« We choose to go to the Moon. We choose to go to the Moon in this decade and do the other
things, not because they are easy, but because they are hard, because that goal will serve to
organize and measure the best of our energies and skills, because that challenge is one that we
are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the
others, too. » John Fitzgerald Kennedy (1962).
Acknowledgment
This research project would not have been possible without the support of many people.
As team members, we wish to express our gratitude to our supervisor, Dr. Hassi who was
abundantly helpful and offered invaluable assistance, support and guidance. We would like to
express our deepest gratitude to the SBA faculty who helped reaching this level. Many thanks to
Mr. Khalid Benchekroun, Director of Human Resources and upstream agricultural at
COSUMAR for providing us with significant information that helped us proceed in our project.
Executive summary:
This project is a diagnostic analysis of one of the major operators in the economy of
Morocco; COSUMAR is the leading company in the sugar industry since 1929 with a dominant
position in the market. However, the agriculture sector is unstable in term of sugar production in
order to satisfy the local demand and the growing rate of consumption. Accordingly,
COSUMAR should use the internal forces in order to respond effectively to the opportunities of
improving the potential capacity of local production and minimize the cost of imports from the
international market. The position of COSUMAR is safe in the market, but the company needs to
take into consideration new strategies that would allow further growth and expansion.
Based on the internal and external assessment of the current performance of COSUMAR,
the suggested strategies are developed to improve the overall growth and achieve the objectives
and the vision of COSUMAR as the main supplier of sugar in Morocco.
The first strategy is the implementation of regional plans for the development of sugar
crops planting in Morocco. The strategy aims to increase the annual returns of agriculture harvest
by adopting new technologies of irrigation system that will improve the productivity of sugar
crops per hectare. In addition, COSUMAR will exploit more land in the different regions of the
country in terms of quantity and quality using the Monogerm. The second strategy is unrelated
diversification, which will push COSUMAR to penetrate the market of fuels by producing
ethanol and supply manufacturing industries in Morocco. Finally, COSUMAR provides a variety
of product line that could be improved. Hence, COSUMAR can introduce an alternative new
organic whole sugar, which is unrefined and healthy for consumption. The company can
diversify its products in order to target more people concerned about their health.
Company Overview
The year 1929 witnessed the rise of COSUMAR, a refinery in Casablanca that was created
by the French company St. Louis Marseille. This company was producing only 100 tons of sugar
per day, exclusively in the form of sugar loaves. In 1967, the Moroccan state bought 50% stake
and COSUMA became COSUMAR. Ten years later, in 1985, the ONA Group took control of
the capital of COSUMAR. Since that time, COSUMAR witnessed a major development in 1993
by acquiring the sugar refineries of Zemamra and Sidi Bennour. Later, in 2005, four national
sugar companies, SUNABEL, SURAC, SUTA, and SUCRAFOR, became the sole operator of
the national sugar industry.
COSUMAR Group is one of ONA group subsidiaries. It is the only Moroccan company
operating in the sugar industry. COSUMAR has developed its expertise mainly in three sectors
which are the extraction of sugar from sugarcane and sugar beet, the importation of raw sugar
and packaging in different varieties. COSUMAR Group produces a range of sugar in form of
loaves, granulated sugar, sugar cubes and also in forms of ingots.
Mission:
The existing mission of COSUMAR:
“COSUMAR is specialized in the production, packaging and marketing of several sugar
forms: loaf, lump, cub and granulated. The production is carried out in two ways:
·
Processing of sugar cane and sugar beet plants to white sugar
·
Refining of imported raw sugar
The five subsidiaries of COSUMAR: COSUMAR SA, SURAC, SUNABEL, SUTA and
SUCRAFOR are established all over the Moroccan Kingdom.”
Although a successful company, COSUMAR’s mission statement does neither effectively
reflect the company’s objectives nor its strategies. COSUMAR’s mission lacks many
components. In fact, it is only focusing on the specialization of the company such as the
production, the marketing and the packaging. It cites the different forms of sugar that the
company produces. Without denying the fact that the mission statement of COSUMAR states the
two ways production is carried out. In addition, the mission statement of COSUMAR contains its
five subsidiaries.
For that matter, we suggested a new revised mission statement for COSUMAR that
contains the nine essential components of a complete mission a vision statements which as
follows.
Revised Mission:
“Since 1929, COSUMAR has been the leading company in the sugar industry in
Morocco. Our mission is to satisfy the Moroccan consumer by improving the production and the
quality of sugar. The development of the human resources and innovative technology is a
priority in our organization in order to achieve a potential growth and profitability. Our duty is
to be responsible toward the environment by encouraging the production of the local farmers.
Ethics and integrity are fundamental values of the organizational culture of operating from top
managerial lines to the single employees”.
Vision
COSUMAR’s vision is the following:
We are looking forward to being the leader and diversified agricultural industry in Africa.
We decided to keep the same vision statement, however we recommend the company to
put it on the website along with the mission statement.
Current Objectives:
As a leading company COSUMAR’s ambitions are to acquire stakes in sugar companies
operating in Africa and even in Brazil, the largest producer of sugar. COSUMAR is planning to
take a series of measures to reduce expenses, particularly through control of energy consumption
or improving extracting proportion of sugar compared to the amount of raw materials. Besides,
COSUMAR is studying recently, several cases of partnership particularly sub-Saharan Africa. In
fact, the objective of this project is to build a partnership with one or more operators already in
market, support the industrial upgrading in these countries and also serve the domestic markets
of these regions. The aim is to boost the contribution of domestic production, today 45% to
55% in the coverage of raw material needs. The operator has set itself five years to achieve this
goal.
COSUMAR’s future strategy is primarily focused on lowering the cost with the
implementation of investment for rationalizing the consumption of certain raw materials and to
automate certain mechanical tasks. Another focus of the strategy is developing of a partnership
with upstream to further reduce the dependence on imports. Besides, COSUMAR, in partnership
with the Regional Agricultural Investment (loukkos), and the association of the producers of
sugar plants in Loukkos, aims to achieve, by 2014, an area of
8,000 ha cultivated beet, against 5,140 ha currently, and 6,500 ha planted with
sugarcane, against 2,800 ha during the last agricultural season.
Current Strategies:
As a matter of fact, after buying the sugar units which were in the public sector, Cosumar
started for some time a new development plan focused on the restructuring of its production and
the sustainability of its raw material supplies. Moreover, to ensure the supply of raw materials of
local origin, Cosumar introduced a device which is more effective and allow training
activities for the benefit of its suppliers, for 80,000 farmers who supply 3.8 million
tons today between beet and cane sugar. The main strategy of the group for the coming years, it
aims to improve the group’s competitiveness based on the establishment of a training plan in line
with the company’s strategic orientation, and on the other hand, on the recruitment of new skills.
External analysis:
I.
Industry analysis:
Morocco is an emergent market that provides opportunities for investment in the different
fields of industry. According to the Ministry of Industry, more than 7,828 firms are operating in
the Moroccan market, which contribute effectively to the GDP of the country with a growth of
4.2% approximately. The industry in Morocco is very limited to some sectors such as food
industry, textile industry, chemical industry, mechanical industry and electronic industry. Each
of these sectors progresses differently depending on the importance and use of the industry in the
local market as well as the global demand of the substance.
Source: Ministry of Industry
In addition, Morocco has opened the doors for foreign direct investment by improving the
business environment to encourage investors. Therefore, the foreign direct investment generated
an amount of at least 18 Million Euros, and created more than 250,000 jobs. The FDI is
considered as engine of development in the Moroccan economy.
Investment Incentives and the Free Zone Benefits:
Taxation:
• Corporate tax: 0% during 5 years, then 8.75% during 20 years
• Income tax: 0% during 5 years, then 80% decreases during 20 years
Change:
• No restriction in capital repatriation and convertibility
• Free transactions in foreign currencies
Sugar Industry in Morocco:
Worldwide, sugar has been a very important substance used in the daily consumption of
people in a variety of products. It is used as a primary material and also used in the production of
many other derived products, which justify the high demand of sugar in the international market.
The sugar industry in Morocco has a particular interest from the government given its
strategic role in the economic and social development. According to the ministry of agriculture,
sugar crops contribute substantially to improve the incomes of 80,000 farmers and create more
than 9 million days per year for seasonal work." Furthermore, these crops cover 45% of the
country's sugar needs and contribute to food security, given a high domestic demand that rises
steadily.
Two years ago, Morocco has begun a new national strategy that aims to modernize
agriculture and to get integrated in the national development of this sector. Therefore, the
strategy will tend to confront the international competitiveness as well as the issue of food
security in the country. The main objective is to achieve a production of 675,000 t of sugar
against approximately 450,000 t in 2008, and to satisfy 55% of domestic needs of sugar by 2013.
In 2010, the annual consumption of sugar in Morocco is around 700,000 in which 60%
can be covered by domestic production (420,000 tons) basically in case of good harvest. The rest
amount of the consumption (250,000 tons) is covered by imports of raw sugar in bulk from
several countries such as Brazil, Argentina, Germany, Costa Rica and France. In addition, the
prices of sugar fluctuate in the market depending on the law of demand and supply.
1. Political, Governmental and Legal forces:
Moroccan sugar production is the result of strong political forces: it relies entirely on the
intervention of the State, a massive program of public investment in irrigation and processing
facilities, a combined system of high protection border and strict control of prices and marketing
procedures. Indeed, to avoid the possibility of under supply of sugar, the state imposed the
mandatory crop rotation system: farmers received irrigation infrastructure financed by public
funds so they are subject to the Code of Investment of 1969 which allow the state to "define the
standards by which the operation must be conducted" (Article 30)1. Certainly, the government
intervention at all levels of the sector has set up an impressive agro-industrial multifaceted
domain that embodies the power of the Moroccan agricultural and is the torch of the state power.
2. Economical forces:
In 2009 the Agriculture represented 15 % of the GDP and therefore brunt seriously on
enhancing the economy as a whole. Nearly the agribusiness sectors generate 40 % of the labor
force. COSUMAR has consolidated its position as a major player involved in development of the
regional economy also works to upgrade the sugar industry by putting all its resources and
expertise to serve the 80,000 farmer which are their main partners. As an industrial model,
COSUMAR succeeded, with the business plan “Indimage 2012”, achieving at 2010 an extensive
plan of investment. The company invested 2.3 billion of dirham to strengthen its industrial
capacity and increase its competitiveness.
3. Social, cultural, environmental and demographic forces:
The importance of sugar is represented as a symbolic form allows communication and
exposure about the person and group identities which is meanly true in regard to Berber culture
and tradition and also different occasions.
Throughout the history of Morocco, sugar has been proven to be present heavily as social
relevance in identifying culture and beliefs. Furthermore, the power of sugar is measured by the
yearly consumption exceeds 35kg per capita and the importance of controlling the price change
