Nador Port" Investment Memorandum for Construction Opportunity in Nador Port Project
1.
Investment
Memorandum
Nador
project
2.
MEKTAL
CONSTRUCTION
Business
Construction
Table
of
Contents
Morocco overview .........................................................................................................................................1
The oriental region of Morocco .................................................................................................................2
NADOR WEST MED PORT ........................................................................................................................2
Overview....................................................................................................................................................2
Nador West Med Project............................................................................................................................3
Port Location..............................................................................................................................................3
SGTM-STFA Consortium .........................................................................................................................4
Business opportunities in the Nador region...............................................................................................4
MEKTAL GROUP ........................................................................................................................................5
Group overview .........................................................................................................................................5
MEKTAL CONSTRUCTION.......................................................................................................................5
List of Machines and Assets ......................................................................................................................6
Rocks and aggregate Quarries in Nador ....................................................................................................6
Zaio Nador quarry:.................................................................................................................................7
Jarf Nssour quarry..................................................................................................................................7
Harcha quarry.........................................................................................................................................8
West Side Works....................................................................................................................................9
West Concassage 1 ................................................................................................................................9
West Concassage 2 ..............................................................................................................................10
Tiztoutine Quarry.................................................................................................................................10
Business Opportunity...................................................................................................................................11
Contexte...................................................................................................................................................11
Financial forecast.....................................................................................................................................11
Five years forecasted income statement ..............................................................................................11
The investment proposal..............................................................................................................................13
Option I: Equity Share in MEKTAL CONSTRUCTION........................Error! Bookmark not defined.
Option II: Bank guarantee........................................................................Error! Bookmark not defined.
Appendix......................................................................................................................................................14
3.
MEKTAL
CONSTRUCTION
Investment
Memorandum
Page
1
Construction
Morocco
overview
Despite global economic uncertainty and slowed capital inflows into North Africa
following the Arab Spring, the Moroccan government is making great strides in attracting
foreign direct investment (FDI). It actively encourages and facilitates foreign investment through
macro-economic policies, trade liberalization, and structural reforms. Further, due to its political
stability, solid infrastructure, and strategic location, Morocco is becoming a regional
manufacturing and export base for international companies. Morocco’s overarching economic
development plan seeks to leverage its unique status as a multilingual nation with a tri-regional
focus (towards Sub-Saharan Africa, Middle East, and Europe) to transform the country into a
regional hub for shipping, logistics, finance, manufacturing, assembly, and sales.
Morocco has ratified 63 bilateral investment treaties for the promotion and protection of
investments and 51 agreements that aim to eliminate the double taxation of income or gains,
including with the United States and most EU nations. Its Investment Charter has put in place a
convertibility system for foreign investors and gives investors the freedom to transfer profits.
Morocco is solidifying its position as a commercial bridge between Europe and West
Africa. Modern infrastructure in the form of world-class ports, airports, and rail links are key to
realizing this goal. Strategically located along the Strait of Gibraltar, just a seven-hour flight
from New York and three hours from Paris, Morocco is increasingly seen as a regional hub in
North West Africa for transportation and business. Morocco’s moderate Mediterranean climate
on 2,750 miles of coastline and its developing infrastructure make it an attractive location for
business and leisure. To meet the domestic demand for infrastructure, the Moroccan government
invested more than $15 billion during 2010 - 2015 to upgrade its basic infrastructure.
With over 930 miles of highways, Morocco plans to build nearly 700 additional miles, beginning
in 2016, at a cost of at least $3 billion. A plan issued in early 2015 to create four new major
roads to form the basis of a new road map will begin implementation in early 2016. At a cost of
between 315 and 445 million, this project will most notably build 250 miles of motorways
4.
