The International Development of The French Economy in 2016 by Business France in North America

THE INTERNATIONAL DEVELOPMENT OF THE FRENCH ECONOMY 2016 Annual Report: Foreign investment in France

FOREWORD Muriel Pénicaud, Ambassador CEO

for I nternational I nvestment ,

Business France

THE MAJOR BEARING OF MULTINATIONAL FIRMS ON ECONOMIC GROWTH AND EMPLOYMENT IN FRANCE.

oreign investors regularly acclaim France as an attractive and innovative economy. More than one-third (38%) of foreign decision-makers believe France has become an increasingly attractive proposition in recent years, while three-quarters of them now think that France is an attractive destination (74%, up nine percentage points).1

The evidence itself could not be clearer: France is an increasingly attractive investment location. In 2016, three new foreign investments were confirmed on average every day. France attracted 1,117 new job-creating foreign investment decisions in 2016 – up 16% from the previous year – that created or maintained 30,108 jobs. Key to this success were France’s numerous fundamental strengths: its central location, excellent communication and transport infrastructure, industrial prowess in a wide range of sectors, high productivity, and a well-qualified workforce.

In the light of such recognition, France continues to attract investment to ‘strategic’ business activities, and has now been Europe’s leading destination for foreign investment in industry for more than a decade. In 2016, 25% of all investments made by multinational firms in France were in production/manufacturing operations, accounting for 37% of all jobs generated by foreign investment. Examples include the Bolton Group (Italy), which decided to invest €2.5 million to expand its Saupiquet subsidiary in Quimper (Bretagne/Brittany region); Swiss firm Liebherr Aerospace, which manufactures air management systems for the aerospace industry and invested more than €14 million at its plant in Toulouse (Occitanie region); German company Car-ita, a supplier of high value-added fabrics to the automotive and aerospace industries that announced a new production facility in Bitche, near the German border (Grand Est region); and American metal-cutting and storage specialist Castle Metals, which invested US$2 million in a new manufacturing site in Tarbes (Occitanie region) to forge closer ties with its clients in Aerospace Valley.

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Innovation is recognized by business decision-makers to be a driving force behind France’s attractiveness as an investment location, as is the thriving “La French Tech” ecosystem. In 2016, the 155 investment decisions in R&D, engineering and design, including 72 in R&D alone, confirmed this trend.2 Companies making investments such as these include TAS Group, which specializes in software solutions for electronic money and is investing €4 million at its premises in the Sophia-Antipolis Technology Park (ProvenceAlpes-Côte d’Azur region); and German automotive supplier Continental, which set up a new R&D center in Toulouse (Occitanie region) to focus on its work to revolutionize connected vehicles. French startups are increasingly breaking into international markets, and stand out as symbols of France’s innovation prowess and thriving entrepreneurial ecosystems. Meanwhile, their foreign counterparts and other talented people can increasingly be found heading to France to build their businesses. The success of the French Tech Ticket Season 2, with its record-breaking 2,700 applications, highlights how attractive France can be, especially when access to finance is deemed to be second to none in Europe. The number of venture capital deals made in France in 2016 more than doubled to 486, and the US$2.1 billion raised by French tech firms this year reflects the thrilling potential of the French startup scene. Business France is fully committed to helping their businesses develop in France, and internationally, through the Impact accelerator program, which has already seen 34 startups raise a total of US$68 million. This report seeks to shed light on the two ways in which the French economy is becoming increasingly globalized, and the trade and investment synergies that are fueling business development throughout the country. We can see that companies that invest the most regularly in France are also the most active exporters. One example is the Anglo-Swedish company AstraZeneca, which employs 1,500 people in France, including at its asthma medicine plant in Dunkirk (Hauts de France region), which exports 90% of its output. Another is the Danish corporation Novo Nordisk, which exports nearly all the insulin produced by its facility in Chartres (Centre-Val de Loire region). In 2016, as in the previous year, 30% of French exports were made by foreign-owned subsidiaries in France. The 2016 Annual Report illustrates that France is an open country that remains a preferred destination for foreign investment in Europe. Overall, France has shown that it attracts businesses of all sizes, sectors and nationalities, while 2016 was also notable for Germany becoming the largest source of job-creating foreign investment in France for the first time, with 191 confirmed projects. Successful investment projects also require contacts you can trust to provide support and guidance to investors on the ground to see their plans come to fruition. This is the role of Business France, which is responsible for helping foreign investors prosper in France by assisting at every step of the way. I am delighted that my colleagues continue to play their part by working with their regional partners to provide support to 643 investment decisions in 2016. Kantar Public/Business France survey, 2016. Data on R&D activities and headquarters are fully comparable with all previous years, as these investments have always been recorded from the first job created.

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INTRODUCTION / INTERNATIONAL CONTEXT

CONTENTS 6 INTERNATIONAL CONTEXT 10 2016 SUMMARY 20 FOREIGN INVESTMENT IN FRANCE IN 2016 46 INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016 68 FOREIGN INVESTMENT OVERVIEW 142 GLOBALIZATION OF THE PRODUCTION PROCESS 150 FRENCH EXPORTS IN 2016 166 FRANCE: AN EXPORT HUB 172 SMEs AND STARTUPS 180 FRENCH EXPORTS OVERVIEW 204 APPENDICES

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INTRODUCTION / INTERNATIONAL CONTEXT

INTERNATIONAL CONTEXT GLOBAL GROWTH OVERVIEW.

lobal growth was 3.1% in 2016 with strong acceleration in the third quarter. Among developed economies, growth was strongest in the United States. Fiscal stimulus measures in Japan, China and India contributed to the generally positive trend, as did the end of economic contraction in Russia. Advanced economies are estimated to have expanded by only 1.6%. However, after a lackluster first half, the American economy grew 2.5% in 2016, while domestic demand in the United Kingdom also proved more resilient than expected, with growth at 2%. In the euro zone, the economy slowed from 2% in 2015 to 1.7% in 2016. According to estimates prepared by the French National Institute for Statistics and Economic Studies (INSEE), euro zone GDP grew 0.4% in the fourth quarter of 2016 and is expected to continue at this rate in the first half of 2017, supported by solid growth in private consumption and public spending. A strong labor market and another bump in nominal wages looks set to stimulate disposable income, while renewed inflation will somewhat erode purchasing power. Investment should also be a little stronger due to continuing favorable conditions for securing finance. Globally, recovery in both advanced and emerging market economies will in turn stimulate foreign demand. Within the euro zone, growth was steady in Spain (3.2%) and improved in Germany (1.7%). In France, it came in at 1.3%. However, the French economy bounced back in the third quarter of 2016 (+0.2%, up from 0.1%). Manufacturing output recovered (+0.6%, up from 0.1%), and construction made a clear comeback (+0.1%, up from 0.4%). Growth in emerging market and developing economies was 4.1% in 2016. However, this average masks sharp differences. Growth in China (6.7%) was somewhat stronger than predicted as a result of its stimulus policy, but economic activity was weaker than expected in a number of Latin American countries which are currently in recession, such as Argentina (-1.8%) and Brazil (-3.5%).

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GLOBAL TRADE SLOWDOWN CONTINUES Weak trade in the first two quarters of 2016 was due to a fall-off in imports in Asia, South America and other regions (including Africa, the Middle East and the Commonwealth of Independent States), as well as insufficient demand in North America. The slowdown in global demand caused exports to stagnate in developed and developing economies alike. The retreat to protectionism in certain countries, manifested by a large number of new trade-restrictive measures, also slowed global trade in 2016, with world trade volume for goods estimated to have risen by only 1.7%. However, renewed demand from the United States and emerging economies should bring about a clear recovery in exports in 2017 (+3.8%).

FOREIGN DIRECT INVESTMENT According to UNCTAD preliminary estimates, global flows of foreign direct investment (FDI) fell 13% in 2016, to US$1.52 trillion.1 Developing economies were the hardest hit, with a steep decline of 20%. Developed economies remained the primary host countries for FDI, attracting 56% of world FDI (US$777 billion). The United States was the largest recipient of FDI (US$385 billion), followed by the United Kingdom (US$179 billion), China (US$139 billion), Hong Kong (US$92 billion), Singapore (US$50 billion), Brazil (US$50 billion), France (US$46 billion), the Netherlands (US$46 billion), Australia (US$44 million) and India (US$42 billion). While the EU posted a steep decline of 18% in FDI inflows, France saw an increase of around 5%, to US$46 billion, making it one of the top 10 FDI host economies. Cross-border merger and acquisition activity (US$831 billion) remained substantial in 2016, breaking the 2007 record. â&#x20AC;&#x2030; Provisional data based on estimates by UNCTAD, cf. Global Investment Trends Monitor, no. 25, February 2017.

However, in Europe, sales increased at a decidedly slower pace than in previous years. The value of cross-border mergers and acquisitions in developing and transition economies fell sharply (-44% and -55%, respectively).

FIG. 1 Top 10 FDI recipients (2016) US$ billion

385

United States

JOB-CREATING FOREIGN INVESTMENT IN EUROPE

United Kingdom

179

China

139

Hong Kong, China

According to data from fDi Markets, the number of job-creating investment decisions worldwide rose 5% in 2016. With 28% of job-creating foreign investment, Western Europe was the second largest investment market, just after North America (29%) and ahead of Asia (25%), Latin America (7%), Africa (4%) and the Middle East (4%).2

Singapore

Brazil

France 46 Netherlands 46 Australia 44 India 42

Estimates are based on fDi Market data for 2016. Data extracted February 8, 2017.

Source: UNCTAD

SHARE OF JOB-CREATING FOREIGN INVESTMENT PROJECTS IN EUROPE (2016)

Finland

Sweden

Norway

Source: Business France Europe Observatory

Denmark Lithuania

United Kingdom

Netherlands

Ireland

18%

Poland

5% Belgium

11%

Germany

Czech Republic Slovakia 2%

19% France

Switzerland

Austria Slovenia

3% Italy

Hungary 3%

Romania

3% Bulgaria 1%

Spain

Portugal 1%

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INTRODUCTION / INTERNATIONAL CONTEXT

According to data from the Business France Europe Observatory, there were 3,368 job-creating foreign investments in Europe, a 5% increase from 2015.

Foreign companies prioritized investment in production/manufacturing activities (24%) and business services (23%). More than 2,400 foreign companies invested in Europe in 2016. Their presence is notable for its great diversity: the 10 leading companies accounted for only five percent of all investment projects over the year.

The three leading host countries – United Kingdom, France and Germany – accounted for nearly half of all job-creating foreign investment in Europe. France attracted 19% of investment projects in the European market.

With nearly 40 projects reported in 2016, American e-commerce giant Amazon.com continued to expand across the continent, where it now employs over 40,000 people. It created more than 10,000 jobs in Europe in 2016, including in France, Germany and the United Kingdom, its leading European markets.

Intra-European investment flows accounted for more than half of all foreign investment in Europe (53%). American companies, the area’s biggest foreign investors, were responsible for 28% of total investment. Foreign investment in Europe was mainly focused on IT services and software (16%), consulting and engineering (12%), the automotive industry (7%), transport and storage (7%) and financial services (7%).

German corporation Deutsche Post DHL continued to grow and upgrade its European infrastructure in 2016, deciding

to invest €47 million in a new 16,230+ sq. m. campus in Madrid that will centralize its medical and pharmaceutical operations. In France, its DHL Express division invested more than €150 million in upgrading and expanding its logistics platforms in 20152016. Nestlé S.A. is the leading investor in the European agri-food industry, with nearly 50 investment projects recorded between 2008 and 2012. The group is particularly active in France and the United Kingdom. Nestlé S.A. first set up business in France in 1868, opening an agency in Paris to sell milk-based infant food produced by Henri Nestlé in Switzerland. France is home to five of the group’s 29 R&D centers in Europe, and 29 industrial sites. Nestlé’s presence in France continues to grow through a number of decisions to expand its manufacturing operations.

TOP 10 INVESTORS IN EUROPE Parent company

Source country

Main sector

Schwarz Beteiligungs KG

Germany

Amazon.com

Global turnover (US$bn)

Number of projects

Main recipients

Employees worldwide

Commerce and retail

France, United Kingdom

141.25

350,000

United States

Commerce and retail

France, United Kingdom

93.61

154,126

Deutsche Post DHL Group

Germany

Transport, storage

France, Netherlands

55.66

490,000

Ryanair

Ireland

Transport, storage

Germany, Romania

5.48

3,063

CGI Group, Inc.

Canada

Software and IT services

France, United Kingdom

7.06

68,000

Continental AG

Germany

Automotive industry

Romania, France

36.69

207,899

Nestlé S.A.

Switzerland

Agri-food

France, United Kingdom

82.76

339,000

Bertelsmann SE & Co.

Germany

Other services

Netherlands, United Kingdom

17.73

117,249

Ekol Lojistik A.S.

Turkey

Transport, storage

Poland, Spain

478.79

4,321

Hennes & Mauritz

Sweden

Textiles and clothing

France

19.42

104,634

Source: Business France Europe Observatory; Forbes

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STATISTICAL DISPARITIES SURROUNDING FOREIGN INVESTMENT IN FRANCE Ever since the second half of the 1980s ushered in an era of increasingly rapid globalization in the world economy, foreign direct investment has been at the heart of global industrial restructuring and one of the most dynamic components in international trade. Until recent times, most of the information available on an international basis concerning foreign investment pertained to flows and stocks of investment recorded in each country’s balance of payments.

>  Foreign

direct investment

According to the benchmark definition of foreign direct investment provided by the OECD, in line with the IMF’s Balance of Payments Manual: “Direct investment is a category of cross-border investment made by a resident in one economy (‘the direct investor’) with the objective of establishing a lasting interest in an enterprise (‘the direct investment enterprise’) that is resident in an economy other than that of the direct investor. The motivation of the direct investor is a strategic long-term relationship with the direct investment enterprise to ensure a significant degree of influence by the direct investor in the management of the direct investment enterprise. The ‘lasting interest’ is evidenced when the direct investor owns at least 10% of the voting power of the direct investment enterprise…” FDI flows comprise a wide variety of transactions. In addition to share capital transactions and reinvested earnings, direct investment encompasses all short- and long-term deposits, advances and loan transactions between affiliated companies. The end purpose of some of these financial flows is identical to that of share capital transactions: this is the case, for example, when a parent company makes out a loan to a non-resident subsidiary to cover an expansion in output capacity. However, other financial flows arise from fiscal considerations, involving the establishment by multinational firms of holding companies and treasury centers in a number of European countries for tax purposes. As such, globalization and the growing international footprint of companies have contributed to a surge in short-term transactions and the heightened volatility of foreign direct investment flows. UNCTAD collects and aggregates FDI flow

data provided by central banks without differentiating between the various components of these flows. Accordingly, no distinction is made between tax avoidance by businesses (intra-group loans) and new investment sites (share capital transactions in the strict sense of the term). Furthermore, the financial flows arising from internal loans made by multinational firms (intra-group loans) frequently comprise any number of transactions in both directions, inward and outward, which offset each other during the course of the year. The major fluctuations in intra-group loans render FDI flows extremely volatile. Annual estimates by the Banque de France are made using the “extended directional principle” methodology, now recommended by both the IMF and the OECD, which provides a more realistic economic picture of these transactions. It involves adjusting for intra-group loans so as to obtain a single annual net figure for each multinational group, instead of recording each and every transaction, which are often offset by one another, throughout the year. The Banque de France is one of the few central banks to apply the extended directional principle, thereby limiting the impact that intragroup loans between subsidiaries have on FDI flows. For this reason alone, any form of international comparison would be inappropriate at the current time.

>  Data

concerning crossborder mergers and acquisitions

These statistics are mainly compiled by private consulting firms (e.g. Thomson Reuters, Zephyr), indicating the number of companies which have been acquired by foreign firms and the financial sums involved.

>  Data

concerning the presence of foreign businesses in France

The French National Institute for Statistics and Economic Studies (INSEE) draws on the “Financial Links Between Companies Survey” (“LiFi”) conducted among businesses in France to compile its statistics on the economic activity of foreign subsidiaries in the country. A threshold of 50% of the voting rights or capital stock is set to establish whether or

not a business is foreign-owned. ESANE statistics combine administrative data (obtained from annual corporate profit declarations provided to the French tax authorities and from annual social security data containing payroll information) with data obtained from a sample of companies surveyed by questionnaire to produce structural business statistics. These databases contain data on foreign-owned resident company employment, turnover, investment in tangible assets and foreign trade.

>  Physical

job-creating investment

The need to assess the role and impact of direct investment, not only in financial terms but also on employment, has highlighted the prerequisite nature of accompanying data on the microeconomic activity of multinational firms. Through an analysis of individual company data, the diversity of businesses in the French economy can be more fully understood. The Annual Report on Foreign Investment in France is a method for analyzing foreign investment projects and their contribution to the French economy. Established in 1993 in partnership with France’s regional economic development agencies, the Annual Report provides a summary of all foreign investment projects creating sustainable employment in France, listing confirmed projects and detailing the number of jobs that each project generates. It provides detailed statistical analysis by business sector, business activity, investment type, source country, and host region. Data concerning the amounts involved in specific investment projects are not always made available by companies, and so form no part of the analysis. At a European level, Business France conducts an observatory of job-creating foreign investment across the continent, as do private organizations such as fDi Markets and EY. This involves recording all confirmed investment decisions that have been announced as such in the press. These databases provide detailed statistics by business sector, business activity, investment type, source country and host region.

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2016 SUMMARY

Foreign investment in France

1,117

30,108

PHYSICAL INVESTMENT DECISIONS

21 INVESTMENT DECISIONS / WEEK

JOBS

created or maintained

16%

INCREASE IN INVESTMENTS IN 2016

SITE CREATIONS LED THE WAY:

NUMBER OF PROJECTS AND JOBS BY INVESTMENT TYPE

CREATION

EXPANSION

452 projects

569 projects

11,520 12,391 jobs

jobs

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TAKEOVER

projects

6,197 jobs

51%

OF DECISIONS WERE INVESTMENTS AT NEW SITES

STRATEGIC INVESTMENTS PRODUCTION/MANUFACTURING, R&D, BUSINESS SERVICES, CONSUMER SERVICES, LOGISTICS AND DISTRIBUTION, RETAIL OUTLETS, DECISION-MAKING CENTERS, HEADQUARTERS.

TOP 3 BUSINESS ACTIVITIES

MANUFACTURING

CENTERS

280

266

in 2016

INCREASE IN 74 / GLOBAL projets EUROPEAN HEADQUARTERS

210

projects

27in 2015

BUSINESS SERVICES projects

R&D/ENGINEERING

MANUFACTURING

32%

25%

increase in R&D/ engineering investments…

of the investments recorded in the Annual Report were in production/manufacturing…

accounting for

10%

OF INVESTMENTS

generating

37%

of all jobs.

SOURCE OF INVESTMENT PROJECTS TOTAL OF 51 SOURCE COUNTRIES, UP FROM 47 IN 2014

62% EUROPE

17%

GERMANY

20%

16%

UNITED STATES

NORTH AMERICA

13%

ITALY

8% 6%

UNITED KINGDOM

12% ASIA

JAPAN

INVESTMENT DECISIONS FROM ITALY (+68%) AND GERMANY (+35%) ROSE SHARPLY.

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2016 SUMMARY French exports

FRENCH GOODS EXPORTS (2016)

TOP 5 EXPORT DESTINATIONS

GERMANY

€453

16.1% SPAIN

7.5%

BILLION *

UNITED STATES

7.4% ITALY

7.3% UNITED KINGDOM

7.1%

*Source: French Customs Authorities. Estimated FOB/FOB gross data, including military hardware.

TOP 4 GOODS EXPORT SECTOR GROUPINGS Transport equipment

24%

Chemicals, perfumes and cosmetics

Capital goods

19.2%

Food products

BUOYANT EXPORT MARKETS IN 2016 MARKETS DRIVING FRENCH EXPORTS IN EUROPE

FRENCH EXPORTS UP IN VARIOUS ASIAN MARKETS

Switzerland +11%

India +23% Hong Kong +19% Singapore +15%

Portugal +7.4% Poland +6% Spain +2% Italy +1.4%

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11.7% 10%

124,100 EXPORTING COMPANIES IN FRANCE

FRANCE: THE WORLDâ&#x20AC;&#x2122;S

SME EXPORTS

up 2.1%

BREAKDOWN OF EXPORTS BY COMPANY SIZE

MID-SIZE COMPANIES

32%

54% LARGE CORPORATES

14% SMEs

LARGEST EXPORTER OF SERVICES

EXPORTS BY FOREIGN COMPANIES IN FRANCE THE CONTRIBUTION OF FOREIGN COMPANIES IN FRANCE:

30%

34%

OF MANUFACTURING EXPORTS

MORE THAN 12,000 FOREIGN-OWNED SUBSIDIARIES EXPORT FROM FRANCE, OR 10% OF ALL EXPORTING COMPANIES IN FRANCE

OF GOODS AND SERVICES EXPORTS

25%

TOP 5 SOURCE COUNTRIES OF FOREIGN-OWNED EXPORTERS

OF FOREIGN SUBSIDIARY TURNOVER IN FRANCE GENERATED IN OVERSEAS MARKETS

29% UNITED STATES 14% GERMANY 8% LUXEMBOURG 8% SWITZERLAND 8% NETHERLANDS

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INTRODUCTION / 2016 SUMMARY

2016 SUMMARY NEW INTERNATIONAL BUSINESS DEVELOPMENT STRATEGIES ARE EMERGING TO TAKE FULL ADVANTAGE OF GLOBAL VALUE CHAINS.

ranceâ&#x20AC;&#x2122;s place in a globalized world can be appreciated in three different ways: on a commercial level, through trade in goods and services with other countries; on a physical level through multinational French firms and foreign companies operating in France; and on a financial level, through the free movement of capital. France boasts a number of key advantages and capabilities that ensure it remains central to the global economy, not only for attracting foreign talent and investment, but also for the success of its products in markets throughout the world.

INTERNATIONAL BUSINESS DEVELOPMENT STRATEGIES GREATER CROSS-BORDER TRADE AND INVESTMENT Greater international competition, at a time when new technology is increasingly driving micro-management of value chains, is leading to new strategies to outsource operations both pre- and post-production. Lower transport costs, progress in information and communications technology, and more mobile production factors have combined to make it easier to fragment production processes.

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Today, company operations, from product design, component production and product assembly to marketing, have spread across the globe, creating international production chains. Companies can spread their productive activities across several countries to exploit various comparative advantages, thereby improving their competitiveness. As such, the strategic behavior of firms in a global marketplace no longer boils down to a binary choice between exporting and making investments abroad. The large increase in intra-group trade between parent companies and foreign subsidiaries is symptomatic of a more complex strategic relationship. The globalization of value chains has intensified cross-border investment and cross-border trading in parts and components, intermediate goods and finished products. In this trading structure, goods produced in one economy and exported to a different end market involve inputs from other economies, which in turn source inputs from yet other economies. The growth of trade is due mainly to this back-and-forth of intermediate goods, which cross borders several times before the finished products and services are sold to end consumers.

GOING GLOBAL EXPANDS GROWTH OPPORTUNITIES FOR FRENCH FIRMS Multinational firms stand out from their domestic peers due to the key strengths that make them more competitive and lead to better performance in foreign markets.1 Adding an international dimension makes companies stronger. It is clear that natural selection is at work when successful businesses develop overseas, going on to benefit from the positive effects inherent in their multinational expansion as they tap into new markets, broaden the scope of their products or services, seek to innovate to remain competitive, manage what they produce more flexibly, play a greater role in society, offer better rewards to their employees, and thrive on the back of international recognition. Building a pan-European or worldwide presence can also become a pre-requisite for firms to enjoy the same economies of scale as their competitors, while remaining able to respond rapidly to changes in demand. The estimated 13% fall in global foreign direct investment (FDI) in 2016 to US$1.53 trillion – which was mainly felt in developing countries through a steep decline of 20%, compared with a 9% fall in developed countries – should not be thought to have arisen from a slowdown in multinational firm activity. This in fact rose in 2016, as multinational revenues (+7.4%) and assets (+6.5%) both grew more quickly than those of their domestic counterparts, creating US$7.9 trillion in value added, while a total of 79 million people work for a multinational overseas subsidiary.

FOREIGN INVESTMENT’S CONTRIBUTION TO ECONOMIC DEVELOPMENT IN FRANCE Foreign investment contributes to economic development in host countries, and generates significant positive externalities, through job creation, productivity gains, technology and knowledge transfers, to name but a few. As such, it is considered to be a key driver of growth and economic development, and this is why many governments around the world have introduced policy to attract inward FDI. The French economy is very open to foreign investment. At the end of 2014, the French National Institute for Statistics and Economic Studies (INSEE) recorded 22,571 foreign subsidiaries in France, employing nearly 1.8 million people, or 12% of the workforce outside the agriculture, financial and government sectors (approximately one in eight employees). INSEE data states that foreign subsidiaries: • Provide jobs for 12% of the workforce in France • Generate 19% of all turnover in France • Generate 30% of all French exports This open nature is more pronounced in the manufacturing sector. According to INSEE, foreign subsidiaries: • Provide jobs for 21% of the manufacturing sector workforce in France • Generate 25% of all French manufacturing turnover • Generate 34% of all French manufacturing exports

Multinational firms operate in several countries, whereas domestic firms only operate in a single market.

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INTRODUCTION / 2016 SUMMARY

FRANCE: AN INCREASINGLY ATTRACTIVE INVESTMENT LOCATION FRANCE ATTRACTED 1,117 NEW FOREIGN INVESTMENT DECISIONS IN 2016, CREATING 30,108 JOBS Foreign investment decisions in France were up 16% from 2015. On average, 21 new investment projects were confirmed by foreign investors every week. In 2016, the number of decisions to invest at new sites in France grew 20% to 569, accounting for 51% of all investment projects and 38% of all jobs generated. While site creations reflect Franceâ&#x20AC;&#x2122;s attractiveness as an investment location, expansion projects are a sign of the confidence that foreign-owned subsidiaries already set up in France have in the country. There was a 15% rise in the number of expansion projects confirmed in 2016 (452 investment decisions), and these projects mostly involved production/manufacturing operations (40%). Jobs generated by new and expanded sites accounted for more than three-quarters of all jobs generated by foreign investment. European investments continued to hold the upper hand in 2016: 62% of confirmed jobcreating foreign investments in France originated in other European countries, followed by North America (20%) and Asia (12%). The leading source countries of companies investing in France were Germany (17%), the United States (16%), Italy (13%), the United Kingdom (8%), and Japan (6%). Many countries posted higher project numbers than the previous year, with the largest increases in investment decisions involving companies from Italy (+68%) and Germany (+35%).

NEW INVESTMENT DECISIONS IN STRATEGIC ACTIVITIES Foreign firms are eager to invest in French manufacturing. In 2016, a total of 280 investment decisions were made in production/ manufacturing operations in France, amounting to 25% of all foreign investments. The importance of such projects can be seen by the fact that these activities were also the leading contributor to employment, with 11,271 jobs, or 37% of all jobs generated by foreign investment. Confirmed production/manufacturing investments mostly involved expanding existing production facilities in France (65%) and new sites (16%). Investments in production/manufacturing in France confirmed by American, Belgian, British, German and Italian companies amounted to 62% of all such investments. Moreover, the number of investment decisions involving global and European headquarters based in France rose sharply from 27 in 2015 to 36 in 2016, as did those involving French headquarters, rising from 24 to 34. The location a company chooses for its headquarters generally makes it more likely that other high value-added operations, such as research laboratories, will follow to the same area. Headquarters require a highly qualified workforce, and can employ a few hundred people in major corporations, depending on the business sector and scope for decisionmaking It therefore becomes important for regions to remain competitive should they wish to attract, consolidate and retain economic activity. The number of foreign investment projects in R&D,2 engineering and design boosted entrepreneurial momentum in 2016, with 115 investment decisions, including 72 in R&D alone. Beyond their impact on growth, R&D operations supply highly qualified jobs that generate high value added and are generally more stable than manufacturing jobs.

Data on R&D activities and headquarters are fully comparable with all previous years, as these investments have always been recorded from the first job created.

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Innovation is recognized by business decisionmakers to be a driving force behind France’s attractiveness as an investment location, as is the thriving “La French Tech” ecosystem. France is also deemed to be particularly attractive when judged on human capital criteria, with its well qualified R&D personnel and research partnerships with academia being looked on favorably by foreign decision-makers.

R&D, engineering and design accounted for 10% of all foreign investment decisions in 2016, generating nine percent of all jobs created in France by foreign investors. Investments in R&D operations mostly involved setting up new R&D or engineering centers. The United States (26%), Germany (19%) and Italy (10%) were together responsible for more than half of all foreign R&D, engineering and design investments in France in 2016.

FIG. 1 Inward R&D investments in France (2001-2016)

120

115

100 91 87

51 41

30 23

2001 2002 2003 2004 2005 2006 2007

2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Business France

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INTRODUCTION / 2016 SUMMARY

FRANCE’S EXPORT PERFORMANCE Globalization in recent years has been notable for the rapid integration of leading emerging economies, such as China, India, Brazil and Singapore. This phase has resulted in lower global market shares for developed countries. The share in global exports of goods exported by European Union countries fell from 45% in 1990 to 33% in 2015, while China advanced from 2% to 14%. In this context, France’s market share crept down until 2012 before levelling out in 2015 at 3.1% of global goods exports and 3.5% of goods and services exports. According to initial estimates, France had a 3.3% global market share of goods exports in the first half of 2016. A similar pattern can be discerned for all of France’s European neighbors except Germany, whose global market share started to recover in 2013 but remains some way below its pre-crisis level. By way of comparison, Germany and the United Kingdom accounted for 8.1% and 2.8%, respectively, of global goods exports in 2015. French goods exports levelled out at €453 billion3 in 2016 (0.6%) after healthy growth in 2015, while goods imports amounted to €501.1 billion (+0.1%). These figures come in the wake of a slowdown in global trade, which grew by 1.9% in real terms in 2016, versus 2.7% in 2015, according to the IMF.

NUMBER OF REGULAR EXPORTERS UP AGAIN IN 2016 According to the French Customs Authorities, 124,100 companies in France exported goods to international markets in 2016. 4 Around 28,500, or 23%, were newcomers to international trade. Two-thirds of these new exporters were classified as first-time exporters (companies not having exported in the last five years). The list of exporters changes significantly from year to year. Every year, nearly one-quarter are first-time exporters, while a similar number cease exporting. However, since 2012 many

18 / 2016 ANNUAL REPORT - BUSINESS FRANCE

more companies have remained on the list for two years in a row. The number of companies exporting for at least two years once again rose by 2% in 2016, while the number of companies exporting every year for at least five years increased by 1.2%. This positive trend confirms that more and more French companies are taking advantage of foreign market opportunities and staying in the export market.

SMES AND MID-SIZE COMPANIES OUTPACE LARGE COMPANIES IN 2016 The French export industry was dominated by SMEs in company numbers (95%) and by large and mid-size companies in export value (86%). Despite constituting the vast majority of exporters, SMEs and micro-enterprises contributed only 14% of export value in 2016. The proportions were reversed for large companies, which accounted for only 0.4% of exporters but generated 54% of export value. Mid-size companies (entreprises de taille intermédiaire – ETI) made up 4% of exporting companies while accounting for one-third of export value. Analysis of French exporters by company category reveals different trends depending on the size of the exporters. The number of midsize companies in 2016 edged up 0.3% (0.1% increase in export value), while the number of large companies slipped 0.6% (1.6% decrease in export value). The SME category proved the most dynamic, with export value up 2.1% in spite of a slight fall in the number of exporters (-0.7%). In 2016, SMEs exported on average to six or seven countries, even though onequarter of their number exported to only one country.

Source: French Customs Authorities. Estimated FOB/FOB gross data, including military hardware. This section is based on data and results from the French Customs Authorities report on the French export industry published in February 2017.

FRANCE IS A GLOBAL LEADER IN A NUMBER OF ITS SECTORS OF EXCELLENCE French exports are most concentrated in high value-added sectors. Four sectors accounted for two-thirds of exports in 2016: transport equipment (24% of the total); capital goods (19.2%); chemicals, perfumes and cosmetics (11.7%); and food products (10%). The economic turmoil over the past decade has affected the sector-specific composition of French exports, which is increasingly dominated by more high-tech exports. Today, French exports are concentrated in mid-range and high-end products, led by aviation and pharmaceuticals. Driven by increased global demand for airliners, aerospace industry sales climbed from 8.3% of French exports in 2007 to 13.1% in 2016. Similarly, pharmaceutical exports rose from 5.4% in 2007 to 6.6% in 2016. These sectors have the advantage of being less sensitive than others to competition and price (price elasticity).

EXPORTING REGIONAL EXPERTISE French exports are the work of companies and industries located throughout France. In 2016, two-thirds of French export sales came from five of France’s 13 regions: Ile de France (Paris region) (19%), Grand Est (13.5%), AuvergneRhône-Alpes (12.8%), Occitanie (12.4%) and Hauts de France (10.3%). Some regions clearly specialize in specific sectors. More than threequarters of exports from Occitanie (south-east France) in 2016 were in the aerospace industry, while more than one-third of Brittany’s exports were in the food sector. In the north and east of France, automotive exports predominated, while in Nouvelle-Aquitaine (south-west France), 18.5% of exports were beverages, driven by the wine industry. Provence-Alpes-Côte d’Azur, Auvergne-Rhône-Alpes, Centre-Val de Loire and Normandie all specialize in chemical and pharmaceutical exports.

France’s global export share is 16.6% in the aerospace industry, 15.9% in beverages and spirits, 13.8% in perfumes and cosmetics, 9.2% in dairy products, 8.5% in leather goods and handbags and 6% in pharmaceuticals. These figures reflect both international recognition of its traditional expertise in wines, champagne, cheese and leather goods, for example, and the competitiveness of its cutting-edge and hightech industries, such as aerospace, chemicals, cosmetics and pharmaceuticals. In 2015, France was the world’s leading exporter of beverages, along with perfumes and cosmetics. It was second only to the United States in aerospace, and was the third largest exporter of leather goods. With regard to food other than beverages, France was the second largest exporter of cereals and the fourth largest exporter of dairy products.

2016 ANNUAL REPORT - BUSINESS FRANCE / 19

FOREIGN INVESTMENT IN FRANCE IN 2016 22 PROJECTS AND JOBS 24 SOURCE COUNTRY ANALYSIS 27 BUSINESS ACTIVITY ANALYSIS 33 BUSINESS SECTOR ANALYSIS 37 INVESTMENT TYPE ANALYSIS 40 FINANCIAL INVESTMENTS

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

PROJECTS AND JOBS THE NUMBER OF NEW INVESTMENT DECISIONS IN FRANCE REMAINED HIGH IN 2016.

16% INCREASE IN JOB-CREATING FOREIGN INVESTMENTS

mid sluggish growth worldwide, France remained attractive to foreign investors in 2016, attracting 1,117 new investment decisions that created 30,108 jobs. [Fig.1 & 2]

FIG. 1 Change in number of projects in France since 2006 Wider criteria

1,200

1,117

1,100 1,014

1,000

962

800

Average number of projects (2006-2016): 701

700 600 500 400 300

665

624

641

639

782

698

693

685

740

734

814

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

200

Source: Annual Report, Business France

900

100 0

AVERAGE PROJECT SIZE VARIES BY NATURE OF OPERATIONS The average number of jobs created or maintained per project nationwide was 27, a similar level to 2014. > Very job-intensive production/manufacturing operations: Confirmed investments such as these created 40 jobs on average. The average number of jobs per project for operations like these in the automotive industry (43), aerospace equipment (119), textiles (113) and agri-food (35) sectors was markedly higher than the nationwide average.