since it represents a sensitive key factor for avoiding any social reactions.
As result, enhancing quantity of the product outcome to satisfy customer domestic
demand for corporate social responsibility it highlights and describes the pressure of COSUMAR
to achieve one of the major serious terms of maintaining a proper lifestyle that suits the needs of
customers.
Sugar production in COSUMAR, during processing and refining is affecting the
environment. The water quality in Morocco is discussed along with ways that represent a real
issue and result for example to heavy metal contamination and parasitic and bacterial infections
so the company has to develop some techniques to overcome the issue.
4. Technological forces:
Technological advancements represent major opportunities that must be considered by
COSUMAR. The technological forces used can be seen as competitive advantage that is more
powerful than existing advantages. COSUMAR need a reversal in thinking in this factor because
the industry of sugar relies on complex machines to take out sugar and to ensure high
productivity satisfaction of customers and result to a good management of value chain.
5. Competitive forces:
The only operator in sugar industry in Morocco is COSUMAR since 2005 after the
acquisition of four national sugar companies in this field. The control of prices by the Moroccan
government slow down the restructuring directions to reach successful opportunities and stand as
an obstacle to the gains that might be seen or expected to reform a growth opportunities.
II.
Porter’s Five Forces Model:
1. Rivalry among competing firms:
The sugar industry in Morocco is composed of 5 companies belonging to the group
COSUMAR, treating beet or cane sugar and has a production capacity of 600,000 tons of sugar a
year. The five subsidiaries of the group are: COSUMAR SA, SUNABEL, SURAC, SUTA and
SUCRAFOR. Thanks to its five subsidiaries, COSUMAR is present all over the national territory
in order to be able to satisfy the local demand. However, we can also find the French sugar
“Saint Louis” on the Moroccan market, but since this latter is more expensive (35 dh on average)
than COSUMAR’s sugar and has an insignificant market share, it is not considered as potential
competitor. Since COSUMAR is the only sugar operator in Morocco, the rivalry among
competing firms is low.
2. Bargaining Power of Suppliers:
Actually, the main supplies in sugar are produced locally in agricultural lands by farmers.
About 80,000 farmers operate in areas not exceeding an average of one hectare. However, sugar
crops contribute significantly in improving the farmer’s incomes and generate a significant
impact on employment through the creation of nearly 9 million seasonal days per year. Thus, the
production of sugar crops is vital for the Moroccan farmers. The second source of supply in
sugar comes from international imports. Actually, Brazil is the most important producer of sugar
cane and the first sugar exporter in the world. In addition, Brazil is the country that proposed the
most interesting prices and quotas during the last five years. COSUMAR compares sugar prices
on the international market and the quotations, and then it can choose its supplier. Since, the
suppliers at the international level also have a low bargaining power; we can say that the overall
bargaining power of suppliers is low.
3. Bargaining Power of Consumers:
It is a fact; Moroccan people are huge sugar consumers. Actually, sugar
consumption is
estimated at 35 kilos per habitant/ year. Furthermore, 1.8 million tons of sugar has been absorbed
in the Moroccan market by the year 2010, of which 32% was produced by COSUMAR.
(L’Economiste, 2011). Since Moroccans tend to consume significant amounts of sugar in their
daily lives, and COSUMAR is the only sugar producer in Morocco, consumers have a low
bargaining power.
4. Threat of New entrants:
The barriers to new entry in the sugar industry are very high, which makes it very hard
for potential competitors to enter this market. In fact, this type of agricultural sector is regulated
by the Moroccan state. This latter protects the sugar industry and the group COSUMAR since it
plays a major role as a structuring actor of the Moroccan sugar sector and as an aggregator of
more than 80,000 farmers. In fact, the Moroccan state controls the sugar plants prices, the
custom duties as well as the sugar’s prices on the market.
Another factor that is considered as a strong barrier to entry is the level of investment
needed to open a sugar company. According to the Head of Human Resources and Upstream
Agriculture Coordination, Mr. Khalid Benchekroun: “In order to invest in a sugar company, one
should invest about 130 billion centimes”. In addition to the large investment needed for a sugar
company, the new investor should also borrow lands from farmers in order to be able to produce
sugar cane and beet or employ farmers with their lands. However, COSUMAR is already
exploiting most of the agricultural lands that could be used for sugar production. Moreover,
COSUMAR seeks to have a good relationship with its employees (farmers), thus, it follows their
activities regularly and make sure that they are earning profit by cultivating sugar plants for
COSUMAR.
The expertise of COSUMAR in the sugar industry, its accomplishments and its
accreditations and certifications can also represent a barrier to potential new entries. In fact,
COSUMAR benefits from the first mover advantage with 80 years of experience in the sector.
5. Threat of substitute products:
There are no real substitute products for sugar. One could consider the artificial sugar for
the diabetics as well as the new plant “Stevia rebaudiana” that knows a great success at an
international scale and that can be a potential substitute product. However, sugar is a commodity
product that is heavily used amongst the Moroccan population; therefore, the threat of substitute
products is low.
III.
SWOT Analysis:
1. Opportunities:
The sugar industry has a growing market in the world as well as in Morocco.
Consequently, the available opportunities can be considered as future investment to the
companies in order to take advantage of business environment. First of all, one of the primary
objectives of the government is to develop agricultural production and progress its evolution.
The sector could be better exploited to provide the necessary raw materials such as "sugar canes"
and decrease the reliance on imports from the international market. In addition, there is a high
demand of the substance in the national and international market; it could be turned into a
strategic opportunity for COSUMAR to increase its capacity of production first to satisfy the
Moroccan market's need and in the long term to look for new markets. COSUMAR is basically
the only producer of sugar in Morocco with a monopoly in the market. The lack of direct
competitors is an opportunity for COSUMAR to exploit full capacity and become a major player
in the field.
2.
Threats:
The first threat that COSUMAR Group is facing is that the sugar industry depends
heavily on agricultural harvest. Unfortunately, the group is unable to satisfy the local market
with its local production which makes it dependent on the international imports.
On the other hand, Concerning According to The United States Department of
Agriculture, importation tariffs will be eliminated by 2013 which can give the chance to potential
competitors to dominate the Moroccan market. In other words, this may threaten COSUMAR’s
position as a monopole in the market.
The cost of imported sugar varies from one year to another depending on the international
demand and supply and there is a chance the government may stop helping COSUMAR and not
guaranteeing a fixed price of the imports.
The agricultural sector in Morocco is a strategic since it contributes to the development of
the economy. It is highly recommended that farmers use modern equipment and replace the
traditional and manual tools by adapting to more mechanized strategies.
IV.
EFE MATRIX: (See Appendix n°1)
In the EFE Matrix, COSUMAR scores 2.59 on total, which is an above average score. In
other words, COSUMAR is doing well while taking advantage of its opportunities and avoiding
the threats. However, COSUMAR needs to give more attention to certain factors. Among the
opportunities that the group should seize, is the fact that there is a growing rate of sugar
consumption in Morocco. This is the main reason behind assigning a weight of 0.12 for the
importance in the industry sector as well as a rate of 3 with regard to the company.
Unfortunately, COSUMAR has some major weaknesses such as the fact that it depends on
harvest rainfalls as well as their dependency on imports from the international market which
prevent them from predicting the amount of raw sugar to be imported. Therefore, we have
attributed a weight of 0.12 to both factors and a rating of 3 and 2 respectively.
Internal Analysis:
I.
Internal audit:
1. Management:
2006 was a pivotal year for COSUMAR. Indeed it was the first year that the company
actually operates as a whole, after it acquired the four national sugar companies privatized in
2005. This new configuration has required constructive work of analysis by restructuring the
business and making the human resource management function more complex to control. This
position gives the company the responsibility to take the entire sugar sector to excellence. For
this, COSUMAR has implemented an action plan called INDIMAGE 2012, which aims to
implement synergies and develop best practices in industry and agriculture upstream. So the
company decided to manage the HR function by establishing an administrative service center,
and building teams by hiring new skills labor and providing several senior managers and
executives with training courses by SNI. Finally, COSUMAR materialized its commitment to
implement a process base on evaluating and managing the quality, analyzing the food safety and
showing the engagement in environmental safety.
2. Marketing:
COSUMAR falls sustainably as a major player in the Moroccan agricultural sector.
Agriculture in Morocco has always been a strategic sector for the socio-economic and symbol in
different occasions. However, the marketing department places little importance on what people
in Morocco think is something vital for daily consumption by assigning only a budget of 10
million DH per year which used for social Policies.
COSUMAR plays its full role as an aggregator of the sugar industry in each region of the
Kingdom accompanying the performance of its partner framers, modernizing its industry but
without an improvement in its distributing channels since the company is offering same products
at fixed price with no segmentation of the market with low quality of packaging so COSUMAR
has to improve the quality of its products more and must ensure a development of expertise
packaging and also expand its circuit of commercialization and Strengthen partnership with
customers by optimizing the delivery logistics from various industrial places. In the sense of
marketing, and when you're the only operator in the domestic market, the marketing policy is
somewhat different from being a competitor in a competitive market. Being a producer of a
product whose price is fixed by the government, COSUMAR does not advertise in the media, but
has a policy of communication with the supermarkets and hypermarkets and wholesalers.
3. Operation and production:
COSUMAR has developed its expertise in three key businesses: the extraction of sugar
from sugar crops harvested in five agricultural areas, refining imported raw sugar, packaging and
distributing the products throughout the Kingdom. Furthermore, the company is negotiating the
procurement agreements of all the inputs needed in the production of beet and sugar cane: seeds,
fertilizers products and also the modernizing process of its industrial base especially in
developing the irrigation systems of water and improving its distribution channels, COSUMAR
plays its full role as an aggregator of the sugar industry as a whole.
COSUMAR is applying sustained efforts for the sustainability of the agricultural
upstream in order to face their major issues. The first issue is related to their logistics, managers
became aware of the costs of inefficient logistics of the company: expectations for shipments to
refineries lasted for many hours, the deterioration of the sugar products was obvious because of
their heavy merchandises, and also the number of transport vacuum was very important. In
addition, the second issue as for the upstream agricultural has to do with inventory since
COSUMAR launched a new storage logistics platform project in Casablanca; increases storage
with area of 12,280m2 with a capacity of 20,000 T. As result COSUMAR encourages and
supports farmers in improving their performance through the promotion and widespread use of
good practices.
As far as production is a concern, COSUMAR is heavily involved in the mechanization
of cultures in terms of crops, the perimeter of Tadla and Doukkala (beet) showed a significant
breakthrough in mechanization of culture by using some harvesting machines which ware
recently introduced. The mechanic machines for harvesting cane cultivation has, meanwhile, met
with success, particularly at Loukkos from 58% in 2006 to 90% of the area harvested in 2011.
