi port. In fact, OCP remains the railway company’s main client: transport activities in 2020  –  despite the health crisis linked to Covid-19  –  included a volume of more than 16m tonnes of phosphates, which represented a turnover of MAD1.3bn ($353m).

With state support, ONCF has succeeded in positioning itself as a key player in the sectoral logistics plans, particularly in terms of cereals and hydrocarbons.”

“To further enhance the transport of phosphates by train, a strategic partnership will soon be set up between ONCF and OCP. It will be extended to other areas related to the transport of phosphates and their derivatives,” says Khlie.

In addition to OCP and the car manufacturers Renault and PSA, the company is a partner to the kingdom’s entire panoply of major public and private operators. Among the 180 key accounts in its client portfolio are the national electricity and drinking water company ONEE (Office national de l’électricité et de l’eau potable); cement manufacturer LafargeHolcim; Cimat (construction materials); Afriquia (fuel distribution); and Maersk (maritime transport).

With state support, ONCF has succeeded in positioning itself as a key player in the sectoral logistics plans, particularly in terms of cereals and hydrocarbons.

Conclusion of strategic partnerships

According to the ONCF management, its freight and logistics activity (excluding phosphates) has thus recorded an average increase of 7% per year over the last four years: its turnover has increased from MAD475m to 510m.

By 2025, OCP is aiming to hit MAD750m in turnover. “This is a realistic objective since it is based on projects that have already been deployed in part,” Khlie says.

Logistics platforms in that respect are almost complete in the kingdom’s major economic centres: Casablanca, Marrakech, Fez, Tangiers and Oujda. Once these are fully operational, higher volume flows by train, to and from the ports as well as the conclusion of strategic partnerships with the main players in the logistics chains, should complete the process of putting Moroccan rail freight on the right track.

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