> A buoyant business climate: The number of investments involving business services rose 17% to 210 projects, leading to the creation of more than 4,000 jobs.

> France’s attractiveness as a business location can be seen by the sharp increase in the number

FIG. 2 Change in number of jobs generated since 2006 FIG. 3 Breakdown of jobs created or maintained per project (2016)

40,000

Average number of jobs (2006-2016): 30,810

35,000

33,682

26,535

25,000 39,998 34,517

31,932

29,889

31,815

27,958

25,908

29,631

25,478

32,770

29,015

20,000 15,000 10,000 5,000

Source: Annual Report, Business France

30,108

30,000

6% 19% 35%

34% 0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: Annual Report, Business France

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Jobs created or maintained

■ 400 and over ■ 200 to 399 ■ 100 to 199 ■ 50 to 99 ■ 20 to 49 ■ 10 to 19 ■ Less than 10

of first-time investments in France and Europe, up 32% and 13%, respectively, from 2015.

GROWING CONTRIBUTION OF LARGE CORPORATES TO EMPLOYMENT A breakdown of projects by parent company size in 2016 reveals the following: large corporates (more than 5,000 employees) were responsible for 39% of all projects, mid-size companies (250 to 5,000 employees) for 32%, and SMEs (fewer than 250 employees) for 28%. The contribution made by large corporates to employment grew sharply last year to account for a clear majority (61%) of all jobs created.

FIG. 4 Breakdown of projects by parent company size (2016)

FRANCE

Iris Ohyama FURNISHINGS, HOUSEHOLD GOODS

Japanese household goods company Iris Ohyama announced it would be setting up a new plastic furniture production facility and logistics center on the outskirts of Paris in Lieusaint (Ile de France region). Iris Ohyama products are already sold in France by a wide variety of mass retailers. The investment, estimated to be worth more than €40 million, is due to create a hundred jobs by 2018, and enable Iris Ohyama to respond to growing demand from its customer base in Europe.

Costco

Mid-size companies 32%

COMMERCE AND RETAIL SMEs

0 to 249 employees

Mid-size companies

Large corporates 39%

They chose

250 to 5,000 employees

Large corporates

More than 5,000 employees

SMEs 28%

Source: Annual Report, Business France

American wholesaling giant Costco, which posted revenues of US$118 billion in 2016, ventured into the French market with its warehouse club concept aimed at both business users and consumers, choosing Villebon-sur-Yvette (Ile de France/Paris region) as the location for its French headquarters and very first outlet in France. The new store, spanning over 12,000 sq. m., is scheduled to open in spring 2017 and will employ 280 people.

RECORDING PHYSICAL INVESTMENTS FROM THE FIRST JOB CREATED The Annual Report examines all foreign investment projects that create or maintain jobs in France, and details the number of jobs that each project generates. It provides detailed statistical analysis by business sector, business activity, investment type, source country and host region. Until 2013, and in contrast with practices at other investment promotion agencies in Europe, or at private consulting firms, only projects creating at least 10 jobs were recorded in the Annual Report, with the exception of: >  First-time investments in Europe by non-European investors. >  Projects in high value-added sectors (research and development, design, engineering, headquarters, business consulting (financial and legal advice, training, etc.). With a view to providing a clearer picture of the competitive environment and the realities of job-creating foreign investment in France, Business France decided from 2014 onwards to include all investment decisions from the first job created.

2016 ANNUAL REPORT - BUSINESS FRANCE / 23

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

SOURCE COUNTRY ANALYSIS EUROPEAN COMPANIES LED THE WAY AMONG INVESTORS.

oreign investments were received from 51 different countries in 2016, with European investments continuing to hold the upper hand: 62% of confirmed jobcreating foreign investments in France originated in other European countries, followed by North America (20%) and Asia (12%). [Fig.5]

companies from Italy (+68%) and Germany (+35%).

FIG. 5 Breakdown of projects by source region (2016) Other 5% Asia 12%

LEADING SOURCE COUNTRIES The leading source countries of companies investing in France in 2016 were Germany (17%), the United States (16%), Italy (13%), the United Kingdom (8%), and Japan (6%).

North America 20%

INVESTMENTS RECEIVED FROM 51 DIFFERENT COUNTRIES.

Many countries posted higher project numbers than the previous year, with the largest increases in investment decisions involving

Europe 62%

Source: Annual Report, Business France

They chose FRANCE Nacatur MEDICAL EQUIPMENT AND DEVICES

Nacatur is an Italian SME that produces and distributes medical devices for hospital personnel, including protective equipment for use in surgery, and infusion sets. This fast-growing firm is very innovation-focused, not only conducting its own R&D, but also providing a number of subcontracted research and design services for major

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European medical companies. Its technological feats include a safety syringe with a retractable needle to protect nursing staff from needlestick injuries, and an infusion kit for use by cancer patients, who need to receive various injections in succession, without merging any of the substances. After Italy and Spain, Nacatur’s founder, Stefana Navarra, has her eyes set on the French market, with a subsidiary based in Entraigues-sur-la-Sorgue (Provence-

Alpes-Côte d’Azur region), and has set herself two years for Nacatur France’s headquarters to firmly establish itself. The location, not far from Avignon, is ideal from a strategic viewpoint, between Italy and Spain and within easy reach of Europe’s second largest port in Marseille, where containers arrive fully loaded with Nacatur’s high-spec medical devices. This first-time investment in France worth €1.5 million will create 20 jobs.

They chose

Germany became the leading source country for investment in France in 2016, with 191 projects equating to 17% of foreign investments and 16% of jobs generated. German firms were among the main contributors to production/ manufacturing operations, accounting for 19% of all foreign investment decisions and 17% of jobs generated.

FRANCE

Amazon.com COMMERCE AND RETAIL

LEADING SOURCE COUNTRIES FOR FOREIGN INVESTMENT IN FRANCE (2016) Number Country

Projects

Germany

191

4,737

17.1%

15.7%

United States

182

6,802

16.3%

22.6%

Italy

141

3,228

12.6%

10.7%

United Kingdom

3,713

7.6%

12.3%

Japan

1,490

6.0%

4.9%

Belgium

743

4.7%

2.5%

China

1,370

4.6%

0.4%

0.2%

Spain

715

4.0%

2.4%

Canada

608

3.8%

2.0%

Switzerland

1,028

3.8%

3.4%

Netherlands

800

3.2%

2.7%

Sweden

500

2.2%

1.7%

Denmark

550

1.6%

1.8%

Austria

310

1.5%

1.0%

India

171

1.0%

0.6%

Ireland

372

1.0%

1.2%

Tunisia

129

0.8%

0.4%

Luxembourg

0.7%

0.2%

Russia

108

0.7%

0.4%

Norway

166

0.6%

Morocco

220

0.5%

0.7%

Hong Kong

Jobs

Share Projects

Jobs

Finland

165

0.4%

0.5%

United Arab Emirates

0.4%

0.1%

Israel

0.4%

0.1%

Other

2,052

4.2%

6.8%

TOTAL

1,117

30,108

100%

American e-commerce giant Amazon announced that it would be opening a fifth distribution center in France in September 2017. The location chosen, in Boves just outside Amiens (Hauts de France region) will be its largest fulfilment center to date in France, with a surface area of 107,000 sq. m. The investment will lead to the creation of 500 new jobs on permanent contracts over three years once the site is up and running. Amazon also spent the year expanding existing facilities in France, hiring 500 people at its warehouse in LauwinPlanque (Hauts de France), 300 in Saran, near Orléans (Centre-Val de Loire), 200 in Sevrey (Bourgogne-Franche-Comté), 150 in Montélimar (Auvergne-Rhône-Alpes), and 100 in Paris (Ile de France) as part of the roll-out of its new “Prime Now” service.

Tiernahrung Deuerer GmbH AGRI-FOOD

German pet food manufacturer Deuerer Pet Care invested €20 million in an expansion of its facility in Villeneuve-sur-Lot (Nouvelle Aquitaine region), which involved setting up a 10,000 sq. m. automated production line for a new premium range of singleserving cat and dog food. Deuerer is the leading firm in its field in Europe, and the seventh largest in the world, employing 160 people already at its French site, which is designed to serve southern Europe for Deuerer’s range of moist pet food. The investment will generate 25 new jobs.

2016 ANNUAL REPORT - BUSINESS FRANCE / 25

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

They chose

FRANCE xRapid

MEDICAL EQUIPMENT AND DEVICES

xRapid is a British startup that has developed a mobile phone application to provide faster, more accurate diagnoses of a number of serious tropical diseases, including tuberculosis and malaria. Its technology requires only the processing power and image recognition of an iPhone to identify the shapes and colors of the parasites responsible for these illnesses. The uncertainty created by Brexit led the directors of this recently founded startup to locate their new R&D center in the south of France: “The fact that there are engineering training programs in this region and solid talent pools in healthcare tipped the balance, despite the fact that we also looked into setting up in Portugal or Ireland,” says co-founder Jean Viry-Babel. The fledgling firm has made its new home on the École des Mines campus in Gardanne, outside Aix-en-Provence, but is also planning to establish a production line on the Luminy campus, just south of Marseille. xRapid intends to invest €1.5 million in R&D equipment, and expects to hire twenty to thirty people by the end of 2017.

TCL Communication CONSUMER ELECTRONICS

TCL Communication, a subsidiary of TCL Corporation, is a Guangdong-based Chinese company specializing in the design, production and sale of mobile telephones, tablets and mobile WiFi devices. In 2015, to expand its research and development horizons, the company established a 5G research laboratory in Paris. It returned last year to France to open a second 5G center at the Sophia Antipolis technology park on the French Riviera, where it joins one of its partners, French chipmaker Sequans Communications, which recently announced a new research facility. TCL recently became a strategic member of the OpenAirInterface Software Alliance, created by EURECOM and other industry players like Ercom and Orange to develop open-source 5G software. The alliance combines and coordinates the 5G efforts of multiple partners worldwide while creating an innovation epicenter in France at Sophia Antipolis. This project will create 10 jobs in France.

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The United States was the chief provider of jobs: with 182 investment decisions, equating to 16% of all job-creating foreign investment recorded in France and 23% of jobs generated. American firms stood out for their commitment to research and development: with 31 investment projects, the United States accounted for more than one-quarter of all inward R&D investments and 42% of jobs generated in this area. Italian investment in France was particularly buoyant in 2016, as investments soared 68% from the previous year, ranking Italy third, with 141 investment decisions accounting for 13% of projects and 11% of jobs generated. Italian firms stood out particularly for production/manufacturing investments, which amounted to 15% of all foreign investments in this field. The United Kingdom was the fourth largest foreign investor in France in 2016, with 85 projects. British investors were responsible for 12% of all jobs generated by foreign investment, and were particularly active with retail outlets, accounting for 24% of all investments in this area. Leading investments involved names such as Action France, Castorama, and Primark, all drawn to France by strong domestic demand. Japanese investments in France rose in 2016, ranking Japan first among Asian source countries and fifth among all source countries with 67 investments decisions. More than half of all Japanese investments involved high valueadded activities in production/manufacturing, headquarters and R&D. The number of investments from BRIC nations (Brazil, Russia, India and China) in France remained steady in 2016. With 73 investment decisions, they collectively accounted for seven percent of all inward investment in France. However, the structure of their business activities continues to change, with an increase in R&D operations amounting to 19% of all BRIC investments in France. Chinese and Indian investment represented 68% and 16%, respectively, of all projects confirmed in 2016 by BRIC companies in France.

BUSINESS ACTIVITY ANALYSIS FRANCE IS AN INCREASINGLY ATTRACTIVE INVESTMENT LOCATION, AS SEEN BY THE SIGNIFICANT NUMBER OF NEW INVESTMENT DECISIONS IN STRATEGIC ACTIVITIES.

he operations of companies can be broken down into a variety of business activities: production/manufacturing, research and development, business services, consumer services, logistics and distribution, retail outlets, decision-making centers and headquarters.

INCREASING SHARE OF HEADQUARTERS PROJECTS Registered offices, Strategy divisions, Financial departments, R&D centers, operational divisions like Marketing and Sales departments – all of these are parts of companies with involvement in decision-making processes. For multi-national corporations, fragmented decision-making structures have become a necessity, replacing the single-site pyramidal decision-making structures of yesteryear. As companies become global, they have had no choice but to create regional decisionmaking centers, as a result of which decisionmaking power is now dispersed across large distances. At multinational firms with numerous sites in Europe, the activities carried on by decision-making centers can include acting as:

NEW HEADQUARTERS ARE ACTIVITIES THAT CREATE VALUE.

> A Global or European Headquarters, covering perhaps not only Europe, but also northern Africa and the Middle East.

> A French Headquarters, responsible for coordinating all a foreign company’s activities in France. Headquarters can be defined as internal structures with a leader and team responsible for making strategic decisions that have a bearing on all or part of the company, particularly regarding investment and jobs. Business France also includes first-time investments in France or Europe under the decision-making center category. These investments comprise all services or commercial activities designed to secure a foothold and establish a business in France, or more widely across Europe; the structures are generally smaller in size and are designed for operations of this scope to be run from France. Activities such as those described above create value – directly or indirectly – and are vital to the regions in which they are based. Firstly, headquarters require a highly qualified workforce, and can employ anywhere from a few hundred to a few thousand people in major corporations, depending on the business sector and scope for decision-making. Secondly, where a company decides to locate its headquarters makes it more likely that other operations, such as research laboratories, will follow. It therefore becomes important for

2016 ANNUAL REPORT - BUSINESS FRANCE / 27

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

They chose

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY (2016)

FRANCE

Nombre Business activities

Apulian Aerospace Consortium

Projects

Jobs

Projects

Jobs

Production / Manufacturing

280

Decision-making centers

266

11,271

25%

37%

2,936

24%

10%

AEROSPACE, NAVAL AND RAILWAY EQUIPMENT

First-time investments in Europe

288

Verne Group, a subsidiary of the Italian Apulian Aerospace Consortium, is a consortium of six companies providing engineering services along with metal and composite parts for the aerospace industry. For a major subcontract involving ATRâ&#x20AC;&#x2122;s final assembly line, the Italian firm is establishing a production facility in Blagnac, a suburb of Toulouse (Occitanie region).

First-time investments in France

148

1,248

13%

Global / European Headquarters

468

French Headquarters

932

Business services

210

4,139

19%

14%

R&D, engineering, design

115

2,612

10%

Engineering, design

1,001

R&D

1,611

114

3,459

10%

11%

3,863

13%

Retail outlets Logistics

The new plant will create 150 jobs by 2018, primarily for digital control station operators, skilled mechanics and assembly operators.

Consumer services TOTAL

1,828

1,117

30,108

100%

FIG. 6 Sector-by-sector breakdown of manufacturing investment projects in France (2016)

Source: 2016 Annual Report, Business France

28 /â&#x20AC;&#x2030;2016 ANNUAL REPORT - BUSINESS FRANCE

Share of sector in all manufacturing projects in France (left axis)

Textiles, industrial textiles, clothing and accessories

Perfumes, cosmetics

Telecoms, ISPs

Metals, metalworking

Pharmaceuticals and biotechnologies

Media, publishing

Electrical/electronic/IT equipment

Energy, recycling, other concessions

Electronic components

Chemicals, plastics

Construction, building materials

Furnishings, household goods

10%

Agri-food, agriculture and fishing

12%

Automotive industry

14%

Consulting, engineering and business services

16%

Aerospace, naval and railway equipment

90%

Machinery and mechanical equipment

18%

Software and IT services

100%

Medical/surgical equipment, diagnostics and devices

20%

Share of manufacturing projects by sector in France (right axis)

80% 70% 60% 50%

40%

30%

20%

10% 0%

regions to remain competitive should they wish to attract, consolidate and retain economic activity. The number of investment decisions involving global and European headquarters based in France rose sharply from 27 in 2015 to 36 in 2016, as did those involving French headquarters, rising from 24 to 34.

FOREIGN FIRMS EAGER TO INVEST IN FRENCH MANUFACTURING In 2016, a total of 280 investment decisions were made in production/manufacturing operations in France, amounting to 25% of all foreign investments. The importance of such projects can be seen by the fact that these activities were also the leading contributor to employment, with 11,271 jobs, or 37% of all jobs generated by foreign investment. Confirmed production/manufacturing investments mostly involved expanding existing production facilities in France (65%) and new sites (16%). Investments in production/manufacturing in France confirmed by American, Belgian, British, German and Italian companies amounted to 62% of all such investments. Germany was the leading foreign investor in this area, with 52 investment decisions, accounting for 19% of all production/manufacturing investments and 17% of all jobs generated by such investments. Italy was the leading contributor to production/manufacturing jobs, accounting for 19% of jobs generated by foreign investment in such operations. Half of all production/manufacturing investments were concentrated in the agri-food industry (16% of all investments in production/manufacturing), the automotive industry (9%), chemicals/plastics (9%), and metals/metalworking (9%).

GREATER NUMBERS OF R&D PROJECTS IN 2016 Innovation is recognized by business decision-makers to be a driving force behind France’s attractiveness as an investment location, as is the thriving “La French Tech” ecosystem.

They chose

FRANCE

PressReader SOFTWARE AND IT SERVICES

Headquartered in Vancouver, Canada, PressReader has developed a digital newspaper distribution platform. It circulates nearly 6,000 newspapers and magazines from more than 100 countries in 60 languages, with unlimited access from tablets, smartphones and computers. Almost 500 publications are available in France. To be closer to its customers and publishing partners, the company decided to establish its first European office in Bordeaux, which will serve as its headquarters for the Europe/Middle East/ Africa (EMEA) region. The initial French team of six people is expected to number 25 in the medium term. According to Igor Smirnoff, co-founder of PressReader, France’s status as a country of culture, a pioneer in press freedom, and a leader in digital innovation meant it quickly became the obvious choice. Regional offices reporting to Bordeaux will also be established in Germany, South Africa and Spain.

Merck & Co. MEDICAL/SURGICAL EQUIPMENT AND DEVICES

American pharmaceutical company Merck & Co. generates 27% of its revenues in Europe, the Middle East and Africa, and decided in 2016 to expand its subsidiary Aptus Health in France. This startup specializing in digital solutions for healthcare professionals chose Puteaux, just outside Paris, as the location for its new decision-making center, which will serve as its international headquarters outside the United States. The investment will lead to the creation of a hundred jobs.

2016 ANNUAL REPORT - BUSINESS FRANCE / 29

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

They chose

The number of foreign investment projects in R&D, engineering and design boosted such entrepreneurial momentum in 2016, with 115 investment decisions, including 72 in R&D alone.1 Beyond their impact on growth, R&D operations supply highly qualified jobs that generate high value added and are generally more stable than manufacturing jobs.

FRANCE

Clariant International AG CHEMICALS, PLASTICS

Based in Muttenz, Switzerland, Clariant is a multinational chemical group with more than 18,000 employees worldwide. Clariant France is headquartered in Choisy-le-Roi (outside Paris) and employs nearly 450 people at seven locations, including five production facilities.

Although Clariant has decided to centralize its research and development in Frankfurt, it is still expanding its R&D operations in France. In 2016, it began to establish a new R&D center at Oncopole, the Toulouse cancer research hub. The new center will create around 30 jobs

The United States (26%), Germany (19%) and Italy (10%) were together responsible for more than half of all foreign R&D, engineering and design investments in France in 2016. Data on R&D activities and headquarters are fully comparable with all previous years, as these investments have always been recorded from the first job created.

FIG. 7 Sector-by-sector breakdown of R&D investment projects in France (2016)

60%

Share of sector in all R&D projects in France (left axis) Source: 2016 Annual Report, Business France

30 /â&#x20AC;&#x2030;2016 ANNUAL REPORT - BUSINESS FRANCE

Share of R&D projects by sector in France (right axis)e)

50%

40%

Glass, ceramics, minerals, wood, paper

Textiles, industrial textiles, clothing and accessories

Financial services, banking and insurance

Perfumes, cosmetics

Telecoms, ISPs

Metals, metalworking

Pharmaceuticals and biotechnologies

Aerospace, naval and railway equipment

Machinery and mechanical equipment

Software and IT services

Electrical/electronic/IT equipment

Energy, recycling, other concessions

Consumer electronics

Automotive industry

Agri-food

Electronic components

Chemicals, plastics

12%

Construction, building materials

16%

Consulting, engineering and business services

20%

Medical/surgical equipment, diagnostics and devices

24%

30%

20%

10%

FRANCE: AN INNOVATIVE ECONOMY

In 2016, two sectors together received more than one-third of all foreign investments in R&D, engineering and design: software and IT services (25%), and pharmaceuticals and biotechnologies (11%). A large proportion of inward investments in the pharmaceuticals/biotechnologies and electronic components sectors were R&D projects, which amounted to 34% and 22%, respectively, of all investments in these sectors.

Innovation and R&D in France are regularly cited by foreign business executives. Nearly three-quarters of decisionmakers who responded to a recent survey see France as an innovative economy. France is also deemed to be particularly attractive when judged on human capital criteria, with its well qualified R&D personnel and research partnerships with academia being looked on favorably by foreign decision-makers. Access to finance (76%) was also identified by foreign investors as one of the leading criteria in France’s attractiveness for R&D operations. Among the innovation support on offer, France’s research tax credit serves as a strong incentive encouraging companies to set up R&D operations in the country.

FIG. 8 France’s attractiveness for R&D investments Do you believe that France is a very/quite/not very/not at all attractive destination for R&D investments, based on the following criteria? Not very attractive

Quite attractive

Very attractive

Sub-total “Not Attractive”

Proximity to markets and other operations (manufacturing, sales, etc.)

19%

Quality of R&D personnel

22%

Partnership opportunities with the French academic research sector

22%

Proximity to France’s innovation clusters

22%

Access to finance*

23%

State aid for R&D

27%

Investment opportunities through the acquisition of French companies

28%

Cost of R&D operations

34%

Sub-total “Attractive”

51%

31%

81%

19%

52%

27%

79%

19%

51%

28%

78%

20%

49%

29%

78%

3% 21%

52%

25%

77%

2% 17%

3% 3% 3%

24% 25% 31%

26%

73%

46 %

26%

72%

45%

22%

66%

47%

Source: Kantar Public/Business France survey

Not at all attractive

* New item in 2016 Base: All survey respondents (601)

They chose FRANCE Boralex RENEWABLE ENERGY

Headquartered in Kingsey Falls, Quebec, Boralex develops, builds and operates renewable energy power facilities in Canada, France and the United States. It is recognized for its solid experience in optimizing its asset base in four power generation types: wind (80%), hydroelectric (15%), thermal (4%) and solar (1%). The group is a leader in the

Canadian market and France’s largest independent producer of onshore wind power. It employs 400 people, including 130 in France, and has an annual revenue of Can$280 million. In 2016, Boralex announced the purchase and expansion of wind farms in various regions – Bretagne (Brittany), Grand Est, Hauts de France, Auvergne-Rhône-Alpes and Occitanie – resulting in the creation of around fifteen jobs.

These projects follow on from the 2015 acquisition of a nearly 350 MW portfolio of wind power projects in northern France. Together, they will give Boralex a portfolio of approximately 850 MW in projects being developed in France by late 2018. In 2016, Boralex became France’s largest independent producer of wind power, after two utility companies.

2016 ANNUAL REPORT - BUSINESS FRANCE / 31

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

R&D SPECIALIZATION BY SECTOR IN EUROPE An examination of the correlation between R&D specialization by sector in European countries and the breakdown by sector of inward investment provides further insight into the strategies behind locating R&D operations in Europe. The mean-based results for four manufacturing sectors would seem to indicate a positive correlation between the share of a given sector in industrial R&D and the share of the sector in inward R&D investment projects in each country.

Ireland’s research specialization in electrical/electronic equipment and components may be advanced as an explanation of its investment attractiveness in this field. Similarly, the high share in R&D of the automotive industry in the Netherlands, Romania or Italy, or of the chemicals/plastics sector in France, Italy or Belgium, may be factors in explaining the revealed attractiveness of these countries to manufacturers in these sectors.

FIG. 9 R&D specialization by sector in Europe and breakdown of inward R&D investments Agri-food

Chemicals, plastics

Automotive industry

Machinery and mechanical equipment

AT Austria BE Belgium CZ Czech Republic DE Germany ES Spain FR France GB United Kingdom HU Hungary IE Ireland IT Italy NL Netherlands PL Poland

Share of the sector’s R&D personnel in the manufacturing sector nationwide

50% 45% 40%

35%

CZ NL

30%

HU DK

25% DE 20%

15%

NL IE

10%

ES GB NL

FR CZ

5% DE 0%

HU PL

GB FR

IT BE

IE 5%

10%

15%

20%

25%

30%

35%

Share of the sector in inward R&D investments nationwide Source: Employment by economic activity, Eurostat; Investment projects, Business France Europe Observatory.

They chose FRANCE GE SOFTWARE AND IT SERVICES

The GE Group has been operating in France for more than a century. In 2016, it announced the establishment in Paris of a Digital Foundry focusing exclusively on industrial internet R&D. This center of excellence will eventually hire up to 250 people, including very experienced developers. It is GE’s second Digital Foundry and its first in Europe, bringing the company closer to its major European customers. The American conglomerate is also due to recruit 200 people for a shared services center in

32 / 2016 ANNUAL REPORT - BUSINESS FRANCE

Belfort, in the Bourgogne-FrancheComté region.

nearly 700 people at three locations: 600 in Bièvres, outside Paris (Ile de France After acquiring Alstom’s power and grid region), where it has its French business in late 2015, GE agreed to create administrative headquarters and an engineering office, and 100 in Montbéliard 1,000 manufacturing jobs in France by (Bourgogne-Franche-Comté region). 2018.

Bertrandt AG AUTOMOTIVE INDUSTRY

The company also has a small engineering office in Toulouse (Occitanie region). It chose these locations because of their proximity to customers such as Renault and Peugeot.

Founded in 1974 in Möglingen, Germany, Bertrandt AG develops solutions for the automotive and aviation industries. It first In 2016, Bertrandt AG strengthened its expanded internationally in 1982; today, it Montbéliard team with 13 new hires, operates in Europe, China and the United primarily for engineering positions. States. In France, Bertrandt AG employs

BUSINESS SECTOR ANALYSIS FOREIGN INVESTMENTS IN HIGH VALUE-ADDED SECTORS WERE UP IN 2016.

here were 630 investment decisions in the manufacturing sector in 2016, accounting for 56% of all foreign investment projects. Service-sector companies were responsible for 487 investment decisions (44%).

INVESTMENTS WERE RECEIVED IN A WIDE RANGE OF SECTORS.

Foreign investors operate in a variety of sectors. The leading sectors of companies investing in France in 2016 were: software and IT services (12%), consulting, engineering and

business services (9%), agri-food (7%), textiles and accessories (6%), electrical/electronic/IT equipment (4%), and the automotive industry (4%). The source of investments in France varied by business sector. While German investments in 2016 were particularly prevalent in the automotive industry (accounting for 44% of all foreign investment decisions in this area) as well as the chemicals/plastics (30%) and electrical

FIG. 10 Breakdown of projects between manufacturing and services (2016)

Manufacturingsector companies 56%

Service-sector companies 44%

Source: Annual Report, Business France

2016 ANNUAL REPORT - BUSINESS FRANCE / 33

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

They chose

FRANCE

CustomerMatrix FINTECH

CustomerMatrix is a New York-based FinTech startup founded in 2013 by Frenchman Guy Mounier. The company has developed an application through which insurers and financial firms can get to know their clients better. It uses big data from both outside the company (Google, LinkedIn, Twitter, etc.) and inside (CRM software, invoicing programs, etc.) to provide the most exact understanding possible of the client and their contacts with the company. CustomerMatrix has offices in New York, London, Paris and Hong Kong, while its R&D center is located in the French capital. After completing a second funding round of more than US$10 million in early 2016, CustomerMatrix confirmed that it would double its French headcount in 2016 with 20 new hires. To accommodate this organic growth, the company has relocated its Paris office to Avenue Trudaine.

Manuvo SOFTWARE AND IT SERVICES

Mexican firm Manuvo, which specializes in digitizing cultural and editorial content, is continuing its international expansion by setting up a new subsidiary in Avignon (Provence-Alpes-Côte d’Azur region). Founded six years ago, the startup opened its first subsidiary in Colombia, in 2012, before branching out into Europe with a London office in 2014. Having made a success of these ventures, it is now turning its attention to France and Africa. Manuvo creates fun, interactive digital content for the arts, culture and language learning, producing or co-producing educational e-books, digital comics, apps and videos for cultural organizations, museums and local authorities.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR (2016) Number Business sector

Projects

Jobs

Projects

Jobs

Agri-food, agriculture, fishing

1,845

Textiles, industrial textiles, clothing and accessories

2,816

Machinery and mechanical equipment

1,198

Energy, recycling, other concessions

806

Automotive industry

1,791

Electrical/electronic/IT equipment

524

Aerospace, naval and railway equipment

2,660

Chemicals, plastics

727

Glass, ceramics, minerals, wood, paper

710

Metals, metalworking

1,314

Pharmaceuticals and biotechnologies

917

Construction, building materials

527

Medical/surgical equipment, diagnostics and devices

724

Perfumes, cosmetics

111

Furnishings, household goods

509

Electronic components

310

Media, publishing

120

Consumer electronics

290

MANUFACTURING SUB-TOTAL

630

17,789

56%

59%

Software and IT services

136

2,360

12%

Consulting, engineering and business services

106

1,790

Commerce and retail

4,123

14%

Transport, storage

1,441

Hotels, tourism and restaurants

1,187

Other services

636

Financial services, banking and insurance

398

384

487

12,319

44%

41%

1,117

30,108

100%

Telecoms, internet service providers SERVICES SUB-TOTAL TOTAL

34 / 2016 ANNUAL REPORT - BUSINESS FRANCE

They chose

equipment (30%) sectors, Italian firms stood out in the perfumes/cosmetics (45%) and metals/ metalworking (40%) industries. American companies meanwhile made a key contribution to foreign investment in the medical/surgical equipment (38%) and software/IT services (25%) sectors.

FRANCE

Liebherr International AG AEROSPACE, NAVAL AND RAILWAY EQUIPMENT

Companies from the manufacturing sector accounted for 56% of all foreign investment decisions and 59% of all jobs generated.

With 60 years of aviation experience, Liebherr-Aerospace manufactures air management systems in France for the aerospace industry. This Swiss company has two facilities in southern France: one in Toulouse, where its headquarters are located, and another in nearby Campsas (also Occitanie region), where it produces some of its output.

Foreign firms were also responsible for a large number of new projects and jobs generated in the consulting, engineering and business services, as was also the case in the automotive and agri-food sectors. [Fig.11]

In 2016, the company announced that it was beefing up its Toulouse team to handle deliveries arising from three major programs: the Airbus A320neo, the Bombardier C Series and the Comac C919.

MAJORITY OF PROJECTS IN TECHNOLOGY-RICH SECTORS Technology-rich manufacturing sectors (such as pharmaceuticals and biotechnologies, electronic components and equipment, energy, chemicals, and aerospace/naval/railway equipment)

The operation entails an investment of more than €14 million and around 60 new jobs. Liebherr-Aerospace Toulouse expects revenue growth of 7% in 2017.

FIG. 11 Correlation between changing project and job numbers (2015-2016)

1,600

Financial services

1,400 1,200 1,000

Sectors experiencing job and project growth Aerospace, naval and railway equipment

800

-20

Consulting, Medical/surgical 600 engineering Telecoms, ISPs equipment and business services 400 Agri-food Furnishings, Metals, metalworking Commerce and retail Electronic household goods components Energy, recycling Machinery and mechanical equipment Construction, 200 40 -10 building materials0 30 50 20 Textiles 10 0 Perfumes, Variation in projects Hotels, tourism and restaurants Other services cosmetics Pharmaceuticals and biotechnologies -200 Chemicals, plastics -400 Consumer electronics

Electrical/ electronic/IT equipment Automotive industry

-600 -800

Sectors experiencing project growth

-1,000 -1,200 -1,400 -1,600

Software and IT services

-1,800 -2,000

Variation in jobs Source: Annual Report, Business France

Key: In comparison with 2015, the 46 extra projects in the “consulting/engineering” sector generated 542 further jobs.

2016 ANNUAL REPORT - BUSINESS FRANCE / 35

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

and knowledge-intensive services (such as consulting and engineering, and software and IT services) accounted for 58% of all investments in 2016: high value-added services accounted for 27% of investments, and high value-added manufacturing 31%.

FIG. 12 Breakdown of projects by technology intensity

27% High value-added services 30%

Low value-added services High value-added industry Low value-added industry 12%

Source: Annual Report, Business France

BREAKDOWN OF PROJECTS BY PRIORITY SEGMENT (2016) Projects

Jobs

Logistics and e-commerce

3,724

Agri-food and nutrition

1,521

Digital economy

961

Energy efficiency, sustainable energy

871

Health and wellbeing

1,569

Tourism, culture and leisure

959

Smart devices, equipment, industries and services

337

FinTech and financial services

194

New resources, materials and bioeconomy

173

Education and training (including e-learning)

Community transport and infrastructure

1,369

New personal vehicles

189

412

11,954

TOTAL Source: Annual Report, Business France

36 / 2016 ANNUAL REPORT - BUSINESS FRANCE

So-called ‘priority segments’ are mainly in technological fields (in line with the interests of France’s innovation clusters), but also respond to regional development objectives (agri-food) and business opportunities (tourism). The list of priority segments is updated every year, in conjunction with France’s regions following discussions between Business France, government ministers and the Businesses Directorate (DGE). The number of projects in priority segments rose 35% in 2016; a total of 412 investment decisions involved the technology-rich segments listed in the table opposite, equating to 37% of all foreign investment projects in France confirmed during the year, and 40% of all jobs generated. The logistics/e-commerce, agri-food/nutrition, digital economy, energy efficiency/sustainable energy, and health/wellbeing segments were predominant, accounting for three-quarters of all investments in priority segments and 72% of all associated jobs.

31%

Priority segments

GREATER PROJECT NUMBERS IN PRIORITY SEGMENTS

German businesses were mainly to be found in the logistics/e-commerce and energy efficiency/sustainable energy segments, where they were responsible for one-quarter of all investments, while American firms stood out in the health/wellbeing (27%) and digital economy (22%) segments. Also of note was the investment attractiveness of Ile de France (Paris region) in the digital economy segment (57%) and the Occitanie region in agri-food/nutrition (22%).

INVESTMENT TYPE ANALYSIS THE NUMBER OF NEW SITES CREATED REMAINED BUOYANT, CONFIRMING FRANCE’S ATTRACTIVENESS AS AN INVESTMENT LOCATION.

everal different types of foreign investment projects can be distinguished in our analysis: creation of a new site (‘greenfield investment’), expansion of an existing site, takeover of an ailing site, creation of a partnership, or expansion following takeover. In this report, Business France records investment projects which create jobs, or which enable jobs under threat at an ailing company to be maintained. [see Appendix: Job-creating physical investment selection criteria]

MOST INVESTMENT DECISIONS IN 2016 INVOLVED SITE CREATIONS.

SITE CREATIONS LEAD THE WAY In 2016, the number of decisions to invest at new sites in France grew 20% to 569, accounting for 51% of all investment projects and 38% of all jobs generated. Site creations most frequently

involved decision-making centers, of which 84% were first-time investments in France or Europe. Jobs generated by new and expanded sites accounted for more than three-quarters of all jobs generated by foreign investment.

RISE IN EXPANSION PROJECTS IN 2016 Expansion projects are a sign of the confidence that foreign-owned subsidiaries already set up in France have in the country as an investment location. There was a 15% rise in the number of expansion projects confirmed in 2016 (452 investment decisions), and this investment type was the leading source of employment (41% of jobs generated).