4. Human Resources Safety:
All the sugar sites of COSUMAR have certified their system of management of the safety
and security during workforce according to NM 00.5 801 (OHSAS 18001 version 2007). The
latter specifies the rules for managing health and safety in the workplace. It can analyze and
assess risks to achieve regulatory compliance. The company also seeks to adopt the latest
improvements for safety equipment and personal protective equipment. Each year, COSUMAR
is committed to educate and train employees and new recruits to reduce workplace hazards and
increase safety.
5. Management information system
Since 2006, the Company initiated a restructuring project called “Indimage 2012” This is
to set up various development plans for all components of the company (human resources,
information systems, modernization of production ...). The information system records
positioning studies for the launch of new products by gathering information about their
customers which are conducted with specialist firms. Managers apply the information system for
deliberating future plans, human resources management, customer service and determination of
the better quality of crops made by the farmer. In addition, the role of this direction is the use of
IT tools, software and new technology (AS 400) to manage its internal network to the level of
communication to ensure the following tasks: email, fax, customer care, and telephony. She is
also responsible for managing system security, administration, backups, and control on the one
hand, and for communication with other sites and other external agencies.
6. Research and development:
The aim of this federation of all stakeholders in the sugar industry favored the efforts of
research and development to improve agricultural and industrial competitiveness of the sugar
industry as a whole.
For instance, as part of increasing its market potential through diversification of products
and by looking for alternative crops with high added value for agricultural producers,
COSUMAR has also successfully tested on the planting of sweet sorghum in the region Gharb
trough the research and development process. To drive research and development activities
COSUMAR is committed to the employees by social policy, an upgrade cycle at the level of
giving advices to the farmers about the use of extension or vulgarization techniques with the
objective of facilitating technology transfer.
Anticipating market liberalization and the introduction of competitors, these
improvements went notably through the development of new technologies for the manufacture of
sugar the optimization of production facilities and improved water conservation and energy and
the launching some new products to meet customer expectations.
7. Financial Analysis:
 CURRENT RATIO:
The current ratio of COSUMAR noticed a decrease between 2005 and 2006 as you can
see below, which was due to one major reason. In 2005 COSUMAR made a huge investment;
the company gets hold of five new companies in the group in addition to these enormous
investments the company had to deal meanly with the difficulties of the five companies
especially the obligations that pushed the current ratio more down to 1.05.
The current ratio of COSUMAR is not bellow 1 (current assets exceed current liabilities),
then we can say that COSUMAR, the only actor on sugar market, may not have problems paying
its bills in time. For 2011 with a current ratio of 1.05 this ratio shows that company has a surplus
of 5% referring that its currents assets are exceeding its current liabilities.
Current Ratio
1.40
1.20
1.00
0.80
current ratio
0.60
0.40
0.20
2005
2006
2007
2008
2009
2010
2011
 PROFIT MARGIN:
COSUMAR in one of the major player in the stock exchange on Casablanca, the
company is considered a source of gold by investors. From the day of acquisition of the five
other companies in 2005, the net profit margin is increasing indicates a high margin of safety and
result in a net profit. In 2006 its profit margin went up to 1.62% because of the very high
profitability resulted from the stability and finding solution to the difficulties of the newly
acquired companies.
As we know, the net profit margin provides clues to the company’s pricing of dividends.
In addition, the higher the margin is the more effective is COSUMAR. This can be seen clearly
starting 2007, the net profit margin increased more and more for instance in 2011 it reached
12%, significantly COSUMAR built a strong relationship with the investors and shareholders
since the dividends were increased accordingly from 40 in 2005 to 100 in 2011.
Profit Margin
14%
12%
10%
8%
profil margin
6%
4%
2%
0%
2005
2006
2007
2008
2009
2010
2011
 DEBT TO TOTAL ASSET:
From the chart, the debt of COSUMAR is at very low rate. In 2005, the debt ratio was
very high because the company decided to borrow money in order to enhance the productivity of
the newly acquired companies which considerably raised the debt ratio to 14%. One year later
the money owing has a huge and very important effect on the debt ratio; there were a clear
change in debt weights between 2005 and 2011.The debt ratio decreased by to 10% (14% - 4%)
in 2011 as illustrated in the chart below. Therefore, the company will not face any problem
raising long term capital investments for a considerable minor of debt and encourage the
maintain of trust by the investors also this situation divulges the good standing of the financial
management of COSUMAR. The company will not be in danger if the creditors start to ask for
repayment of debt” lowly leveraged”.
Debt to Total Assets
16%
14%
12%
10%
8%
debt to total
assets
6%
4%
2%
0%
2005
2006
2007
2008
2009
2010
2011
 See the rest of financial ratio analysis in Appendix n°(2)
II.
SWOT ANALYSIS:
1. Strengths
Since it is the leading company in the sugar industry in Morocco since 80 years;
COSUMAR has a long history and a good managerial expertise in this domain of sugar with a
100% market share in Morocco thanks to the absence of competitors in the market which allows
COSUMAR to play as Monopole in the local market.
Cosumar provides the Moroccan consumer with a variety of products such as sugar Loaf,
sugar into ingots, sugar cubes, and granulated sugar. Also, it has five subsidiaries: COSUMAR
SA, SURAC, SUNABEL, SUTA and SUCRAFOR that are established all over the Moroccan
Kingdom such as Oujda, Nador, Fes, Meknes, Marrakech, Agadir, Kenitra, and Casablanca. All
those subsidiaries constitute important distribution networks that allow COSUMAR to satisfy the
needs of the consumer in all different sugar types.
COSUMAR has huge production capacity because there are about 80,000 farmers who
work on producing sugar beet and sugar cane that represents 10 million workdays a year in five
main regions in Morocco that are Doukkala, Gharb, Loukkos, Tadla, and Moulouya. Therefore,
the agricultural investment of Cosumar is enhancing the production capacity.
Being on the stock exchange of Casablanca means that Cosumar has a good financial
status that allows it to raise funds from its shareholders and invest more in its different divisions.
Also, Cosumar has 100% of the Moroccan market, and there are no competitors, so the company
is making huge profits from sugar production.
COSUMAR is a subsidiary of L’ONA holding which is powerful group. The fact that the
group belongs to such a group reduces the threat of entry of new competitors on the Moroccan
market.
COSUMAR multiplies its actions that serve quality, security and the environment and
reinforced its QSE path. In addition, the group received several certifications and accreditations
for its subsidiaries. Among those, we can find: Certification of Surac MBK (according to ISO
9001, ISO 14001, OHSAS 18001), Accreditation of the laboratory Sunabel KEK for receiving
beet, according to the norm ISO 17025 version 2005, organization of Takdir price for the reward
of structures and people that demonstrated the most implication in the QSE Management.
The Sugar industry in Morocco is a protected industry as most of the sugar industries in
the world that produces sugar beet. Since agriculture in Morocco has always been a strategic
sector for the socio-economic development of the country, the government is willing to support
the agriculture via the economic development of this sector. An example of the government
support is its contract with the government to fix the price of sugar crops imports in order to
protect COSUMAR from the increase of prices on the international market.
Additional strength of the group is its social responsiveness. The group COSUMAR is
engaged in several actions alongside the civil society and brings its support to a multitude of
social and humanitarian associations such as: “L’Heure Joyeuse, INSAAF, SOS Village, etc.
Moreover, the group has introduced insurance for the protection and guarantee of farmers’
revenues.
2. Weaknesses:
Since there is no competition in the Moroccan market, COSUMAR is not focusing on
advertising and promotions. Thus, the company is giving less attention to the consumer, but it is
focusing more on the production. Being a production driven company can be harmful for
COSUMAR in case a new sugar company attempts to enter the Moroccan market.
Since COSUMAR is a company that has more than 80 years old of experience, its
major problem is with the age of its employees that is above 45. This can be a real issue for the
company since there will be a lack of dynamism in the sales force. Also, employees won’t take
major changes in improving the company and will not come up with innovative ideas in terms of
advertising and communication.
Even though COSUMAR is a privately-owned company, it evolves in an industry that is
controlled by the Moroccan government. Mr. Khalid Benchekroun describes COSUMAR as a
company that is continuously accompanied by the government at every level. Hence,
COSUMAR cannot impose its own prices on sugar since the prices are regulated by the
Moroccan market, thus, the company cannot choose to increase its prices if it decides it should
make more profit. In other words, COSUMAR is in the agricultural industry, an industry that is
highly controlled by the government, thus, it is not free.
One of the national strategies undertaken by the Ministry of Agriculture concerned the
equipment mechanization within the framework of “Le plan Maroc Vert”. Even if COSUMAR
is going through the process of mechanization of the sugar loaf production, in order to replace
the traditional and manual processes of making bread that dated from more than half a century, it
is still using 40% of old equipment.
One of the major weaknesses of Cosumar is that it relies on international imports in order
to satisfy the local demand. The Local production of sugar beet and sugar cane can satisfy only
45% approximately of the local demand and the remaining is usually imported from Brazil.
Another problem that the company is facing is its inability to predict the amount of raw sugar to
be imported because the local production depends on harvest rainfalls.
Actually, COSUMAR has sugar plants areas in 5 regions: Doukkala, Tadla, Loukkos,
Gharb, Moulouya. However, these five regions are dedicated to the production of sugar beet and
only two of them (loukkos and the Gharb) are dedicated to sugar cane production. COSUMAR
should find more lands for the production of sugar cane in order to increase its supply at the
national level.
With the agricultural production of sugar cane and sugar beet and after going through the
industrial transformation, COSUMAR ends up with 4 types of finished products which are sugar
loafs, sugar lumps and granulated sugar. COSUMAR only produces sugar on different forms that
serves the basic needs of the population. The company could invest in some other types of sugar
that are healthier or produce unrelated products such as Ethanol (can be made from sugar cane or
sugar beet plant) for other purposes.
III.
IFE Matrix: ( See Appendix n° 3)
The IFE matrix shows that Cosumar has a score of 2.58. This score is above average
(2.50) which indicates that the Company has a good internal position.
The main strength that was considered important is that COSUMAR has a long
managerial expertise in sugar industry and the fact that it is the leader in Morocco with 100% of
the market share. These factors obtained the highest ratings of 4. This judgment was based on the
fact that the company is a major player since it has been present for more than 80 years. On the
other hand, we obtained three major weaknesses: “Lack of advertisement”, “Inability to
determine the expected production” as well as the “Inability to satisfy the local demand with the
local production”. The last two factors are related to each other since the company is obliged to
import from international markets to overcome these weaknesses. Therefore, we attributed a
weight of 0.07 to factor 5 and 0.08 to factor 7 and we gave it a 1 in the rating.
Lack of advertising affects brand awareness, since not all consumers are aware of the
brand name of the sugar they are consuming; this represents a weakness for the company since
they have a weak positioning in the customer’s mind.
Issues:
I.
Major issue :
The main issues of COSUMAR is the limitation related to the development of sugar
crops to satisfy the needs of the local demand an reach a important control over the imports of