MEKTAL
CONSTRUCTION
Investment
Memorandum
Page
2
Construction
The
oriental
region
of
Morocco
The Oriental region is located in the north-east of the kingdom. Thanks to its geostrategic
dimension, it has a unique feature to be close and linked to the Maghreb, the Euro-
Mediterranean, and the Sahara and Sub-Saharan communities. It has borders with:
• Algeria to the east, with a border of 550 km from the seaside resort of Saidia in the north
to Figuig city in the south.
• Spain, along the occupied enclave of Melilla City adjoining the city of Nador.
• The countries of southern Europe, along a 200 km coastline on the Mediterranean Sea.
It is renowned for its natural resources, and also for the qualification and abundance of its
workforce. The region is constantly growing thanks to the construction of significant
infrastructure projects (Nador West Med Med, railways, free zones, industrial zones etc.) and
tourist facilities (seaside resorts of Saidia and Marchika). The Oriental region is the second
largest region in Morocco in terms of area.
NADOR
WEST
MED
PORT
Overview
NADOR WEST MED implementation is in line with the overall national transport sector
development strategy, particularly the continuous upgrading and modernization of transport
infrastructure and services to enhance the logistical competitiveness of the national economy.
The sector goal of the project is to contribute to eradicating regional disparities, particularly by
accelerating and strengthening the economic and social development of the Oriental Region
through enhancement of its attractiveness and creation of wealth and jobs. Specifically, it seeks
to:
• Strengthen Morocco’s port services in the Western Mediterranean region and take
advantage of its geostrategic position on the Strait of Gibraltar to attract part of global
shipping activities
• Firmly establish Moroccan value chains in the global economy and develop the
hinterland
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MEKTAL
CONSTRUCTION
Investment
Memorandum
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3
Construction
• Secure the supply of energy commodities to Morocco, particularly for the future thermal
power plant that will be built in the project area, by establishing a second pole.
The construction of the Nador West Med port complex is an integrated project, ambitious and
progressive project. It has local, regional, national and Mediterranean dimensions. The Port
infrastructure has been designed to enable its implementation in several modules that provide:
• Development potential in the medium and long term to enable potential operators and
owners to have better perspectives and prospects
• A gradual implementation of infrastructure and flexibility in planning for possible future
extensions
• The ability to adapt to changing traffic and shipping industries.
Nador
West
Med
Project
▫ Expected completion year : 2021
▫ Location : 30 Kilometers from Nador
▫ Project Value : 10 billion MAD (approx. 1 B US$)
▫ Project Size : 5000 hectares
Port
Location
The Nador West Med port platform is located on the Mediterranean coast in the north-east of
the Kingdom, in the oriental region, 30 km from Nador city, in the Beotya Bay. The port location
is characterized by:
• a very advantageous maritime position in the west of the Mediterranean (distance reduced
maritime transport);
• Significant potential for the evolution of the container transshipment market;
• High potential for hydrocarbon trading market;
• A proximity to Europe, which will allow the free zone backing the port to benefit from an
entry-exit door of an exceptionally well-situated market
6.
MEKTAL
CONSTRUCTION
Investment
Memorandum
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4
Construction
SGTM-‐‑STFA
Consortium
After a public tender, a consortium between SGTM, a Moroccan company and STFA, a
leading Turkish company has won the tender to build the Nador West Med port
• SGTM is a Moroccan company created in 1971 operating in real estate and infrastructure
development. They have international presence through many projects in Africa and
UAE.
• STFA Investment Holding Group is one of Turkey’s most well-established and
reputable conglomerates created in 1938 providing services in the construction, energy
and construction equipment sectors.
Business
opportunities
in
the
Nador
region
Besides Nador West Med port, there are many projects undergoing in the area of Nador such as:
• 106 kilometers highway linking Nador to Taourirt
• New double line fast road between Nador and Nador West med port
• New railway connecting Nador West Med port to Nador city
• Nador West Med free zone for a total area of 1500 hectares
7.
MEKTAL
CONSTRUCTION
Investment
Memorandum
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Construction
MEKTAL
GROUP
Group
overview
MEKTAL, owned by Mekki Abdulla, is a group of companies operating in different
fields specializing in bulk transport as well as earth and rock excavation and movement.