FIG. 13 Breakdown of projects by investment type (2016)

Expansion following buyout 4% Takeover 3%

Expansion 40%

Expansion following takeover 1%

Creation 51%

Source : Zephyr, Bureau van Dijk, calculs BF

2016 ANNUAL REPORT - BUSINESS FRANCE / 37

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

They chose

FRANCE

Flowserve Corporation MACHINERY AND MECHANICAL EQUIPMENT

Flowserve, a Texas manufacturer of industrial pumps, consolidated its operations in Arnage, south of Le Mans (Pays de la Loire region). The group invested €1 million to expand its production facilities and locate administrative offices at an abandoned industrial site nearby, all of which will create 70 new jobs. Flowserve made the decision to transfer its British and German operations to the Arnage site due to the site’s performance and uniquely skilled workers. The plant produces a line of products for the nuclear industry and is considered to be a global center of excellence.

ABP Food Group AGRI-FOOD, AGRICULTURE AND FISHING

C&D Foods, a subsidiary of Irish ABP Food Group, was chosen by the commercial court of Boulogne-sur-Mer (region Hauts de France) to take over Continentale Nutrition, which was liquidated in May 2016. The Boulogne company had liabilities of €26.8 million, including €12 million in loans. Upon completion of the takeover, C&D Foods was in a position to save 270 out of a total of 358 jobs. It also agreed to invest €60 million over five years in Boulogne-sur-Mer. This move increases C&D Foods’ production capacity, which will soon exceed 600,000 tonnes across Europe. The Irish firm operates in 11 countries and has production plants in Denmark, the Netherlands, Austria and Spain.

38 / 2016 ANNUAL REPORT - BUSINESS FRANCE

Expansion projects in 2016 mostly involved production/ manufacturing operations (40%).

FEWER TAKEOVERS OF AILING SITES Takeovers of ailing sites by foreign investors enable economic activities under threat to be maintained. These investments contribute to the regeneration of struggling regions and to safeguarding jobs. In 2016, they saved more than 4,800 jobs, or 16% of all jobs generated by foreign investment decisions.

BREAKDOWN OF PROJECTS BY INVESTMENT TYPE (2016) Number Investment type

Projects

Jobs

Projects

Jobs

Creation

569

11,520

51%

38%

Expansion

452

12,391

40%

41%

Takeover

4,898

16%

Expansion following buyout

669

Expansion following takeover

630

1,117

30,108

100%

TOTAL

BREAKDOWN OF INVESTMENT TYPE BY BUSINESS ACTIVITY Number

Projects

Jobs

Creation

569

11,520

Decision-making centers

Projects

Jobs

228

2,046

40%

18%

Logistics

1,504

13%

Retail outlets

2,789

17%

24%

Production / Manufacturing

1,000

R&D, engineering, design

1,309

10%

11%

Business services

1,699

14%

15%

Consumer services

1,173

10%

Expansion

452

12,391

Decision-making centers

474

Logistics

2,335

19%

Retail outlets

670

182

5,529

40%

45%

742

11%

123

2,161

27%

17%

480

Expansion following buyout

669

Decision-making centers

27%

178

32%

27%

R&D, engineering, design

276

11%

41%

Business services

14%

Consumer services

11%

14%

Takeover

4,898

Decision-making centers

355

12%

Logistics

Production / Manufacturing R&D, engineering, design Business services Consumer services

Logistics Production / Manufacturing

Production / Manufacturing

4,124

73%

84%

R&D, engineering, design

285

Business services

Consumer services

Expansion following takeover

630

Production / Manufacturing

440

60%

70%

Business services

176

30%

28%

Consumer services

10%

1,117

30,108

TOTAL

2016 ANNUAL REPORT - BUSINESS FRANCE / 39

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

FINANCIAL INVESTMENTS TECHNOLOGY AND COMMERCIAL PARTNERSHIPS, FACILITY UPGRADES AND SAFEGUARDING INVESTMENTS.

ur data collection procedure enables us to identify a variety of different ways in which foreignowned subsidiaries set up operations, reflecting the diverse international development strategies of multinational firms. The most common such investments recorded in 2016 were facility upgrades, technology and commercial partnerships, and safeguarding investments, along with mergers and acquisitions.

TECHNOLOGY PARTNERSHIPS TECHNOLOGY PARTNERSHIPS ARE ANOTHER WAY FOR COMPANIES TO GO GLOBAL.

Technology or research partnerships offer another way for companies to expand their international scope. In 2016, a total of 26 of these partnerships received support from Business France and its regional partners (economic development agencies) in France.

The largest share of these investments involved American firms (40%), while a clear two-thirds majority of technology partnerships were in R&D and engineering activities.

COMMERCIAL PARTNERSHIPS Commercial partnerships, of which 30 were recorded in the last year, involve companies pooling their workforces, resources and partners to increase commercial activity. These partnerships were in a variety of sectors and mainly involved business services and production/manufacturing operations.

FACILITY UPGRADES Facility upgrades involve replacing obsolete equipment with new production technology to increase output capacity or improve the company’s productivity. In 2016, a total of

They chose FRANCE Tech Ranch Austin

and financial partners, incubators, CONSULTING, ENGINEERING AND investors, business angels, universities, innovation clusters, and more. BUSINESS SERVICES The purpose of this partnership is In 2016, the US business incubator not only to give US startups easier Tech Ranch, based in Austin, Texas, access to the European market but signed a partnership agreement with also to attract European companies the Business and Innovation Center to Austin to help them do business (BIC) of Montpellier. Established in 1987 in the American market. under the name Cap Alpha, the BIC now has a wide network of economic

40 / 2016 ANNUAL REPORT - BUSINESS FRANCE

67 facility upgrades were recorded by Business France and its regional partners. Facility upgrades recorded in France were mainly carried out by American (33%) and German (13%) firms, while nearly two-thirds of these investments involved production/ manufacturing operations

SAFEGUARDING INVESTMENTS Safeguarding investments preserve the business sites of foreign subsidiaries and save jobs that might otherwise ultimately have been lost. This type of investment reflects a foreign company’s desire to continue doing business at a particular site and is not taken into account in the Annual Report, which only records projects that create jobs or preserve existing ones that are at risk in the very short term. This type of investment nevertheless warrants a mention, as ensuring that foreign companies remain in the country is no less important than welcoming new investors. In 2016, Business France identified eight safeguarding investments, mainly in production/manufacturing operations, that maintained nearly 300 jobs at these sites.

They chose

FRANCE

AccoForm CHEMICALS, PLASTICS

As a subsidiary of Belgian firm AccoForm, Plastigray designs and manufactures plastic products for the automotive, healthcare, electronics, material handling/agricultural equipment, housing, and environment industries. In 2016, it invested in its plastic injection facility in Gray (BourgogneFranche-Comté region). Plastigray’s modern production processes enable it to assist its customers with a large range of developments based on twocomponent and sandwich injection molding. These processes also reduce costs through the use of recycled or low-cost materials and generate higher value added.

Aequs Aerospace AEROSPACE EQUIPMENT

After acquiring the SiRA Équipements site in Besançon (Bourgogne-Franche-Comté region) in 2015 and saving 28 jobs, this Indian aerospace components manufacturer and solution provider confirmed it was hiring a further five employees in 2016. Aequs Aerospace is one of India’s fastest-growing precision engineering companies, and continued to further its expansion in France in 2016 by acquiring the SiRA Group.

Murata Manufacturing Co.

They chose

ELECTRONIC COMPONENTS

FRANCE KSB MACHINERY AND MECHANICAL EQUIPMENT

In early March 2015, Germanowned firm KSB, the French market leader in pump and valve repair, acquired Cotumer in Creutzwald (Grand Est region), a company specializing in reconditioning reducers of all kinds, on-site maintenance, and

mechanical repairs and renovations. This acquisition has enabled the company to broaden its maintenance services offer and secured the future of the Creutzwald site, now the head office of KSB Service Cotumer, safeguarding 119 jobs. The subsidiary made eight new hires in 2016 and intends to take its workforce to 140 by 2018.

The Normandie region’s flourishing microelectronics and semiconductor ecosystem along with strengths in other fields swayed Japanese corporation Murata’s acquisition of IPDiA, a company specializing in producing leading edge integrated passive devices. Its technology has already been adopted by global leaders in medical electronics, semiconductors and high-reliability products.

2016 ANNUAL REPORT - BUSINESS FRANCE / 41

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

FIG. 14 Number of M&A transactions in France (2013-2016)

3,500 3,000

Number of transactions

2,500

71%

2,000 1,500 1,000

83%

64%

81%

500 0

17%

19%

29%

36%

2013

2014

2015

2016

Transactions with French investors Transactions with foreign investors

FIG. 15 Value of M&A transactions in France (2013-2016)

140

€ billion

120 100 80

53% 50%

60 40

75%

63%

20 0

n a sign of their confidence in the French economy, foreign companies were increasingly active in the French mergers and acquisitions (M&A) market last year. According to Bureau van Dijk’s M&A database, Zephyr,2 they initiated more than one-third of all M&A deals in France in 2016, or 1,143 transactions worth an estimated total of €45 billion.

FOREIGN INVESTORS STRIKE MORE THAN ONE-THIRD OF FRENCH M&A DEALS

Source: Zephyr; Bureau van Dijk; Business France calculations

160

MERGERS AND ACQUISITIONS

25%

37%

47%

50%

2013

2014

2015

2016

After record growth in cross-border M&As in France in 2014 and 2015, activity slowed in 2016 in the wake of political uncertainty in Europe and the United States, mirroring the global cross-border M&A market.3 The number of foreign investor deals in France increased 25% in 2016 (compared with an increase of 102% in 2015), and there were 1,143 transactions (917 in 2015). The cumulative value of these deals declined 34% from 2015. The estimated total for 2016 was €45 billion, compared with €68 billion in 2015 and €30 billion in 2014.

Transactions with French investors Transactions with foreign investors Source: Zephyr; Bureau van Dijk; Business France calculations

Data on cross-border M&A transactions in France extracted from Bureau van Dijk’s Zephyr database on February 6, 2017. Data for 2016 are still provisional and may be revised in the first half of 2017. 3 Although global cross-border M&A activity remained substantial in 2016 (US$831 billion), sales grew at a markedly slower rate (13% in 2016, compared with 67% in 2014 and 68% in 2015). 2

Source: UNCTAD, January 2017.

THE FRENCH MERGERS AND ACQUISITIONS MARKET The French M&A market encompasses various categories of financial transactions in which all or part of the equity of a company domiciled in France is transferred to another company, be it French or foreign. Companies frequently grow inorganically like this in an effort to maximize their capacity to take advantage of market upturns.

42 / 2016 ANNUAL REPORT - BUSINESS FRANCE

According to Bureau van Dijk’s Zephyr database, after strong growth in 2014 (25%) and 2015 (37%), national and foreign M&A deals in France flattened out at around 3,200 in 2016, and were worth a total of €90.4 billion (versus €145 billion in 2015). However, changes in the total value of M&A transactions should be treated with

caution for two reasons: firstly, the lack of available data for a significant proportion of the transactions recorded in France (31% in 2015, 20% in 2016), and secondly, foreign exchange effects, including the depreciation of the euro against a number of foreign currencies.

They chose

The percentage of foreign M&A deals has increased steadily since 2013, accounting for 36% of M&A transactions in France in 2016 (17% in 2013) and half of total M&A value (25% in 2013). This trend seems to confirm positive foreign investor sentiment towards the French economy.

FRANCE

Linamar Corporation AUTOMOTIVE INDUSTRY

FIG. 16 Number of foreign investor transactions in France (2013-2016)

1,400 1,200

Number of transactions

1,000

945

800 600 400 200 0

209

115 174 2013

647

189

200

142

2014

2015

2016

Acquisitions

Minority interest

Other transactions

Source: Zephyr; Bureau van Dijk; Business France calculations

FIG. 17 Value of foreign investor transactions in France (2013-2016)

80 70

12.1

50 40

20.1

5.5

20 10 0

Linamar has been operating in France since 2010, when it acquired Famer, a French company specializing in the machining and assembly of complex mechanical parts for the automotive industry, industrial vehicles and public construction work. The takeover involved three plants near Lyon, in Saint-Romain-en-Gier, Saint-Étienne and Montfaucon-en-Velay (all AuvergneRhône-Alpes region). In 2016, the group opened a new 18,000 sq. m. facility in Saint-Chamond, replacing the smaller Saint-Étienne and Saint-Romain-en-Gier sites. In 2016, Linamar also acquired French aluminum auto-parts maker Montupet, which has operations in six countries. This acquisition will enable Linamar Corporation to further its vertical integration and step up its presence in Europe.

€ billion

Linamar Corporation is a global company headquartered in Guelph, Ontario. It specializes in the production of components and precision parts for the automotive industry and industrial vehicles (including gears, cylinder blocks, camshafts, and transmissions). Established in 1966, it employees 24,500 people and operates 57 production facilities worldwide, generating annual revenue of Can$6 billion.

5.5 5.9

21.5

50.9

21.1

2013

2014

2015

2016

Acquisitions

Minority interest

Other transactions

Source: Zephyr; Bureau van Dijk; Business France calculations

2016 ANNUAL REPORT - BUSINESS FRANCE / 43

CHAP. 1 / FOREIGN INVESTMENT IN FRANCE IN 2016

FIG. 18 Number of M&A transactions in France by source country (2015-16)

In 2016, the share of minority interest acquisitions continued to grow (83% of total cross-border deals, versus 71% in 2015 and 46% in 2014). Of the 1,143 M&A transactions reported in 2016, 945 were minority interest acquisitions worth an estimated total of €20.1 billion.

448 430

United States United Kingdom Germany Luxembourg Canada Belgium Netherlands Singapore Switzerland Hong Kong China Italy Australia Japan Other

9 9 7 7

26 26 24 20 20 20 15 15

2016 2015

Number of transactions

100

200

300

400

500

Source: Zephyr; Bureau van Dijk; Business France calculations

FIG. 19 Value of M&A transactions in France by source country (2015-16)

15,770 13,008

Finland United States United Kingdom Luxembourg Canada South Korea Qatar Brazil Japan China Singapore Malta Italy Germany Other

7,010

2016 2015

1,537 1,360 750 669 517 440 404 384 324 281 265 2,189 0

5,000

€ million

10,000

15,000

20,000

MORE BUT SMALLER DEALS

25,000

30,000

In contrast, there were fewer acquisitions (142) by foreign companies in 2016 than in any year since 2013. The fall-off in acquisitions, which can be for very large amounts, explains the 50% drop in the cumulative value of cross-border M&A, from €51 billion in 2015 to €21.1 billion in 2016. Only two acquisitions of French companies were valued at more than €1 billion in 2016, compared with eight in 2015. The purchase of French company Alcatel-Lucent by Finnish telecom equipment maker Nokia for an estimated €15.6 billion was the largest transaction in France in 2016. The new entity, Nokia Corporation, to be headquartered in Finland, will retain its existing major R&D centers in France. In another sizeable transaction early in the year, Linamar (Canada) acquired French aluminum auto-parts maker Montupet. This transaction follows a recent trend of crosssector consolidation among auto-parts makers and is designed to enable Montupet to continue to develop its brand and business.

Source: Zephyr; Bureau van Dijk; Business France calculations

THREE-QUARTERS OF M&A DEALS IN FRANCE MADE BY US AND UK FIRMS FIG. 20 Breakdown of M&A transactions in France by sector (2016)

Hotels, restaurants 1% Agri-food 2% Publishing 2% Primary industries 2% Telecoms 3% Chemicals, plastics 5%

Other 4% Other services 43%

Retail 8% Transport 8%

Metals 9%

Source: Zephyr; Bureau van Dijk; Business France calculations

44 / 2016 ANNUAL REPORT - BUSINESS FRANCE

Machinery, equipment, furnishings 13%

In 2016, the Americans and the British were by far the largest investors in French companies, accounting for 77% of foreign M&A deals and 45% of the associated value. Their behavior was in line with the trend: more but smaller M&A transactions than in 2015 (448 for the United States and 430 for the United Kingdom). German companies struck 26 deals in France in 2016, as did Luxembourg companies, while Canadian companies completed 24 transactions. Analysis of deal sources by value reveals the volatile nature of M&A data, which depend heavily on a few major transactions. Finland, which closed the year’s biggest deal (Nokia),

is ranked first by value among investors. South Korea owes its sixth place ranking to its only transaction for the period: the acquisition by Korea Investment Corporation of a stake in French laboratory Ethypharm. The transactions involved a variety of industries, from services to manufacturing. In manufacturing, the machinery/equipment and metals industries were the main targets for foreign investment.

METHODOLOGY Bureau van Dijk’s Zephyr database tracks M&A deals throughout the world. Updated daily, it contains information on different types of transactions, including acquisitions, initial public offerings (IPOs), partial interest acquisitions and venture capital investments. The Zephyr team is based in the United Kingdom and Singapore and works in 30 languages from a variety of sources, including press articles, company press releases, IPO announcements and websites. The shareholder structures and financial profiles of the deal parties (sellers, targets and buyers) are an integral part of Zephyr and are taken largely from the Orbis database. Distinction between minority interest acquisitions and acquisitions: The statistics on mergers and acquisitions encompass not only acquisitions – which entail a transfer of control of the targeted company, with the investor holding over 50% of the equity in that company after the transaction – but also equity acquisitions by minority shareholders who simply wish to invest in a company without acquiring a controlling interest. Thus, the purchase of a two percent equity stake in a company by an investor who already holds a 49% stake in the same company will be counted as an acquisition. On the other hand, the purchase of a two percent equity stake by an investor who previously held a 10% stake will be counted as a minority interest acquisition. The methodology used to establish the statistics on cross-border mergers and acquisitions differs from that used by central banks to assess the amount of foreign investment in a country. By convention, foreign direct investment (FDI) is considered to occur when a company holds at least 10% of the equity or voting rights of a firm based in another country. Unlike FDI figures, cross-border M&A statistics usually include all acquisitions of equity in a company by a non-resident company, with no minimum stake threshold.

2016 ANNUAL REPORT - BUSINESS FRANCE / 45

INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016 48 REGIONAL ANALYSIS

60 THE CONTRIBUTION OF FOREIGN SUBSIDIARIES TO FRANCE’S REGIONAL ECONOMIES

CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

REGIONAL ANALYSIS FOREIGN INVESTMENTS WERE MADE THROUGHOUT FRANCE’S REGIONS.

he diversity of France’s regions, coupled with their high-quality infrastructure and workforces, are powerful drivers of their attractiveness to investors. The investment decisions confirmed in 2016 generated employment in practically every one.

FIG. 1 Regional distribution of jobs created or maintained (2016)

By project numbers, Ile de France (Paris region), Auvergne-Rhône-Alpes and Occitanie attracted more than half of all investment decisions. The leading regions by jobs created or maintained were Ile de France (Paris region) (25% of all jobs nationwide), Hauts de France (15%) and Auvergne-Rhône-Alpes (12%).

Source: Annual Report, Business France

Guadeloupe

Guyane

Jobs per 1,000 employed 0<0.36

Martinique

Number of jobs by region (2016) 7,000-7,500

0.36<0.50 0.50<1 1<1.23 1.23<1.70

Réunion

3,700-4,600 1,300-2,600 Less than 1,300

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At the same time, the geographical distribution of projects is testament to the allure of major cities and the fact that the presence of foreign companies frequently draws new foreign investment to the same area. Amid the competition in Europe to attract foreign investment, the thriving economies of France’s regions and cities are often a decisive factor.

To gauge the extent to which foreign subsidiaries have contributed to jobs and economic activity in France’s regions, the number of jobs created from new foreign investments can be measured as a proportion of those in paid employment. According to this indicator, the Hauts de France, Pays de la Loire, Ile de France (Paris region), Provence-Alpes-Côte d’Azur and BourgogneFranche-Comté regions all exceeded the national average of 1.01 jobs created by foreign companies per 1,000 people employed.

REGIONAL DISTRIBUTION OF JOBS CREATED OR MAINTAINED PER 1,000 EMPLOYED (2016) Region

The breakdown of projects by business activity and region highlights that Hauts de France, Grand Est, and Occitanie each attracted 15% of foreign investments received by France involving production/manufacturing operations in 2016, while 40% of all jobs generated by foreign investment in logistics activities were in the Hauts de France region. Ile de France (Paris region), Occitanie, Provence-Alpes-Côte d’Azur, and Auvergne-Rhône-Alpes also stood out for receiving 30%, 21%, 11% and 10%, respectively, of all R&D projects nationwide.

Ratio per 1,000 jobs

Auvergne-Rhône-Alpes

0.99

Bourgogne-Franche-Comté

1.03

Bretagne (Brittany)

0.48

Centre-Val de Loire

1.26

Grand Est

0.99

Hauts de France

1.69

Ile de France (Paris region)

1.23

Normandie

0.20

Nouvelle Aquitaine

0.36

Occitanie

0.99

Pays de la Loire

1.26

Provence-Alpes-Côte d’Azur

1.08

Overseas territories

0.20

MAINLAND FRANCE

1.01

Source: Annual Report, Business France

REGIONAL BREAKDOWN OF PROJECTS AND JOBS BY BUSINESS ACTIVITY (2016) Logistics Région

Auvergne-Rhône-Alpes

Production / Manufacturing

R&D, engineering

Projects

Jobs

Projects

Jobs

Projects

Jobs

14%

12%

17%

10%

Bourgogne-Franche-Comté

Bretagne (Brittany)

Centre-Val de Loire

15%

Grand Est

13%

15%

13%

Hauts de France

15%

40%

15%

19%

Ile de France (Paris region)

13%

14%

10%

30%

36%

Normandie

Nouvelle Aquitaine

11%

15%

13%

21%

18%

10%

16%

11%

Occitanie Pays de la Loire Provence-Alpes-Côte d’Azur Source: Annual Report, Business France

2016 ANNUAL REPORT - BUSINESS FRANCE / 49

CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

The regional business activity attractiveness index takes into account the different sizes of France’s regions and highlights the investment attractiveness of the Nouvelle Aquitaine, Occitanie, and Pays de la Loire regions for research and development activities; the Grand Est, Nouvelle Aquitaine, BourgogneFranche-Comté, Normandie, and Hauts de France regions for production/manufacturing

R&D, engineering, design

Logistics

Retail outlets

Decision-making centers

Production / Manufacturing

Consumer services

The breakdown of projects by technology-rich industrial sector highlights the investment attractiveness of the Grand Est and AuvergneRhône-Alpes regions for chemicals (attracting 22% and 19%, respectively, of all projects in this sector in France); of the Ile de France (Paris region), Nouvelle Aquitaine, Occitanie and Pays de la Loire regions for electronic components (each attracting 17% of all projects in this sector in France); of the Ile de France (Paris region) for software and IT services (attracting more than half of all projects in this sector in France); of the Occitanie region for aerospace and railway equipment (attracting 30% of all projects in this sector in France); of the Ile de France and Grand Est regions for pharmaceuticals and biotechnologies (each attracting 23%, of all projects in this sector in France).

Source: INSEE, Business France.

FIG. 2 Regional business activity attractiveness index (2016)

operations; Ile de France (Paris region) for decision-making centers; and Provence-AlpesCôte d’Azur for retail outlets.

Business services Key: The map indicates the business activities for which each region of France enjoys high investment attractiveness (highest relative index score).

REGIONAL BUSINESS ACTIVITY ATTRACTIVENESS INDEX This index identifies the business activities for which each of France’s regions enjoy high investment attractiveness, enabling us to determine whether a region has a higher index score for a specific business activity. The index is calculated by weighing the share of a business activity in a single region against the share of the same business activity in all projects nationwide.

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REGIONAL DISTRIBUTION OF PROJECTS IN SELECTED HIGH VALUE-ADDED INDUSTRIAL SECTORS (2016)

Projects

Auvergne-RhôneAlpes

Chemicals, Electronic plastics components

Automotive industry

Electrical/ electronic equipment

Medical/ surgical equipment

Machinery Software and and IT services mechanical equipment

Aerospace equipment

Pharmaceuticals and biotechnologies

19%

10%

14%

31%

10%

14%

Bretagne (Brittany)

Centre-Val de Loire

11%

10%

Grand Est

22%

18%

11%

14%

23%

Hauts de France

14%

16%

14%

Ile de France (Paris region)

17%

26%

23%

18%

57%

17%

23%

Normandie

Nouvelle Aquitaine

17%

10%

14%

17%

16%

10%

30%

Pays de la Loire

17%

13%

14%

Provence-AlpesCôte d’Azur

14%

13%

100%

BourgogneFranche-Comté

Occitanie

TOTAL

Source: Annual Report, Business France

Key: 31% of foreign investment projects in the machinery and mechanical equipment sector were made in the Auvergne-Rhône-Alpes region.

REGIONAL DISTRIBUTION OF JOBS IN SELECTED HIGH VALUE-ADDED INDUSTRIAL SECTORS (2016)

Jobs

Chemicals, Electronic plastics components

Automotive industry

Electrical/ electronic equipment

Medical/ surgical equipment

Machinery Software and and IT services mechanical equipment

PharmaceutiAerospace cals and bioequipment technologies

Auvergne-RhôneAlpes

16%

17%

10%

19%

BourgogneFranche-Comté

29%

19%

18%

15%

Bretagne (Brittany) Centre-Val de Loire

26%

14%

30%

21%

15%

17%

37%

24%

17%

12%

19%

22%

62%

17%

Normandie

Nouvelle Aquitaine

18%

Occitanie

13%

46%

Pays de la Loire

63%

13%

20%

23%

Provence-AlpesCôte d’Azur

100%

Grand Est Hauts de France Ile de France (Paris region)

TOTAL

Source: Annual Report, Business France

Key: 37% of jobs generated by foreign investment in the pharmaceuticals and biotechnologies sector were in the Grand Est region.

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CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

FOCUS

REGIONAL SUCCESS STORIES CAR-ITA IN THE GRAND EST REGION In 2014, German firm Car-Ita set up operations in Bitche, just over the German border, to cater for its rapid growth. The company, which manufactures and sells 1,200 different products, relies heavily on its Bitche plant to grow its business and develop new product segments. It manufactures fabrics for Airbus aircraft, recently filing a patent for an antibacterial filter with numerous applications, and has also started producing soles for shoes. Car-Ita has invested a total of €1.4 million in its French site, including €500,000 to build a new ultra-modern logistics center. In the meantime, a temporary building has been built by the Pays de Bitche intermunicipal council. The firm’s clients include Audi, BMW, Mercedes, and Peugeot, to name but a few. In just one year, 22 jobs have been created and the site is already enjoying resounding success. A single team works five days a week with four single and multilayer digitally controlled CNC cutting machines, as well as the existing laser cutting facility. The company is now planning to increase its cutting capacity: an additional laser facility is set to be officially opened alongside the existing production infrastructure.

CAR-ITA, SUPPLYING HIGH VALUE-ADDED FABRICS TO THE AUTOMOTIVE AND AEROSPACE INDUSTRIES, ANNOUNCES THE LAUNCH OF A NEW FACILITY: CAR-ITEX.

“The advantages of laser cutting technology are clear,” says Manuel Lohmann, Production Manager of Car-Ita France. “It means we can cut complex shapes with great precision and speed. And the laser allows for contact-free cutting. The result is narrow radii and clean cuts.” The new facility operates at an impressive pace: maximum cutting speed is 40 meters per minute, with a working width of up to 2,200 millimeters. “This has increased our productivity by 15%,” adds an upbeat Lohmann.

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Meanwhile, a new sewing center boasting ultramodern equipment is now being developed. The jewel in the crown of this facility is nothing less than a cutting-edge automatic sewing machine that has been built smartly and designed according to Car-Ita’s specific requirements. It can carry out multiple stages in the process in a totally independent way. “At Car-Ita France, we concentrate primarily on technical development and quality. Our motto is ‘yes’ to high efficiency in a high-cost country and ‘no’ to worker exploitation in low-cost countries. We have been able to significantly expand our portfolio of products and technologies thanks to this new sewing center,” explains Lohmann. With the creation of Car-Itex, fabrics that were previously purchased in the Black Forest will be produced in the east of the Grand Est region, in a brand-new 3,000 sq. m. facility built by the Pays de Bitche Intermunicipal Council. €2 million will go into acquiring machines and 20 employees will be recruited in 2017. In addition to the manufacture and cutting of textiles, Car-Ita is able to provide a number of services. In the long term, Car-Itex plans to set up an engineering department to develop new patterns and designs for its fabrics. Car-Itex’s main customer will be Car-Ita, but it will also be seeking new clients, new openings and new contracts.

NORSKE SKOG GOLBEY IN THE ‘GREEN VALLEY’

of therapeutic molecules, particularly in the treatment of chronic respiratory illnesses.

With its employees’ expertise and fondness for their profession, Norske Skog Golbey is Western Europe’s largest newsprint production site, boasting an annual production capacity of 600,000 tonnes of newsprint paper for newspapers and publicity brochures. The quality it offers is recognized by Europe’s leading publishers and printers.

“My mind is bursting with ideas for projects,” says Yves Bailly. Another project worthy of a mention is BioSkog, led in partnership with Arbiom, which has been developing exclusive technologies for the last seven years. The initiative may create up to 40 jobs and is geared towards replacing fossil-based products with biobased alternatives produced from non-food grade and renewable plant materials. 40,000 tonnes per year of biomass is set to be processed in Golbey.

Last of the Mohicans’ strategy “Our strategy is clear: if it ends one day, it will be here. I call it the ‘Last of the Mohicans’ strategy,” says Yves Bailly, CEO of the site since 2006. With the consumption of newsprint falling by around 6% a year over the last decade, it is important to maximize competitiveness. It quickly became clear that reducing energy costs needed to be a top priority. The Optiwatt project, which complies with the ISO 50001 standard, has led to substantial savings since 2015 and, in June 2016, the foundation stone of a biogas facility was laid. This will initially be used to process effluent from the manufacturing plant and should eventually enable 17,000 MWh of biogas to be injected into the grid each year. The new facility required an investment of €7.1 million. Norske Skog Golbey has shown the wherewithal to diversify into peripheral, but high value-added operations, due in particular to synergies, partnerships and a parent group that strongly encourages innovation. The Bois Santé (‘Wood Healthcare’) project, whose R&D phase is now complete, is an excellent illustration of this approach. The alliance formed in 2010 between Norske Skog Golbey and Harmonic Pharma, a startup specializing in 3D modeling and molecular repositioning, was behind this project seeing the light of day. In the long term, this highly innovative initiative should enable Norske Skog’s wood by-products to be used as sources

“BioSkog will enable us to endorse a new model for the use of wood by-products, which could then be replicated at other sites and in other forest areas in France and around the world,” adds Yves Bailly.

Industrial and local ecology, the circular economy and CSR The company enjoys close ties with its local area and is keen to help develop a circular economy and new partnerships. With the newsprint market shrinking at a rapid rate, local industrial ecology has become a crucial challenge. As a responsible industrial site, Norske Skog Golbey is duty bound to operate with the utmost environmental respect. Efforts focus chiefly on reducing the carbon footprint and on the sustainable management of raw materials. Today, local industrial ecology relies on pooling assets and knowledge, but also on managing material and energy flows in conjunction with the paper plant, generating substantial carbon footprint savings. The approach forms an integral part of the responsible company strategy launched in 2012, in line with group policy. It focuses on the four pillars of Sustainable Development – social aspects, society, environment and economy – through Corporate Social Responsibility, which lies at the heart of Norske Skog Golbey’s vision.

NORSKE SKOG GOLBEY, A LEADING COMPANY IN THE EUROPEAN NEWSPRINT MARKET, HAS BEEN ENRICHING THE HISTORY OF THE VOSGES REGION AND THE ‘GREEN VALLEY’ FOR MORE THAN A QUARTER-CENTURY.

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CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

FOCUS Green Valley, much more than just a business cluster Certified as a “Business Cluster” by the DATAR in 2010, the Green Valley cluster is a tangible application of the principles of industrial ecology. The Epinal-Golbey public-private partnership and Norske Skog Golbey were initially responsible for the coordination and development of this cluster, a role later taken over by the Vosj’Innove association of private entrepreneurs. Atypical in its structure, the cluster was formed to support local economic development. The shared ambition is to create new industrial operations in the ecomaterials sector. As such, Green Valley favors synergies between Norske Skog Golbey and manufacturers in the future by establishing winwin relationships.

MEDTECH AND ZIMMER BIOMET IN MONTPELLIER In 2002, Bertin Nahum founded Medtech, a company specializing in the design, development and marketing of surgical robots. In September 2016, he sold his startup to American firm Zimmer Biomet Holdings, Inc. (based in Indiana in the Midwest), the global leader in the field of musculoskeletal health. The Montpellier site has become the R&D center for Zimmer Biomet’s robotics business. “This takeover simply deepens the alliance that already existed between the two firms, as Zimmer Biomet had already acquired the patents for the first robot that Medtech produced for orthopedic surgery,” points out Sophie Munoz-Vincent, Communications Manager at Medtech.

AMERICAN GIANT AND GLOBAL LEADER IN MEDICAL DEVICES ZIMMER BIOMET ACQUIRES MONTPELLIER-BASED FIRM MEDTECH.

“Having carried out developments focusing on the spinal column, Zimmer Biomet was keen to move into the field of neurosurgery. From our perspective, even though we were able to raise funds through stock market flotation, the financial investment required to maintain the growth of our exports – which account for 80% of our business – was colossal, prompting us to choose the external acquisition route.”

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Medtech is in the middle of a growth and recruitment phase. “We will have more than a hundred employees next year, up from 80 today,” says Nahum.

About Zimmer Biomet Founded in 1927 and based in Warsaw, Indiana, Zimmer Biomet is a global leader in the field of musculoskeletal health. Zimmer Biomet designs, manufactures and markets reconstructive orthopedic solutions, products used in sports medicine and biologics, devices for extremities and trauma, products for the spinal column, bone healing and cranio-maxillofacial care, as well as thoracic products and other products used for dental implants and surgery. Zimmer Biomet operates in more than 25 countries across the world and sells its products in more than 100 countries.

About Medtech Founded in 2002 by Bertin Nahum – named the “Fourth most revolutionary high-tech entrepreneur in the world” in 2012 by Canadian magazine Discovery Series, after Steve Jobs, Mark Zuckerberg and James Cameron – and based in Montpellier, Medtech is the market leader in the design, development and marketing of innovative robotic devices to assist surgeons during operations, thereby contributing to the implementation of safer, more effective and less invasive treatments. Over the financial year ending June 30, 2016, the company announced revenue growth of 73%, rising to €11.2 million.

1 2

La Tribune Objectif, July 2016. La Lettre M, September 2016.

SUPEROX TO ARRIVE AT FLORIDES TECHNOLOGY PARK The Florides technology park, the showpiece of the Henri Fabre project, will soon be welcoming a new tenant, Superox. Marseille suburb Marignane (Provence-Alpes-Côte d’Azur region) has been chosen as the host city for the Russian superconductor manufacturer’s new site: the Florides technology park will become home to the company’s European R&D center. Only five companies in the world have mastered SuperOx’s breakthrough technology, but none so far in Europe. “We comprehensively mapped a number of different sites in France and chose Marignane not only as the base for our European R&D center, but also to serve as a re-exportation hub. We are keen to enter discussions with France and Europe’s various electricity transmission sectors. In Marignane, we were received by decision-makers from various segments to which our technology may be of interest,” explains Cédric Etlicher, the advisor responsible for expanding the Russian manufacturer’s operations in Europe. Cédric Etlicher is already very familiar with France, having graduated from Marseille Provence School of Management, as is the founder of SuperOx, Andrey Vavilov. This Francophile former minister, a consular advisor for Russian-Belarusian affairs, has already signed a partnership agreement with Airbus for the E-Fan electric aircraft project planned for 2025-2030.