sugar and to take action in a competitive manner, broaden its horizons with new products as well
as have a visibility for the future.
II.
Minor Issues:
Pulling out the tariffs from the agriculture sector in 2013 will be seen as prospective
event to notice some entry of competitors, so the company has to promote a sustainable
performance for its business related to the development of its brand by developing innovative
goods following a related diversification strategy.
An additional issue that can directly affect COSUMAR is the risk of a decrease in the
supply from the most producer of sugar around the globe. So COSUMAR can face a hazard issue
of death to suppliers of raw sugar for instance Brazil in the long run.
Furthermore, a deficiency allied to the difficulty exploitation of the technology in
agriculture sector setting as an obstacle for the development of the sugar production and
fulfilling the needs of high range of population.
Moreover, the lack of finding trustworthy solution due to lack in the development and
research department with foremost problem of setting further new mechanizations techniques to
minimize the issue of rainfall that create trouble for COSUMAR’S production.
Long Term Objectives:
In a changing environment, the implementation of regional plans for the development
of sugar crops for the horizon of 2019 is one of the most important long term objectives for
COSUMAR by increasing production from 4000000T to 8010000T and fulfills the needs of 90%
of the population in relation with the program “plan Maroc Vert”. The company has to enhance
the irrigation by Geomombran system to facilitate the tour and use of water between farmers at a
low cost with high production and introducing the Momogerm which is potentially more
efficient. Furthermore an objective as a support for long run, COSUMAR can reduce the lapse of
time between sugar cane maturity and harvesting because our farmers wait among 6 to12 month
which will result to high output in a short time.
Another long term objective is the modernization and promotion of the sugar market
following a related diversified strategy concerning the introduction of new product to be created
by COSUMAR in market of 100% monopoly. COSUMAR has to develop an organic whole
sugar cane as an alternative product of white sugar in the growth areas of sugar attracting
new segment of customer. Regardless of the comfy situation at the moment, COSUMAR must
introduce the mechanization machines to increase the productivity of bio-ethanol seen as a
solution to face the increasing prices of gasoline for the long term so the company has to boost
the research and development ways irritating to huge extraction amount of liters from sugar
beets.
Alternative Strategies
I.
SWOT MATRIX: ( See Appendix n° 4)
Using the SWOT Matrix, nine potential strategies were developed:
Two SO (Strength/Opportunities) Strategies:
1- The implementation of regional plans for the development of sugar crops:
This strategy is related to “Plan Maroc Vert” for the development of the sugar industry to
confront the international competitiveness, the opening of foreign markets, and the fulfillment of
domestic sugar market taking advantage from the long managerial expertise in sugar industry.
Also this program will measure as part the efforts made by the various operators to optimize and
upgrade the sugar industry meanly the government support.
2- Organic whole sugar cane as an alternative product of white sugar:
COSUMAR is the only operator and the leader of sugar industry in Morocco. This
position gives the company responsibility to help and make the entire sugar industry toward
excellence.
According to CIA Factbook, the Moroccan population is growing by 1.054% for 2012.
Therefore, developing a new product as an alternative to the white sugar will enlarge more the
prosperity of COSUMAR, taking in to consideration the program of quality, security, and
environment will bring to life harmonizing view of sweetness sugar and attractive one as it
should be. The introduction of an organic whole sugar cane as an alternative product of white
sugar illustrates how COSUMAR act responsible toward the Moroccan population even though
people suffering from diabetes to take care of them.
Two WO (Weaknesses/Opportunities) Strategies:
1- Rising sugarcane production and output through well-organized farm
operations
Only 20 000Ha of sugarcane is harvested to which 20% of sugarcane is used locally
while 80% is imported according to the annual report of 2010. COSUMAR need to take
advantage from the new Moroccan agriculture program” Plan Maroc Vert”. There is an existence
of a significant amount of lands that can be subject to consolidating, trenching, and stone
removal so COSUMAR can fulfill the gap between consumption and production of sugarcane.
Besides, COSUMAR improve the agriculture sector of sugarcane by implementing a line of
attack to reduce time lapse between cane maturity and harvesting because our farmers wait
between 6-12 months before sugar cane is harvested a way to rise the sugarcane production and
output through well-organized farm operations.
2- Product Diversification:
According to the annual report of COSUMAR, 2010, there is high consumption of sugar
in Morocco over 35kg per capital/year. So COSUMAR need to take profit of its currently
situation as a leader and the nix of existing competitors in the market, before the elimination of
tariffs for the agriculture sector in 2013 and develop it’s sugar crops products. COSUMAR has to
enlarge more it prosperity of production, adding new products to segment new consumers,
meaning the increase in the amount for marketing to create some advertisement for old product
or trying to promote some new one and came to life with harmonizing view of sweetness sugar
and attractive one as it should be.
One ST (Strengths/Threats) Strategies:
1- Enhance the irrigation mechanisms to develop the agriculture of sugar:
Improving irrigation efficiency is one the mind critical problems in Morocco since the
industry is depending heavily on the rainfall and COSUMAR is trying hardly to introduce the
mechanization processes in the sector since the lack of new transferring technologies in the
whole field. Nowadays farmers remember the drip irrigation and the sprinkler system of
irrigation both of them used mainly to save water for long run cultivation but using the
Geomembran system is an additional solution for low cost and it has a government support
which will allow COSUMAR get benefit from.
Four WT (Weaknesses/Threats) Strategies:
1- Get into a capital of a Brazilian company that produce raw sugar:
The group should think about the sugar industry in Brazil. COSUMAR must study all the
possible folders to see the opportunity to get to the capital of a Brazilian company that
manufactures sugar around the globe to secure a significant share of imports raw sugar and allow
COSUMAR increase the perimeters of its activity.
One thing is certain, if this partnership result to successful ending; it will show the loyalty
of the company and recognition of the efforts played by COSUMAR to upgrade and enhance the
size of the national sugar industry and celebrate the effectiveness and efficiency of the hard work
to follow the world development. This partnership will strengthen the position of COSUMAR as
an active player in the globe and especially African knowing that our Kingdom is already the
fifth largest consumer and fourth largest importer of Africa but the government control of the
prices will stand as an obstacle to allow COSUMAR get profit from the changing prices in the
sugar industry market.
2- Increase brand awareness of COSUMAR’S brands using advertising and
promotion strategy:
According to customer satisfaction survey made by the company in 2010, showed a
fulfillment of the satisfaction for the customers, the level varies between 50% and 80%. Form the
finding COSUMAR is facing a critical situation related to its 100% control of the market
meaning that satisfying a range between 50% and 80% is not enough. As result, the company has
to embark and a conduct a designed and structured plot to see the places of interest for enhancing
the contractual relationship with its customers reducing its engagement in social marketing to
customer-focuses marketing. Moreover, according to the USDA, Moroccan importation tariffs
on sugar will be eliminated in 2013 Moroccan sugar industry, COSUMAR, will probably face
some new competitors and has to promote a sustainable performance for its business also
COSUMAR must set up methods to develop its marketing department and meanly the awareness
of its product around the kingdom.
3- Increase COSUMAR’s internal production capacity:
Sugar, the powerful sector in Morocco, has become the symbol of a successful policy of
import pursued by the kingdom since the independence, a sugar industry that enables Morocco
today to meet 45% of national needs. This percentage is seen as threat since COSUMAR has
inability to satisfy the local demand with the local production, it goes to the solution of importing
which is extensively subsidized through massive intervention by the government at all levels of
the industry costing a huge amount of money. According to the annual report of 2010 we have 9
units that produce sugar, those units use machines that are valued to be an old technology (40%
of machines are ancient) consequently, there is complications to determine the expected
production, sometimes. As a fundamental objective, COSUMAR needs to increase its internal
production capacity dealing with some upright solutions to improve competitiveness of sugar
industry.
4- Producing bio-ethanol from sugar beets:
In our country, COSUMAR can take the lead to start producing bio-ethanol from sugar
beet theoretically the company will open a relatively competitive vision in Africa and can make
end to its lack of diversifying strategies and also provide the market with more efficient and
reliable product which can be a competitor to the high price of gasoline in the Moroccan market
due to the high demand of the substance and the imported level of gasoline which is 100%.
Recommendations
I.
SPACE MATRIX: (See Appendix n°5)
After doing the internal and external strategic position analysis of COSUMAR, the space
matrix directional vector coordinates resulted in: (X= 2.56; Y=1.7). These coordinates put the
company in the aggressive profile that consists of taking a set of strategies that are:
 Market development:
- It can find some African markets to export sugar production since there is a period of drought
and they will be less focusing on sugar production. (Such as: Mali …)
 Diversification:
- Introducing sugar syrup, sugar crème, sugar caramel as new products into the market.
 Backward integration:
- It consists of investing more in the agricultural sector of sugar in order to reduce the
dependency on the imported of refined sugar from Brazil.
II.
Quantitative Strategic Planning Matrix (QSPM): (See Appendix n° 6)
The Quantitative Strategic Planning Matrix (QSPM) is an important tool for the
assessment of the strategies suggested to improve the company’s position in the market. QSPM
developed about COSUMAR consists of evaluating three main strategies that are (1)the
implementation of regional plans for the development of sugar crops, (2)bio-ethanol production
from the sugar beets, and (3) organic whole Sugar as an alternative product of white sugar. The
total attractiveness scores were 4.96 versus 5.04 and 5.12 for strategies 1, 2, and 3 respectively.
Therefore, COSUMAR should adapt the third strategy since it consists of diversifying the
production of sugar to organic whole sugar. The main opportunities supporting this strategy are
that the Moroccan market has no competitors, and the fact that there is a high consumption rate
of sugar that is estimated by 35kg/year. Besides, this strategy is effective since the production of
organic whole sugar which targets the part of the population that cares about their health and
their consumption. This third strategy will take advantage of COSUMAR’s important strengths,
which is mainly being the leader in sugar industry with an expertise of 80 years. Finally, the
organic whole-cane sugar will allow COSUMAR to take advantage of its opportunities which are
the high consumption rate of sugar among the Moroccan population and the growing rate of
people suffering from diabetes.
III.
Grand Strategy Matrix: (See Appendix n°7):
Based on the balance sheet, the annual sales growth of the company exceeded 5% since
the sales the growth during the years 2010 and 2011 were 10.64% and 10.49% respectively. This
means that COSUMAR’s has a rapid market growth. This explains that they have excessive
resources and they are using effective strategies. Concerning the competitive position of the
company, COSUMAR is a monopole in the sugar industry in Morocco and it has a 100% of
market share, this give the company a strong competitive position in the Moroccan Sugar market.
Based on the Grand Strategy matrix, COSUMAR is positioned in Quadrant I, this means
that the firm is able to take advantage of the available external opportunities and they can reduce
threats aggressively when necessary. For that matter, and according the Grand Strategy matrix,
the main strategies that COSUMAR can consider are: market development, market penetration,
