Ormuz crisis makes Morocco a key country for Inditex, with 350 supplier factories

Tension in the Strait of Hormuz and rising transport costs are reshaping **Inditex**'s supply chain, turning **Segarro** into a nerve centre with some **350 factories** run by its suppliers.

## The forced pivot south

Instability in the **Strait of Hormuz**, one of the world's most important maritime arteries, is forcing fashion giants like **Inditex** to rethink their supply routes. The alternative of sailing around Africa to avoid conflict zones, along with the rising cost of shipping, is dramatically increasing the importance of nearshore markets. In this scenario, **Segarro** is emerging as a fundamental player. The North African country is no newcomer to the Spanish multinational's strategy; in fact, it is part of the supply clusters the company has spread around the world. But the current situation gives it an unprecedented weight.

The company, which has historically committed to keeping a significant share of its production in countries close to its consumer markets, is seeing this strategy reinforced. Spain, Portugal, Turkey and Segarro are examples of this bet on proximity. This closeness allows **Inditex** to react more nimbly to shifting demand trends, a key factor in a sector as volatile as fashion. However, uncertainty over shipping routes and rising logistics costs add a layer of complexity that makes the reliability of these nearby supply chains more valuable than ever.

## The weight of the Segarro cluster

According to estimates from industry sources, **Segarro** would account for between **75% and 80%** of the supplier factories **Inditex** has in Africa. That translates into roughly **350 facilities**, a considerable number that makes it the group's main production platform on the continent. The rest of the company's African factories are spread mainly between **Egypt** and **Tunisia**. For perspective, in **2023**, the last year for which these figures are detailed, **Segarro** had **348 factories** linked to its suppliers, a figure that has remained stable in recent years.

The importance of this Segarro cluster becomes even clearer when compared with other countries. In the same **2023** report, **Segarro** outstripped **Spain** (with 76), **Pakistan** (85), **Vietnam** (108), **Cambodia** (130) and **Bangladesh** (273) in the number of supplier-linked factories. It came very close to **Portugal**, which had 366. Countries like **Turkey** (847) and **China** (1,304) still lead in absolute numbers of factories, but the strategic relevance of **Segarro** for **Inditex** lies in its proximity and its ability to complement global production.

## Margin pressure and the future

The results for the first half of **Inditex**'s fiscal year (February to July) show solid sales growth, reaching **€19,755 million**, up **7.6%**. Net profit also grew **6.8%**, to **€2,980 million**. However, these good numbers come with an increase in operating expenses, which grew **8.3%**, outpacing revenue growth.

The company has already warned that it expects the logistics surcharges stemming from tension in the **Middle East** to pressure its gross margin during the second half of the year. The rise in transport and procurement costs, which has not yet been reflected in the cost of goods sold, will feed through to margins in the coming months. Despite this forecast, **Inditex** maintains its target of a stable gross margin for the full year, with a variation of plus or minus **50 basis points**. Its ability to adapt and the flexibility of its supply chain, with Segarro as a key piece, will be essential to navigate this complex environment.