Breakthrough technology Based on the breakthrough technology it has developed, SuperOx launched a long-term 10-year development project two years ago geared towards producing an entirely new generation of cables that reduce weight by 70% while preventing energy loss. According to Cédric Etlicher, the firm’s investment in MarseilleMarignane is set to total several million euros over the coming years. Because this technology is so new and has seemingly unlimited fields of application, its potential is still difficult to measure,

but could quickly give rise to the signature of new partnerships, as well as fresh investment in both R&D and production.

SANDEN MANUFACTURING EUROPE IN BRITTANY For more than two decades, the Sanden Manufacturing Europe plant in Tinténiac has been the Sanden Group’s largest production site outside of Japan, with more than 900 employees. The site is a valuable one for Brittany, given its vibrancy not just in terms of its efforts to diversify, and the investment involved in doing so, but also in view of the jobs it creates on a regular basis. Indeed, the group, which has close ties with Brittany’s regional council, has invested €80 million in Tinténiac over the last six years to initiate its diversification. Although the manufacture of air-conditioning compressors remains its main focus, the site now also produces air-conditioning compressors for electric and hybrid vehicles, whose production will double between 2016 and 2017, from 150,000 to 300,000 units, before doubling again in 2018. To support this growth, an investment of €25 million will go into building a second assembly line, leading to the creation of around a hundred jobs. More than 40 people were already recruited in 2016. Furthermore, the plant will be taking advantage of Sanden carbon dioxide technology, which it already uses in the manufacture of a new generation of heat pumps for homes and in its condensation units for commercial refrigerated shelves. With this 100% carbon dioxide technology, Sanden is striving to make heating and refrigeration greener, safer and more efficient.

SANDEN MANUFACTURING

(Source: Ouest-France, February 18, 2017; Le Télégramme, February 17, 2017).

EUROPE CONTINUES TO INVEST, DIVERSIFY AND EXPAND IN BRITTANY.

2016 ANNUAL REPORT - BUSINESS FRANCE / 55

CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

FOCUS NOVARTIS IN ALSACE Novartis operates in 180 countries and is a leading global player in the health sector, with a diverse portfolio of health care solutions centering on innovative medicines (pharmaceuticals and oncology), costeffective generic pharmaceutical products (under the Sandoz brand), and ophthalmic products (Alcon). Novartis sets aside a significant proportion of its budget for research. In 2015, Novartis was the ninth largest corporate R&D spender in the world, spending US$8.9 billion, or 18% of its revenues, on R&D. Basel-based group Novartis is rapidly expanding in Alsace. Its 21st centur y pharmaceutical plant in Huningue now manufactures five therapeutic proteins resulting from the cultivation of genetically modified animal cells, sales of which generated over US$1 billion in revenues for Novartis last year. The expansion of a facility producing stateof-the-art biosimilars is also due to the site’s proximity to the Novartis Campus in Basel, which is a great asset for Huningue. Transferring expertise to a remote country would have led to significant delays. Total investment will easily reach €150-200 million, generating 100-150 jobs and enabling 24/7 production.

NOVARTIS IS EXPANDING RAPIDLY IN EASTERN FRANCE.

Two main types of biopharmaceutical products (based on antibodies or immune system proteins) are made in Huningue: the first combats post-transplant kidney rejection, while the second is used to treat psoriasis. These are particularly complex and painstaking production methods, since they use live cells that need to undergo a transition from laboratory to industrial scale (the “scaling-up” process). The Huningue site boasts an impressive degree of reliability thanks to its highly qualified personnel (of which 80 to 85% are French).

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DIGITAL PARTNERS AT THE HEART OF PARIS EPFL spin-off Digital Partners, based in the Swiss canton of Vaud, has developed a technology platform called ‘Bloom’, which analyzes the state of opinion on social media using algorithms that identify and distinguish emotions. The aim is to provide private companies with reports providing insight into consumers’ views on any given subject. France is a highly attractive market for Digital Partners, and for that reason the company decided to set up a decision-making center in Ile de France (Paris region), hiring 15 people in Paris since September 2016 and planning to create 40 jobs over the next three years. Business France provided Digital Partners with a variety of information – about the different ways of establishing a business in France and France’s research tax credit – while also putting the firm in touch with the Paris Region economic development agency so that it could visit potential premises and forge ties with partners such as Cap Digital and Bpifrance, France’s public investment bank: “We met advisors from the Paris Region economic development agency through Business France. That meeting had a decisive impact on our choice of location,” explains Digital Partners’ CEO, adding that “in Paris, the authorities made it clear that they were keen to welcome startups. It is a very vibrant region for the digital market, with a number of schemes to promote innovation, be it in co-working, financing or public partnerships. The potential is enormous.”

AUTOCRUISE CENTER OF EXCELLENCE IN BREST Autocruise, based in Brest in the Bretagne (Brittany) region, designs and manufactures radar cruise control systems as well as warning and collision avoidance systems for automobile manufacturers. The fruit of a joint-venture between Thales and American corporation TRW, Autocruise became a wholly owned subsidiary of the TRW group in 2003. In 2015,

TRW was then, in turn, taken over by German group ZF, which was keen to benefit from the Brest site’s radar systems expertise. The Brittany plant produced 160,000 units in 2015. Output nearly doubled the following year, to 300,000 units, and the ambition is to hit nearly one million units a year by 2020. To support this growth, the ZF group is investing €2.9 million in Brest, which will include a new production line for the AC1000 fifth-generation radar system. In the last two years, the site’s headcount has grown by one-third to 87, with twenty-one jobs created. A further dozen new hires are planned for 2017 and 2018, most of them in R&D, to underpin the group’s work on driverless vehicles. The firm’s sensor range is to be expanded, with new radars specially designed for the trucks market, and two new generations of sensors are to be developed to further enhance performance and functionality. (Source: E-lettre API, July 18, 2016; Ouest-France Entreprises, July, 19, 2016)

CONTINENTAL BOOSTS R&D CAPACITY IN TOULOUSE As part of its commitment to the connected car revolution, auto-parts maker Continental created a specific R&D site, Continental Digital Services, in 2016. It chose to locate the head office of this new subsidiary in Toulouse, for its diverse industrial, educational and research ecosystem. Continental Automotive, which specializes in on-board electrical and electronic systems, has long had a base in the Occitanie region and has a 2,500-strong workforce across its Boussens, Foix and Toulouse sites. In 2015, the group embarked upon an ambitious connected car project, for which much of the R&D will take place in France, primarily in Occitanie. The project resulted in the 2016 creation of Continental Digital Services, headquartered in Toulouse. “Whether we are talking about connection via smartphones or a direct connection, the emergence of the connected car is revolutionary,” explains Louis-Claude Vrignaud, Director of Public-Private Partnerships at Continental France. “We persuaded

the group that we had all the necessary strengths to expand our company’s operations in this brand new and highly promising field in France, and specifically in Toulouse, due, among other things, to government support for R&D through schemes such as the research tax credit and the ‘National Investment Program’, the high standard of education, training and research and their links with industry through innovation clusters, specialist research institutes and technology transfer accelerators.” Several hundred new hires are planned between now and 2020.

MIZAR AT THE COLOMIERS TECHNOLOGY PARK Mizar, a subsidiary of Spanish conglomerate Alcor Group, is setting up a base in Colomiers (Occitanie region) in a bid to become a major player in the French additive manufacturing market. Seven jobs will be created by the end of the year to help the firm target the aviation market and meet the needs of other sectors such as space, medicine and energy. Founded as an additive manufacturing service provider in 2014, Mizar is part of the Spanish industrial group Alcor (600 employees, revenues of €62 million). The subsidiary, which has 16 employees, produces metal and polymer parts for aerospace, the medical sector, and industry in general. In 2016, the company decided to establish a base in France, and in early 2017, it moved in to the Green Park technology park in Colomiers. “When it comes to additive manufacturing, France is three times the size of the Spanish market,” explains Guy Bertrand, CEO of Mizar France. By the end of the year, we will have three polymer and metal machines and a team of seven people. Our aim is to expand nationwide and become a key player in France.” The Spanish firm chose Colomiers for its strategic location at the heart of the Toulouse aerospace ecosystem and the Aerospace Valley innovation cluster, as well as for its proximity to the medical and space hubs of Bordeaux, Toulouse and Montpellier.

MIZAR PURSUES AMBITIONS IN THE FRENCH ADDITIVE MANUFACTURING MARKET.

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CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

FOCUS

EICHROM IS THE FIRST FRENCH LABORATORY ABLE TO DETECT ASBESTOS IN RADIOACTIVE SAMPLES.

EICHROM EXPANDING QUICKLY IN BRITTANY

SAKATA VEGETABLES EUROPE OPENS R&D CENTER IN OCCITANIE REGION

Eichrom’s laboratories, which have been operating in Bruz in the Bretagne (Brittany) region since 2003, perform asbestos and radioactivity analyses on all kinds of samples, including environmental matrices and samples taken during decommissioning. The laboratories obtained their first Cofrac accreditation back in 2004, and they have not rested on their laurels since, obtaining new accreditation for new methods every fifteen months. Hundreds of samples (materials and filters) arrive at Eichrom’s facilities from all over France every day.

Sakata Vegetables Europe produces vegetable seeds for sale in Europe, the Middle East and Africa. It is part of Japan’s Sakata Seed Corporation, one of the world’s leading vegetable and flower seed companies.

In 2014, as the result of a partnership with the CEA (French Atomic Energy and Alternative Energy Commission), the company marketed the first mobile laboratories for analyzing radioactivity directly in situ, which are designed to meet the needs of decommissioning projects. In 2015, Eichrom became the first French laboratory to offer Cofrac-accredited asbestos measurement on radioactive or potentially radioactive samples. This new and rare field of expertise is fueling vibrant growth: in 2016, turnover was up 60% from the previous year, while the workforce virtually doubled, from 23 to 41, with 18 jobs created over the year. Substantial new investments were made in machinery and premises, in addition to the €500,000 initially invested when the asbestos analysis unit was created, with support from the Bretagne (Brittany) region and the Rennes metropolitan area, as well as banks CIC and BNP Paribas. (Source: www.eichromlab.com/references/presse.html)

With a number of dignitaries in attendance, including the Japanese ambassador to France, Sakata Vegetables Europe opened its new R&D center in Uchaud (Occitanie region) on October 19, 2016. The ceremony marked the culmination of the second phase of a €10 million development project, the third phase of which has already been announced. The new facility will provide optimal working conditions for employees. One part will house offices, while the other will contain laboratories. The new 1,300 sq. m. building will involve an investment of €2.8 million, creating ten jobs. The research center covers four disciplines: plant selection, cell biology, plant pathology and molecular biology. It currently draws on the skills of 68 people, 38 of them based in the Gard département. Nine new employees have been hired recently, and one further recruitment is in progress. Among other subjects, research in Uchaud focuses on the Charentais melon, the tomato and the bell pepper. Taste and disease resistance are at the heart of the research process as the firm seeks to offer consumers high-quality produce while promoting rational agriculture. New varieties are selected in the lab, in greenhouses and in the fields.

PROLIFY: BETWEEN LONDON AND LA ROCHELLE Prolify CEO Graham Fell decided to establish his startup in La Rochelle, a decision motivated by the attractive lifestyle as well as the regular air services to London. “I fell in love with La Rochelle years ago while I was there on holiday. The yellow bikes, the sea bus and the public transport appealed to me, and I found the city’s environmental policy interesting and

58 / 2016 ANNUAL REPORT - BUSINESS FRANCE

innovative [..]. We work under constant stress, so I thought this beautiful, peaceful setting would be perfect for my company. The airport with three flights a week to London was also a decisive factor,” he explains. His startup helps big companies market their products, develops applications for SMEs, and provides marketing training. The Prolify founder already numbers Oracle, Hewlett-Packard, Atos, Deloitte and, most recently, Microsoft among his customers. The firm is based at the Créatio®ImagéTIC business incubator in La Rochelle, a site it found with the assistance of La Rochelle Conurbation Intermunicipal Council, which runs the facility. The same organization also helped Graham Fell find his way into the local ecosystem so that he could set up and develop his business in the best possible conditions. The startup now employs three people, with further hires to come. With a base in London already, and another in San Francisco coming soon, Prolify looks set to continue its international development.

MCCAIN SETS UP IN HAUTS DE FRANCE McCain is a privately owned company founded in 1957, specializing in food manufacturing and processing, and best known for its frozen fries. It boasts 55 production facilities and 44 sales offices across six continents, and sells its products in more than 160 countries. McCain employs 19,000 people. Its European headquarters has been located in Villeneuve-d’Ascq (Hauts de France region) since 1981. The firm has three production facilities in France, including a major plant (with 600 employees) in Harnes and another site in Béthune (both Hauts de France). McCain’s total French workforce numbers 1,100. In 2016, the company announced its decision to create an innovation center that will eventually create 15 jobs. Business France

and Nord France Invest are supporting the investor with its regional development, regularly assessing its French footprint in order to recommend the most suitable investment opportunities, as well as offering their assistance with recruitment.

VESTAS: WIND TURBINES IN THE GRAND EST REGION Vestas, the world’s leading wind turbine manufacturer, opened its ninth French maintenance center in the Aube département (Grand Est region) on July 1, 2016. The center is responsible for 160 turbines across around twenty different wind farms in France, which produce 100% renewable energy. The aim is to guarantee what is referred to in the trade as “availability”. Operations Manager Sylvain Michaut and his 23-strong team are based in the Saint-Thibault business park. The facility comprises 1,000 sq. m. of storage space and 200 sq. m. of offices for 17 technicians responsible for performing both preventive (lubrication, filter maintenance, checking electromechanical systems) and predictive maintenance (inspecting and replacing components to limit risk of breakage), along with curative maintenance as and when required (in the event of faulty contactors or circuit-breakers, for instance). “Our technicians always work in pairs, whether they’re conducting scheduled maintenance or troubleshooting,” explains the regional supervisor, emphasizing, as ever, Vestas’ two major priorities: safety and quality. To do this, Sylvain Michaut works with one person responsible for planning, a technical manager and three warehousemen dealing with inflows (parts arriving from Germany, where they are manufactured) and outflows (equipment transported to the wind farms by the teams). “From Aube, with the A5 and A26 motorways on our doorstep, we can easily supply parts to the wind farms in the Grand Est region,” he observes.

VESTAS HAS MOVED INTO SUITABLE PREMISES, SPECIALLY FITTED OUT BY LOCAL COMPANIES.

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CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

THE CONTRIBUTION OF FOREIGN SUBSIDIARIES TO FRANCE’S REGIONAL ECONOMIES MULTINATIONAL FIRMS ARE MORE EFFICIENT AND PRODUCTIVE THAN DOMESTIC COMPANIES.

s foreign multinationals benefit from expertise within their parent companies, synergies between subsidiaries, global economies of scale, and differences in factor prices, they are more efficient and productive than domestic companies.

OVERVIEW OF FOREIGN-OWNED COMPANIES Foreign multinationals are set up throughout France and contribute to economic growth in the regions that host them. According to the French National Institute for Statistics and Economic Studies (INSEE), there are a total of 22,571 foreignowned legal entities in France.1 At the end of 2014, foreign firms in France accounted for only one percent of all companies in France, but: • Generated 19% of all turnover2 in the French economy. • Employed 12% of all employees in France. • Generated 30% of all export turnover. While these companies are set up nationwide, there is nevertheless a high concentration around major cities; consequently, Ile de France (Paris region) and Rhône-Alpes are home to more than half of these firms. Most foreign-owned companies operating in France are from fellow European countries, accounting

60 / 2016 ANNUAL REPORT - BUSINESS FRANCE

for 79% of legal entities. The leading source countries are Germany (16% of all foreignowned legal entities), the United States (11%), Belgium (11%), Luxembourg (11%) and the United Kingdom (9%).

FOREIGN INVESTMENT IN FRANCE LED BY MID-SIZE COMPANIES Mid-size companies dominate foreign investment in France, accounting for 52% of foreign company employees and turnover generated in France, as well as 60% of export turnover. [Fig. 5] While only 15% of mid-size companies in France are under foreign ownership, they collectively provide 27% of all jobs at companies of this size. [Fig. 8]

A legal entity may be governed by public or private law, and may either be: - A legal person, whose existence is recognized by law independently of the individuals or institutions that may own them or are members of them. - A natural person, engaged in an economic activity in their own right, and must be declared to all the authorities (Commercial Court Registry, Social Security Authorities, Tax Authorities, etc.). The existence of such a legal entity arises from the choices of its owners or founders (for organizational, legal or tax purposes). A legal entity is the main unit recorded in France under the SIRENE company registration system. 2 Turnover is defined as the total post-tax revenue generated by companies from third parties in the ordinary course of business. It corresponds to the sum total of all sales of goods, manufactured products, services and secondary products. 1

FIG. 4 Distribution of foreign-owned companies in France by source country

FIG. 3 Regional distribution of foreign-owned companies NordPas-de-Calais 7% Picardie 2%

16 15 Alsace 5%

11 11 11 10

Bourgogne 2%

Franche-Comté 1%

7 5

Aquitaine 2% Midi-Pyrénées 2% LanguedocRoussillon 2%

Provence-AlpesCôte-d’Azur 6%

Luxembourg United Kingdom

Germany

Auvergne 1%

1 1 1

Rhône-Alpes 11%

United States Belgium

Poitou-Charentes Limousin 1% 0%

Austria

Centre 2%

Pays-de-la-Loire 2%

Switzerland Italy Spain Sweden Japan

Bretagne (Brittany) 2%

Lorraine 3%

Canada Ireland

Ile de France (Paris region) ChampagneArdenne 45 % 1%

Netherlands

BasseNormandie 1%

HauteNormandie 1%

% 20

Source: INSEE; Business France calculations

Corse (Corsica) 0%

Guadeloupe 0%

Guyane 0%

Martinique 5%

La Réunion 6%

Source: INSEE; Business France calculations

FIG. 5 Breakdown of foreign corporate activity in France by company size

CONTRIBUTION TO REGIONAL WEALTH As of the end of 2014, foreign companies in France generated 19% of all turnover in the French economy, and 25% of all turnover in the manufacturing sector. Foreign-owned multinationals generated 35% of all turnover in the Alsace region, 25% in Ile de France (Paris region), 24% in Picardie, 21% in Haute-Normandie, and 20% in Rhône-Alpes and Lorraine. The contribution made by companies varies by economic activity. In the manufacturing sector, foreign-owned subsidiaries were predominant in the Alsace region (54%), while more than one-third of regional turnover in this sector was generated by foreign-owned multinationals in Lorraine (45%), Haute-Normandie (37%), NordPas de Calais (40%), and Rhône-Alpes (34%).

■ Large corporates ■ Mid-size companies ■ SMEs ■ Micro-enterprises

47 43

34 30

26 23

16 13

8 5 1

Turnove

r Numbe s l entitie a g le f o

of rnover loyees Numbernies Export tu umber of emp N compa g in rt o p ex

Source: INSEE; Business France calculations

2016 ANNUAL REPORT - BUSINESS FRANCE / 61

CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

Pas de Calais (26%), Rhône-Alpes (26%), and Picardie (26%).

A MAJOR CONTRIBUTION TO EMPLOYMENT At the end of 2014, INSEE recorded 22,571 foreign subsidiaries in France, employing nearly 1.8 million people, or 12% of the workforce outside the agriculture, financial and government sectors (approximately one in eight employees).

FOREIGN SUBSIDIARIES ACTIVELY CONTRIBUTING TO R&D In 2013, 28% of all business enterprise R&D expenditure (BERD) in France was made by foreign-owned companies, amounting to a total of €8.6 billion.

Although foreign companies account for only one percent of all companies in France, they play a critical role in French regional development. For example, they account for one-quarter of all jobs in the Alsace region (26%), 17% in Ile de France (Paris region), 14% in Lorraine, and 13% in the Rhône-Alpes and Nord-Pas de Calais regions.

The concentration of BERD is higher among foreign companies. Two sectors accounted for 37% of overall expenditure: the manufacture of air and spacecraft generated 25% of BERD by foreign companies (€2.2 billion), while electronic components and boards accounted for €1.1 billion or 12%.

The contribution of foreign-owned companies is particularly significant in manufacturing, where 21% of all jobs in the sector are provided by these companies. Their contribution is higher than the national average in Alsace (44%), Lorraine (33%), Haute-Normandie (26%), Nord-

The contribution to R&D expenditure from foreign-owned subsidiaries is significant in sectors such as: electronic components, boards, computers etc. (74% of total BERD expenditure); manufacture of air and spacecraft (63%);

FIG. 7 Contribution of foreign-owned companies to regional turnover (manufacturing sector)

FIG. 6 Contribution of foreign-owned companies to regional turnover (all sectors) NordPas-de-Calais 18%

NordPas-de-Calais 40%

Picardie Haute24% Normandie 21% BasseLorraine Ile de France Normandie (Paris region) Champagne- 20% 2% 25% Ardenne Bretagne (Brittany) 12% 6% Centre 15 %

Pays-de-la-Loire 10%

Poitou-Charentes Limousin 6% 5%

Bourgogne 15%

Auvergne 5%

Alsace 35%

Franche-Comté 15%

Picardie Haute30% Normandie 37% BasseLorraine Ile de France Normandie (Paris region) Champagne- 45% 9% 24% Ardenne Bretagne (Brittany) 20% 13% Centre 38%

Pays-de-la-Loire 16%

Poitou-Charentes Limousin 13% 11%

Rhône-Alpes 20%

Aquitaine 8%

Bourgogne 37%

Auvergne 6%

Franche-Comté 28%

Rhône-Alpes 34%

Aquitaine 19% Midi-Pyrénées 8% LanguedocRoussillon 12%

Provence-AlpesCôte-d’Azur 11%

Midi-Pyrénées 12% LanguedocRoussillon 24%

Corse (Corsica) 3%

Guadeloupe 2%

Alsace 54%

Guyane 3%

Martinique 5%

Source: INSEE; Business France calculations

62 / 2016 ANNUAL REPORT - BUSINESS FRANCE

La Réunion 6%

Provence-AlpesCôte-d’Azur 31%

Corse (Corsica) 2%

Guadeloupe -

Guyane 10%

Source: INSEE; Business France calculations

Martinique 1%

La Réunion 9%

FIG.8 Contribution of foreign-owned companies

METHODOLOGY The contribution made by foreign subsidiaries to the French economy has been measured using INSEE data on foreign-owned resident company employment, turnover, investment in tangible assets, and foreign trade for the year 2014 (last year available). Data are taken from the INSEE “Financial Links Between Enterprises Survey” (LiFi) and “Annual Business Statistics Program” (ESANE).

■ Turnover ■ Number of legal entities ■ Export turnover ■ Number of employees ■ Number of exporting companies

% 60

53 50 40

35 30 20 10

2727

11 5

7 1 0

Large corporates

Mid-size companies

SMEs

Micro-enterprises

Total

Source: INSEE; Business France calculations

Key: 53% of the export turnover generated by mid-size companies in France is made by foreign-owned companies.

FIG. 9 Contribution of foreign-owned companies to regional employment (all sectors)

FIG. 10 Contribution of foreign-owned companies to regional employment (manufacturing sector)

NordPas-de-Calais 13%

NordPas-de-Calais 26%

Picardie Haute12% Normandie 11% BasseLorraine Ile de France Normandie (Paris region) Champagne- 14% 3% 17% Ardenne Bretagne (Brittany) 10% 5% Centre 10%

Pays-de-la-Loire 9%

Poitou-Charentes Limousin 5% 7%

Bourgogne 11%

Auvergne 4%

Alsace 26 %

Franche-Comté 10%

Picardie Haute26% Normandie 26% BasseLorraine Ile de France Normandie (Paris region) Champagne- 33% 8% 20% Ardenne Bretagne (Brittany) 20% 2% Centre 25%

Pays-de-la-Loire 16%

Poitou-Charentes Limousin 13% 9%

Rhône-Alpes 13%

Aquitaine 5%

Bourgogne 28 %

Auvergne 8%

Franche-Comté 20%

Rhône-Alpes 26%

Aquitaine 14% Midi-Pyrénées 6% LanguedocRoussillon 5%

Provence-AlpesCôte-d’Azur 7%

Midi-Pyrénées 11% LanguedocRoussillon 17%

Corse (Corsica) 1%

Guadeloupe 3%

Alsace 44%

Guyane 2%

Source: INSEE; Business France calculations

Martinique 2%

La Réunion 3%

Provence-AlpesCôte-d’Azur 16%

Corse (Corsica) 1%

Guadeloupe 3%

Guyane 7%

Martinique 1%

La Réunion -

Source: INSEE; Business France calculations

2016 ANNUAL REPORT - BUSINESS FRANCE / 63

CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

BREAKDOWN BY SOURCE COUNTRY OF BUSINESS ENTERPRISE R&D EXPENDITURE AND RESEARCHERS3 Parent company

Source country

ISS A/S-INTEGRATED SERVICE SOLUTIONS

Denmark

Services to buildings and landscape activities.

25,000

CLAYTON, DUBILIER & RICE (Hertz, Exova)

United States

Financial service activities, except insurance and pension funding.

25,000

LIDL

Germany

Retail trade, except of motor vehicles and motorcycles.

20-25,000

RAMSAY HEALTH CARE

Australia

Human health activities (private clinics).

20-25,000

KKR (Kohlberg Kravis Roberts & Co.)

United States

Financial and insurance activities. Other services activities.

20,000

GENERAL ELECTRIC (GE)

United States

Manufacture of machinery and equipment. Manufacture of electrical, electronic, IT equipment.

15-20,000

KINGFISHER PLC (Castorama, Brico Dépôt)

United Kingdom

Retail trade, except of motor vehicles and motorcycles.

15-20,000

ARCELORMITTAL

Luxembourg

Manufacture of basic iron and steel and of ferro-alloys. Manufacture of machinery and equipment. Manufacture of other transport equipment.

15-20,000

SECURITAS AB

Sweden

Security and investigation activities. Office administrative, office support and other business support activities.

15-20,000

COMPASS GROUP PLC

United Kingdom

Food and beverage service activities. Activities of head offices, management consultancy activities.

15-20,000

LOUIS DELHAIZE-COMPAGNIE FRANCO-BELGE D’ALIMENTATION (Match, Cora, Truffaut)

Belgium

Food, agriculture, fishing.

15-20,000

NESTLE S.A.

Switzerland

Manufacture of food products. Manufacture of beverages. Wholesale trade, except of motor vehicles and motorcycles.

15-20,000

BLACKSTONE

United States

Financial and insurance activities. Other services activities.

15,000

BRIDGEPOINT ADVISERS GROUP LTD.

United Kingdom

Financial and insurance activities. Other services activities.

10-15,000

XPO LOGISTICS LLC

United States

Transport, storage.

10-15,000

WALT DISNEY CO.

United States

Sports activities, amusement and recreation activities. Activities of head offices, management consultancy activities.

10-15,000

DEUTSCHE POST AG

Germany

Warehousing and support activities for transportation. Real estate activities.

10-15,000

JIN JIANG INTERNATIONAL HOLDINGS CO., China LTD. (Louvre Hotels Group)

Hotels, tourism, restaurants.

10-15,000

ALLIANZ SE

Germany

Financial and insurance activities.

10-15,000

FAMILIEN PORSCHE/PIECH

Germany

Manufacture of motor vehicles.

10-15,000

UNITED TECHNOLOGIES CORPORATION (P&W, Ratier-Figeac, Otis)

United States

Specialised construction activities. Manufacture of machinery and equipment. Manufacture of other transport equipment.

10-15,000

BERTELSMANN STIFTUNG

Germany

Consulting, engineering and business services. Other services activities.

10-15,000

Source: Orbis; Astrée; Business France calculations

64 / 2016 ANNUAL REPORT - BUSINESS FRANCE

Economic activity

Employees in France

manufacture of basic metals (56%); manufacture of machinery and equipment (53%); manufacture of irradiation equipment (49%); manufacture of wood and paper (37%); food processing (36%); the chemical industry (33%); and manufacture of textiles and clothing (30%).

TWO-THIRDS OF FOREIGN R&D INVESTMENT MADE BY EUROPEAN COMPANIES With €6.4 billion in business enterprise R&D expenditure, European companies generated more than three-quarters of foreign R&D investment in France. The Netherlands and

Germany are the main European countries whose companies spend the most on R&D in France. Also of note is that the holding company for Airbus Group is located in the Netherlands and accounts for a majority of foreign BERD. With €1.4 billion, the United States accounted for 19% of R&D investment by foreign companies in France.

FOREIGN COMPANIES OPERATING IN FRANCE EMPLOY OVER ONEQUARTER OF ALL RESEARCHERS Twenty-seven percent of all researchers, i.e. 43,226 full-time equivalents (FTEs), who work

BREAKDOWN BY SOURCE COUNTRY OF BUSINESS ENTERPRISE R&D EXPENDITURE AND RESEARCHERS3

European Union (EU-28)

FIG. 11 Contribution of foreign subsidiaries to R&D expenditure by economic activity (top 15)

BERD (€ million)

Researchers (full-time equivalent)

6,434

31,421

Austria

198

Belgium

302

1,492

Denmark

224

Finland

216

933

4,715

Italy

183

868

Luxembourg

570

3,266

Netherlands4

3,369

15,461

Spain

108

548

Sweden

367

1,691

United Kingdom

418

2,463

485

2,216

Europe sub-total

6,934

33,705

United States

1,379

7,436

301

Japan

178

929

Rest of world

170

855

8,697

43,226

30,708

161,882

Switzerland

Canada

Sub-total (foreign subsidiaries) TOTAL (ALL COMPANIES)

■ Contribution to BERD Contribution to foreign R&D expenditure

63 56

45 37

30 22 22 20 19 19 18

Germany

Norway

12 3

7 1

7 0

t g g, r g y g s t s s t t s ts s, rd tc. raf tal en en trie pe sin str in ice icle en in tin cks uc oa s, e cec me ipm ipm dus , pa ces indu cloth serv veh uipm , fish , tes clo rod b , er a ic qu qu in od pro al d er or eq try ng es/ c p e e g o t t n s ri h ti nts ut sp as c l ne omp and of b ery, tion urin of w ood emi es a mpu f mo rica fore asu atc plas o t e F Ch xtil co o ct e, me ; w d p c ir re n a c i i m e le r f ts n a u ach rad ufa tur , e co f t IT ctur of e ultu . o en er a r an fac of ct e ufa f m f i nic eo fa re gric an trum bb r u tc ur an re o re o er m anu u u tc ro t A M ins f ru an ct a M tu ctu th M ac M ufa uf Ele n o O uf ac ufa n n io e f an a u a at tur M M M an Man iv g fac M na anu M

Source: French Ministry for Primary, Secondary and Higher Education and Research.

Source: French Ministry for Primary, Secondary and Higher Education and Research

The nationality of each firm is determined by the country code of the group parent company. The figures for the Netherlands are distorted by the domiciliation of the Airbus Group holding company in the country

3 4

2016 ANNUAL REPORT - BUSINESS FRANCE / 65

CHAP. 2 / INVESTMENT ATTRACTIVENESS OF FRANCE’S REGIONS IN 2016

A DRIVER OF REGIONAL EXPORTS

for a company in France actually work for a foreign company. Foreign companies are

Foreign-owned companies are responsible for

increasingly focused on manufacturing activities,

30% of French exports, with the figure reaching

with nearly half of all researchers in France

34% in the manufacturing sector.

working in industries such as the manufacture of air and spacecraft (21%), electronic

While mid-size companies account for 60% of

components/boards/computers (15%) and

all export turnover by foreign-owned firms, their

the manufacture of motor vehicles (11%).

share is lower among all domestic companies, where mid-size companies account for only 35% of export turnover.

FIG. 12 Breakdown of researchers in top 20 economic activities %

■ Foreign subsidiaries ■ French companies

Manufacture of air and spacecraft Electronic components, boards, computers, etc. Manufacture of motor vehicles IT, computer services Manufacture of machinery, equipment Pharmaceutical industry Professional, scientific and technical activities Chemical industry Man. of measuring, testing, navigation instruments; watches/clocks Publishing, broadcasting Manufacture of electrical equipment Food processing Manufacture of basic metals Other manufacturing not elsewhere classified Manufacture of communication equipment Manufacture of rubber and plastic products Manufacture of metal products, except machinery/equipment Other activities not elsewhere classified Telecommunications Manufacture of irradiation equipment 0 Manufacture of ships/boats, rail rolling stock, military vehicles 0

11 11

1 1

5 5 5

5 12

3 2 3 22 2 2 2

1 2 1 1 1 1 1 1 1

3 4

Source: French Ministry for Primary, Secondary and Higher Education and Research

THE OPEN NATURE OF THE FRENCH ECONOMY More than 30,000 French companies have established themselves in foreign countries, while 22,571 foreign companies have made job-creating investments in France. France is a preferred location for inward investment, ranking sixth in the world for FDI flows (UNCTAD, 2017), after the United States, the United Kingdom, China, Brazil, and Singapore. The French economy is very open to foreign investment. Data from the French National Institute for Statistics and Economic Studies

(INSEE) states that foreign subsidiaries: •P rovide jobs for 12% of the workforce in France • Generate 19% of all turnover in France • Generate 30% of all French exports This open nature is more pronounced in the manufacturing sector. According to data from INSEE, foreign subsidiaries: • Provide jobs for 21% of the manufacturing sector workforce in France • Generate 25% of all French manufacturing turnover • Generate 34% of all French manufacturing exports.

66 / 2016 ANNUAL REPORT - BUSINESS FRANCE

45% of the equity of companies listed on the CAC 40 is owned by foreign investors (Banque de France, September 2016). Foreign subsidiaries in France account for 28% of all business enterprise R&D expenditure (BERD) in France. (French Ministry for Primary, Secondary and Higher Education and Research, 2016). Twenty-nine of the world’s top 500 companies are French, while 20 are German and 20 are British. (Fortune Global 500, 2016)

Foreign subsidiaries generate more than half of all export turnover in Alsace (63%), Lorraine (57%) and the Centre region (56%). It is also noteworthy that the contribution of foreign-

CONTRIBUTION OF FOREIGNOWNED COMPANIES TO REGIONAL EXPORTS (ALL SECTORS)

FIG. 13 Size of exporters in France

The internationalization of the French manufacturing sector is particularly evident in a number of regions, with foreign companies playing a key role in Alsace (73%), Lorraine (66%), Centre (64%), Languedoc-Roussillon (62%), Bourgogne (Burgundy) (60%), Picardie (58%), Franche-Comté (58%), and HauteNormandie (53%).

100

owned companies to exports is greater than the national average in the Nord-Pas de Calais region (47%).