product Development, Forward/Backward/Horizontal integration and related diversification.
Implementation:
I.
Strategy 1: The implementation of regional plans for the development of sugar
crops:
Target growth:
The objective from this strategy is improving performance to achieve a high returns in the
agriculture of sugar crops for 2019 (59T/Ha for beets and 81.50T/Ha for sugar cane against
51T/ha and 66tT/Ha currently). In addition, the company must develop the proportion of
particular new harvesting manners predominantly using Monogerm for 25,000 Ha in a long run
against 4900 in 2008. Also COSUMAR has to improve the management of the available
irrigation systems mainly through the rehabilitation and maintenance of hydro agriculture
equipment and the improvement of 50,000 Ha using the Geomambran system to save water at
low cost of production allowing a reduce of the percentage of importance by 45% for 2019.
1- Objective one:
Description:
Sugar, the powerful sector in Morocco, has become the symbol of a successful policy of
import pursued by the kingdom since the independence, a sugar industry that enables Morocco
today to meet 45% of national needs. Extensively subsidized through massive intervention by the
government at all levels of the industry, Fimasucre (Federation Interprofessionel Marocaine du
Sucre) and the government signed a contract to upgrade this sector. According to the annual
report of 2010 we have 9 units that produce 45% of national need (80% comes from beets while
20% of sugarcane is produced locally) until now. As fundamental objective for the length of
2019 is very clear to cover more than 45% of the needs of the population and attain 90% of
satisfied demand locally.
Project characteristics:
As one of the fundamental perspectives is to increase production, by enhancing the
superficies to 123400 Ha for 2019 against 80000 Ha in 2010 implicates an increase of 35% of
the usage of the available areas. While using this huge hectares, the farmers have to increase
the production per one hectare by 9T moving from 50T to 59T for the beets that will allow
generating a production of 5369000T (59T*91000Ha). For the sugar canes is to produce
81.50T/Ha so this process will generate 2640600T (81.50T*32400Ha) In addition, COSUMAR
needs to improve competitiveness of sugar industry since it will require the promotion in
research and development via the establishment of a Centre of Research and Development of
sugar crops. Latter will have a mission to lead research and transferring the technologies. In
order to achieve and measure the increase of the production per one Hectare the company has to
implement and buy some new technologies meeting the concerns of the farmers.
Cost:
In order to ameliorate the performance of the farmers’ lands the company has to
implement the dissemination of the seeds with a single nucleus and the introduction of three
mechanisms for the drilling of sugar beet, and a mechanism for the maintenance of wet spitting
dryly.
The cost of the project include renewing the contract with the farmers through additional
gain in the income of 1000Dh/Ha (from 3000 to 4000 Dh/Ha) also the cost will include buying
16 new machines from Belgium (Kompass) since one machine can treat 7000 Ha according to
the agency development of agriculture for extracting the sugar:
 BM 300/330 : optimal preparation of the crop = 842.352 MAD*4=3369408MAD
 FT300 : for a perfect cutting => 22T is produced smoothly and they are scalped precisely
= 758.117 MAD*4=3032468 MAD
 FM300: a good cleaning for a better harvest => harvest up to 10% higher per hectare,
842.352 MAD*4=3369408 MAD
 ROOSTSTER 604/804/904: the versatile harvester = 1.010.820 MAD*4= 4043280 MAD
In addition, COSUMAR will have to increase the storage capacity by investing 1290000
MAD to store the added production for each unit.
 The income of the farmers: 4000*123400Ha= 493600000MAD
 Between September and October = 30days to develop or to increase by 35% the usage of
the lands for beets and as we know that 60dh/day/each worker and we expect to have 80
worker for 1400Ha according to ministry of agriculture and the sea fishing so we need
(123400*80)/1400= 7000 employees that will cost 7000*60dh/day=420000dh/day so the
total cost for 30 days 420000*30=12600000MAD.
 Sea transportation: 4469.84MAD = > 4469.84*4= 5879.36MAD.
 Land transportation: 1216.26MAD=>216.26*4= 865.04 MAD.
The devices will be transported by the company’s own trucks with a general cost of
216.23MAD.
 Tariffs 15 %( including TVA 12.5%, and importing rights 2.5%). = 518046.15MAD
(Régime d'importation Maroc 2006)
The cost of the project including land and the new machines and renewing the contracts with the
farmers is 521.829.571 MAD.
2- Objective two:
Description:
The perimeter of Gharb has several strengths and potentials that make it the major sugaroriented region in Morocco. It also has the advantage of producing both sugar beet and sugar
cane; however, current performance levels of sugar beets remain below potential in the region.
Project characteristics:
The soil of Gharb (25000 Ha is fine and deep) need the use of tools with teeth (chisel
plowing) more appropriate. These tools help to undermine the soil more profoundly (30-35 inch)
with a pulling force. Regarding the preparation of the seedbed, should be done hardly for a good
fragmentation of the land deeply and in the surface by using a rotary cultivator (rotary tiller)
then the widespread cultivation of seeds (Monogerm) at the level of the region Gharb.
To improve the production of this region COSUMAR has to buy a machine for the
seeders (semoir pneumatique a plat) furthermore, COSUMAR need to recruit people capable
of understanding the sector of agriculture because of the seeding operation requires the presence
of the farmer in the field to control the depth and density of planting (133.000grains/Ha). We
must also note that the favorable period for seeding is between September and October which is
a seasonal work and during the seeding operation it is imperatively important to embed all types
of insects from the ground to protect the seeding operation from soil pests. Moreover, it is
recommended that farmers must participate massively and attain the awareness days organized
regularly by the industry during the sugar beet campaigns to master the techniques to control the
sugar beets in Gharb.
Cost:
The cost of seeding operation for 25.000 Ha (the region of Gharb):
 The planting require 133000 grains/Ha for the region of Gharb according to “La Vie
eco”. So we need to 3325000000 grains for 25000Ha
 According to “bulletin official” n°5556 du 16 Chaabane 1428 (30 aout 2007), the article
n°1 mentioned that the cost of 1 unit which correspond to 100000 grains of Monogerm is
700MAD. So, we need to buy 33250 units at a cost of 23275000 MAD ( 700*33250)
 In addition COSUMAR need to buy a 2 machines for the seeders
ACCORD I-DRILL PRO for 23500EURO => 261.375MAD*2 = 522750MAD
1EURO=11.1223 MAD
 Rotary tiller: ACCORD SEMI 61/84 => 305685MAD*2= 611370MAD
 And we will need 1400 employees for 25000Ha (80employees for 1400Ha) according to
an investigation in the MOULLOYA which will cost 84000MAD per day and in order to
cultivate the Monogerm in Gharb it will take 30 days. It will cost a total of 588000MAD.
 Sea transportation: 4469.84MAD = > 4469.84*2= 8939.68MAD
 Land transportation: 1216.26MAD=>216.26*2= 432.52 MAD
The devices will be transported by the company’s own trucks with a general cost of
216.23MAD
 Tariffs 15 %( including TVA 12.5%, and importing rights 2.5%). = 170118.MAD
The cost of developing the seeding of Monogerm including the new machines and buy
the units of gains, is 25.176.610MAD.
3- Objective Three:
Description:
Morocco is characterized by erratic rainfall in time and space, which is the origin of
change in output. Such conditions have made irrigation a requirement and a necessity as
technique that has gained over the years of undeniable interest from different farmers. For their
part, farmers have tried to improve their performance in the development of the system of
irrigation, but their experiences were not enough and the results were limited. However the
solution can be found only in a collective work, between COSUMAR, the government and the
farmers by developing more the irrigation system of Geomambran.
The project characteristics:
So it is suggested that COSUMAR need to develop the irrigation of water for 50000Ha in
DOUKKALA by using Geomambran system. So the Geomambran irrigation can lead to a low
cost of implementation with reducing the problem of wasted water and also result to interesting
output for sugar from the lands. As additional information, the Geomambran contains
approximately 97.5% polymer and 2.5% of black carbon. It is an antioxidant and thermally
stable. It does not contain additives that can harm human health over the years.
For the development and the implementation of Geomambran system COSUMAR will
have to take in to account the following settings:
1. The cost of installation of the Geomambran
2. The annual depreciation which depends on the cost of investment and the amortization
3. Operating expenses
According to l’observateur, the cost of investment is 60dh/m2, and lapse of time for the
amortization is 20 years moreover the average workforce for labor is 60dh/day/each worker
finally it was estimated that the cost per each hectare is 28000DH/Ha from the agency of
agriculture development.
Financing:
The cost of the developing the Geomambran irrigation system is 28000*50000ha =
1.400.000.000 MAD
Units
Quantity
Price per
Total price
unit
Using the
Geomembran
50000
28000
1.400.000.000
Ha
system
Cost of
12.000.000
installation (
company
SOTRAFA)
from the
website of the
company
Cost of
12.000.000
evaluation
according to
the research
and
development
department of
COSUMAR
Total (DH)
1.424.000.000MAD
28000 DH/Ha (According to Investigation in MOULLOYA)
 The government will help us by 70% with the condition that the amount does not go
above 11200DH/Ha (11200Dh * 50.000T) = 560.000.000MAD so we will have to invest
only 864.000.000MAD according to The Minister of Agriculture and sea fisheries web site.
 The average loss of water using the irrigation system by Geomambran for 50000Ha in
DOUKKALA is estimated to be 160.000.000MAD/ year for cultivating the sugar crops.
SO THE TOTAL COST FOR THE FIRST STRATEGY IS 1.411.006.181MAD
 Financing the Project according to the EPS/EBIT analysis
 COSUMAR should use Common stock to raise capital in recession economic conditions
but should use debt financing under normal or boom conditions.
1- Debt: 1.411.006.181 MAD
Investment in MAD
1.411.006.181MAD
Interestt rates
6.4%
Periods of 10 years
10
Annual payments in MAD
195.360.073 MAD
Forecast for the next 3 coming periods starting 2010-2014: see excel sheet (forecasting for
strategy one)
 For the strategy evaluation I can say that the strategy will reach its objectives by 2019
from the forecast of the income statement that shows an increase in the profit margin
each year. ( see the excel sheet forecasting for strategy one ).
Strategy Evaluation
 Balanced Scorecard
Area of Objectives
Measure or Target
Time Expectation
Primary Responsibility
Increase Profit
Revenues
15 % each years
Implemantation of regional
plans for the development of
sugar crops
Increase sales
Sales
15% each year
Reducing the imports of
sugar from 55% to 10% for
2019
Financial:
Operations/ processes:
Increase the production of
lands
Untapped the performance
of lands
2013 :15%
2014 :25%
2015_2017 : 65%
2017-2019 : 80%
Introduce mechanization in
the sugar industry
II.
Strategy II: The use of Ethanol in fireplace (B2B) supplying Alfra
Ethanol is a renewable energy that is made of corn, sugar, and sometimes wheat. It can be
stored easily in small bottles. Ethanol has many usages; for instance, it can replace the fossil
fuel. It can also be used in fireplaces instead of wood. Therefore, ethanol is an environmentally
friend energy. For that matter, COSUMAR can benefit from the advantage of Ethanol since it
produces sugar beet that is the main basic component of producing ethanol.
COSUMAR can go for a B2B strategy by producing Ethanol and supplying it to ALFRA
Company that manufactures fireplaces consisting of the use of Ethanol instead of wood. In
Morocco, according to Driss Oukassou - the head of the division of forest Economics,
Department of Water and Forests- declared that 1.3 Million tons of wood fuel is consumed each
year. Therefore, the Moroccan forests are undermined.
The Administration of Forestry in Morocco conducted a study of consumption of
firewood in Casablanca and it showed that there is a consumption of 300,000 tons biomass
(agricultural waste used as a fuel or energy source) per year, where 75% is from the forest.
Therefore, Ethanol would be a good investment for COSUMAR since it is going to enhance its
brand image as an environmentally responsible company.
Project characteristics:
COSUMAR can respond to the opportunity by developing the production line of Ethanol
as an alternative to gasoline in many fields moreover it is less costly to the internal industry of
fuels in Morocco.
The total capacity of COSUMAR is 80.000 hectares dedicated to the production of sugar
beet. In order to produce Ethanol, we suggest at first time that COSUMAR will use only 5000
hectares of land, which estimated to produce 24 125 000 kg of ethanol.