In less than 3 years, MEKTAL has managed to become a serious bulk handler of Phosphate in
the Moroccan market through its contracted projects in the Kingdom. This is secured by,
MEKTAL signing a long-term partnership agreement with national government agency SNTL
for the excavation and transport of phosphate for the Government Conglomerate OCP, the
worlds largest producer of Phosphate
• PHOSPHATE IN OCP-YOUSOUFIA
o Project Duration 3 years
o Location Yousoufia
o Project Value Projected 112 Million DHS (over 12 million US Dollars)
• PHOSPHATE IN OCP-BENGUERIR
o Project Duration 2 years
o Location Benguerir
o Project Value Projected 72 Million DH (around 9 million US Dollars)
MEKTAL
CONSTRUCTION
MEKTAL Construction is to be specialized mainly in construction, land development and
aggregates and rock quarry management. The company has signed a contract with SGTM-STFA
for the for supply of rocks to the new Nador West Med port in the north of Morocco
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CONSTRUCTION
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Construction
List
of
Machines
and
Assets
The current shareholder of MEKTAL Construction, Mr Mekki Abdulla, has invested in
the following assets to the Nador project in order to pre-qualify:
Table 1 : Machines and Assets Invested in and allocated to Nador Project January 2017
Asset Brand Type Number Value Total
Excavators
Komatsu 2017 PC 450 1 $382,800.00 $382,800.00
Komatsu 2017 PC 350 NLC8 2 $257,400.00 $514,800.00
Hyundai 2017 R480LC-9S 1 $385,000.00 $385,000.00
Case New Holland
12
E215C 6 $85,000.00 $510,000.00
Wheel loaders
Hyundai 2017 HL770-9S 2 $242,000.00 $484,000.00
Case New Holland
15
W230C 1 $175,760.00 $175,760.00
Compactors Dynapac 2017 CA602D 1 $147,840.00 $147,840.00
Graders Komatsu GD 663A 1 $195,000.00 $195,000.00
Bulldozer
Komatsu 85EX 1 $385,000.00 $385,000.00
Komatsu D155 AX-6R 1 $495,000.00 $495,000.00
Trucks 8X4 Iveco 2016 Trakker 12 $123,200.00 $1,478,400.00
Water tanker Iveco 2016 Trakker 1 $116,600.00 $116,600.00
Electric Generator Perkins 2016 50 KVA 1 $33,000.00 $33,000.00
Weight bridge GRT 2017 180 Metric Ton 1 $43,560.00 $43,560.00
Offices PortaKabina Office/WC 3 $5,500.00 $16,500.00
TOTAL $5,363,260.00
Rocks
and
aggregate
Quarries
in
Nador
MEKTAL Construction has acquired concessions to seven quarries in Nador region, from
which, we can supply over 20 million tons of high quality products to the different current and
future projects in the area. The quarries can produce different types of rocks and aggregate
ranging from big block boulders that can be used in port construction, to ballast used in the
construction of roads and railways, to small aggregates needed for general construction of
foundations and platforms. Two quarries are now operational and MEKTAL can produce up to
3000 ton of rock per day from them.
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CONSTRUCTION
Investment
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Construction
The quarries currently operated by MEKTAL are:
Zaio
Nador
quarry:
The first MEKTAL quarry is located in the region of Zaio in the rural area of Oulad
Setout, 1 km from the national road number 2 and 30km from Nador. The laboratory tests of the
rocks taken from this quarry provided very good results and got accepted by the port authorities
to be used in the building of the port (the laboratory results are attached in the appendix).