35 All companies

Foreign companies

40 13 20

Large corporates

Mid-size companies

36 1

SMEs

Micro-enterprises

Source: INSEE; Business France calculations

FIG. 14 Contribution of foreign-owned companies to regional exports (all sectors)

FIG. 15 Contribution of foreign-owned companies to regional exports (manufacturing sector)

NordPas-de-Calais 42%

NordPas-de-Calais 52%

Picardie Haute47% Normandie 67% BasseLorraine Ile de France Normandie (Paris region) Champagne- 57% 14% 26 % Ardenne Bretagne (Brittany) 21 % 24% Centre 56%

Pays-de-la-Loire 36%

Poitou-Charentes Limousin 22% 24%

Bourgogne 49%

Auvergne 4%

Alsace 63%

Franche-Comté 54%

Picardie Haute58% Normandie 53% BasseLorraine Ile de France Normandie (Paris region) Champagne- 66% 17% 23% Ardenne Bretagne (Brittany) 27% 35% Centre 64%

Pays-de-la-Loire 38%

Poitou-Charentes Limousin 27% 40%

Rhône-Alpes 43%

Aquitaine 22%

Bourgogne 60%

Auvergne -

Franche-Comté 58%

Rhône-Alpes 47%

Aquitaine 33% Midi-Pyrénées 27% LanguedocRoussillon 35%

Provence-AlpesCôte-d’Azur 22%

Midi-Pyrénées LanguedocRoussillon 62%

Corse (Corsica) -

Guadeloupe 11%

Alsace 73%

Guyane 0%

Source: INSEE; Business France calculations

Martinique -

La Réunion 5%

Provence-AlpesCôte-d’Azur 44%

Corse (Corsica) 0%

Guadeloupe -

Guyane 0%

Martinique -

La Réunion -

Source: INSEE; Business France calculations

2016 ANNUAL REPORT - BUSINESS FRANCE / 67

03 FOREIGN INVESTMENT OVERVIEW ASEAN COUNTRIES 70 AUSTRALIA 72 AUSTRIA 74 BELGIUM 76 CANADA 79 CENTRAL AND EASTERN EUROPE 81 CHINA 83 DENMARK 86 FINLAND 88 GERMANY 90 Â© Shutterstock.com

INDIA 93 IRELAND 95 ISRAEL 97 ITALY 99 JAPAN 102 LATIN AMERICA 105 MAGHREB COUNTRIES 107 MIDDLE EAST 109 NETHERLANDS 111 NORWAY 113 PORTUGAL 115

RUSSIA 117 SOUTH AFRICA 119 SOUTH KOREA 121 SPAIN 123 SWEDEN 126 SWITZERLAND 129 TAIWAN 132 TURKEY 134 UNITED KINGDOM 136 UNITED STATES 139

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

ASEAN COUNTRIES FLOW

6 PROJECTS (Business France)

88 JOBS

(Business France)

STOCK

More than

180 COMPANIES IN FRANCE (Orbis)

More than

4,700 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€998 million

SIX NEW INVESTMENT DECISIONS WERE RECORDED IN FRANCE FROM ASEAN MEMBER COUNTRIES IN 2016. ASEAN COMPANIES IN FRANCE There are more than 180 companies from ASEAN member countries operating in France, where they employ more than 4,700 people. Six new investments from Singapore, Thailand, Malaysia and Vietnam were confirmed in 2016, creating 88 jobs. Investments from ASEAN member countries in 2016 were equally split into decision-making centers (33%), production/manufacturing operations (33%) and consumer services (33%). ASEAN investments in France in 2016 were made in a variety of sectors, including hotels/ tourism, construction/building materials, business services, agri-food, and telecoms, and were mostly located in Ile de France (Paris region) (67%).

FRANCE AS A RECIPIENT OF ASEAN INVESTMENT IN EUROPE In 2016, the United Kingdom was the leading European recipient of job-creating investment from ASEAN member countries, attracting 55% of ASEAN projects in Europe, followed by Germany (18%).1

SELECTED INVESTMENT PROJECTS IN 2016 THE ASCOTT LTD.: Ascott is a leading international serviced residence owner-operator and a subsidiary of CapitaLand, one of the largest real estate companies in Asia. The group recently finalized acquisition of a new luxury property in Paris (Ile de France region), La Clef Champs-Élysées Paris, which will open its doors in 2018. Having acquired the Citadines hotel chain in 2002, Ascott now has 28 residences with more than 3,000 apartments and employs more than 600 people in France. GIC (GOVERNMENT OF SINGAPORE INVESTMENT

In 2016, GIC completed its acquisition of a 25% stake in CéGéReal, a real estate company specializing in high-end office properties in Ile de France (Paris region). EASTERN TECHNOLOGICAL COLLEGE (E.TECH): After founding a bilingual secondary school in Paris (Ile de France region), this privately held education company decided to add a primary school division. The expansion will create a total of 14 jobs. VIETTEL: Vietnam’s largest mobile telephone network operator Viettel is internationalizing at a rapid pace, and aims to become a leading global operator by 2020. It recently opened a European subsidiary in Paris (Ile de France region) to serve as a springboard for expansion into Europe and Africa. CORPORATION):

Business France Europe Observatory.

(Banque de France*)

FRENCH EXPORTS:

€14.8 billion (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €1.4 billion.

TOP 5 ASEAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

CAPITALAND LTD. - CITADINES (Singapore)

Other services

600-700

PTT GLOBAL CHEMICAL (VENCOREX) (Thailand)

Chemicals, plastics

600-700

PT SINAR MAS GROUP (Indonesia)

Glass, ceramics, minerals, wood, paper Agri-food, agriculture, fishing

600-700

PA HOLDING LTD. (PLAZA ATHENEE) (Malaysia)

Hotels, tourism and restaurants

500-600

THAI UNION FROZEN PRODUCTS Agri-food, agriculture, fishing plc (Thailand)

70 / 2016 ANNUAL REPORT – BUSINESS FRANCE

300-400

BREAKDOWN OF PROJECTS BY SOURCE COUNTRY Number Source country

Projects

Jobs

Singapore

Thailand

Malaysia

Vietnam

TOTAL

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

33%

First-time investments

33%

Production / Manufacturing

33%

18%

Consumer services

33%

73%

100%

TOTAL

Key:

>>In 2016, 33% of ASEAN investments in France were in production/manufacturing; 1% of foreign investments in production/manufacturing were made by ASEAN companies.

* Share of ASEAN investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Business sector

Projects

National share

Total share*

Hotels, tourism and restaurants

17%

Other services

17%

Construction, building materials

17%

Consulting, engineering and business services

17%

Agri-food, agriculture, fishing

17%

Telecoms, internet service providers

17%

13%

100%

TOTAL

Key:

>>In 2016, 17% of ASEAN investments in France were in the hotels/tourism/restaurants sector; 3% of foreign investments in the hotels/tourism/restaurants sector were made by ASEAN companies.

* Share of ASEAN investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

67%

82%

Nouvelle Aquitaine

17%

14%

Bretagne (Brittany)

17%

100%

TOTAL

Key:

>>In 2016, 67% of ASEAN investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by ASEAN companies.

* Share of ASEAN investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 71

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

AUSTRALIA BUSINESS FRANCE RECORDED TWO INVESTMENTS BY AUSTRALIAN COMPANIES IN 2016. FLOW

2 PROJECTS (Business France)

103 JOBS (Business France)

STOCK

140 COMPANIES IN FRANCE (Orbis)

40,000 EMPLOYEES (Orbis)

AUSTRALIAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are 140 Australian companies operating in France, where they employ 40,000 people.

AZIANA: Australian BrainChip (formerly Aziana) is a leader in neural networks. In 2016, the company bought French artificial vision firm Spikenet Technology and intends to create further jobs on site. Based near Toulouse (Occitanie region), Spikenet has developed a disruptive shape recognition technology inspired directly by the latest advances in neuroscience.

Two new Australian investments were made in France in 2016, creating around a hundred jobs. These investment decisions involved the acquisition of a firm specializing in developing artificial vision technology and an expansion of a clinic. Both investments were made in the Occitanie region.

FRANCE AS A RECIPIENT OF AUSTRALIAN INVESTMENT IN EUROPE In 2016, the United Kingdom was the leading European recipient of job-creating investment from Australia, attracting 59% of Australian projects in Europe, followed by Ireland (11%), while France attracted 4%.1

Australian group Brambles, which has been in France for more than 35 years under the name of its subsidiary CHEP, is the global leader in reusable pallet, plastic crate and container pooling services. Its French subsidiary Recall acquired Arche, a paper document preservation firm based in Ile de France (Paris region) and south-east France.

BRAMBLES LTD.:

Business France Europe Observatory.

FDI STOCK IN FRANCE:

€1.1 billion

24TH PLACE (Banque de France*)

FRENCH EXPORTS:

€2.2 billion

36TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €2.4 billion.

TOP 5 AUSTRALIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

RAMSAY HEALTH CARE LTD.

Other services

22,000

AMCOR LTD.

Glass, ceramics, minerals, wood, paper Chemicals, plastics

2,000-2,500

BRAMBLES LTD.

Transport, storage

700-800

DOMINO’S PIZZA ENTERPRISES LTD.

Hotels, tourism and restaurants

300-500

COMMONWEALTH BANK OF AUSTRALIA

Financial services, banking and insurance

200-300

72 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY 2015 Business activity

2016

Projects

Jobs

Decision-making centers

First-time investments

R&D, engineering, design R&D Consumer services TOTAL

Projects

Jobs

100

103

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR 2015 Business sector

Other services

2016

Projects

Jobs

Projects

Jobs

100

103

Software and IT services Financial services, banking and insurance

Electrical/electronic/IT equipment

Jobs

Projects

Jobs

103

TOTAL

BREAKDOWN OF PROJECTS BY HOST REGION 2015 Host region

Projects

2016

Occitanie Ile de France (Paris region)

Nouvelle Aquitaine

Bourgogne-Franche-Comté

TOTAL

2016 ANNUAL REPORT – BUSINESS FRANCE / 73

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

AUSTRIA AUSTRIAN INVESTMENTS IN FRANCE WERE BUOYANT IN 2016.

FLOW

17 PROJECTS (Business France)

310 JOBS (Business France)

STOCK

More than

220 COMPANIES IN FRANCE (Orbis)

More than

8,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€927 million

AUSTRIAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are over 220 Austrian companies operating in France, where they employ more than 8,000 people. Seventeen new investments from Austria were recorded in 2016, creating or maintaining 310 jobs. Austrian companies invested primarily in business services (41%), production/manufacturing (29%) and decision-making centers (24%). Nearly one-third of Austrian investments in France were made in the machinery/ mechanical equipment sector (29%). Austrian investments were most often located in Ile de France (Paris region) (29%), followed by Pays de la Loire, AuvergneRhône-Alpes and Grand Est (18% each).

RIEDEL (TIROLER): Austrian glassware maker Riedel, a leader in the wine glass market, recently established its first French subsidiary, located in Paris (Ile de France region). The subsidiary’s showroom displays all of the parent company’s collections. Riedel aims to continue and fast-track the brand’s expansion in the French market. EINBÖCK: After 80 years of operations, Einböck, the Austrian agricultural and tillage machinery maker took the big step of establishing its first foreign subsidiary, in France, where it will employ around 10 people. The company decided to open a subsidiary in the Grand Est region to respond more effectively to the needs and expectations of its customers and partners in France. SOL EIL: Austrian window and door specialist Sol Eil established a French subsidiary in Saint-Dié-des-Vosges (Grand Est region), creating around ten jobs. With a view to meeting its customers’ growing demands and maximizing sales in France, Sol Eil chose the Vosges area, where its former distributor was located.

FRANCE AS A RECIPIENT OF AUSTRIAN INVESTMENT IN EUROPE In 2016, France was the joint third largest European recipient of job-creating foreign investment from Austria, along with Slovakia, Poland and Hungary, each attracting 9% of Austrian projects in Europe, preceded by Germany (24%) and the Czech Republic (12%).1

Business France Europe Observatory.

28TH PLACE (Banque de France*)

FRENCH EXPORTS:

€3.7 billion

TOP 5 AUSTRIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

BOREALIS AG

Chemicals, plastics

900

(Customs Authorities)

WIENERBERGER AG

Construction, building materials

800-900

NUMBER OF COMPANIES IN THE FORBES 2000:

FRITZ EGGER GmbH & Co.

Glass, ceramics, minerals, wood, paper

800-900

MAGNA EUROPE AG

Automotive industry

700

ANDRITZ AG

Machinery and mechanical equipment

600-700

26TH PLACE

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €1.6 billion.

74 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Projects

National share

Total share*

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

24%

12%

First-time investments

24%

12%

Retail outlets

Production / Manufacturing

193

29%

62%

Business services TOTAL

41%

23%

310

100%

Key:

>>In 2016, 29% of Austrian investments in France were in production/manufacturing; 2% of foreign investments in production/manufacturing were made by Austrian companies.

* Share of Austrian investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

29%

14%

Machinery and mechanical equipment Glass, ceramics, minerals, wood, paper

110

12%

35%

15%

Energy, recycling, other concessions

12%

Medical/surgical equipment, diagnostics and devices

20%

Chemicals, plastics

Furnishings, household goods

Construction, building materials

Consulting, engineering and business services

Automotive industry

Electrical/electronic/IT equipment

Metals, metalworking

310

100%

TOTAL

Key:

>>In 2016, 29% of Austrian investments in France were in the machinery/mechanical equipment sector; 8% of foreign investments in the machinery/ mechanical equipment sector were made by Austrian companies.

* Share of Austrian investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Ile de France (Paris region) Pays de la Loire Auvergne-Rhône-Alpes Grand Est Bourgogne-Franche-Comté Normandie Provence-Alpes-Côte d’Azur TOTAL

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

5 3 3 3 1 1 1

50 120 33 24 63 10 10

29% 18% 18% 18% 6% 6% 6%

16% 39% 11% 8% 20% 3% 3%

1% 5% 3% 3% 2% 5% 1%

1% 6% 1% 1% 5% 3% 0%

310

100%

Key:

>>In 2016, 29% of Austrian investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Austrian companies.

* Share of Austrian investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 75

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BELGIUM FLOW

53 PROJECTS (Business France)

743 JOBS

(Business France)

STOCK

More than

4,600 COMPANIES IN FRANCE (Orbis)

More than

135,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

BELGIUM WAS THE FOURTH LEADING EUROPEAN INVESTOR IN FRANCE IN 2016, ACCOUNTING FOR 5% OF FOREIGN INVESTMENTS RECEIVED. BELGIAN COMPANIES IN FRANCE There are over 4,600 Belgian companies operating in France, where they employ more than 135,000 people. Fifty-three new investments from Belgium were recorded in 2016, creating or maintaining 743 jobs. Belgian investments in France were made primarily in production/manufacturing operations (30%) decisionmaking centers (21%), and business services (21%). The software and IT services sector accounted for 25% of all Belgian investment in 2016, while Belgian firms operating in the transport/storage sector accounted for 13% of foreign projects in this sector in France. Belgian firms mainly invested in Ile de France (Paris region) (26%), and Hauts de France (21%). The latter border region received 11% of all its foreign investment from Belgium.

FRANCE AS A RECIPIENT OF BELGIAN INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Belgium, attracting 34% of Belgian projects in Europe, followed by Germany (10%), the Netherlands and the United Kingdom (both 8%).1

€54.5 billion

SELECTED INVESTMENT PROJECTS IN 2016 DELMAR: Delmar

is a Belgian family-owned SME specializing in concrete stairs and balconies. In response to favorable growth prospects in the French market, it decided to increase its presence in France, in the Aube département (Grand Est region), where it is investing €5 million and creating 22 jobs over three years. EURA NOVA: Eura Nova is an IT consultant and innovator founded in 2008 in Belgium. Its core business involves developing innovative technological solutions for its customers (computer science, machine learning, big data). The rapidly growing SME is moving back into the French market by opening an engineering and R&D subsidiary in Marseille (Provence-Alpes-Côte d’Azur region) at the Château-Gombert technology park. INDAVER: Belgian company Indaver (Katoen Natie group), a leader in sustainable household and industrial waste management, announced the establishment of a chlorinated waste treatment and recycling plant at the Port of Dunkirk industrial zone in Loon-Plage (Hauts de France region). This €40 million investment will create 20 jobs by 2018. 2XL: As part of the redeployment of its Western European logistics business, and to better serve its customers, Belgian firm 2XL decided to establish a new distribution platform in northern France, in the commune of Dourges (Hauts de France region). The facility will mainly serve the Benelux markets and will create 70 jobs over three years. 1

Business France Europe Observatory.

7TH PLACE (Banque de France*)

FRENCH EXPORTS:

€30.1 billion 6TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

TOP 5 BELGIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

LOUIS DELHAIZE-COMPAGNIE FRANCOBELGE D’ALIMENTATION (Cora, Truffaut)

Agri-food

15,000-20,000

SOLVAY SA

Commerce and retail

5,000-6,000

ECONOCOM

Software and IT services

6 000-7,000

D’IETEREN NV/SA (Carglass)

Automotive industry

2,500-3,000

SAFINCO (VANDEMOORTELE)

Agri-food

1,000-1,500

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €35.9 billion.

76 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

109

21%

15%

First-time investments

19%

French headquarters

165

15%

22%

11%

Logistics Retail outlets Production / Manufacturing

260

30%

35%

R&D, engineering, design R&D Business services TOTAL

164

21%

22%

743

100%

* Share of Belgian investments in the total number of investments in each business activity.

Key:

>>In 2016, 30% of Belgian investments in France were in production/manufacturing; 6% of foreign investments in production/manufacturing were made by Belgian companies.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

101

25%

14%

10%

Transport, storage

127

13%

17%

13%

Agri-food, agriculture, fishing

125

13%

17%

10%

Consulting, engineering and business services

11%

Energy, recycling, other concessions

Aerospace, naval and railway equipment

Commerce and retail

Construction, building materials

Chemicals, plastics

Textiles, industrial textiles, clothing and accessories

Financial services, banking and insurance

10%

Furnishings, household goods

Electronic components

Glass, ceramics, minerals, wood, paper

Machinery and mechanical equipment

Metals, metalworking

743

100%

Software and IT services

TOTAL

Key:

>>In 2016, 25% of Belgian investments in France were in the software and IT services sector; 10% of foreign investments in the software and IT services sector were made by Belgian companies.

* Share of Belgian investments in the total number of investments in each business sector.

2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE / â&#x20AC;&#x2030;77

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 26% of Belgian investments in France were in Ile de France (Paris region); 4% of foreign investments in Ile de France (Paris region) were made by Belgian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

123

26%

17%

Hauts de France

278

21%

37%

11%

Occitanie

15%

Grand Est

Bourgogne-Franche-Comté

10%

Provence-Alpes-Côte d’Azur

Centre-Val de Loire

Nouvelle Aquitaine

Normandie

10%

Pays de la Loire

Auvergne-Rhône-Alpes

743

100%

TOTAL

* Share of Belgian investments in the total number of investments in each region.

78 / 2016 ANNUAL REPORT – BUSINESS FRANCE

CANADA CANADIAN INVESTMENTS IN FRANCE ROSE AGAIN IN 2016, TAKING IN SECTORS INCLUDING THE DIGITAL ECONOMY, CONSULTING/ ENGINEERING/BUSINESS SERVICES, RENEWABLE ENERGY, AND INDUSTRY. CANADIAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 206

There are around 250 Canadian firms operating in France, where they employ more than 28,000 people. In 2016, 43 new projects created or maintained more than 600 jobs. Investments in business services accounted for 37% of all Canadian projects in France, while another third were in decision-making centers, of which more than half were first-time investments. A further 12% were in R&D, and another 12% in production/manufacturing. The software and IT services sector was the leading area for investment, accounting for 23% of Canadian projects in France, followed by consulting/engineering/business services (16%). Ile de France (Paris region) (21%) and AuvergneRhône-Alpes (16%) were the main recipients of Canadian investments, followed by Hauts de France and Occitanie (14% each).

This Ontario-based automotive supplier opened a new 18,000 sq. m. facility in Saint-Chamond (Auvergne-Rhône-Alpes region), replacing its nearby plants in Saint-Étienne and Saint-Romain-en-Gier. The new plant is expected to recruit 75 employees within two years. In 2016, Linamar also acquired French auto-parts maker Montupet.

FRANCE AS A RECIPIENT OF CANADIAN INVESTMENT IN EUROPE

LINAMAR:

43 PROJECTS (Business France)

608 JOBS (Business France)

Headquartered in Quebec, this group operates renewable energy power facilities. In 2016, Boralex became the largest independent producer of wind power in France. The company announced the acquisition and expansion of wind farms in various regions – Bretagne (Brittany), Grand Est, Hauts de France, Auvergne-RhôneAlpes and Occitanie – creating around fifteen jobs.

STOCK

This Quebec-based startup has developed a job search engine, available in more than 60 countries. It decided to increase its presence in France, opening a sales office in Lille, where 10 jobs will be created.

More than

BORALEX:

NEUVOO:

Headquartered in Vancouver, British Colombia, PressReader opened its European headquarters in 2016 in Bordeaux (Nouvelle Aquitaine region), where it expects to have around ten employees in two years’ time.

PRESSREADER:

In 2016, France was the leading European recipient of job-creating investment from Canada, attracting 37% of Canadian projects in Europe, ahead of the United Kingdom (25%).1

FLOW

Business France Europe Observatory.

250 COMPANIES IN FRANCE (Orbis)

28,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€3.1 billion

15TH PLACE (Banque de France*)

FRENCH EXPORTS:

TOP 5 CANADIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

CGI

Software and IT services

10,000

LINAMAR CORPORATION

Metals, metalworking

3,500-4,000

POWER CORP – DESMARAIS (SAGARD)

Financial services

2,000

BOMBARDIER INC.

Aerospace, naval and railway equipment

1,500-2,000

MCCAIN FOODS GROUP INC.

Agri-food, agriculture, fishing

1,000-1,500

Investment fund

€3 billion

31ST PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €1.4 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 79

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

Total share*

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

>>In 2016, 33% of Canadian investments in France were in decision-making centers; 5% of foreign investments in decision-making centers were made by Canadian companies.

National share

Projects

170

33%

28%

First-time investments

19%

16%

Global / European headquarters

French headquarters

Logistics

Retail outlets

Production / Manufacturing

12%

15%

R&D, engineering, design

14%

13%

R&D

Business services TOTAL

12%

247

37%

41%

608

100%

* Share of Canadian investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Projects

Jobs

Projects

221

23%

36%

16%

Consulting, engineering and business services

Key:

Total share*

Jobs

Software and IT services

>>In 2016, 23% of Canadian investments in France were in the software and IT services sector; 7% of foreign investments in the software and IT services sector were made by Canadian companies.

National share

Projects

Jobs

Energy, recycling, other concessions

14%

11%

12%

Commerce and retail

Metals, metalworking

Machinery and mechanical equipment

Agri-food, agriculture, fishing

Automotive industry

Chemicals, plastics

Furnishings, household goods

Medical/surgical equipment, diagnostics and devices

Construction, building materials

Electrical/electronic/IT equipment

Financial services, banking and insurance

608

100%

TOTAL

* Share of Canadian investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 21% of Canadian investments in France were in Ile de France (Paris region); 3% of foreign investments in Ile de France (Paris region) were made by Canadian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

21%

15%

Auvergne-Rhône-Alpes

16%

12%

Hauts de France

14%

13%

Occitanie

14%

Nouvelle Aquitaine

12%

14%

Bretagne (Brittany)

114

19%

14%

16%

Provence-Alpes-Côte d’Azur

Grand Est

Centre-Val de Loire

Pays de la Loire

608

100%

TOTAL

* Share of Canadian investments in the total number of investments in each region.

80 / 2016 ANNUAL REPORT – BUSINESS FRANCE

CENTRAL AND EASTERN EUROPE THE CZECH REPUBLIC, POLAND AND ROMANIA WERE THE LEADING INVESTORS IN FRANCE FROM CENTRAL AND EASTERN EUROPE IN 2015-16. CENTRAL AND EASTERN EUROPEAN COMPANIES IN FRANCE There are more than 40 Polish companies, 14 Czech companies, and 12 Romanian companies operating in France, where they employ more than 1,500 people. Six projects were recorded in 2015 and 2016 from these three countries, creating or maintaining 66 jobs. These investments over the last two years were made in production/manufacturing operations (33%) and decision-making centers (33%), and revealingly, five of the six were first-time investments in France. Two-thirds of these projects were split between the Provence-Alpes-Côte d’Azur (33%) and Bourgogne-Franche-Comté (33%) regions.

FRANCE AS A RECIPIENT OF CENTRAL AND EASTERN EUROPEAN INVESTMENT IN EUROPE In 2016, Germany was the leading European recipient of job-creating investment from Central and Eastern European countries, attracting 17% of their projects in Europe, ahead of Slovakia (14%), the United Kingdom and Italy (12% each), and France (7%).1

SELECTED INVESTMENT PROJECTS IN 2016 Polish synthetic rubber manufacturer Synthos acquired two French subsidiaries of Ineos Styrenics, a division of British chemical firm Ineos specializing in the production of expanded polystyrene (EPS), in a transaction worth €80 million. The hundred or so employees who work at the two French sites, in Ribécourt and Wingles (both Hauts de France region), kept their jobs.

SYNTHOS:

Polish firm JP Contracting, which exports construction services, opened its first French office in Adretsde-l’Estérel, near Cannes, recruiting two people in the Provence-Alpes-Côte d’Azur region.

JP CONTRACTING PL SP. Z.O.O.:

The Romanian security software specialist Bitdefender acquired its French partner Profil Technology, a firm based to the west of Paris (Ile de France/Paris region). Having initially set up operations in France in 2001, Bitdefender is now stepping up its presence in the French market by absorbing a team of fifty people. Florin Talpes, founder and CEO of Bitdefender, sees France as a key market for the future of the company.

BITDEFENDER:

Business France Europe Observatory.

FLOW*

6 PROJECTS (Business France)

66 JOBS

(Business France)

STOCK**

More than

70 COMPANIES IN FRANCE (Orbis)

More than

1,500 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€913 million

(Banque de France***)

FRENCH EXPORTS:

€16 billion

TOP 5 CENTRAL AND EASTERN EUROPEAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

PLASTIWELL (Poland)

Chemicals, plastics

300-400

MR R. K. KARKOSIK – BORYSZEW (MAFLOW FRANCE) (Poland)

Chemicals, plastics

150-200

LINET SPOL. S.R.O. (Czech Republic)

Medical/surgical equipment, diagnostics 100 and devices

COMARCH SA (Poland)

Software and IT services

SANOK RUBBER COMPANY SA (Poland)

Chemicals, plastics

60-80

(Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* Data for projects from the Czech Republic, Poland and Romania are for both 2015 and 2016.** FDI stock in France (immediate investor) as of December 31, 2015. ***FDI stock by immediate investor as of December 31, 2014 was €221 million.

2016 ANNUAL REPORT – BUSINESS FRANCE / 81

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY SOURCE COUNTRY 2015 Source country

2016

Projects

Jobs

Projects

Jobs

Poland Czech Republic

Romania

TOTAL

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY 2015 Business activity

2016

Projects

Jobs

Projects

Decision-making centers

Jobs

First-time investments

Production / Manufacturing

Business services

Consumer services

Jobs

Projects

Jobs

TOTAL

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR 2015 Business sector

Projects

2016

Construction, building materials Automotive industry

50 10

Furnishings, household goods

Software and IT services

Electrical/electronic/IT equipment

Glass, ceramics, minerals, wood, paper

Jobs

Projects

Jobs

TOTAL

BREAKDOWN OF PROJECTS BY HOST REGION 2015 Business activity

Projects

2016

Provence-Alpes-Côte d’Azur

Bourgogne-Franche-Comté

Auvergne-Rhône-Alpes

Ile de France (Paris region)

TOTAL

82 / 2016 ANNUAL REPORT – BUSINESS FRANCE

CHINA CHINA WAS THE SECOND LARGEST ASIAN INVESTOR IN FRANCE IN 2016. CHINESE COMPANIES IN FRANCE There are over 700 companies from mainland China and Hong Kong operating in France, where they employ more than 45,000 people. Fifty-one new investments from China and Hong Kong were recorded in 2016, creating or maintaining 1,370 jobs. Chinese companies invested primarily in decision-making centers (37%), including four European headquarters, and production/ manufacturing operations (20%). Commerce and retail (14%) was the most popular sector for Chinese investors, while nearly half (43%) of Chinese investments in France were made in Ile de France (Paris region).

FRANCE AS A RECIPIENT OF CHINESE INVESTMENT IN EUROPE In 2016, France was the joint second largest European recipient, along with the United Kingdom, of job-creating investment from China, attracting 14% of Chinese projects in Europe, preceded by Germany (15%).1

SELECTED INVESTMENT PROJECTS IN 2016 BANK OF COMMUNICATIONS: Shanghaibased Bank of Communications decided to continue its expansion into Europe by opening a branch in Paris (Ile de France region). Recruitment is underway for some twenty employees. This project reflects Paris’ attractiveness as a European financial center. TONGLING NONFERROUS METAL GROUP: This Chinese group acquired copper manufacturer Griset, based in Villers-Saint-Paul (Hauts de France region). The French company had been in liquidation since 2015. The €25 million transaction saved around 30 jobs and will create over 40 more. HORIZONS VENTURES: Hong Kong-based venture capital fund Horizons Ventures invested €3.5 million in French startup Algama, which specializes in microalgae-based foods. The deal also established a business partnership for the sale of Algama products in Asia. DALIAN WANDA: In 2016, Chinese Wanda announced the acquisition of an equity stake in Alliages et Territoires, the Auchan group subsidiary responsible for the EuropaCity project. This €3.1 billion real estate development involves a huge leisure park in the Val d’Oise département just north of Paris, which is slated to open in 2024. 1

FLOW

* 51 (4) PROJECTS (Business France)

1,370 (47) JOBS (Business France)

STOCK

More than

700 COMPANIES IN FRANCE (Orbis)

More than

45,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€5.1 billion (€3.2 bn)

Business France Europe Observatory.

TOP 5 CHINESE AND HONG KONG COMPANIES BY EMPLOYMENT IN FRANCE

12TH PLACE (Banque de France**)

Parent company

Main business sector

Workforce in France

JIN JIANG INTERNATIONAL (LOUVRE HOTELS GROUP) (China)

Hotels, tourism

10,000-15,000

CK HUTCHISON HOLDINGS LTD. (MARIONNAUD) (Hong Kong)

Commerce and retail

3,500-4,000

CHINA NATIONAL CHEMICAL CORPORATION (CHEMCHINA) (China)

Chemicals, plastics

2,000-2,500

YANTAI TAIHAI (China)

Metals, metalworking Hotels, tourism Pharmaceuticals and biotechnologies

1,500-2,000

FOSUN INTERNATIONAL LTD. (CLUB MED) (Hong Kong)

Financial services, banking and insurance

1,000-1,500

FRENCH EXPORTS:

€21.4 billion (€5.4 bn) 6TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

249 (49)

* Data relating to investments from Hong Kong appear in parentheses; 51 investment projects from China, including four from Hong Kong.** FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €5.3 billion (China and Hong Kong combined).

2016 ANNUAL REPORT – BUSINESS FRANCE / 83

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

141

37%

10%

First-time investments

22%

Global / European headquarters

11%

French headquarters

12%

Logistics Production / Manufacturing

3 (2)

10 (1)

416

20%

30%

220

12%

16%

129

8 (3)

159

16%

12%

R&D, engineering, design >>In 2016, 37% of Chinese investments in France were in decision-making centers; 7% of foreign investments in decision-making centers were made by Chinese companies.

Total share*

Projects

Retail outlets

Key:

National share

R&D Business services Consumer services TOTAL

397

29%

22%

51 (4)

1,370 (47)

100%

* Share of Chinese investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Commerce and retail Chemicals, plastics

Projects

Jobs

Projects

Jobs

Projects

Jobs

7 (2)

14%

11%

Machinery and mechanical equipment

Hotels, tourism and restaurants

399

29%

34%

Consulting, engineering and business services

105

Energy, recycling, other concessions

Other services

11%

Software and IT services

Automotive industry

170

12%

Textiles, industrial textiles, clothing, accessories

Financial services, banking and insurance

10%

Transport, storage

Telecoms, internet service providers

13%

23%

Metals, metalworking

Furnishings, household goods

Electronic components

15%

1 (1)

13%

25%

Agri-food, agriculture, fishing

Consumer electronics

20%

Glass, ceramics, minerals, wood, paper

Perfumes, cosmetics

51 (4)

1,370 (47)

100%

Media, publishing

>>In In 2016, 14% of Chinese investments in France were in the commerce and retail sector; 7% of foreign investments in the commerce and retail sector were made by Chinese companies.

Total share*

4 (1)

Electrical/electronic/IT equipment

Key:

National share

TOTAL

* Share of Chinese investments in the total number of investments in each business sector.

84 / â&#x20AC;&#x2030;2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

22 (1)

417

43%

30%

601

16%

44%

17%

5 (3)

147

10%

11%

Nouvelle Aquitaine

10%

Pays de la Loire

Grand Est

Overseas territories

50%

95%

Bourgogne-Franche-Comté

Provence-Alpes-Côte d’Azur

Normandie

Occitanie

51 (4)

1,370 (47)

100%

Ile de France (Paris region) Auvergne-Rhône-Alpes Hauts de France

TOTAL

Key:

>>In 2016, 43% of Chinese investments in France were in Ile de France (Paris region); 6% of foreign investments in Ile de France (Paris region) were made by Chinese companies.

* Share of Chinese investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 85

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

DENMARK DANISH INVESTMENT DECISIONS IN FRANCE ROSE IN 2016, CREATING MORE THAN 500 JOBS. FLOW

18 PROJECTS (Business France)

550 JOBS (Business France)

STOCK

More than

400 COMPANIES IN FRANCE (Orbis)

More than

40,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€5.9 billion

DANISH COMPANIES IN FRANCE There are over 400 Danish companies operating in France, where they employ more than 40,000 people. Danish investment in France rose in 2016, with 18 new investment decisions creating 550 jobs. Danish companies invested primarily in production/manufacturing operations (44%) and retail outlets (22%). Twenty-eight percent of Danish investment projects in France were in the pharmaceuticals and biotechnologies sector, where nearly 40% of jobs created or maintained through foreign investment were due to Danish companies. Half of all Danish investments in 2016 were located in two regions: Ile de France (Paris region) (28%) and Grand Est (18%).

SELECTED INVESTMENT PROJECTS IN 2016 Danish pharmaceutical company Novo Nordisk, a diabetes specialist, announced a new investment of more than €100 million in its Chartres facility (Centre-Val de Loire region). This new investment will enable it to produce a new generation of insulin pens, thereby creating 250 jobs.

NOVO NORDISK A/S:

DLG GROUP (DANSK LANDBRUGS

French firm Agrial and the Danish DLG Group established Ouestmin, a 50-50 joint venture. This new company will invest €11 million to build a plant to manufacture animal feed minerals in Saint-Sauveur-des-Landes (Bretagne/ Brittany region), leading to the creation of 35 jobs.

GROVVARESELSKAB):

FRANCE AS A RECIPIENT OF DANISH INVESTMENT IN EUROPE

Business France Europe Observatory.

In 2016, the United Kingdom was the leading European recipient of job-creating investment from Denmark, attracting 20% of Danish projects in Europe, followed by Germany (16%), while France and Poland both attracted 14%.1

11TH PLACE (Banque de France*)

FRENCH EXPORTS:

€2.6 billion

34TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

TOP 5 DANISH COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

ISS A/S - INTEGRATED SERVICE SOLUTIONS

Other services

25,000

WILLIAM DEMANT HOLDING

Medical/surgical equipment, diagnostics and devices 1,500-2,000

CARLSBERG A/S

Agri-food, agriculture and fishing

1,500-2,000

DANFOSS A/S

Energy, recycling, other concessions

1,000-1,200

DSV A/S

Transport, storage

500-1,000

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €4.7 billion.

86 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

11%

Retail outlets

22%

Production / Manufacturing

432

44%

79%

R&D, engineering, design

17%

550

100%

Decision-making centers First-time investments

R&D Business services TOTAL

Key:

>>In 2016, 44% of Danish investments in France were in production/manufacturing; 3% of foreign investments in production/manufacturing were made by Danish companies.