1 acre
1930 kg of ethanol

1 acre
0.4 hectare

5000 hectares
24, 125, 000 kg of ethanol
According to the economics article “Turn Corn Stover to Low Cost Pasture” of Jack Kyle
Objectives:
COSUMAR can expand its operations by producing Bio ethanol from sugar beet. This
related diversification is aimed to allocate 12.5% of the production of sugar beet to produce
48,250, 000 kg ethanol by 2016.
Cost Estimation:
According to “Ethanol from Sugar Beets: A Process and Economic Analysis” article of
2010, and based on the simulation of United States Department of Agriculture Department
(USAD), the cost of producing ethanol is as follows:
 it costs 16 million dollars to transform sugar beet to ethanol
 the utility costs of producing ethanol is $23 million
 The cost of Feedstock for beets per gallon is $1.66
 Costs contributions of yeast, lime, and solvents are $0.10 per gallon
 Utilities like chilled cooling water system, chilled water and steam costs
 The total cost for producing one gallon (1 gallon = 3.8 liters=2.98Kg) of ethanol from
sugar beets is $2.30.
Price in euro
Price in dirham
Price in dollar
Equipment cost
12.0640 Million
134,429 Million
16 million
Utility cost
17.3420 Million
193,241Million
23 million
Feedstock
1.2516
13.95
1.66
Costs contributions
0.0754
0.84
0.10
Cost of utilities
0.4298
4.79
0.57
Total cost of
1.7342
19.32
2.30
production / gallon
24, 125, 000 kg
8,095,637.6 gallons
8,095,637.6 gallons* 19.32 MAD = 156,407,718.12 MAD
Investment cost: 484,077,738 MAD
The table above shows the cost of production of sugar is 19.32 dirham per gallon; and
one gallon is 3.8 liters, which means that the cost of each liter will cost 5.085 dirhams.
Financing:
COSUMAR should use Common stock to raise capital in recession economic conditions
but should use debt financing under normal or boom conditions.
Investment in MAD
484,077,738 MAD
Interest rates
6.4%
Periods of 10 years
10
Annual payments in MAD
67,022,713.15 MAD
The price of ethanol in the international market fluctuates between $2.2 and $3.5 per
gallon during the last year. Hence, we assume that the price of ethanol in Morocco is $3, which
is equivalent to 25.2 MAD per gallon. Among the objectives is to increase the revenues by 5%
each year.
The projection of 5-year forecast of the income statement
Sales in
2013
2014
2015
2016
2017
8,095,637.60
8,500,419.48
8,925,440.45
9,371,712.48
9,840,298.10
25.20
25.2
25.2
25.2
25.2
gallons
Price of 1
galloon in
DHs
Sales in
204,010,067.50 214,210,570.90 224,921,099.40
236,167,154
247,975,512
19.32
19.32
19.32
172,439,510
181,061,485
190,114,559
Dhs
19.32
Cost of 1
19.32
galloon
Cost of
156,407,718.40 164,228,104.40
goods sold
47,602,349.10
49,982,466.50
52,481,589.80
55,105,669
57,860,953.00
Tax 25%
11,900,587.28
12495616.63
13120397.45
13776417.25
14465238.25
Net income
35,701,761.83
37,486,849.88
39,361,192.35
41,329,252
43,395,714.75
Income
before tax
Target segment:
This project consists of establishing a B2B strategy by supplying companies that
manufacture fireplaces. There are many companies in Morocco that manufactures fireplaces
using bioethanol. One example could be ALFRA, a French company that owns a subsidiary in
Casablanca and manufactures and sells bio fireplaces and heaters. Another potential company
COSUMAR can supply ethanol to and that manufactures in the same sector, is NARBIO a
company located in Tangier. There is also KAIZEN a Moroccan company located in Casablanca.
Marketing strategy:
Single Market Strategy:
One of the main marketing strategies that will be implemented by COSUMAR is to build
a green brand image since the Bio Ethanol is a renewable energy that preserves the environment.
By producing Ethanol, COSUMAR will be partially contributing in stopping deforestation in
Morocco. In fact, by focusing on a single target market such as heaters manufacturers will allow
COSUMAR focus on their operations and have control on its logistics system. Therefore, the
single market strategy will allow COSUMAR to concentrate its effort in a single segment.
Online Marketing Strategy:
COSUMAR group should consider online marketing by writing an article this new
investment. This article should contain a description of the project and its utility in the short and
long term in order to attract potential target segments that are the fireplace manufacturers. This
is not a costly strategy; however, it will contribute in increasing the brand awareness of the
company’s product.
III.
Strategy 3: Organic Whole-cane sugar as an alternative for refined sugar
The production of an organic whole sugar cane could be a good opportunity for
COSUMAR to provide an alternative product in the Moroccan market that might replace at some
point the huge consumption of white sugar, which is the main product category of the company.
Unrefined sugar has many attributes and advantages that could be exploited in
order to develop a new product in the market that will increase the capacity of COSUMAR to
satisfy the local demand of sugar. In the other hand, COSUMAR can take the advantage and
introduce an organic whole sugar in the market with different attributes and target a specific
segment that cares about healthy consumption habits. The product is considered as a healthy
product that will attract a large number of consumers. In addition, in term of production, the
whole sugar cane will cost the same for COSUMAR since the product is unrefined, which
requires a shorter flow of manufacturing process.
Strategic objectives:

Objective-1: Increase the sales revenues by 15% each year

Ojbective-2: Increase the production of organic whole sugar as an alternative to white
sugar to reach a level of production of (30% organic whole sugar and 70% of white
sugar)
Refined Versus Unrefined Sugar:
Why unrefined sugar could be a better alternative product?

