French carmaker Peugeot Citroen has committed to building a €557m ($632m) factory in Morocco’s Kenitra province in an agreement that will significantly increase the company’s presence in the Middle East and Africa region.

On 19 June, Peugeot released a statement saying that Morocco’s Industry Minister Moulay Hafid Elalamy and Carlos Tavares, CEO and chairman of the managing board of Peugeot Citroen, have signed an agreement committing Peugeot to the construction of the facility.

The plant will begin producing engines and vehicles as from 2019 and it will have an initial production capacity of 90,000 engines and vehicles, according to the statement.

Its output will ultimately be raised to 200,000 units under current plans.

Peugeot says the construction of the factory in Kenitra will complement existing facilities in Nigeria and Iran.

In a press conference, Tavares reportedly said the facility “will provide us with centrally located production capacity for helping achieve our ambition to sell 1 million vehicles in 2025 in the region”.

Peugeot sold 2.9 million vehicles worldwide in 2014, up by 4.3 per cent from its sales in 2013.

The carmaker says under its current strategy the Africa-Middle East region will become its third-largest profitable growth market.