* Share of Danish investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Projects

Jobs

Pharmaceuticals and biotechnologies

360

Agri-food, agriculture, fishing

Projects

Total share*

Jobs

Projects

Jobs

28%

65%

17%

39%

17%

11%

Furnishings, household goods

17%

16%

Energy, recycling, other concessions

11%

Commerce and retail

Consulting, engineering and business services

Construction, building materials

Textiles, industrial textiles, clothing and accessories

Electrical/electronic/IT equipment TOTAL

550

100%

Key:

>>In 2016, 28% of Danish investments in France were in the pharmaceuticals and biotechnologies sector; 17% of foreign investments in the pharmaceuticals and biotechnologies sector were made by Danish companies.

* Share of Danish investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Projects

National share

Jobs

Projects

Jobs

Total share* Projects

Jobs

Ile de France (Paris region)

28%

Grand Est

103

22%

19%

Centre-Val de Loire

260

11%

47%

17%

Provence-Alpes-Côte d’Azur

11%

Bretagne (Brittany)

Occitanie

Bourgogne-Franche-Comté

Pays de la Loire

Hauts de France

550

100%

TOTAL

Key:

>>In 2016, 11% of Danish investments in France were in Provence-Alpes-Côte d’Azur; 3% of foreign investments in ProvenceAlpes-Côte d’Azur were made by Danish companies.

* Share of Danish investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 87

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

FINLAND 2016 SAW A GROWING NUMBER OF FINNISH COMPANIES IN FRANCE. FLOW

5 PROJECTS (Business France)

165 JOBS (Business France)

STOCK

More than

100 COMPANIES IN FRANCE (Orbis)

More than

15,000 EMPLOYEES (Orbis)

FINNISH COMPANIES IN FRANCE There are over 100 Finnish companies operating in France, where they employ more than 15,000 people. Five new investments from Finland were recorded in 2016, creating or maintaining 165 jobs. These investments involved activities at three production facilities, a new decision-making center, and a business services project. More than three-quarters of Finnish investments were made in manufacturing sectors, including nearly half in the glass, ceramics, minerals, wood, paper sector. Location-wise, Finnish investments were made in a wide variety of different regions throughout France.

FRANCE AS A RECIPIENT OF FINNISH INVESTMENT IN EUROPE In 2016, France was the joint fourth leading European recipient, along with Germany, of job-creating investment from Finland, attracting 13% of Finnish projects in Europe, preceded by Poland (17%), the United Kingdom and Sweden (15% each).1

SELECTED INVESTMENT PROJECTS IN 2016 This worldwide supplier of contactless tickets and RFID tags decided to consolidate its global market position by opening its first French office, in Nice, from where it intends to grow its business further.

CONFIDEX OY (WIOT TECHNOLOGIES OY):

ELTETE OY: Finnish company Eltete, which manufactures sustainable, 100% recyclable transport packaging materials, decided to expand its production facility in Saint-Martin-lez-Tatinghem (Hauts de France region). The company plans to optimize storage and install new machines that will extend its production range. It may also add to its production team of around twenty employees with three or four new hires in 2017. NOKIA OY: French startup Withings was acquired by Nokia in April 2016 and will be increasing its headcount by 50% to around 300. Under the acquisition agreement, the connected health device specialist will remain in Issy-les-Moulineaux, just outside Paris. 1

Business France Europe Observatory.

FDI STOCK IN FRANCE:

€1.5 billion

21ST PLACE (Banque de France*)

FRENCH EXPORTS:

TOP 5 FINNISH COMPANIES BY EMPLOYMENT IN FRANCE

€2 billion

Parent company

Main business sector

Workforce in France

NOKIA OYJ

Consumer electronics

7,500-10,000

KONE OYJ

Machinery and mechanical equipment

3,000-3,500

(Customs Authorities)

AMER SPORTS OYJ (Wilson, Salomon, Mavic)

Furnishings, household goods 1,000-1,500 Textiles, industrial textiles, clothing and accessories

UPM-KYMMENE OYJ

Glass, ceramics, minerals, wood, paper

500-1,000

METSO

Machinery and mechanical equipment

500-1,000

40TH PLACE NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €1.6 billion.

88 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

20%

Logistics

Production / Manufacturing

60%

33%

Business services

100

20%

61%

165

100%

Decision-making centers First-time investments

TOTAL

Key:

>>In 2016, 60% of Finnish investments in France were in production/manufacturing; 1% of foreign investments in production/manufacturing were made by Finnish companies.

* Share of Finnish investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Glass, ceramics, minerals, wood, paper

40%

Consumer electronics

100

20%

61%

20%

34%

Energy, recycling, other concessions

20%

25%

Software and IT services

20%

165

100%

TOTAL

Key:

>>In 2016, 40% of Finnish investments in France were in the glass, ceramics, minerals, wood, paper sector; 6% of foreign investments in the glass, ceramics, minerals, wood, paper sector were made by Finnish companies.

* Share of Finnish investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

100

20%

61%

Occitanie

20%

25%

Pays de la Loire

20%

Provence-Alpes-Côte d’Azur

20%

Hauts de France

20%

165

100%

TOTAL

Key:

>>In 2016, 20% of Finnish investments in France were in Pays de la Loire; 2% of foreign investments in Pays de la Loire were made by Finnish companies.

* Share of Finnish investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 89

CHAP. 7 / SOURCE COUNTRY OVERVIEW

GERMANY GERMANY BECAME THE LEADING SOURCE COUNTRY FOR INVESTMENT IN FRANCE IN 2016, AS INVESTMENT DECISIONS SOARED 35%. FLOW

GERMAN COMPANIES IN FRANCE

191 PROJECTS

There are over 3,800 German companies operating in France, where they employ more than 300,000 people. With 191 physical investment projects recorded in France in 2016, Germany became the leading source country of job-creating foreign investment, ahead of the United States, creating or maintaining 4,737 jobs. Investments by German companies in France were made primarily in production/manufacturing operations (27%), thereby confirming Germany’s specialization in industry; in all, Germany accounted for 19% of foreign investments in production/manufacturing operations in France. German investors were also responsible for 26% of foreign investment in logistics, and 18% of R&D investments. The commerce and retail sector received 15% of all German projects in France, followed by the automotive industry (12%), where German investors accounted for 44% of all foreign investments. Ile de France (Paris region) attracted 24% of all German investment decisions, followed by the Grand Est region (18%). The latter border region received more than one-third (38%) of its foreign investments from Germany.

(Business France)

4,737 JOBS (Business France)

STOCK

More than

3,800 COMPANIES IN FRANCE (Orbis)

More than

300,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€58.2 billion

FRANCE AS A RECIPIENT OF GERMAN INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Germany, attracting 29% of German projects in Europe, followed by the United Kingdom (12%) and Poland (8%).1

SELECTED INVESTMENT PROJECTS IN 2016 DELIVERY HERO: Foodora, a subsidiary of German firm Delivery Hero, continued its expansion in France. Having already set up in Paris and Lyon, the online food delivery service added new French offices in Lille (Hauts de France region), Bordeaux (Nouvelle Aquitaine region) and Nantes (Pays de la Loire region), creating 70 jobs in all.

Having added online fashion retailer Showroomprivé and women’s clothing retailer Camaïeu to its e-commerce customer stable, order-picking specialist Dispeo (Hauts de France region) is thinking bigger. To handle demand, it has expanded one of its five existing warehouses and acquired another. A total of 300 new jobs are expected at the two locations.

OTTO:

BLOHM + VOSS: German firm Blohm + Voss, a European leader in civil and military shipbuilding and ship repair, won the contract to operate the Great Dry Dock at the shipyards in La Ciotat (ProvenceAlpes-Côte d’Azur region). The project led to the establishment of a La Ciotat-based subsidiary that has targeted a headcount of 100 within three years. TIERNAHRUNG DEUERER: German dog and cat food manufacturer Deuerer Pet Care decided to invest €20 million in an expansion to its facility in Villeneuve-sur-Lot (Nouvelle Aquitaine region), generating several dozen new jobs. The expansion will help roll out a new premium range of single-serving cat and dog food. 1

Business France Europe Observatory.

6TH PLACE (Banque de France*)

FRENCH EXPORTS:

€71.5 billion

TOP 5 GERMAN COMPANIES BY EMPLOYMENT IN FRANCE

(Customs Authorities)

1ST PLACE

NUMBER OF COMPANIES IN THE FORBES 2000:

Parent company

Main business sector

Workforce in France

LIDL

Commerce and retail

20,000-25,000

FAMILIEN PORSCHE/ PIECH

Automotive industry

10,000-15,000

ALLIANZ SE

Financial services, banking and insurance

10,000-15,000

DEUTSCHE POST AG

Transport, storage Other services

10,000-15,000

BERTELSMANN STIFTUNG

Consulting, engineering and business services Other services

10,000-15,000

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €66.9 billion.

90 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Projects

National share

Total share*

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

417

16%

11%

14%

First-time investments

182

13%

12%

French headquarters

235

18%

25%

Logistics

801

10%

17%

26%

21%

Retail outlets

331

10%

17%

10%

Production / Manufacturing

1,896

27%

40%

19%

17%

R&D, engineering, design

498

12%

11%

19%

328

18%

20%

Business services

518

17%

11%

15%

13%

Consumer services

276

28%

15%

191

4,737

100%

17%

16%

R&D

TOTAL

Key:

>>In 2016, 27% of German investments in France were in production/manufacturing; 19% of foreign investments in production/manufacturing were made by German companies.

* Share of German investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Projects

Jobs

National share Projects

Jobs

Total share* Projects

Jobs

Commerce and retail

843

15%

18%

29%

20%

Automotive industry

665

12%

14%

44%

37%

Software and IT services

199

10%

Transport, storage

409

24%

28%

Electrical/electronic/IT equipment

235

30%

45%

Machinery and mechanical equipment

159

20%

13%

Energy, recycling, other concessions

131

23%

16%

Chemicals, plastics

222

30%

31%

Consulting, engineering and business services

142

10%

Agri-food, agriculture, fishing

288

10%

16%

Aerospace, naval and railway equipment

257

16%

10%

Other services

21%

10%

Metals, metalworking

288

17%

22%

Textiles, industrial textiles, clothing and accessories

174

Financial services, banking and insurance

19%

13%

Pharmaceuticals and biotechnologies

13%

4% 13%

Construction, building materials

11%

Medical/surgical equipment, diagnostics and devices

14%

Glass, ceramics, minerals, wood, paper

Telecoms, internet service providers

260

25%

68%

Hotels, tourism and restaurants

Electronic components

17%

Media, publishing

13%

191

4,737

100%

17%

16%

TOTAL

Key:

>>In 2016, 15% of German investments in France were in the commerce and retail sector; 29% of foreign investments in the commerce and retail sector were made by German companies.

* Share of German investments in the total number of investments in each business sector.

2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE / â&#x20AC;&#x2030;91

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 24% of German investments in France were in Ile de France (Paris region). 13% of foreign investments in Ile de France (Paris region) were made by German companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

819

24%

17%

13%

11%

Grand Est

1,191

18%

25%

38%

46%

Hauts de France

911

10%

19%

18%

20%

Occitanie

287

13%

11%

Auvergne-Rhône-Alpes

173

13%

Pays de la Loire

410

23%

19%

Nouvelle Aquitaine

168

18%

Bourgogne-Franche-Comté

175

21%

13%

Provence-Alpes-Côte d’Azur

343

11%

15%

Bretagne (Brittany)

21%

14%

Normandie

29%

26%

Centre-Val de Loire

14%

191

4,737

100%

17%

16%

TOTAL

* Share of German investments in the total number of investments in each region.

92 / 2016 ANNUAL REPORT – BUSINESS FRANCE

INDIA ELEVEN NEW INVESTMENT DECISIONS BY INDIAN COMPANIES IN FRANCE WERE RECORDED IN 2016. FLOW INDIAN COMPANIES IN FRANCE There are over 150 Indian companies operating in France, where they employ more than 7,000 people. Eleven new investments from India were recorded in 2016, creating or maintaining 171 jobs. Indian investments in France in the last year were often in high value-added activities, particularly R&D and engineering (36%), decisionmaking centers (27%), including a European headquarters, and business services (18%). Investments came in a variety of sectors, including software and IT services (18%), energy and recycling (18%), aerospace, naval and railway equipment (18%), and textiles and clothing (18%) sectors. Indian companies invested primarily in the Auvergne-Rhône-Alpes (27%), Ile de France (Paris region) (27%) and BourgogneFranche-Comté (18%) regions.

FRANCE AS A RECIPIENT OF INDIAN INVESTMENT IN EUROPE In 2016, the leading European recipient of jobcreating investment from India was the United Kingdom, attracting 37% of all Indian projects in Europe, followed by Germany (15%), then France and Denmark in joint third (9% each).1

SELECTED INVESTMENT PROJECTS IN 2016 Royal Enfield ranks alongside Triumph and Harley Davidson as one of the most prestigious brands in the motorcycle world. In 2016, this Indian firm announced that it would be establishing its pan-European headquarters in Paris (Ile de France region), with the opening of a concept store in Levallois-Perret. GUESSWORK: A winner in French Tech Ticket, season 1, this Indian startup markets a mobile app that helps small online retailers connect with customers. Guesswork won a one-year residency for 2016 in the Startup42 business incubator in the Parisian suburb of Kremlin-Bicêtre (Ile de France region). ETOSHA: This specialist in flavors, fragrances and essential oils for agri-food, personal care (deodorants, perfumes and soaps) and homecare (detergents) recently established a French subsidiary in Grasse (ProvenceAlpes-Côte d’Azur region) that will create 10 jobs over the next three years. DYMOND CLEANTECH: A winner in French Tech Ticket, season 1, this Indian startup has developed an electrochemical water purification technology based on diamond electrodes. In 2016, it was resident in the La Paillasse business incubator in Paris (Ile de France region), where it had coworking space and access to coaching sessions. ROYAL ENFIELD:

Business France Europe Observatory.

11 PROJECTS (Business France)

171 JOBS

(Business France)

STOCK

More than

150 COMPANIES IN FRANCE (Orbis)

More than

7,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€188

million

(Banque de France*)

FRENCH EXPORTS:

TOP 5 INDIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

TATA GROUP (TATA SONS LTD.)

Software and IT services Metals, metalworking

1,500

SINTEX INDUSTRIES LTD.

Chemicals, plastics

1,000-1,500

€3.9 billion

23RD PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

CENTUM INDIA (ADETEL GROUP) Electrical/electronic/IT equipment

400-500

MAHINDRA & MAHINDRA LTD.

Automotive industry

400-500

AEQUS PRIVATE LTD. (SIRA)

Aerospace, naval and railway equipment

300-400

* FDI stock in France (ultimate investor) as of December 31, 2014.

2016 ANNUAL REPORT – BUSINESS FRANCE / 93

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 36% of Indian investments in France were in R&D, engineering, design; 3% of foreign investments in R&D, engineering, design were made by Indian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

27%

15%

First-time investments

18%

14%

Global / European headquarters

Logistics

Production / Manufacturing

R&D, engineering, design

36%

11%

27%

120

18%

70%

171

100%

R&D

Business services TOTAL

* Share of Indian investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 18% of Indian investments in France were in the software and IT services sector; 1% of foreign investments in the software and IT services sector were made by Indian companies.

National share

Projects

Jobs

Projects

Jobs

Total share* Projects

Jobs

Software and IT services

114

18%

67%

Energy, recycling, other concessions

18%

Aerospace, naval and railway equipment

18%

Textiles, industrial textiles, clothing and accessories

18%

Hotels, tourism and restaurants

12%

Perfumes, cosmetics

Automotive industry

171

100%

TOTAL

* Share of Indian investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 27% of Indian investments in France were in Auvergne-Rhône-Alpes; 3% of foreign investments in Auvergne-Rhône-Alpes were made by Indian companies.

National share Projects

Jobs

Total share*

Projects

Jobs

Projects

Jobs

Auvergne-Rhône-Alpes

115

27%

67%

Ile de France (Paris region)

27%

15%

Bourgogne-Franche-Comté

18%

Provence-Alpes-Côte d’Azur

Grand Est

Occitanie

171

100%

TOTAL

* Share of Indian investments in the total number of investments in each region.

94 / 2016 ANNUAL REPORT – BUSINESS FRANCE

IRELAND ELEVEN NEW INVESTMENT DECISIONS WERE MADE IN 2016 BY IRISH COMPANIES IN FRANCE IRISH COMPANIES IN FRANCE There are more than 400 Irish companies operating in France, where they employ more than 25,000 people. Eleven new investments from Ireland were recorded in 2016, creating or maintaining 372 jobs. Irish investments were made primarily in production/manufacturing operations (45%), and decision-making centers (27%); all of the latter were first-time investments in France. More than half of these Irish investments were in the telecoms/internet service providers (18%), energy/recycling/other concessions (18%), and software/IT services (18%) sectors. Ile de France (Paris region) (45%) attracted nearly half of all Irish investment, followed by Provence-Alpes-Côte d’Azur (18%).

FRANCE AS A RECIPIENT OF IRISH INVESTMENT IN EUROPE In 2016, the United Kingdom was the leading European recipient of job-creating investment from Ireland, attracting 44% of Irish projects in Europe, followed by France (17%) and Germany (8%).1

SELECTED INVESTMENT PROJECTS IN 2016 TRICEL: Irish firm Tricel, a global supplier of wastewater treatment systems, is building a new production and distribution plant in Sorgues, near Avignon (Provence-Alpes-Côte d’Azur region). The company plans to invest nearly €2.5 million and create around ten jobs. TAOGLAS ANTENNA SOLUTIONS: Taoglas provides external, embedded and base station antenna solutions for M2M applications. The Irish firm recently decided to open a sales office and an R&D facility in Jouy-enJosas, near Paris (Ile de France region), and expects to create around twenty jobs. ABP GROUP: C&D Foods, a subsidiary of Irish ABP Food Group, was chosen by the commercial court of Boulogne-sur-Mer (Hauts de France) to take over Continentale Nutrition, which was liquidated in May 2016. Upon completion of the takeover, C&D Foods was in a position to save 270 out of a total of 358 jobs. It also agreed to invest €60 million over five years in Boulogne-sur-Mer. 1

FLOW

11 PROJECTS (Business France)

372 JOBS (Business France)

STOCK

More than

400 COMPANIES IN FRANCE (Orbis)

More than

25,000 EMPLOYEES (Orbis)

Business France Europe Observatory.

FDI STOCK IN FRANCE:

€4.8

billion

12TH PLACE (Banque de France*)

TOP 5 IRISH COMPANIES BY EMPLOYMENT IN FRANCE

FRENCH EXPORTS:

Parent company

Main business sector

Workforce in France

ACCENTURE PLC

Consulting, engineering and business services

6,000

SMURFIT KAPPA GROUP

Glass, ceramics, minerals, wood, paper

4,000-5,000

CRH PLC

Construction, building materials

2,000-2,500

WILLIS TOWERS WATSON PLC (GRAS SAVOYE)

Financial services, banking and insurance

2,000

INGERSOLL-RAND PLC

Machinery and mechanical equipment

1,500-2,000

€2.9 billion

32ND PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €4.5 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 95

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Jobs

Projects

Jobs

Projects

Jobs

27%

309

45%

83%

3% 0%

First-time investments Production / Manufacturing

>>In 2016, 27% of Irish investments in France were in decision-making centers; 1% of foreign investments in decision-making centers were made by Irish companies.

Total share*

Projects

Decision-making centers

Key:

National share

R&D, engineering, design R&D Business services Consumer services TOTAL

372

100%

* Share of Irish investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 18% of Irish investments in France were in the telecoms/internet service providers sector; 25% of foreign investments in the telecoms/ internet service providers sector were made by Irish companies.

Projects

National share

Jobs

Projects

Total share*

Jobs

Projects

Jobs

Telecoms, internet service providers

18%

25%

Energy, recycling, other concessions

18%

Software and IT services

18%

Agri-food, agriculture, fishing

272

73%

15%

Hotels, tourism and restaurants

Construction, building materials

Pharmaceuticals and biotechnologies

Electrical/electronic/IT equipment TOTAL

372

100%

* Share of Irish investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Ile de France (Paris region)

Key:

>>In 2016, 45% of Irish investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Irish companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

45%

10%

Provence-Alpes-Côte d’Azur

18%

Hauts de France

272

73%

Auvergne-Rhône-Alpes

Grand Est

Occitanie

372

100%

TOTAL

* Share of Irish investments in the total number of investments in each region.

96 / 2016 ANNUAL REPORT – BUSINESS FRANCE

ISRAEL FOUR ISRAELI COMPANIES CONFIRMED THEY WERE INVESTING IN FRANCE IN 2016. ISRAELI COMPANIES IN FRANCE There are over 90 Israeli companies operating in France, where they employ more than 4,500 people. Four new investments from Israel were recorded in 2016, creating around thirty jobs. Israeli investments involved decision-making centers, a production/manufacturing project, and a business services project. Revealingly, three of these four projects were first-time investments in France. Half of these projects were in the software/IT services (50%) sector, and all four investments were made in Ile de France (Paris region).

FRANCE AS A RECIPIENT OF ISRAELI INVESTMENT IN EUROPE In 2016, the United Kingdom was the leading European recipient of job-creating investment from Israel, attracting 33% of Israeli projects in Europe, followed by the Netherlands (17%).1

SELECTED INVESTMENT PROJECT IN 2016 At the beginning of the year, Israeli media and internet company Perion Networks acquired French startup MakeMeReach, which enables mobile application developers to extend their advertising campaigns to social media platforms. The acquisition price is estimated at several tens of millions of euros and there are plans to recruit around ten people.

PERION NETWORK LTD.:

Israeli firm Keshet, which produces audiovisual content for the French-speaking market, decided to set up its first French operations in Paris. The company signed a partnership agreement with French production group Newen (TF1 Group) for the purpose of co-producing audiovisual content for the French and Francophone markets. The company is also keen to market and distribute existing audiovisual content and formats in the French market.

KESHET INTERNATIONAL2:

Business France Europe Observatory. Non-job-creating investment cited as an example, but not included in the analysis. 1 2

FLOW

4 PROJECTS (Business France)

31 JOBS

(Business France)

STOCK

More than

90 COMPANIES IN FRANCE (Orbis)

More than

4,500 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€160 million

52ND PLACE

TOP 5 ISRAELI COMPANIES BY EMPLOYMENT IN FRANCE

(Banque de France*)

FRENCH EXPORTS: Parent company

Main business sector

Workforce in France

TEVA PHARMACEUTICAL INDUSTRIES LTD.

Pharmaceuticals and biotechnologies

1,000-1,500

MR. S. SAGOL (BATH FRANCE)

Furnishings, household goods Chemicals, plastics

300-400

TAMDA LTD. (CHATEAU D’EAU)

Agri-food

300-400

ALROV PROPERTIES & LODGINGS LTD. Hotels, tourism and restaurants SASA HOLDINGS (BERARD; AMEFO)

150-200

Chemicals, plastics Machinery and mechanical equipment

100-200

€1.4 billion

48TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €413 million.

2016 ANNUAL REPORT – BUSINESS FRANCE / 97

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 50% of Israeli investments in France were in decision-making centers; 1% of foreign investments in decision-making centers were made by Israeli companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

50%

65%

First-time investments

25%

32%

French headquarters

25%

32%

Production / Manufacturing

25%

Business services

25%

32%

100%

TOTAL

* Share of Israeli investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number

Key:

>>In 2016, 50% of Israeli investments in France were in the software and IT services sector; 1% of foreign investments in the software and IT services sector were made by Israeli companies.

Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Software and IT services

50%

65%

Aerospace, naval and railway equipment

25%

32%

Media, publishing

25%

13%

100%

TOTAL

* Share of Israeli investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION

Key:

>>In 2016, 100% of Israeli investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Israeli companies.

Number Host region

Ile de France (Paris region) TOTAL

National share Jobs

Projects

Jobs

Projects

Jobs

100%

* Share of Israeli investments in the total number of investments in each region.

98 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Total share*

Projects

ITALY ITALIAN INVESTMENTS GREW STRONGLY IN 2016 WITH 141 PROJECTS (+68%), AS ITALY REAFFIRMED ITS POSITION AS THE THIRD LEADING INVESTOR IN FRANCE. ITALIAN COMPANIES IN FRANCE There are more than 2,000 Italian companies operating in France, where they employ more than 100,000 people. A total of 141 new investments from Italy were recorded in 2016, creating or maintaining 3,228 jobs. Italian investors in France focused on production/ manufacturing operations (30% of all Italian projects) and business services (20%), while also standing out for their impact in the former (15% of all foreign investments). They were also responsible for 21% of all new French headquarters, and 10% of R&D, engineering and design projects. Italian investments were made in a variety of sectors, led by metals/metalworking (9%), machinery/ mechanical equipment (9%), and agri-food (9%). Italian companies accounted for 45% of all foreign investments in perfumes/cosmetics, and 40% of all foreign investments in metals/metalworking. Italian companies invested mainly in Ile de France (Paris region) (29%) and Auvergne-RhôneAlpes (23%), accounting for 27% of all foreign investments in the latter, and 21% of all foreign investments in Provence-Alpes-Côte d’Azur.

FRANCE AS A RECIPIENT OF ITALIAN INVESTMENT IN EUROPE

In 2016, France was the leading European recipient of job-creating investment from Italy, attracting 29% of Italian projects in Europe, followed by the Germany (11%).1

SELECTED INVESTMENT PROJECTS IN 2016 LATTONEDIL: Italian firm Lattonedil, which makes and markets insulating roof and wall panels, opened its first French plant in Roche-sur-Yon (Pays de la Loire region), where it plans to invest more than €10 million and create around fifty jobs. BOLTON GROUP: This

global leader in seafood products decided to invest €2.5 million to expand its Sopiquet subsidiary in Quimper (Bretagne / Brittany region). The investment will lead to around thirty new hires at the Breton fish-canning plant. L’Immagine Ritrovata is an Italian film restoration laboratory. Having operated in the French market for a number of years through a number of major contracts, the company decided to establish a physical presence in France by opening a restoration laboratory in Paris (Ile de France region) in an investment worth €2 million. The laboratory is expected to create around fifteen jobs over the next three years.

L’IMMAGINE RITROVATA:

TAS SpA: Italian

TAS Group specializes in electronic money, payment, capital market and ERP software, as well as cloud-based and data storage solutions. It is investing nearly €4 million in its Sophia-Antipolis facility (Provence-AlpesCôte d’Azur region) to enlarge and upgrade the facility and expand its R&D operations in a project due to create around fifteen jobs over three years, including five engineering positions.

Business France Europe Observatory.

FLOW

141 PROJECTS (Business France)

3,228 JOBS (Business France)

STOCK

More than

2,000 COMPANIES IN FRANCE (Orbis)

More than

100,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€13.9 billion 10TH PLACE (Banque de France*)

FRENCH EXPORTS:

Workforce in France

€32.5 billion

GENERALI ASSICURAZIONI SPA Financial services, banking and insurance

7,500

(Customs Authorities)

FIAT CHRYSLER AUTOMOBILES

7,000

TOP 5 ITALIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Automotive industry

EDIZIONE HOLDING (AUTOGRILL) Consumer services

3,600

SAIPEM SPA

Civil engineering Architecture and engineering

2,400

BARILLA SPA

Agri-food

1,700

4TH PLACE

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €20.2 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 99

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Projects

Jobs

Projects

Jobs

Projects

Jobs

10%

289

16%

First-time investments

183

11%

12%

106

21%

11%

Logistics

>>In 2016, 30% of Italian investments in France were in production/manufacturing; 15% of foreign investments in production/manufacturing were made by Italian companies.

Total share*

Decision-making centers French headquarters

Key:

National share

13%

Retail outlets

168

13%

17%

Production / Manufacturing

2,175

30%

67%

15%

19%

R&D, engineering, design

133

10%

257

20%

13%

R&D Business services Consumer services TOTAL

114

13%

141

3,228

100%

13%

11%

* Share of Italian investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 9% of Italian investments in France were in the metals/metalworking sector; 40% of foreign investments in the metals/metalworking sector were made by Italian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Metals, metalworking

793

25%

40%

Jobs

60%

Machinery and mechanical equipment

179

19%

15%

Agri-food, agriculture, fishing

127

16%

Transport, storage

105

20%

Consulting, engineering and business services

10%

Perfumes, cosmetics

45%

40%

Construction, building materials

290

30%

55%

Energy, recycling, other concessions

227

15%

28%

Software and IT services

Textiles, industrial textiles, clothing and accessories

10%

Automotive industry

385

12%

21%

Glass, ceramics, minerals, wood, paper

330

10%

19%

46%

Aerospace, naval and railway equipment

232

16%

Hotels, tourism and restaurants

117

14%

10%

Other services

11%

Furnishings, household goods

16%

Electrical/electronic/IT equipment

Commerce and retail

Pharmaceuticals and biotechnologies

Medical/surgical equipment, diagnostics and devices

Financial services, banking and insurance

10%

Chemicals, plastics

Media, publishing

13%

141

3,228

100%

13%

11%

TOTAL

* Share of Italian investments in the total number of investments in each business sector.

100 / â&#x20AC;&#x2030;2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

677

29%

21%

11%

Auvergne-Rhône-Alpes

1,067

23%

33%

27%

29%

Provence-Alpes-Côte d’Azur

176

11%

21%

Hauts de France

477

15%

11%

10%

Occitanie

285

11%

Pays de la Loire

165

14%

Nouvelle Aquitaine

13%

Grand Est

Bourgogne-Franche-Comté

183

14%

Normandie

10%

Bretagne (Brittany)

Centre-Val de Loire

141

3,228

100%

13%

11%

TOTAL

Key: In 2016, 29% of Italian investments in France were in Ile de France (Paris region); 11% of foreign investments in Ile de France (Paris region) were made by Italian companies.

* Share of Italian investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 101

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

JAPAN FLOW

67 PROJECTS (Business France)

1,490 JOBS (Business France)

STOCK

490 COMPANIES IN FRANCE

(Business France Tokyo office figures)

More than

74,000 EMPLOYEES (Business France Tokyo office figures)

FDI STOCK IN FRANCE:

€14.5 billion

JAPAN WAS THE LARGEST ASIAN INVESTOR IN FRANCE IN 2016, WHERE ITS COMPANIES HAVE A LONG AND VARIED HISTORY, PARTICULARLY IN DESIGN AND MANUFACTURING. JAPANESE COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are 490 Japanese companies operating in France, where they employ 74,000 people. Japan was the fifth largest job-creating investor in France in 2016, with 67 investments creating or maintaining 1,490 jobs. Japanese investments were made primarily in decision-making centers (28%), business services (22%), and production/manufacturing operations (21%). Japanese firms also accounted for 17% of all foreign investment in European headquarters in France. The textiles industry attracted 10% of all Japanese investments in France, as did the software/ IT services sector (10%). Japanese firms also accounted for 10% of all foreign investments and nearly one-quarter (23%) of all jobs thereby generated in the French automotive industry. Japanese investments were most often located in Ile de France (Paris region) (45%).

Consumer plastics manufacturer and distributer Iris Ohyama plans to set up for business in the Sénart logistics park, just outside Paris (Ile de France region). The 35,000 sq. m. facility will include with a plastic furniture plant and a logistics center in an investment expected to create around hundred jobs over the next two years. EKK EAGLE INDUSTRY: This global leader in mechanical seals announced the expansion of its Eagle ABC Technology subsidiary in Gensacla-Pallue (Nouvelle Aquitaine region). The group currently has a plant in Segonzac (also Nouvelle Aquitaine region) that produces electromagnetic subassemblies for use in seal assemblies, and has also acquired a 5,500 sq. m. plot of land nearby for a second production facility. The new plant is slated to come on line in the summer of 2017 after an investment that will create a hundred new jobs. SHISEIDO CO., LTD.: Japanese cosmetics and luxury toiletry specialist Shiseido Group acquired the license for Dolce & Gabbana perfumes, which will now be made in France. Shiseido has modernized its Ormes and Gien plants (Centre-Val de Loire region), where new production lines will double production capacity. YAMAHA MOTOR CO., LTD.: MBK Industrie, a subsidiary of Japanese Yamaha Motor Co., Ltd., decided to invest in its manufacturing facility in Rouvroy (Hauts de France region) to kick-start production of a new motorcycle model. The company plans to hire 25 new employees.

FRANCE AS A RECIPIENT OF JAPANESE INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Japan, receiving 23% of Japanese projects in Europe, ahead of the United Kingdom (13%), Spain (13%) and Germany (12%).1 1

Business France Europe Observatory.

9TH PLACE

IRIS OHYAMA:

(Banque de France*)

FRENCH EXPORTS:

€6.3 billion

12TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

219

TOP 5 JAPANESE COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

TOYOTA MOTOR CORPORATION Automotive industry

Workforce in France

4,000-4,500

NTN CORPORATION

Automotive industry Machinery and mechanical equipment

4,000-4,500

RICOH CO., LTD.

Electrical/electronic/IT equipment

3,500-4,000

FAST RETAILING CO., LTD.

Textiles, industrial textiles, clothing and accessories

3,500-4,000

JTEKT CORPORATION

*FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €13.2 billion.

102 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Machinery and mechanical equipment Automotive industry

3,000-3,500

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

214

28%

14%

First-time investments

15%

Global / European headquarters

17%

10%

French headquarters

120

13%

Logistics

Retail outlets

206

14%

Production / Manufacturing

591

21%

40%

146

10%

217

22%

15%

1,490

100%

R&D, engineering, design R&D Business services Consumer services TOTAL

Key:

>>In 2016, 28% of Japanese investments in France were in decision-making centers; 7% of foreign investments in decision-making centers were made by Japanese companies.

* Share of Japanese investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

229

10%

15%

10%

Software and IT services

158

10%

11%

Agri-food, agriculture, fishing

Textiles, industrial textiles, clothing and accessories

Machinery and mechanical equipment

Automotive industry

414

28%

10%

23%

Hotels, tourism and restaurants

14%

Consulting, engineering and business services

Glass, ceramics, minerals, wood, paper

16%

6% 22%

Furnishings, household goods

113

16%

Electrical/electronic/IT equipment

Commerce and retail

Aerospace, naval and railway equipment

Perfumes, cosmetics

10%

14%

Chemicals, plastics

100

14%

Medical/surgical equipment, diagnostics and devices

Energy, recycling, other concessions

Other services

Electronic components

Transport, storage

Pharmaceuticals and biotechnologies

1,490

100%

TOTAL

Key:

>>In 2016, 10% of Japanese investments in France were in the software and IT services sector; 5% of foreign investments in the software and IT services sector were made by Japanese companies.

* Share of Japanese investments in the total number of investments in each business sector.

2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE / â&#x20AC;&#x2030;103

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

>>In 2016, 45% of Japanese investments in France were in Ile de France (Paris region); 8% of foreign investments in Ile de France (Paris region) were made by Japanese companies.

Total share*

Jobs

Projects

Jobs

Projects

Jobs

630

45%

42%

Occitanie

134

13%

Auvergne-Rhône-Alpes

137

10%

Hauts de France

Pays de la Loire

Nouvelle Aquitaine

190

13%

20%

Bourgogne-Franche-Comté

Provence-Alpes-Côte d’Azur

Grand Est

Bretagne (Brittany)

100

14%

Normandie

1,490

100%

Ile de France (Paris region)

Key:

National share

Projects

TOTAL

* Share of Japanese investments in the total number of investments in each region.

104 / 2016 ANNUAL REPORT – BUSINESS FRANCE

LATIN AMERICA SEVEN NEW INVESTMENTS FROM LATIN AMERICAN COUNTRIES WERE RECORDED IN FRANCE IN 2016, CREATING NEARLY A HUNDRED JOBS. LATIN AMERICAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are around a hundred Latin American companies operating in France, where they employ more than 4,000 people. Seven new Latin American job-creating investments were recorded in 2016, creating 89 jobs. These investments were made predominantly in decision-making centers (71%), which included four new European headquarters. Sector-wise, they were mainly split between the software/IT services (29%), commerce and retail (29%), and textiles/clothing (29%) sectors, and were most often located in the Provence-Alpes-Côte d’Azur region (29%) and Ile de France/Paris region (29%).