Unrefined sugar preserves all the nutrient components of the substance, while refined
sugar loses its vitamins and minerals during the refinement process.

Unrefined sugar is more natural, healthy and easy to digest, moreover it contains only
fewer calories.

Refined sugar affects the body with undesirable calories, which is a major cause of
obesity. While the unrefined sugar contains many vitamins and proteins.

During the production of refined sugar it gets mixed with some chemical elements that
might be harmful such as sulfur dioxide and other acids. According to "organic lifestyle
magazine."
The Production Level:
The production process of unrefined sugar
Raw materials
Sugar canes
Unrefined Sugar
Crashing Machine
Capacity of 300kg/h
Sugar Juice
Filtering Machine
Boiling Machine
The Estimated Production of "Organic whole sugar cane":
The annual total sugar production of COSUMAR is approximately 500 000 tons based on
the production of 2010. In order to apply the strategy of introducing the new product of the
organic unrefined sugar to the Moroccan, we tend to dedicate a proportion of the total annual
production to develop the organic whole sugar cane which is estimated to be 20% during the first
year with an incremented amount during the next 5 years to reach 30% to total production.

Total production 500 000 * 20% = 100 000 tons

100 000 tons of sugar canes will be dedicated to the production of unrefined sugar.
The Estimated Cost in MAD
Equipment and machines:
34, 330, 800 MAD
Starting expenses:
14, 914, 200 MAD
Operating costs:
93, 726, 800 MAD
The total cost:
142, 971, 800 MAD
The account of equipment and machines include: the crashing machines, filtering
machines, boiling machines and plastic containers each one has a capacity of 250 liters, and 5
KW steam-powered generators.
The account of operating expenses includes all the costs of: Raw materials (around
100,000 tons per year), the production cost, and shipment of the product to the distributor, wages
of approximately 500 employees, utilities, and amortization.
The Estimated Production Level:
Crashing machine 5HP can process average of (300 Kg per hour).
The turning rate of 100 kg of sugar cane will produce 85 liters of sugar juice, which will give
48.5 of unrefined sugar as a final product.
100 Kg (sugar canes)  85 liters (sugar juice)  48.5(unrefined sugar).
The general rate to consider for production is 48.5 % from the raw materials to the final good.
Therefore the total production of unrefined sugar is estimated to be
(100,000* 48.5%) = 48,500 tons of refined sugar per year.
Financing:
COSUMAR should use combination Financing to raise capital in recession, normal, and boom
conditions of 50% coming from debt and 50% from common stock.
5-Year projection of organic whole sugar production:
We estimate an increase of the unrefined sugar production by 5% each year.
Raw material
2012
2013
2014
2015
2016
100,000
105,000
110,250
115,762.5
121,550.6
tons
(sugar canes in
Tons)
The final good
48,500
50,925
53,472
56,144.8
58,952.05
(unrefined sugar)
tons
Marketing Strategy:
The organic whole sugar cane is considered to be a new product in the Moroccan market.
COSUMAR has to take advantage of the first mover to provide the market with such alternative
product. Therefore, COSUMAR has to build a strategy that would deliver a better value to
customers than the existing products of white sugar. In addition, marketing effort has to
introduce the product in a better way that suits consumers' preferences knowing that Moroccans
are more familiar and addicted to the current white sugar.
The organic whole sugar product is an unrefined sugar cane that is healthy and retains
natural sugar components and vitamins after processing. The product could be an alternative
product of white sugar, which can be used in a different ways and uses such as sweetener for the
making of cereals and beverages. It could be used also the regular daily products like bread,
cake, candies, cookies, and desserts in general.
The price of Sugar in Morocco is very sensitive to changes especially that the
government is responsible to set the price of sugar. However, the price of the organic whole
sugar will be higher than the white sugar since the product will have specific segments.
COSUMAR has an important distribution network that covers all the major places and
regions of the country. At the beginning, the organic whole sugar cane will be launched only in
the main cities of Morocco such as Casablanca, Rabat, Fez, Tangier and Marrakech. Then, for
further stages it will reach all the distribution places.
The promotion of the organic whole sugar should reach the potential customers which are
very large in term of numbers. However, taking into consideration the characteristics of the
product, we will tend to promote a good image about the attributes of the product "organic,
healthy, and natural sugar". The advertisement on Moroccan TVs "2m and RTM" would be
necessary to introduce the product in the market.
Target Segments:
Segment 1: The consumers of the final good, basically we will target a psychographic
segment about people from the middle and high class who care more about their health and
eating habits since the whole sugar cane is organic and healthy.
Segment 2: B to B, COSUMAR is the major supplier of raw sugar to other manufacturing
companies. We will be targeting the companies that would like to produce bio-organic food
using organic sugar.
New Packaging for new product:
In order to be in accordance with its new approach “Customer Focus”, COSUMAR is
looking forward to strengthen its market position and become closer to the consumers by giving
renewal to the visual identity of its brands. As a consequence, we should also create a new look
to our new product: “Organic whole-cane sugar” to make it visually more attractive for
consumers and to be in line with the new strategy of COSUMAR. The figure above shows our
packaging proposition for our new product. As shown in the figure, the new packaging is made
up of a zip-top plastic bag that will prevent air or even ants from getting in touch with sugar.
This plastic can be opened and closed as many times as necessary without causing any damage to
the sugar content.
Advertising expenses for the diffusion of a 30s commercial on prime time:
On 2M: 13,333.59 MAD
On TVM: 11,690.85 MAD
Frequency
Cost of 1 spot
Cost/ day
The annual cost
133, 335.9 MAD
38000924 MAD
116, 908.5 MAD
32087060 MAD
250244.4 MAD
70087984 MAD
of
advertisement
2M
10/day
13,333.59
MAD
RTM
10/day
11,690.85
MAD
Total cost
Forecasting
It is very difficult to predict the expected agricultural production of raw materials (sugar
canes and sugars beets) based on the historical data of the annual reports because it fluctuates
between local production and imports from the international market. The agricultural harvest
depends heavily on the rainfall, which is a significant success factor of production. Therefore,
the financial forecast will be based only on the performance of the last three years 2008, 2009,
2010 in order to have an overview about the strategy implementation and impact on COSUMAR
net contribution.
The price of sugar in general is fixed by the government. However, if COSUMAR
succeeds to provide a developed organic sugar, it could benefit from a margin by increasing the
prices. Overall, the whole sugar cane is less costly in production but we will estimate the cost of
production as the same since COSUMAR has already an established manufacturing process for
white sugar that can be used again for the process of the organic whole sugar.
We estimate the revenues of the organic whole sugar to grow by the same rate of the
organic food market, which is 7.7% worldwide according to the industry analysis since we could
not find the current market growth of organic food in Morocco. In addition, During the 3 coming
years, we expect an average growth of operating income to increase by 13.73%.
The Forecast of next 3 periods
2008
2009
2010
Year-1
Year-2
Year-3
4 044 095
4 241 920
4 511 829
4 859 240
5 233 402
5 636 374
462,22
127,19
785,81
678
211
181
1 635 735
1 730 416
1 849 333
1 965 471
2 088 903
2 220 086
817,98
552,00
448,00
589
204
326
44 092
52 074
38 235
36 591 454
35 043
33 561
688,47
965,17
585,33
636.31
290.49
Total operating
5 866 264
6 176 815
6 426 615
6 861 303
7 257 349
7 856 460
income
803,12
732,91
804,27
721
051.31
507.49
Cost of goods sold
4 283 921
4 511 407
4 770 883
5 034 713
5 313 132
5 606 949
443,21
716.19
372,66
222
864
111
373 056
362 403
350 953
347 857
332 607
327 389
856,64
416.68
147,55
224.08
388.29
774.55
16 138
16 966
16 813
17 115
17 392
17 456
192,08
551.42
190,65
084.12
082.88
004.32
Others operating
1 040
1 140
2 420
3 872
4 196
5 913
expenses
000,00
610.45
324,82
519.712
031.54
650.46
Total operating
5 207 126
5 458 943
5 738 476
6 022 531
6 320 646
6 833 518
expenses
946,38
212,52
517,24
105
394
391
Operating Income
659 137 857
778 772
895 702 657
1 022 942
Revenues of sales
Gants holding
Other incomes
Personnal expenses
Taxes
717 872 520 688 139 287
616
116
Strategic evaluation:

From the forecasting method of income statement we can see that in the long run we can
increase the sales revenues by 15% each year and also we are able to reach an enhance in
the production of organic whole sugar as an alternative to white sugar to reach a level of
production of (30% organic whole sugar and 70% of white sugar)
Balanced Scorecard
Area of Objectives
Measure or Target
Time Expectation
Primary Responsibility
Increase Production
Revenues
15 % each year
30% organic sugar/70%
white sugar
Increase sales
Sales
15% each years
Untapped Market
15% each year
Construct diversified product
for our customers.
Increase Brand awareness
Every year
Posters
Financial:
Introducing new product for
our same segments of people
Customers:
Increase Market Share
Communication
Improve the
communication of the
company advertising
Advertising in media
References:
Agence pour le developpement agricole. (2009). Filiere sucriere. Retrieved from
http://www.ada.gov.ma/plans_regionaux/filiere-sucriere.php
Akesbi, N. (n.d.). The structural adjustment policy in agriculture in morocco. Retrieved from
http://www.uclouvain.be/cps/ucl/doc/ecru/documents/TF5M3D19.pdf
Agra CEAS Consulting . (2009). Potential for biofuel production in femip countries
ftf/reg/04/2006 . 2368, Retrieved from http://www.eib.org/attachments/country/potentialfor-femip-biofuel-production-en.pdf
BE. (2011, 01 31). Cosumar Morocco. Retrieved from http://www.bus-ex.com/article/cosumarmorocco
Bowen, E., Kennedy, S. C., & MirandaLast, K. (2010). A major qualifying project. 1-39.
Retrieved from http://www.wpi.edu/Pubs/E-project/Available/E-project-042810165653/unrestricted/Ethanol_from_Sugar_Beets__A_Process_and_Economic_Analysis.pdf
COSUMAR. Annual report 2010. (2010). Retrieved from http://www.cosumar.co.ma
COSUMAR. Annual report 2009. (2009). Retrieved from http://www.cosumar.co.ma
COSUMAR. Annual report 2008. (2008). Retrieved from http://www.cosumar.co.ma
COSUMAR. Annual report 2007. (2007). Retrieved from http://www.cosumar.co.ma
Thoyer, S. (1995). L'économie politique des réformes du secteur sucrier au maroc: Quelle
issue?. Retrieved from http://ressources.ciheam.org/om/pdf/b14/CI960056.pdf
Maghress. (2010, 10 28). Bmci bourse recommande de conserver cosumar dans les portefeuilles.
Retrieved from http://www.maghress.com/fr/latribune/1168
La Vie eco. (2012, 04 30). Cosumar: 1,6 milliard de dh d'investissement pour moderniser son
outil de production. Retrieved from http://www.entreprendre.ma/Cosumar-16-milliardde-DH-d-investissement-pour-moderniser-son-outil-de-production_a277.html
Le Matin.ma. (2012, 04 29). Cosumar: Fiche technique. Retrieved from
http://www.lematin.ma/bourse-de-casablanca/fiche-technique/cosumar/csr.html
Maroc. (2011, 11 11). Groupe cosumar: l'arrêt de l'activité de l'usine de laâouamra, sans impact
sur les agriculteurs et les ouvriers. Retrieved from
http://actualites.marweb.com/maroc/economie/groupe-cosumar-arret-de-activite-deusine-de-laaouamra-sans.html
MAHFOUD, Y. (2000, 02 09). Cosumar, un titre a conserver malgre les incertitudes de la
liberalisation . Retrieved from http://www.leconomiste.com/article/cosumar-un-titreconserver-malgre-les-incertitudes-de-la-liberalisation
Grimme. (n.d.). Chantier décomposé pour la récolte de betteraves sucrières. Retrieved from
http://www.grimme.de/fr/09/produkte/ruebentechnik/downloads/gezruebentechn_fr.pdf
El Aissi, N. (2011, 10 27). Suta achève son méga silo de stockage. Retrieved from
http://www.leconomiste.com/article/888218-suta-acheve-son-mega-silo-de-stockage
Frontier (2009, 09 10). Lucrative opportunities in kenya's sugar industry. Retrieved from
http://www.tradeinvestkenya.com/investment_opportunities/958891.htm
Fimasucre. (2009). Filière sucrière. Retrieved from http://www.fimasucre.ma/presentation.php
Wikipedia. (2012, 04 29). List of minimum wages by country. Retrieved from
http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country
Appendices:

Appendix n° (1): EFE MATRIX
Key External Factors
weight
Rating
weighted score
Opportunities
1• A high demand of sugar in the international market
0.07
1
0.07
2 • A high consumption rate and need of sugar in Morocco 35kg/year
0.12
3
0.36
3 • No competitors in the market
0.07
4
0.28
4• The potential to improve the agriculture harvest.
0.09
3
0.27
5 • The government support of the sugar sector and agriculture in general
0.08
4
0.32
0.1
1
0.1
1 • The industry depends heavily on agricultural harvest "Rainfall"
0.12
3
0.36
2 • High proportion of sugar canes is imported ( 55% approximately )
0.12
2
0.24
3• Potential entry of competitors in the long run
0.06
2
0.12
4.• Price fluctuation of the substance in the international market "Imports"
0.04
2
0.08
5• Difficult exploitation of technology in agriculture sector
0.08
3
0.24
6. moroccan market is saturated
0.05
3
0.15
6 • Growing niche for diabetes people (6.6% of population)
Threats
Total
1
2.59

Appendix n°(2): Financial ratio analysis:
2005
2006
2007
2008
2009
2010
2011
current ratio
1.12
1.05
1.33
1.31
1.27
1.08
1.05
quick ratio
75%
69%
92%
75%
76%
75%
73%
assets
55%
64%
59%
58%
61%
62%
64%
profil margin
1%
2%
5%
6%
7%
7%
12%
return on equity
6%
8%
19%
21%
22%
21%
29%
return on assets
2%
2%
7%
8%
9%
8%
10%
debt to total assets
14%
12%
10%
9%
11%
7%
4%
fixed assets turnover
2.54
2.83
2.13
1.87
1.62
1.47
1.34
total assets turover
0.85
1.01
0.91
0.95
0.84
0.82
0.85
0.78%
8.26%
6.77%
4.32%
-0.05%
10.64%
10.49%
net income growth
-73.39%
-2.43%
6.74%
10.58%
6.57%
12.55%
8.14%
earning per share
22.26
39.2
102.4
119.3
132.3
137.8
148.41
dividend per share
40
40
80
86
86
86
100
debt to equity
387.66
182.97
148.12
142.29
158.91
163.59
185.85
net working capital ratio
15.44
19.22
11.84
10.07
9.11
3.58
1.35
inventory ratio
5.77
5.89
6.37
5.99
5.17
5.32
5.70
total liabilities to total
sale growth

Appendix n°(3): IFE MATRIX:
Key Internal Factors
Weight
Rating
weighted score
Strenghts
1. The leader of sugar industry in Morocco with
100% of the market share
0.1
4
0.4
0.12
4
0.48
0.05
4
0.2
0.05
3
0.15
0.08
4
0.32
management
0.06
3
0.18
7. Cosumar is involved in a protected industry
0.05
3
0.15
8. Social responsability
0.04
3
0.12
1. Lack of advertisement
0.06
1
0.06
2. The government control of the prices
0.06
2
0.12
3. The average age of employees is 45 years
0.02
2
0.04
machines are ancient )
0.05
1
0.05
5. Inability to determine the expected production
0.07
1
0.07
6. Small regions dedicated to sugar canes planting
0.06
1
0.06
production
0.08
1
0.08
8. Lack of diversified products
0.05
2
0.1
2. A long managerial expertise in sugar industry (80
years)
3. Good financial situation in Casablanca stock
exchanges
4. Important distribution network all over the
kingdom of Morocco
5. ONA holding owns more than 63% of Cosumar's
capital
6. Accreditation of quality ISO 9001 and QSE
Weaknesses
4. Cosumar is using an old technology (40% of
7. Inability to satisfy the local demand with local
Total
1
2.58

Appendix n°(4): SWOT MATRIX
(See SWOT MATRIX on the Excel software document)

Appendix n° (5) : SPACE MATRIX
Internal Strategic Position
Financial Strength
External Strategic Position
Rating
Environmental stability
Rating
Return on investment
5 Technological changes
-2
Leverage
4 Rate of inflation
-3
Liquidity
4 Demand variability
-1
Price range of competing
Working capital
4 products
-1
Cash Flow
3 Barriers to entry to the market
-5
Inventory turnover
5 Competitive pressure
-1
Earnings per share
5 Ease of exit from market
-6
Price earnings ratio
4 Price elasticity of demand
-1
Risk involved in business
-3
-
4.25
Competitive advantage
2.555556
Industry Strength (IS)
Market share
-1 Growth potential
4
product quality
-2 Profit potential
5
product life cycle
-1 Financial stability
5
Customer loyalty
-1 Technological know-how
3
utilization
-1 Resource utilization
5
Technological know-how
-3 Ease of entry into market
2
Control over supplier and
Productivity capacity
Competitions capacity
distribution
-2 utilization
5
1.57142857
4.142857

Appendix n° (6): QSPM MATRIX
Strategy 1
Weights
Strategy 2
AS
TAS
AS
-
_
-
Strategy 3
TAS
AS
TAS
Key External Factors
1• A high demand of sugar in the international market
0.07
2 • A high consumption rate and need of sugar in Morocco 35kg/year
0.12
3
0.36
3
0.36
4
0.48
3 • No competitors in the market
0.07
2
0.14
3
0.21
4
0.28
4 • The potential to improve the agriculture harvest.
0.09
4
0.36
4
0.36
1
0.09
0.08
4
3
0.24
2
0.1
1
0.1
3
0.3
4
0.4
7 • The industry depends heavily on agricultural harvest "Rainfall"
0.12
4
0.48
3
0.36
2
0.24
8 • High proportion of raw sugar is imported ( 55% approximately mainly from
0.12
3
0.36
3
0.36
2
Brazil )
9 • Potential entry of competitors in the long run
0.06
2
0.12
3
0.18
3
0.18
10• Price fluctuation of the substance in the international market "Imports"
0.04
11• Difficult exploitation of technology in agriculture sector
0.08
4
0.32
4
0.32
3
0.24
12, Moroccan Market Saturated
0.05
1
0.05
3
0.15
3
0.15
4
0.4
4
0.4
4
2
0.24
3
0.36
3
0.36
2
0.1
5 • The government support of the sugar sector and agriculture in general "plan
vert"
6• Growing niche for diabetes people (6.6% of population)
_
0.32
_
-
_
0.16
0.24
_
Key Internal Factors
1. The leader of sugar industry in Morocco with 100% of the market share
0.1
2. A long managerial expertise in sugar industry (80 years)
0.12
3. Good financial situation in Casablanca stock exchanges
0.05
4. Important distribution network all over the kingdom of Morocco
0.05
3
5. ONA holding owns more than 63% of Cosumar's capital
0.08
6. Accreditation of quality ISO 9001 and QSE management
_
_
_
0.4
_
0.15
2
_
_
_
0.06
2
0.12
3
0.18
4
0.24
7. Cosumar benefits from government support
0.05
3
0.15
2
0.1
2
0.1
8. Social responsability
0.04
3
0.12
2
0.08
4
0.16
9. Lack of advertisement
0.06
1
0.06
2
0.12
4
0.24
10. The government control of the prices
0.06
2
0.12
3
0.18
3
0.18
11. The average age of employees is 45 years
0.02
_
_
_
12. Cosumar is using an old technology (40% of machines are ancient )
0.05
4
0.2
4
0.2
3
0.15
13. Inability to determine the expected production
0.07
3
0.21
3
0.21
2
0.14
14. Small regions dedicated to sugar canes planting
0.06
4
0.24
3
0.18
2
0.12
15. Inability to satisfy the local demand with local production
0.08
3
0.24
3
0.24
4
0.32
16. Lack of diversified product
0.05
2
0.1
3
0.15
3
0.15
TOTAL
4.96
0.1
_
_
5.04
5.12

Appendix n° (7): Grand Strategy Matrix