GPS coordinates of the quarry : X=733,600 Y=488,900
Total area of the quarry : 14 Hectares
Production potential : over 4 million tons of Rocks and aggregates
Jarf
Nssour
quarry
The second quarry is located in a region called Jarf Nsour, also in the rural area of oulad
Settout, 1.5 km from the national road 1 and 31km from Nador. The rocks produced from Jarf
Nsour quarry are suitable for the construction of Nador West Med port since they passed the tests
requested by the port authority, the results of LPEE laboratory and the quarry plan are attached
in the appendix.
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CONSTRUCTION
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Construction
GPS coordinates of the quarry : X=732,900 Y=489,200
Total area of the quarry : 3.5 Hectares
Production potential : over 2.5 million tons of Rocks and aggregates
Harcha
quarry
The quarry of Harcha is located in the rural area of IKSANE, 5 km from the regional road
610 linking Nador to Ben Tayeb. This area was recommended by the Nador West Med
committee in their initial studies as a region of good rocks that can be used to supply rocks and
aggregates for the port
GPS coordinates of the quarry : X=713,185 Y=500,050
Total area of the quarry : 4.5 Hectares
Production potential : over 4 million tons of Rocks and aggregates
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CONSTRUCTION
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Memorandum
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Construction
West
Side
Works
This
quarry
is
located
in
the
commune
of
Driouach,
65
km
from
the
Nador
West
Med
Port,
the
big
rocks
that
can
be
extracted
from
this
area
are
also
good
for
the
port
construction
Total area of the quarry : 24.5 Hectares
Production potential : over 18.2 million tons of Rocks and aggregates
West
Concassage
1
The
quarry
of
West
Concassage
1
is
located
in
the
commune
of
Hassi
Berkane,
70
km
from
The
Nador
West
Med
Port
Total area of the quarry : 6 Hectares
Production potential : over 10 million tons of Rocks and aggregates
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CONSTRUCTION
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Construction
West
Concassage
2
The
quarry
of
West
Concassage
2
is
located
in
the
commune
of
Hassi
Berkane,
70
km
from
The
Nador
West
Med
Port
Total area of the quarry : 6 Hectares
Production potential : over 11 million tons of Rocks and aggregates
Tiztoutine
Quarry
Total area of the quarry : 10.6 Hectares
Production potential : over 11 million tons of Rocks and aggregates
The total land of the quarries mentioned above is around 69 hectares with a production
potential of more than 60 tons of Rocks capable of satisfying the demand of rocks and aggregate
of the project the north region of Morocco (Port, railway, highway, roads, construction projects,
free zones and industrial areas….)
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CONSTRUCTION
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Construction
Business
Opportunity
Context
MEKTAL has agreed to deliver 8 million plus tons with the consortium of SGTM-STFA
for Nador West Med Port with Rocks, and have an initial contract order signed for 4 million tons
of 0/500KG and 1/500KG Rock to the port project. The revenues generated from this quantity
will recover the full investmen. However according to the studies done, to be able to supply the
large contractual quantity and at the same time supply the other big projects in the area,
MEKTAL needs to operate and produce from at least 4 or 5 quarries at the same time. MEKTAL
has been approved to be a major supplier of rocks to the port because of its capacity to satisfy the
project’s needs of rocks in the most professional and efficient way.
In addition to Nador West Med port, MEKTAL expects to generate high revenues from other
important projects in the area such as:
• The new highway linking Nador to Taourirt for a total distance of 106 km, MEKTAL
will supply aggregate as well as ballast needed for the road construction
• New railway connecting Nador West Med port to Nador. This project will have a high
demand of ballasts and rocks
• A 1500 Hectares free zone in Nador West Ned
• New commercial, touristic and residential projects in the oriental region(Saidia touristic
zone, Wisslane industrial zone, Marchica….)
Financial
forecast
• The revenues expected to be generated from the sales of rocks, ballast and aggregates to the
different projects in the region of Nador, the total potential over the period of five (5) years is
estimated at 20 000 000 tons of rocks with a total revenue of $77,000,000.00
• The gross profit Margin generated from this project is 36%
Five
years
forecasted
income
statement
Table
3.
Total
Projected
income
statement