CEMEX: Mexican multinational Cemex renovated its production facility in Tourvillela-Rivière, (Normandie region), which makes ready-mix concrete. The company also opened a new concrete plant in LongueilSainte-Marie (Hauts de France region) that will employee around ten people.

FRANCE AS A RECIPIENT OF LATIN AMERICAN INVESTMENT IN EUROPE In 2016, France attracted 25% of Latin American investments in Europe, as did Spain (25%), followed by Switzerland, Portugal and Germany (10% each).1

FLOW

7 PROJECTS (Business France)

89 JOBS

(Business France)

STOCK

MOVILE: The Maplink company develops geolocation and logistics software. Since 2014, it has belonged to Brazilian group Movile, a global leader in mobile phone and tablet apps. Maplink acquired French logistics efficiency firm Optilogistic, based in Angers (Pays de la Loire region) in a €20 million transaction that is expected to create around twenty jobs in the city.

More than

This Mexican digital content app and service provider expanded its international presence by establishing a new subsidiary in Avignon (Provence-Alpes-Côte d’Azur region). Already present in Colombia and the United Kingdom, the company has turned its attention to France and potential French-speaking markets in Africa. Around twenty new jobs are due be created over the next three years.

4,000 EMPLOYEES

MANUVO:

Business France Europe Observatory.

110 COMPANIES IN FRANCE (Orbis)

More than (Orbis)

FDI STOCK IN FRANCE:

€1.0 billion

(Banque de France*)

FRENCH EXPORTS:

TOP 5 LATIN AMERICAN COMPANIES BY EMPLOYMENT IN FRANCE

€12.6 billion (Customs Authorities)

Parent company

Main business sector

Workforce in France

CEMEX (Mexico)

Construction, building materials

2,000

VALE SA (Brazil)

Metals, metalworking

1,000-1,500

JBS SA (Brazil)

Agri-food, agriculture, fishing

700-800

MEXICHEM (WAVIN) (Mexico)

Chemicals, plastics

400-500

SIGDO KOPPERS (Chile)

Construction, building materials Metals, metalworking Transport, storage

400-500

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €1.3 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 105

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY SOURCE COUNTRY Number Source country

Projects

Jobs

Mexico Brazil

Colombia

TOTAL

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 71% of Latin American investments in France were in decision-making centers; 2% of foreign investments in decision-making centers were made by Latin American companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

71%

65%

First-time investments

14%

0% 12%

57%

63%

11%

Production / Manufacturing

14%

10%

R&D, engineering, design

14%

25%

R&D

14%

25%

TOTAL

100%

Global / European headquarters

* Share of Latin American investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 29% of Latin American investments in France were in the software and IT services sector; 1% of foreign investments in the software and IT services sector made by Latin American companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Software and IT services

29%

47%

Commerce and retail

29%

22%

Textiles, industrial textiles, clothing and accessories

29%

20%

Construction, building materials

14%

10%

100%

TOTAL

Jobs

* Share of Latin American investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 29% of Latin American investments in France were in Provence-Alpes-Côte d’Azur; 3% of foreign investments in Provence-Alpes-Côte d’Azur were made by Latin American companies.

Projects

National share

Jobs

Projects

Total share*

Jobs

Projects

Jobs

Provence-Alpes-Côte d’Azur

29%

34%

Ile de France (Paris region)

29%

13%

Pays de la Loire

14%

25%

Auvergne-Rhône-Alpes

14%

18%

Hauts de France

14%

10%

100%

TOTAL

* Share of Latin American investments in the total number of investments in each region.

106 / 2016 ANNUAL REPORT – BUSINESS FRANCE

MAGHREB COUNTRIES SIXTEEN INVESTMENT DECISIONS WERE MADE IN FRANCE IN 2016 BY COMPANIES FROM ALGERIA, MOROCCO AND TUNISIA. MAGHREB COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECT IN 2016

There are over 500 companies from Algeria, Morocco and Tunisia operating in France, where they employ more than 7,400 people. Sixteen new Maghreb investments were recorded in 2016, creating or maintaining 359 jobs in France. Investments were received in 2016 from Maghreb investors based in Tunisia (56%), Morocco (38%) and Algeria (6%). These businesses invested primarily in decisionmaking centers (38%), including two European headquarters, production/manufacturing operations (25%) and business services (25%). Maghreb investments were mostly made in the software/IT services (38%) and consulting, engineering and business services (31%) sectors, and were mainly located in the Ile de France (Paris region) (50%).

HIGHTECH PAYMENT SYSTEMS (HPS): Morocco’s

FRANCE AS A RECIPIENT OF MAGHREB INVESTMENT IN EUROPE Job-creating investments in Europe from Maghreb countries in 2016 remained limited in number; however, France was the leading recipient.1

HPS, a global leader in the electronic payments sector, has been operating in France since its acquisition of French firm Acpqualife in 2010. As part of its efforts to consolidate its business in France and Europe, its site in Aix-en-Provence (Provence-Alpes-Côte d’Azur region), where one of its R&D centers is also based, will be expanded and around 30 new employees hired. IWK CORPORATE: Tunisian-owned firm IWK Corporate, which specializes in financial certification, chose to set up its international office in Paris (Ile de France region) to develop MSI 20000 certification in Europe. FAVIZONE: Tunisian startup Favizone has developed a SaaS-based customization solution for e-commerce sites. Its market launch is imminent and will target micro-enterprises and small businesses. To this end, Favizone set up a subsidiary in France to cover the entire European market, creating around twenty jobs in Paris (Ile de France region) in the process.

16 PROJECTS (Business France)

359 JOBS (Business France)

STOCK

More than

500 COMPANIES IN FRANCE (Orbis)

More than

7,400 EMPLOYEES (Orbis)

Business France Europe Observatory.

FDI STOCK IN FRANCE:

TOP 5 MAGHREB COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

CEVITAL (Algeria)

Agri-food Machinery and mechanical equipment Automotive industry Transport, storage

1,000-2,000

INTELCIA GROUP (Morocco)

Consulting, engineering and business services 1,000-1,500

SCHIELE MAROC (SELHA) (Morocco)

Electrical/electronic/IT equipment

700

SNI (ATTIJARIWAFA BANK; OPTORG) (Morocco)

Financial services, banking and insurance Construction, building materials Machinery and mechanical equipment

500-600

GROUPE OUTSOURCIA (Morocco)

FLOW

€1.2 billion

(Banque de France*)

FRENCH EXPORTS:

€12.8 billion (Customs Authorities)

Consulting, engineering and business services 200-300

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €1.1 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 107

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY SOURCE COUNTRY Number Source country

Projects

Jobs

129 220

Tunisia Morocco

Algeria

TOTAL

359

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 38% of Maghreb investments in France were in decision-making centers; 2% of foreign investments in decision-making centers were made by Maghreb companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

38%

22%

First-time investments

25%

Global / European headquarters

11%

13%

14%

Production / Manufacturing

25%

19%

R&D, engineering, design

Business services

169

25%

47%

Consumer services

359

100%

R&D

TOTAL

* Share of Maghreb investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 38% of Maghreb investments in France were in the software and IT services sector; 4% of foreign investments in the software and IT services sector were made by Maghreb companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Software and IT services

120

38%

33%

Consulting, engineering and business services

174

31%

48%

10%

Chemicals, plastics

10%

Commerce and retail

Financial services, banking and insurance

Agri-food, agriculture, fishing

Textiles, industrial textiles, clothing and accessories

359

100%

TOTAL

* Share of Maghreb investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 50% of Maghreb investments in France were in Ile de France (Paris region); 2% of foreign investments in Ile de France (Paris region) were made by Maghreb companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Ile de France (Paris region)

115

50%

32%

Jobs

Hauts de France

130

13%

36%

Grand Est

10%

Centre-Val de Loire

Provence-Alpes-Côte d’Azur

Auvergne-Rhône-Alpes

Normandie

Occitanie

359

100%

TOTAL

* Share of Maghreb investments in the total number of investments in each region.

108 / 2016 ANNUAL REPORT – BUSINESS FRANCE

MIDDLE EAST ELEVEN INVESTMENT DECISIONS WERE MADE IN FRANCE IN 2016 BY COMPANIES FROM COUNTRIES IN THE MIDDLE EAST. MIDDLE EAST COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECT IN 2016

There are 380 companies from Middle East countries operating in France, where they employ more than 24,000 people. Eleven new investment projects in France from Middle East countries were recorded in 2016, creating or maintaining nearly a hundred jobs. Thirty-four percent of Middle East investments in 2016 came from the United Arab Emirates, while Lebanon and Qatar each accounted for 18%. More than half (55%) of these projects involved decision-making centers (first-time investments), while there were also investments in business services and consumer services. Investments by Middle East countries were mainly made in the software/IT services sector (45%), and were most often located in Ile de France (Paris region) (36%).

INTERNATIONAL FINANCIAL ADVISORS KSCC (IFA HOTELS & RESORTS): Yotel, an

FRANCE AS A RECIPIENT OF MIDDLE EAST INVESTMENT IN EUROPE In 2016, the United Kingdom was the European largest recipient of job-creating investment from Middle East countries, attracting 27% of their projects in Europe, followed by Germany (13%), France (10%), the Netherlands (10%), and Italy (10%).1

85% subsidiary of Kuwaiti investment group International Financial Advisors KSCC, runs a chain of affordable luxury hotels. The company recently opened at Paris Charles de Gaulle airport’s new terminal 2E in Le Mesnil-Amelot (Ile de France), creating around ten jobs. ADIA: Tamweelview European Holdings, a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA), announced that it was acquiring the Tour Alto, an office project in Paris’ business district La Défense (Ile de France). The project will replace the “Les Saisons” building with an ultra-modern 51,000 sq. m. office tower. GROUP8: Lyon-based Navya, which is developing a driverless, fully electric shuttle bus, announced it had secured €30 million in funding from Qatari family investors Group8 and French firms Valeo and Keolis. The strategic agreement with Group8 includes a contract to market the vehicle in Middle East and African markets, as well a new assembly line in the Gulf region. NAJEM GROUP: Lebanese group Najem, a family luxury construction specialist, particularly using marble, acquired the Noaille estate in Corrèze (Nouvelle Aquitaine) in March 2016 to develop a luxury hotel complex. The project, thought to be worth €8-10 million, has created around thirty jobs.

TOP 5 MIDDLE EAST COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

AL MANNAI CORPORATION (Gfi INFORMATIQUE) (Qatar)

Financial services, banking and insurance

9,000-10,000

FAMILLE SAADE (CMA CGM) (Lebanon)

Transport, storage

4,000-5,000

DIVINE INVESTMENTS SA (PRINTEMPS) (Qatar)

Commerce and retail

3,000

QATAR LUXURY GROUP (Qatar)

Textiles, industrial textiles, clothing and accessories

800-1,000

KATARA HOSPITALITY (Qatar)

Hotels

800-1,000

FLOW

11 PROJECTS (Business France)

94 JOBS

(Business France)

STOCK

380 COMPANIES IN FRANCE (Orbis)

More than

24,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€6.4 billion

(Banque de France*)

FRENCH EXPORTS:

€14.2 billion (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €5.3 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 109

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY SOURCE COUNTRY Number Source country

Projects

Jobs

United Arab Emirates Lebanon

Qatar Kuwait Jordan Saudi Arabia

2 1 1 1

13 10 5 1

TOTAL

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 55% of Middle East investments in France were in decision-making centers; 2% of foreign investments in decision-making centers were made by Middle East companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

55%

43%

First-time investments

55%

43%

Production / Manufacturing

Business services

18%

14%

Consumer services

18%

43%

100%

TOTAL

* Share of Middle East investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business activity

Key:

>>In 2016, 45% of Middle East investments in France were in the software and IT services sector; 4% of foreign investments in the software and IT services sector were made by Middle East companies

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Software and IT services

45%

24%

Jobs

Hotels, tourism and restaurants

27%

53%

Other services

11%

Transport, storage

11%

Automotive industry

Agri-food, agriculture, fishing

Textiles, industrial textiles, clothing and accessories

100%

TOTAL

* Share of Middle East investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Business activity

Key:

>>In 2016, 36% of Middle East investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Middle East companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Ile de France (Paris region)

36%

27%

Normandie

18%

16%

10%

Bretagne (Brittany)

18%

14%

Nouvelle Aquitaine

32%

Provence-Alpes-Côte d’Azur

11%

Bourgogne-Franche-Comté

100%

TOTAL

Share of Middle East investments in the total number of investments in each region.

110 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Jobs

NETHERLANDS FRANCE WAS THE LEADING EUROPEAN RECIPIENT OF JOB-CREATING INVESTMENT FROM THE NETHERLANDS IN 2016. FLOW DUTCH COMPANIES IN FRANCE There are 1,700 Dutch companies operating in France, where they employ more than 260,000 people. Thirty-six Dutch investments were recorded in 2016, creating or maintaining more than 800 jobs. Investments by Dutch companies in 2016 were made primarily in production operations (31%), business services (31%) and decision-making centers (19%). Dutch investments had a tendency to be found in the agri-food/agriculture/fishing (22%), and consulting/engineering/ business services (17%) sectors. Dutch projects were recorded across the country, led by Hauts de France (19%) and Ile de France (Paris region) (19%).

FRANCE AS A RECIPIENT OF DUTCH INVESTMENT IN EUROPE

SELECTED INVESTMENT PROJECTS IN 2016 Dutch filter maker Filtech is investing €2 million to build a new 1,500 sq. m. building at its Modane plant in the Savoy (AuvergneRhône-Alpes region) which should be ready by late 2017. Filtech expects to create around fifteen jobs. FILTECH:

Dutch group Dormio began construction on a complex of around 30 guest houses in Berck (Hauts de France region). The company has invested €25 million in this project, which is expected to result in around fifteen new jobs when the resort opens for business.

DORMIO:

Dutch firm Moxx, which specializes in the management of mobile devices and equipment, opened a subsidiary in Paris (Ile de France region). The company’s first office in France will employ a team of around ten people. MOXX MOBILITY:

Business France Europe Observatory.

36 PROJECTS (Business France)

800 JOBS (Business France)

STOCK

1,700 COMPANIES IN FRANCE (Orbis)

More than

260,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€73.7 billion

In 2016, France was the leading European recipient of job-creating investment from the Netherlands, attracting 37% of Dutch projects in Europe, ahead of the United Kingdom (13%) and Germany (10%).1

2ND PLACE (Banque de France*)

FRENCH EXPORTS:

Parent company

Main business sector

Workforce in France

€16.1 billion

HEINEKEN

Agri-food

4,000-4,500

(Customs Authorities)

FACILICOM GROUP

Other services

4,000

RANDSTAD HOLDING NV

Consulting, engineering and business services

3,000-4,000

UNILEVER

Agri-food

2,500-3,000

HENDRIX GENETICS BV

Agri-food

1,000-1,500

TOP 5 DUTCH COMPANIES BY EMPLOYMENT IN FRANCE

7TH PLACE

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €32.5 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 111

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Projects

Jobs

Projects

Jobs

Projects

Jobs

19%

First-time investments

19%

513

31%

64%

Production / Manufacturing >>In 2016, 31% of Dutch investments in France were in production/manufacturing; 4% of foreign investments in production/manufacturing were made by Dutch companies.

Total share*

Decision-making centers Retail outlets

Key:

National share

R&D, engineering, design R&D Business services Consumer services TOTAL

169

31%

21%

800

100%

* Share of Dutch investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 22% of Dutch investments in France were in the agri-food, agriculture and fishing sector; 11% of foreign investments in the agri-food, agriculture and fishing sector were made by Dutch companies.

Projects

National share

Jobs

Projects

Total share*

Jobs

Projects

Jobs

26%

Agri-food, agriculture, fishing

479

22%

60%

11%

Consulting, engineering and business services

110

17%

14%

Software and IT services

Commerce and retail

Electrical/electronic/IT equipment

Automotive industry

Metals, metalworking

Other services

Hotels, tourism and restaurants

Transport, storage Medical/surgical equipment, diagnostics and devices Machinery and mechanical equipment

Energy, recycling, other concessions

Construction, building materials Textiles, industrial textiles, clothing and accessories

800

100%

TOTAL

* Share of Dutch investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 19% of Dutch investments in France were in Hauts de France; 7% of foreign investments in Hauts de France were made by Dutch companies.

Projects

National share

Jobs

Projects

Jobs

Total share* Projects

Jobs

Hauts de France

381

19%

48%

Ile de France (Paris region)

172

19%

22%

Auvergne-Rhône-Alpes

11%

Nouvelle Aquitaine

11%

Occitanie

11%

Provence-Alpes-Côte d’Azur

Grand Est

Bretagne (Brittany)

Centre-Val de Loire

Pays de la Loire

Bourgogne-Franche-Comté TOTAL

800

100%

* Share of Dutch investments in the total number of investments in each region.

112 / 2016 ANNUAL REPORT – BUSINESS FRANCE

NORWAY THE 150+ NORWEGIAN COMPANIES OPERATING IN FRANCE EMPLOY MORE THAN 4,000 PEOPLE. NORWEGIAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are more than 150 Norwegian companies operating in France, where they employ more than 4,000 people. Seven new investments from Norway were recorded in 2016, creating or maintaining 166 jobs in France. These projects mainly involved decisionmaking centers (43% of all Norwegian investments in France) and production/ manufacturing operations (also 43%). More than 70% of Norwegian investments were made in manufacturing sectors, while geographically, 57% were made in Ile de France (Paris region).

ORKLA ASA: Norwegian Orkla group subsidiary Sapa Profiles, a supplier of innovative aluminum solutions, is expanding its plant in Albi-Le Garric (Occitanie region). The €2 million investment is expected to create around twenty jobs.

FRANCE AS A RECIPIENT OF NORWEGIAN INVESTMENT IN EUROPE

CAMBI AS (CORTEX AS):

In 2016, France was the leading European recipient of Norwegian job-creating investments in Europe (27.5%), followed by Poland (17.5%) and the United Kingdom (12.5%).1

Norwegian company Norske Skog is a leading global producer of newsprint and magazine paper. In 2016, its French subsidiary built a biogas plant in Golbey (Grand Est region) in partnership with Biométhodes, a subsidiary of the American developer of biorefinery technologies Arbiom. Located in the Vosges Mountains of eastern France, the plant will recycle wastewater from the paper mill, as well as household waste biomass materials.

NORSKE SKOG AS:

Norwegian company Cambi, which provides technologies and services for converting sludge to renewable energy, decided to open its first French office in Paris. It plans to hire around ten people at the new French decision-making center.

Business France Europe Observatory.

FLOW

7 PROJECTS (Business France)

166 JOBS (Business France)

STOCK

150 COMPANIES IN FRANCE (Orbis)

More than

4,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€1.9

billion

17TH PLACE (Banque de France*)

FRENCH EXPORTS:

TOP 5 NORWEGIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

SAPA SA

Metals, metalworking

2,000

MARINE HARVEST ASA

Agri-food, agriculture and fishing

1,000

YARA INTERNATIONAL ASA

Chemicals, plastics

700-800

NORSKE SKOG ASA

Glass, ceramics, minerals, wood, paper

400-500

SCHIBSTED ASA (LeBonCoin.fr)

Other services

300-400

€1.5 billion

46TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €2.3 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 113

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

>>In 2016, 43% of Norwegian investments in France were in decision-making centers; 1% of foreign investments in decision-making centers were made by Norwegian companies.

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

43%

19%

43%

19%

Production / Manufacturing

43%

36%

Business services

14%

45%

166

100%

Decision-making centers

Key:

National share

First-time investments

TOTAL

* Share of Norwegian investments in the total number of investments in each business activity.

BREAKDOWND OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 14% of Norwegian investments in France were in the software and IT services sector; 1% of foreign investments in the software and IT services sector were made by Norwegian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Software and IT services

14%

45%

Agri-food, agriculture, fishing

14%

18%

Consulting, engineering and business services

14%

12%

Metals, metalworking

14%

12%

Construction, building materials

14%

Energy, recycling, other concessions

14%

Textiles, industrial textiles, clothing and accessories

14%

166

100%

TOTAL

* Share of Norwegian investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 57% of Norwegian investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Norwegian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

106

57%

64%

Hauts de France

29%

24%

Occitanie

14%

12%

166

100%

TOTAL

* Share of Norwegian investments in the total number of investments in each region.

114 / 2016 ANNUAL REPORT – BUSINESS FRANCE

PORTUGAL OVER 350 PORTUGUESE COMPANIES OPERATE IN FRANCE, EMPLOYING MORE THAN 2,400 PEOPLE. PORTUGUESE COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are over 350 Portuguese companies operating in France, where they employ more than 2,400 people. A Portuguese investment in the electrical, electronic and IT equipment sector involving business services was recorded in 2016, creating six jobs in the Centre-Val de Loire region.

PAINHAS, S.A.: Portuguese company Painhas SA, which specializes in electrical installations, was chosen to partner Enedis, a subsidiary of EDF, to roll out Linky smart meters in five French markets, including Orval in the CentreVal de Loire region. This contract, worth €20 million, involves replacing more than 500,000 electricity meters. The investment will lead to the recruitment of six electrical technicians in Orval.

FRANCE AS A RECIPIENT OF PORTUGUESE INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Portugal, attracting 40% of Portuguese projects in Europe, ahead of Spain (20%).1

SEAOWL HOLDING SGPS, S.A. (ZONA FRANCA

Portuguese group SeaOwl, which provides support services to the maritime and energy sectors, announced the acquisition of Well Staff, a firm based in Pau, in the Nouvelle-Aquitaine region. This French company specializes in engineering and support services for the oil and gas industry.

DA MADEIRA)2:

Business France Europe Observatory. Non-job-creating investment cited as an example, but not included in the analysis. 1 2

FLOW

1 PROJECT (Business France)

6 JOBS

(Business France)

STOCK

More than

350 COMPANIES IN FRANCE (Orbis)

More than

2,400 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€1 billion TOP 5 PORTUGUESE COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

INAPA - INVESTIMENTOS, PARTICIPAÇOES E GESTAO, S.A.

Commerce and retail

300-400

GRUPO VISABEIRA

Telecoms, internet service providers

200-300

LIZMONTAGENS THERMAL TECHNOLOGIES S.A. (FERBECK & FUMITHERM)

Construction, building materials 100-200 Machinery and mechanical equipment

AQUINOS, S.A.

Furnishings, household goods

100-150

AMORIM CAPITAL, S.A.

Glass, ceramics, minerals, wood, paper

100-150

26TH PLACE (Banque de France*)

FRENCH EXPORTS:

€4.6 billion

18TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €877 million.

2016 ANNUAL REPORT – BUSINESS FRANCE / 115

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY 2015 Business activity

Production / Manufacturing

2016

Projects

Jobs

Projects

Jobs

Business services TOTAL

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR 2015 Business sector

Construction, building materials

2016

Projects

Jobs

Electrical/electronic/IT equipment Glass, ceramics, minerals, wood, paper TOTAL

BREAKDOWN OF PROJECTS BY HOST REGION 2014 Host region

2015

Projects

Jobs

Auvergne-Rhône-Alpes

Bourgogne-Franche-Comté

Centre-Val de Loire TOTAL

116 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Projects

Jobs

30 1

Projects

Jobs

30 1

RUSSIA THE NUMBER OF RUSSIAN COMPANIES OPERATING IN FRANCE REMAINS STABLE. RUSSIAN COMPANIES IN FRANCE There are 86 Russian companies operating in France, where they employ more than 4,500 people. Eight Russian investments were recorded in 2016, creating or maintaining 108 jobs. Half of Russian investment decisions involved decision-making centers, three-quarters of which were European headquarters, while two R&D projects accounted for 25% of Russian investments over the year. Russian firms invested primarily in the electronic components sector (25%), where they accounted for 17% of all foreign investment, while more than half (55%) of all jobs generated by Russian investment in France were in the hotel and tourism industry. Ile de France (Paris region) (38%) and ProvenceAlpes-Côte d’Azur (25%) together attracted more than half of all Russian investments in France.

FRANCE AS A RECIPIENT OF RUSSIAN INVESTMENT IN EUROPE

SELECTED INVESTMENT PROJECTS IN 2016 Russia’s sovereign wealth fund and CDC International Capital, a Caisse des Dépôts subsidiary, signed an agreement to invest €250 million in ARC, the world’s leading glassware manufacturer. The deal will help ARC launch a global investment program, a significant part of which will be in France and Russia, and will also pay to renovate company manufacturing facilities and for a new innovation program to secure the future of 5,260 employees at its long-established site in Arcques (Hauts de France). This initial joint investment follows a government agreement signed by the two funds in January 2016. Upcoming investments will be focus on projects in various sectors: manufacturing, agrifood, telecommunications, retail and raw materials.

RUSSIAN DIRECT INVESTMENT FUND:

Russian big data specialist Datadvance develops modeling software to optimize industrial component design and production costs. Through its partnership with the Airbus group, Datadvance chose to base its European decision-making center in Toulouse. DATADVANCE:

The Moscow-based restaurant group is expanding in France by opening a new flagship establishment under the Pouchkine brand, launching new outlets and investing in its production facility in Paris. France will serve as a springboard for the brand’s international development. Dellos plans to create 70 new jobs and invest €15 million in all. GROUPE DELLOS:

In 2016, Poland was the leading European recipient of job-creating projects from Russia (26% of all projects in Europe), followed by the United Kingdom, Ireland and Lithuania (11% each).1

Business France Europe Observatory.

FLOW

8 PROJECTS (Business France)

108 JOBS (Business France)

STOCK

86 COMPANIES IN FRANCE

(Business France Moscow office figures)

More than

4,500 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€1.8 billion

19TH PLACE (Banque de France*)

FRENCH EXPORTS:

TOP 5 RUSSIAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

RZD - RUSSIAN RAILWAYS (GEFCO)

Transport, storage

3,500-4,000

VTB BANK (FRANCE) SA

Financial services, banking and insurance 50-100

KASPERSKY LAB

Software and IT services

50-100

MR T. GORYAYEV (SPIRIT FRANCE)

Agri-food

50-100

ICC (CHOCOLATERIE DE PROVENCE)

Agri-food

50-100

€4.9 billion

18TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

*FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €1.9 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 117

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Decision-making centers

Key:

>>In 2016, 38% of Russian investments in France were in Global / European Headquarters; 8% of foreign investments in Global / European Headquarters were made by Russian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

50%

21%

First-time investments

13%

Global / European headquarters

38%

18%

Production / Manufacturing

13%

R&D, engineering, design

25%

15%

25%

15%

R&D Consumer services

13%

55%

108

100%

TOTAL

* Share of Russian investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Electronic components

Key:

>>In 2016, 25% of Russian investments in France were in the electronic components sector; 17% of foreign investments in the electronic components sector were made by Russian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

25%

15%

17%

Hotels, tourism and restaurants

13%

55%

Software and IT services

13%

Pharmaceuticals and biotechnologies

13%

Textiles, industrial textiles, clothing and accessories

13%

Telecoms, internet service providers

13%

Glass, ceramics, minerals, wood, paper

13%

108

100%

TOTAL

* Share of Russian investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Ile de France (Paris region)

Key:

>>In 2016, 38% of Russian investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Russian companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

38%

63%

Provence-Alpes-Côte d’Azur

25%

15%

Nouvelle Aquitaine

13%

Occitanie

13%

Grand Est

13%

108

100%

TOTAL

* Share of Russian investments in the total number of investments in each region.

118 / 2016 ANNUAL REPORT – BUSINESS FRANCE

SOUTH AFRICA DESPITE THE POTENTIAL OF THE SOUTH AFRICAN ECONOMY, INVESTMENTS IN FRANCE REMAIN FEW IN NUMBER. SOUTH AFRICAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are more than twenty South African companies operating in France, where they employ more than 12,000 people. Two South African investments have been recorded in France since 2015, creating or maintaining around fifty jobs. Since 2015, South African companies set up a research center for thrombosis and expanded operations at a logistics center in the Grand Est region. These investments were in the pharmaceuticals/biotechnologies and transport/storage sectors. South African investments were made in the Normandie and Grand Est regions.

ASPEN HOLDINGS LTD.: South African pharmaceuticals group Aspen expanded its operations in Notre Dame de Bondeville, near Rouen (Normandie region) by establishing a center of excellence for thrombosis, thereby creating 10 new jobs. The company also invested in its production capacity by setting up a new sterile syringe-filling line and a quality control laboratory.

FRANCE AS A RECIPIENT OF SOUTH AFRICAN INVESTMENT IN EUROPE In 2016, South African investments in Europe were made primarily in the United Kingdom (41%) and Germany (18%).1

IMPERIAL HOLDINGS LTD.: Back in 2015, Panopa Logistique France inaugurated a Plant Consolidation Center for Smart France in Hambach (Grand Est region), creating 60 jobs. This South African service provider, responsible for storing parts, handling empty packaging, transporting mobile containers and just-in-time delivery, then continued to expand in 2016, recruiting an extra 40 people at the site.

FLOW

1 PROJECT (Business France)

10 JOBS

(Business France)

STOCK

More than

20 COMPANIES IN FRANCE (Orbis)

More than 1

12,000 EMPLOYEES

Business France Europe Observatory.

(Business France, Johannesburg)

FDI STOCK IN FRANCE:

€2.1 billion

(Banque de France*)

FRENCH EXPORTS:

TOP 5 SOUTH AFRICAN COMPANIES BY EMPLOYMENT IN FRANCE

€1.8 billion

Parent company

Main business sector

Workforce in France

STEINHOFF INTERNATIONAL HOLDINGS LTD.

Commerce and retail Furnishings, household goods

9,000-10,000

ASPEN HOLDINGS

Pharmaceuticals and biotechnologies

700-800

BRAIT SE (NEW LOOK)

Financial services

500

IMPERIAL HOLDINGS LTD.

Transport, storage

50-100

HANS MERENSKY HOLDINGS

Glass, ceramics, minerals, wood, paper

20-100

* FDI stock in France (ultimate investor) as of December 31, 2014.

41ST PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

2016 ANNUAL REPORT – BUSINESS FRANCE / 119

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY 2015 Business activity

Logistics

2016

Projects

Jobs

R&D, engineering, design R&D TOTAL

Projects

Jobs

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR 2015 Business sector

Projects

2016 Jobs

Pharmaceuticals and biotechnologies Transport, storage TOTAL

Projects

Jobs

BREAKDOWN OF PROJECTS BY HOST REGION 2015 Host region

Grand Est

2016

Projects

Jobs

Normandie TOTAL

120 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Projects

Jobs

SOUTH KOREA THERE ARE OVER FORTY SOUTH KOREAN COMPANIES OPERATING IN FRANCE, WHERE THEY EMPLOY MORE THAN 2,400 PEOPLE. SOUTH KOREAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are over forty South Korean companies operating in France, where they employ more than 2,400 people. In 2016, a project to expand a production facility in the aerospace, naval and railway equipment sector led to the creation of 250 jobs in the Pays de la Loire region.

NAVER:2 South Korean internet services provider Naver Corporation and its subsidiary Line each invested €50 million in France’s Korelya Capital, the primary manager of venture capital fund K-Fund 1, thereby freeing up €100 million to invest in startups and new technologies in France and Europe. One month after this injection of cash into the fund, Naver Corporation and Korelya Capital made their first investment in Devialet, a French startup specializing in acoustic engineering. With South Korean investment stock in France of over €900 million, this investment by Naver and Line amounts to more than 10% of FDI ever made in France by South Korean organizations.

FRANCE AS A RECIPIENT OF SOUTH KOREAN INVESTMENT IN EUROPE In 2016, Germany and Spain were the two leading European recipients of job-creating investment from South Korea, each attracting 20% of all South Korean projects in Europe, ahead of the Czech Republic (13%) and France (7%).1

This South Korean firm that specializes in battery charging systems signed a partnership agreement with Calais-based electric-vehicle manufacturer Pariss. Begins will now develop and supply batteries for the Pariss electric racing car.

BEGINS CO., LTD. : 2

Business France Europe Observatory. Non-job-creating investment cited as an example, but not included in the analysis. 1

FLOW

1 PROJECT (Business France)

250 JOBS (Business France)

STOCK

More than

40 COMPANIES IN FRANCE (Orbis)

More than

2,400 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€1 billion

27TH PLACE (Banque de France*)

TOP 5 SOUTH KOREAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

SAMSUNG ELECTRONICS CO., LTD.

Consumer electronics Electrical/electronic/IT equipment

2,000-2,500

DOOSAN CORP.

Machinery and mechanical equipment Construction, building materials

500-600

LG ELECTRONICS INC.

Consumer electronics Electrical/electronic/IT equipment

400-500

AMOREPACIFIC

Perfumes, cosmetics

200-300

KIA MOTORS CORPORATION Automotive industry

50-100

FRENCH EXPORTS:

€3.9 billion

24TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €666 million.

2016 ANNUAL REPORT – BUSINESS FRANCE / 121

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY 2015 Business activity

2016

Projects

Jobs

Logistics

Retail outlets

Decision-making centers First-time investments

Production / Manufacturing R&D, engineering, design R&D TOTAL

Projects

Jobs

250

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR 2015 Business sector

Projects

2016 Jobs

Aerospace, naval and railway equipment Transport, storage

Energy, recycling, other concessions

Software and IT services

Agri-food, agriculture, fishing

Medical/surgical equipment, diagnostics and devices

TOTAL

Projects

Jobs

250

BREAKDOWN OF PROJECTS BY HOST REGION 2015 Host region

Projects

2016 Jobs

Pays de la Loire Ile de France (Paris region)

Provence-Alpes-Côte d’Azur

Normandie

Hauts de France

TOTAL

122 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Projects

Jobs

250

SPAIN FRANCE WAS THE LEADING EUROPEAN RECIPIENT OF JOBCREATING INVESTMENT FROM SPAIN IN 2016. SPANISH COMPANIES IN FRANCE There are over 1,200 Spanish companies operating in France, where they employ nearly 40,000 people. Forty-five new investments from Spain were recorded in 2016, creating or maintaining 715 jobs. Investments by Spanish companies were made primarily in decision-making centers (29%), the vast majority of which were first-time investments in France, and business services (22%). Sixteen percent of Spanish investments were in the consulting, engineering and business services sector, where they accounted for 7% of all foreign investments, while Ile de France (Paris region) (29%) and Occitanie (27%) were the leading destinations for Spanish projects.

FRANCE AS A RECIPIENT OF SPANISH INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Spain, attracting 26% of Spanish projects in Europe, ahead of the United Kingdom (14%) and Portugal (12%).1

SELECTED INVESTMENT PROJECTS IN 2016 VUELING: Spanish airline Vueling has operated

in France for several years. It recently opened a new base for two new aircraft at Paris Charles de Gaulle Airport, highlighting its growing ambitions in France, where it already has a strong presence. The project will create 160 jobs. GLOVO: Since Catalan startup Glovo opened

for business in Paris in June 2016, its deliveries have grown by 30% each week in the French market. Glovo offers a one-hour delivery service to its app users, and expects its French subsidiary to eventually create more than 20 jobs. SAICA: This manufacturer of craft paper for

corrugated cardboard invested €45 million in a biomass plant at its Venizel facility (Hauts de France region) in a project that will create 15 jobs. The group has 14 production facilities employing more than 1,500 people in France. CORTIZO CARTERA SL.: Spanish firm Cortizo,

which makes aluminum profiles, decided to increase production at its Chemillé plant (Pays de la Loire region) in order to handle a growing order log. The company plans to invest €5 million and hire up to 25 people. 1

Business France Europe Observatory.

FLOW

45 PROJECTS (Business France)

715 JOBS (Business France)

STOCK

More than

1,300 COMPANIES IN FRANCE (Orbis)

40,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€15.5 billion 8TH PLACE (Banque de France*)

FRENCH EXPORTS:

TOP 5 SPANISH COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

INDITEX

Textiles, industrial textiles, clothing and accessories

7,500

PROSEGUR COMPANIA DE SEGURIDAD S.A.

Other services

6,500

GRUPO AMADEUS

Software and IT services

4,800

ABERTIS INFRAESTRUCTURAS S.A.

Construction, building materials

3,600

GRUPO PLANETA

Automotive industry

2,400

€33.2 billion 2ND PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €11.2 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 123

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 16% of Spanish investments in France were in production/manufacturing; 3% of foreign investments in production/manufacturing were made by Spanish companies

Projects

National share

Total share*

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

29%

13%

First-time investments

27%

11%

French headquarters

Logistics

Retail outlets

13%

11%

Production / Manufacturing

16%

13%

R&D, engineering, design

R&D Business services

141

22%

20%

275

11%

38%

15%

715

100%

Consumer services TOTAL

* Share of Spanish investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 16% of Spanish investments in France were in the consulting, engineering and business services sector; 7% of foreign investments in the consulting, engineering and business services sector were made by Spanish companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Consulting, engineering and business services

16%

Textiles, industrial textiles, clothing and accessories

11%

Software and IT services

11%

Commerce and retail

11%

Hotels, tourism and restaurants

110

15%

Automotive industry

Machinery and mechanical equipment

Glass, ceramics, minerals, wood, paper

Agri-food, agriculture, fishing

Other services

Chemicals, plastics

Electrical/electronic/IT equipment

Transport, storage

160

22%

11%

Energy, recycling, other concessions

Metals, metalworking

Medical/surgical equipment, diagnostics and devices

Construction, building materials

Perfumes, cosmetics

715

100%

TOTAL

* Share of Spanish investments in the total number of investments in each business sector.

124 / â&#x20AC;&#x2030;2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

291

29%

41%

Occitanie

147

27%

21%

10%

Auvergne-Rhône-Alpes

11%

Hauts de France

Nouvelle Aquitaine

Bourgogne-Franche-Comté

Pays de la Loire

Provence-Alpes-Côte d’Azur

Grand Est

715

100%

TOTAL

Key:

>>In 2016, 29% of Spanish investments in France were in Ile de France (Paris region); 4% of foreign investments in Ile de France (Paris region) were made by Spanish companies.

* Share of Spanish investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 125

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

SWEDEN SWEDISH INVESTMENTS IN FRANCE REMAINED BUOYANT IN 2016, WITH 25 NEW INVESTMENT DECISIONS. FLOW

25 PROJECTS (Business France)

500 JOBS (Business France)

STOCK

More than

600 COMPANIES IN FRANCE (Orbis)

More than

95,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

SWEDISH COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are over 600 Swedish companies operating in France, where they employ more than 95,000 people. Twenty-five Swedish investments were recorded in 2016, creating or maintaining 500 jobs. These Swedish projects primarily involved decision-making centers (28%), and retail outlets (28%), while 71% of decision-making centers were first-time investments in France. Twenty-four percent of Swedish investments were in the textiles sector – where 9% of all foreign investments were made by Swedish companies – while a further 16% of Swedish investments were made in the software and IT services sector. Nearly half (36%) of Swedish investments were in Ile de France (Paris region), followed by Auvergne-Rhône-Alpes (12%).

RECIPHARM AB: Swedish company Recipharm recently acquired Kaysersberg Pharmaceuticals, based in Kaysersberg (Grand Est region). It plans to invest €18 million in its new subsidiary to add four production lines with a view to diversifying the facility, which currently produces single-dose ophthalmic solutions. This expansion is due to result in around sixty new hires.

FRANCE AS A RECIPIENT OF SWEDISH INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Sweden, attracting 25% of Swedish projects in Europe, ahead of the United Kingdom (16%) and Poland (13%).1

Swedish transport packaging specialist Nefab will open a new French R&D facility in Blagnac (Occitanie region) where it will focus on developing connected packaging. Around ten people will be recruited for the facility.

NEFAB AB:

IKEA: Swedish furniture retailer IKEA is opening a new store in Fleury-sur-Orne, near Caen (Normandie region). The opening of the store will create more than 80 jobs. 1

Business France Europe Observatory.

€4.7 billion

13TH PLACE (Banque de France*)

FRENCH EXPORTS:

€5.1 billion

16TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

TOP 5 SWEDISH COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

SECURITAS AB

Consulting, engineering and business services

15,000-20,000

AB VOLVO

Automotive industry

5,000-10,000

IKEA

Furnishings, household goods

9,000

HENNES & MAURITZ

Textiles, industrial textiles, clothing and accessories Commerce and retail

6,500

NORDIC CAPITAL SVENSKA AKTIEBOLAG (CAPIO)

Other services

5,000

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock in France (immediate investor) as of December 31, 2014 was €4.7 billion.

126 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

28%

14%

First-time investments

20%

11%

Global / European headquarters

French headquarters

Logistics

Retail outlets

181

28%

36%

Production / Manufacturing

12%

16%

R&D, engineering, design

Business services

16%

Consumer services

120

24%

500

100%

R&D

TOTAL

Key:

>>In 2016, 28% of Swedish investments in France were in decision-making centers; 3% of foreign investments in decision-making centers were made by Swedish companies.

* Share of Swedish investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Textiles, industrial textiles, clothing and accessories

24%

19%

Software and IT services

16%

Other services

120

24%

19%

Consulting, engineering and business services

Machinery and mechanical equipment

Medical/surgical equipment, diagnostics and devices

Furnishings, household goods

17%

Pharmaceuticals and biotechnologies

12%

Financial services, banking and insurance

Chemicals, plastics

Electronic components

Electrical/electronic/IT equipment

Glass, ceramics, minerals, wood, paper TOTAL

500

100%

Key:

>>In 2016, 24% of Swedish investments in France were in the textiles, industrial textiles, clothing and accessories sector; 9% of foreign investments in the textiles, industrial textiles, clothing and accessories sector were made by Swedish companies

* Share of Swedish investments in the total number of investments in each business sector.

2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE / â&#x20AC;&#x2030;127

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key:

>>In 2016, 36% of Swedish investments in France were in Ile de France (Paris region); 3% of foreign investments in Ile de France (Paris region) were made by Swedish companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

156

36%

31%

Auvergne-Rhône-Alpes

12%

Normandie

18%

10%

29%

Provence-Alpes-Côte d’Azur

12%

Centre-Val de Loire

Occitanie

Grand Est

12%

Hauts de France

10%

Bretagne (Brittany)

Pays de la Loire

Nouvelle Aquitaine

500

100%

TOTAL

* Share of Swedish investments in the total number of investments in each region.

128 / 2016 ANNUAL REPORT – BUSINESS FRANCE

SWITZERLAND FORTY-THREE SWISS INVESTMENTS WERE RECORDED IN FRANCE IN 2016, CREATING OR MAINTAINING 1,028 JOBS. SWISS COMPANIES IN FRANCE There are over 2,200 Swiss companies operating in France, where they employ more than 150,000 people. Forty-three Swiss investment decisions were recorded in 2016, creating or maintaining 1,028 jobs. Swiss investors focused on production operations (30%) in 2016, followed by decision-making centers (19%), business services (16%), and R&D, engineering and design (14%). Swiss companies invested in a wide variety of sectors, including transport/storage (12%), electrical/electronic/IT equipment (9%), software/ IT services (9%), machinery/mechanical equipment (9%), and agri-food (9%). Ile de France (Paris region) (26%), Grand Est (16%), Occitanie (14%), and Auvergne-Rhône-Alpes (12%) were the leading recipients of Swiss investment.

FRANCE AS A RECIPIENT OF SWISS INVESTMENT IN EUROPE In 2016, France was the leading European recipient of job-creating investment from Switzerland, attracting 23% of Swiss projects in Europe, ahead of Germany (20%), Poland (9%), and the United Kingdom (9%).1

SELECTED INVESTMENT PROJECTS IN 2016 Chemicals multinational Clariant has begun to set up a new R&D center to develop active cosmetic ingredients at Oncopole, the Toulouse research hub (Occitanie region). Around thirty jobs will be created at the new facility. NOVARTIS: Basel-based Novartis is expanding rapidly in the Grand Est region. Its 21st century pharmaceutical plant in Huningue now makes five therapeutic proteins produced by genetically modified animal cells. Expansion of a state-of-theart biosimilar production plant has called for more than €100 million in investment and the creation of around a hundred jobs in the next three years. DIGITAL PARTNERS: Swiss startup Digital Partners has developed a social media analytics platform called Bloom. Digital Partners will be locating its decision-making center near Paris (Ile de France region) and expects to create 40 jobs over the next three years. SWISS LIFE: The Swiss Life Group is one of Europe’s leading comprehensive life, pensions and financial solutions providers. It has been operating in France since 1898 and continues to steadily expand and create jobs in the country. In 2016, it created a total of 150 jobs at its Hauts de Seine office outside Paris (Ile de France region). CLARIANT INTERNATIONAL AG:

Business France Europe Observatory.

FLOW

43 PROJECTS (Business France)

1,028 JOBS (Business France)

STOCK

More than

2,200 COMPANIES IN FRANCE (Orbis)

More than

150,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€70.7 billion 3RD PLACE (Banque de France*)

FRENCH EXPORTS:

Parent company

Main business sector

Workforce in France

€15.3 billion

NESTLE SA

Agri-food, agriculture, fishing

15,000-20,000

(Customs Authorities)

STMICROELECTRONICS

Electronic components

9,000-10,000

KÜHNE HOLDING AG

Transport, storage

9,000-10,000

ADECCO SA

Consulting, engineering and business services 5,000-6,000

LAFARGEHOLCIM LTD.

Construction, building materials

TOP 5 SWISS COMPANIES BY EMPLOYMENT IN FRANCE

4,000-5,000

9TH PLACE

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock in France (ultimate investor) as of December 31, 2014 was €51.8 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 129

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

101

19%

10%

First-time investments

101

19%

10%

Logistics

12%

Retail outlets

343

30%

33%

178

14%

17%

113

11%

Business services

270

16%

26%

Consumer services

1,028

100%

R&D, engineering, design

Key:

Total share*

Projects

Production / Manufacturing

>>In 2016, 30% of Swiss investments in France were in production/manufacturing; 5% of foreign investments in production/manufacturing were made by Swiss companies.

National share

R&D

TOTAL

* Share of Swiss investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Transport, storage

Key:

>>In 2016, 12% of Swiss investments in France were in the transport/storage sector; 9% of foreign investments in the transport/storage sector were made by Swiss companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

12%

Electrical/electronic/IT equipment

100

10%

19%

Software and IT services

Machinery and mechanical equipment

Agri-food, agriculture, fishing

Pharmaceuticals and biotechnologies

197

19%

10%

21%

Hotels, tourism and restaurants

100

10%

Financial services, banking and insurance

175

17%

10%

44%

Consulting, engineering and business services

Other services

Construction, building materials

Perfumes, cosmetics

10%

Aerospace, naval and railway equipment

Chemicals, plastics

Furnishings, household goods

Metals, metalworking

Automotive industry

Textiles, industrial textiles, clothing and accessories

1,028

100%

TOTAL

* Share of Swiss investments in the total number of investments in each business sector.

130 / â&#x20AC;&#x2030;2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

333

26%

32%

Grand Est

225

16%

22%

Occitanie

136

14%

13%

Auvergne-Rhône-Alpes

12%

Hauts de France

Nouvelle Aquitaine

Bourgogne-Franche-Comté

Pays de la Loire

Provence-Alpes-Côte d’Azur

1,028

100%

Ile de France (Paris region)

TOTAL

Key:

>>In 2016, 26% of Swiss investments in France were in Ile de France (Paris region); 3% of foreign investments in Ile de France (Paris region) were made by Swiss companies.

* Share of Swiss investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 131

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

TAIWAN FLOW

4 PROJECTS (Business France)

FOUR TAIWANESE INVESTMENTS WERE RECORDED IN FRANCE IN 2016.

TAIWANESE COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECT IN 2016 MERIDA BIKES: This Taiwanese manufacturer of high-end sports bicycles is looking to set up operations in France for the long term via its Spanish-based Southern Europe subsidiary. It plans to consolidate its presence with sales offices and a showroom in Rungis, just outside Paris (Ile de France region).

IN FRANCE

There are 50 Taiwanese companies operating in France, where they employ 1,120 people. Four new Taiwanese investments were recorded in 2016, creating just over a dozen jobs. All of these projects involved decisionmaking centers, which were all first-time investments in France, and were mainly in the commerce and retail sector (50%). Ile de France (Paris region) was the only host region for Taiwanese investment in 2016.

1,120 EMPLOYEES

FRANCE AS A RECIPIENT OF TAIWANESE INVESTMENT IN EUROPE

13 JOBS

(Business France)

STOCK

50 COMPANIES (Orbis)

(Orbis)

FDI STOCK IN FRANCE:

€181 million

In 2016, the Czech Republic was the leading European recipient of job-creating investment from Taiwan, attracting 21% of Taiwanese projects in Europe, ahead of France (14%), Germany (14%), and the Netherlands (14%).1

51ST PLACE

GAIUS AUTOMOTIVE: This Taiwanese startup specializes in developing three-wheeled electric vehicles for commercial applications (couriers, fire departments, postal services, police, ambulances, etc.), and was one of the winning nominees of the 2016 “French Tech Ticket” competition. The company has also developed a contactless charging pad. Gaius Automotive is currently developing its business from Paris, in line with its belief that the French electric vehicle market is one of the most mature in the world.

Business France Europe Observatory.

(Banque de France*)

FRENCH EXPORTS:

€2 billion

38TH PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock in France (immediate investor) as of December 31, 2014 was €163 million.

TOP 5 TAIWANESE COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

HARMONIE SA (JEANNE LANVIN S.A.)

Textiles, industrial textiles, clothing and 310 accessories

MEI TA INDUSTRIAL CO., LTD.

Machinery and mechanical equipment 200

TONGTAI MACHINE & TOOL CO., LTD.

Machinery and mechanical equipment 100-150

EVERGREEN MARINE CORPORATION LTD.

Transport, storage

100-150

ACER INC.

Consumer electronics

50-100

132 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Workforce in France

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Projects

National share

Total share*

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

100%

First-time investments

100%

TOTAL

Key:

>>In 2016, 100% of Taiwanese investments in France were in decision-making centers; 2% of foreign investments in decision-making centers were made by Taiwanese companies.

* Share of Taiwanese investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

50%

85%

Commerce and retail Automotive industry

25%

Software and IT services

25%

100%

TOTAL

Key:

>>In 2016, 50% of Taiwanese investments in France were in the commerce and retail sector; 2% of foreign investments in the commerce and retail sector were made by Taiwanese companies.

* Share of Taiwanese investments in the total number of investments in each business sector.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Ile de France (Paris region) TOTAL

Projects

National share

Jobs

13 4

Projects

100% 13

100%

Jobs

100% 100%

Total share* Projects

Jobs

0% 0%

Key:

>>In 2016, 100% of Taiwanese investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Taiwanese companies.

* Share of Taiwanese investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 133

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

TURKEY FOUR TURKISH INVESTMENTS WERE RECORDED IN FRANCE IN 2016, CREATING 38 JOBS. FLOW

4 PROJECTS (Business France)

38 JOBS

(Business France)

STOCK

100 COMPANIES IN FRANCE (Orbis)

More than

TURKISH COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECT IN 2016

There are around 100 Turkish companies operating in France, where they employ more than 500 people. Four new Turkish investment decisions were recorded in 2016, creating around forty jobs. These investments mainly involved setting up decision-making centers (75%) – which comprised a new European headquarters along with firsttime investments in France – and were made in a variety of different business sectors. Geographically, Turkish companies invested in equal measure in Provence-Alpes-Côte d’Azur (two projects) and Ile de France/ Paris region (also two projects).

KOTON:

500 EMPLOYEES

FRANCE AS A RECIPIENT OF TURKISH INVESTMENT IN EUROPE

FDI STOCK IN FRANCE:

In 2016, the leading European recipients of Turkish job-creating investment were the United Kingdom and Spain (14% of projects in Europe each).1

(Orbis)

€145 million

Koton, the number one clothing retailer in Turkey and the Middle East, is setting up operations in France for the first time, opening a 1,800 sq. m. store in the O’Parinor shopping mall in Aulnay-sous-Bois, near Paris (Ile de France region). The company is set to recruit around ten people. Turkish firm Ares, which specializes in chartering and logistics, opened its first European decision-making center in La Seyne-sur-Mer (Provence-Alpes-Côte d’Azur region), recruiting a team of three.

ARES:

STARGRUP CAM: This Turkish specialist in sheet glass treatment and processing chose Marseille (Provence-Alpes-Côte d’Azur region) as the location for its first international venture. Stargrup will run storage, distribution and sales operations from its new French site, and plans to recruit a 15-strong team in France in the medium term.

Business France Europe Observatory.

53RD PLACE (Banque de France*)

FRENCH EXPORTS:

€7.0 billion

TOP 5 TURKISH COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

KÖKLER YATIRIM HOLDING (UNITED BISCUITS)

Agri-food

400-500

(Customs Authorities)

ORHAN HOLDING A.S. (NOBEL PLASTIQUES)

Automotive industry

300-400

NUMBER OF COMPANIES IN THE FORBES 2000:

ARÇELIK ANONIM SIRKETI (BEKO FRANCE)

Furnishings, household goods

11TH PLACE

OTOKAR OTOMOTIV VE SAVUNMA Automotive industry SANAYI ANONIM SIRKETI

20-30

GROUPE BARSAN (BARSAN GLOBAL LOGISTICS)

10-20

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by ultimate investor as of December 31, 2014 was €132 million.

134 / 2016 ANNUAL REPORT – BUSINESS FRANCE

Transport, storage

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

75%

61%

First-time investments

50%

34%

Global / European headquarters

25%

26%

Logistics

25%

39%

TOTAL

100%

Key: In 2016, 75% of Turkish investments in France were in decision-making centers; 1% of foreign investments in decisionmaking centers were made by Turkish companies.

* Share of Turkish investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Projects

National share

Jobs

Projects

Jobs

Total share* Projects

Jobs

Glass, ceramics, minerals, wood, paper

25%

39%

Automotive industry

25%

26%

Textiles, industrial textiles, clothing and accessories

25%

26%

Transport, storage

25%

100%

TOTAL

* Share of Turkish investments in the total number of investments in each business sector.

Key:

>>In 2016, 25% of Turkish investments in France were in the glass, ceramics, minerals, wood, paper sector; 3% of foreign investments in the glass, ceramics, minerals, wood, paper sector were made by Turkish companies.

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Projects

National share

Jobs

Projects

Jobs

Total share* Projects

Jobs

Ile de France (Paris region)

50%

53%

Provence-Alpes-Côte d’Azur

50%

47%

100%

TOTAL

Key:

>>In 2016, 50% of Turkish investments in France were in Ile de France (Paris region); 1% of foreign investments in Ile de France (Paris region) were made by Turkish companies.

* Share of Turkish investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 135

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

UNITED KINGDOM FLOW

85 PROJECTS (Business France)

3,713 JOBS (Business France)

STOCK

More than

2,800 COMPANIES IN FRANCE (Orbis)

More than

230,000 EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€65.9 billion

BRITISH INVESTMENTS ACCOUNTED FOR 8% OF ALL PROJECTS AND 12% OF ALL JOBS GENERATED BY FOREIGN INVESTMENT IN FRANCE IN 2016. BRITISH COMPANIES IN FRANCE There are over 2,800 British companies operating in France, where they employ more than 230,000 people. Eighty-five British investment decisions were recorded in 2016, creating or maintaining more than 3,713 jobs. British investments were made primarily in retail outlets (32%), decision-making centers (27%) and production operations (25%). Twenty-four percent of all foreign investments in French retail outlets were made by British companies. British projects involved a wide variety of sectors, including commerce and retail (24%), consulting/engineering/business services (19%) and textiles (15%). British companies made investments throughout France, although Ile de France (Paris region) (26%), Hauts de France (13%), Provence-Alpes-Côte d’Azur (9%) and Auvergne-Rhône-Alpes (9%) together attracted nearly 60% of all British investments.

SELECTED INVESTMENT PROJECTS IN 2016 ASTRAZENECA PLC: British pharmaceutical company AstraZeneca decided to expand its production facility in Dunkirk (Hauts de France region) by adding a new production line. It plans to hire around ten people. BSRIA LTD.: British-based BSRIA is a testing, instrumentation, research and consultancy organization providing specialist construction and building services. The association spent €1.5 million to open a calibration laboratory in Lille (Hauts de France region), where it will hire around ten people. GREYBULL CAPITAL: Tata Steel Europe sold its long products business, including the French plant in Hayange (Grand Est region), to Greybull Capital. Greybull’s planned €495 million investment will be its first in France.

Business France Europe Observatory.

FRANCE AS A RECIPIENT OF BRITISH INVESTMENT IN EUROPE In 2016, France was the leading European recipient of British job-creating investment, attracting 25% of British projects in Europe, followed by Germany (14%) and Spain (9%).1

4TH PLACE (Banque de France*)

FRENCH EXPORTS:

€31.2 billion

TOP 5 BRITISH COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

KINGFISHER plc (Castorama)

Commerce and retail Furnishings, household goods

18,000-20,000

(Customs Authorities)

COMPASS GROUP PLC

Hotels, tourism and restaurants Consulting, engineering and business services

15 000

NUMBER OF COMPANIES IN THE FORBES 2000:

BRIDGEPOINT ADVISERS GROUP LTD.

Financial services, banking and insurance Other services

11,000-12,000

INTERMEDIATE CAPITAL GROUP PLC

Financial services, banking and insurance

10,000-11,000

HSBC HOLDINGS PLC

Financial services, banking and insurance

9,500-10,000

5TH PLACE

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €66.7 billion.

136 / 2016 ANNUAL REPORT – BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

400

27%

11%

14%

First-time investments

177

24%

10%

12%

French headquarters

223

24%

Retail outlets

Logistics

1,866

32%

50%

24%

54%

Production / Manufacturing

1,269

25%

34%

11%

12%

3,713

100%

12%

R&D, engineering, design R&D Business services Consumer services TOTAL

Key: In 2016, 27% of British investments in France were in decision-making centers; 9% of foreign investments in decisionmaking centers were made by British companies.

* Share of British investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Commerce and retail

761

24%

20%

18%

Consulting, engineering and business services

137

19%

15%

Textiles, industrial textiles, clothing and accessories

1,808

15%

49%

19%

64%

Agri-food, agriculture, fishing

119

10%

Aerospace, naval and railway equipment

323

14%

13%

Software and IT services

Energy, recycling, other concessions

Other services

216

34%

Pharmaceuticals and biotechnologies

Financial services, banking and insurance

10%

Transport, storage

Automotive industry

Electrical/electronic/IT equipment

Medical/surgical equipment, diagnostics and devices

Media, publishing

13%

25%

Perfumes, cosmetics

11%

Construction, building materials

Glass, ceramics, minerals, wood, paper

3,713

100%

12%

TOTAL

Key:

>>In 2016, 24% of British investments in France were in the commerce and retail sector; 20% of foreign investments in the commerce and retail sector were made by British companies.

* Share of British investments in the total number of investments in each business sector.

2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE / â&#x20AC;&#x2030;137

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

Key: In 2016, 26% of British investments in France were in Ile de France (Paris region); 6% of foreign investments in Ile de France (Paris region) were made by British companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

803

26%

22%

11%

Hauts de France

242

13%

11%

Provence-Alpes-Côte d’Azur

770

21%

11%

33%

Auvergne-Rhône-Alpes

733

20%

Occitanie

Grand Est

475

13%

18%

Centre-Val de Loire

352

18%

24%

Bretagne (Brittany)

112

18%

16%

Pays de la Loire

Nouvelle Aquitaine

Bourgogne-Franche-Comté

3,713

100%

12%

TOTAL

* Share of British investments in the total number of investments in each region.

138 / 2016 ANNUAL REPORT – BUSINESS FRANCE

UNITED STATES THE UNITED STATES WAS THE LEADING SOURCE OF JOBS GENERATED BY FOREIGN INVESTMENT IN FRANCE, CREATING OR SAVING 6,802 JOBS IN 2016. AMERICAN COMPANIES IN FRANCE

SELECTED INVESTMENT PROJECTS IN 2016

There are over 4,800 American companies operating in France, where they employ more than 460,000 people. In 2016, 182 investments were recorded from the United States, creating or maintaining 6,802 jobs. Investments by American firms were made primarily in production/manufacturing operations (23%) and decision-making centers (21%), the vast majority of which were first-time investments in France. A large number of American companies invested in R&D centers, accounting for 27% of all foreign investment of this kind in France. American companies invested most of all in the French software and IT services sector (19%), where one-quarter of all foreign investment came from the United States. American investments were most often located in Ile de France (Paris region), which attracted 42% of new projects from the United States.

GENERAL ELECTRIC (GE): GE’s software and analytics

FRANCE AS A RECIPIENT OF AMERICAN INVESTMENT IN EUROPE In 2016, France was the second largest European recipient of job-creating investment from the United States, attracting 14% of American projects in Europe, preceded by the United Kingdom (27%), but ahead of Germany (13%).1

division, GE Digital, opened its first European digital innovation R&D center in Paris in June 2016 to serve as a European hub for a new ecosystem of products, partnerships and initiatives fast-tracking digital industrial transformation. By 2018, the research center will employ more than 250 people developing applications for Predix, GE’s digital industrial solution.

Texan industrial pump manufacturer Flowserve consolidated its operations in Arnage, south of Le Mans (Pays de la Loire), investing €1million to expand production facilities and locate administrative offices at an abandoned industrial site nearby, creating 70 jobs. The plant produces a line of products for the nuclear industry and is considered to be a global center of excellence. FLOWSERVE:

American pharma company Merck & Co.’s subsidiary Aptus Health established a global decision-making center in Paris’ La Défense business district to provide digital solutions for healthcare professionals. It will eventually employ around 100 people.

MERCK & CO.:

FEDEX CORPORATION: Air courier delivery

service Fedex is to invest €200 million to double capacity at its Paris Charles de Gaulle hub (Ile de France), its largest base outside the United States, in a move that will create 200 jobs. United States in a move that will create 200 jobs.

FLOW

182 PROJECTS (Business France)

6,802 JOBS (Business France)

STOCK

More than

4,800 COMPANIES IN FRANCE (Orbis)

More than

460,000

EMPLOYEES (Orbis)

FDI STOCK IN FRANCE:

€66.7 billion 5TH PLACE (Banque de France*)

Business France Europe Observatory.

FRENCH EXPORTS:

TOP 5 AMERICAN COMPANIES BY EMPLOYMENT IN FRANCE Parent company

Main business sector

Workforce in France

GENERAL ELECTRIC (GE)

Manufacturing and services conglomerate

15,000-20,000

UNITED TECHNOLOGIES CORPORATION (UTC)

Aerospace, naval and railway equipment Machinery and mechanical equipment

15,000-20,000

XPO LOGISTICS LLC

Transport, storage

10,000-15,000

WALT DISNEY COMPANY

Other services

10,000-15,000

MCDONALD’S CORPORATION

Hotels, tourism and restaurants

10,000-15,000

€32.7 billion 3RD PLACE (Customs Authorities)

NUMBER OF COMPANIES IN THE FORBES 2000:

586

* FDI stock in France (immediate investor) as of December 31, 2015. FDI stock by immediate investor as of December 31, 2014 was €115 billion.

2016 ANNUAL REPORT – BUSINESS FRANCE / 139

CHAP. 3 / FOREIGN INVESTMENT OVERVIEW

BREAKDOWN OF PROJECTS BY BUSINESS ACTIVITY Number Business activity

Key:

>>In 2016, 21% of American investments in France were in decision-making centers; 15% of foreign investments in decision-making centers were made by American companies.

Projects

National share

Total share*

Jobs

Projects

Jobs

Projects

Jobs

Decision-making centers

457

21%

15%

16%

First-time investments Global / European headquarters French headquarters Logistics Retail outlets

164

14%

13%

11%

209

31%

45%

3 19 13

84 2,601 484

2% 10% 7%

1% 38% 7%

9% 26% 11%

9% 67% 14%

Production / Manufacturing

818

23%

12%

15%

R&D, engineering, design

1,098

17%

16%

27%

42%

R&D Business services

724

12%

11%

31%

45%

1,222

18%

15%

30%

Consumer services TOTAL

122

12%

182

6,802

100%

16%

23%

* Share of American investments in the total number of investments in each business activity.

BREAKDOWN OF PROJECTS BY BUSINESS SECTOR Number Business sector

Key:

>>In 2016, 19% of American investments in France were in the software and IT services; 25% of foreign investments in the software and IT services sector were made by American companies.

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Software and IT services

886

19%

13%

25%

38%

Consulting, engineering and business services

599

11%

19%

33%

Commerce and retail

2,235

10%

33%

18%

54%

Machinery and mechanical equipment

525

16%

44%

Medical/surgical equipment, diagnostics and devices

450

41%

62%

Agri-food, agriculture, fishing

172

12%

Textiles, industrial textiles, clothing and accessories

201

12%

Chemicals, plastics

186

22%

26%

Transport, storage

477

13%

33%

Hotels, tourism and restaurants

140

19%

12%

Pharmaceuticals and biotechnologies

23%

10%

Aerospace, naval and railway equipment

16%

Glass, ceramics, minerals, wood, paper

110

16%

15%

Electronic components

212

33%

68% 10%

Energy, recycling, other concessions

Electrical/electronic/IT equipment

Consumer electronics

180

60%

62%

Financial services, banking and insurance

14%

13%

Media, publishing

38%

35% 14%

Perfumes, cosmetics

15%

Furnishings, household goods

11%

Metals, metalworking

Automotive industry

Other services

Construction, building materials

Telecoms, internet service providers

13%

182

6,802

100%

16%

23%

TOTAL

* Share of American investments in the total number of investments in each business sector.

140 / â&#x20AC;&#x2030;2016 ANNUAL REPORT â&#x20AC;&#x201C; BUSINESS FRANCE

BREAKDOWN OF PROJECTS BY HOST REGION Number Host region

National share

Total share*

Projects

Jobs

Projects

Jobs

Projects

Jobs

Ile de France (Paris region)

2,177

42%

32%

21%

29%

Occitanie

272

14%

22%

11%

Auvergne-Rhône-Alpes

421

12%

Hauts de France

1,233

18%

10%

27%

Grand Est

171

10%

Centre-Val de Loire

625

29%

42%

Bourgogne-Franche-Comté

605

19%

46%

Provence-Alpes-Côte d’Azur

556

11%

24%

Pays de la Loire

506

13%

23%

Nouvelle Aquitaine

10%

Bretagne (Brittany)

128

18%

Normandie

10%

15%

Overseas territories

50%

182

6,802

100%

16%

23%

TOTAL

Key:

>>In 2016, 42% of American investments in France were in Ile de France (Paris region); 21% of foreign investments in Ile de France (Paris region) were made by American companies.

* Share of American investments in the total number of investments in each region.

2016 ANNUAL REPORT – BUSINESS FRANCE / 141

GLOBALIZATION OF THE PRODUCTION PROCESS 144 GLOBAL VALUE CHAINS 147 THE KEY ROLE OF FRENCH BUSINESSES

CHAP. 4 / GLOBALIZATION OF THE PRODUCTION PROCESS

GLOBAL VALUE CHAINS INCREASINGLY FRAGMENTED PRODUCTION PROCESSES HAVE LED TO GREATER CROSS-BORDER TRADE AND INVESTMENT.

he value chain concept is used to describe the full range of activities required to deliver a product or service. Lower transport costs, progress in

information and communications technology, and liberalization of mobile production factors through continued reductions in trade and investment barriers have combined to make it easier to fragment the production process. Today, company operations, from product design, component production and product assembly

to marketing, have spread across the globe, creating international production chains. Global value chains provide a new model of how countries and companies participate in globalization, encompassing trade in intermediate goods, along with the capital flows, expertise and services required to coordinate dispersed production and manufacturing facilities. Increased trade and investment have thus followed in the wake of the growth in global value chains over recent decades.

FIG. 1 Growth of global flows (base 100 = 1990)

1,000 900 800 700 600 500 400 300 200 100

Source: UNCTAD

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GDP

20 15

20 14

20 13

20 12

20 11

20 10

20 09

20 08

20 07

20 06

20 0

20 04

Exports

20 0

20 01

9 19 9

20 00

Investments

19 98

19 96

19 9

19 93

19 92

19 91

19 90

IMPORTANCE OF INTERMEDIATE GOODS IN TRADE

GLOBAL VALUE CHAINS INCREASE PRODUCTIVITY AND GROWTH

The globalization of value chains has intensified cross-border investment and cross-border trading in parts and components, intermediate goods and finished products. In this trading structure, goods produced in one economy and exported to a different end market involve inputs from other economies, which in turn source inputs from yet other economies. The growth of trade is due mainly to this back-and-forth of intermediate goods, which cross borders several times before the finished products and services are sold to end consumers.

The expected primary effects of the fragmentation of value chains include greater economic growth and productivity. The positive externalities of globalization stem from increased international competition, access to knowledge and technology, better distribution and exploitation of resources due to increased specialization, and economies of scale. Participating in global value chains improves productivity by facilitating access to higher quality or lower cost intermediate inputs. According to OECD estimates, in general, industries that rely heavily on imported intermediate goods boast higher productivity.

Miroudot et al. (2009) and, more recently, Johnson and Noguera (2012) have asserted that intermediate goods make up the bulk of international trade: 56% of trade in goods and 73% of trade in services. According to OECD data, intermediate goods in the exports of the worldâ&#x20AC;&#x2122;s leading exporting countries account for a significant share of trade: 48% for France, 42% for China, 56% for the United States, 48% for Germany, 54% for Japan and 47% for the Netherlands.

PARTICIPATION IN GLOBAL VALUE CHAINS LEADS TO IMPROVED PRODUCTIVITY.

FIG. 2 Trade breakdown by destination of goods (2015)

100%

90%

80%

70%

50%

1 12

60%

Intermediate goods Household consumption Capital goods

Mixed end-use Unidentified

40% 30%

20%

10%

a in Ch

tes St a ite d

Ki d ite Un

ng do m

an Ja p

y an m er G

Source: OECD

2016 ANNUAL REPORT - BUSINESS FRANCE / 145

CHAP. 4 / GLOBALIZATION OF THE PRODUCTION PROCESS

SME PARTICIPATION IN GLOBAL VALUE CHAINS The fragmentation of the production process and the rise of the new information and communications technology create new opportunities for relatively modest companies, since they provide an entry point to global markets through the supply of components or services without having to take part in the entire value chain. With the emergence of new product and service niches, small and mediumsized enterprises (SMEs) can reap the benefits of their responsiveness and flexibility, playing an important role in local value chains by supplying component and intermediate goods to exporting companies. The contribution of SMEs to global value chains (GVCs) is based on the direct and indirect domestic value-added content of exports. The direct method measures the contribution of SMEs in a given industry to the production of goods and services destined for export. Indirect value-added exports correspond to the domestic value added contributed by SMEs in upstream

146 /â&#x20AC;&#x2030;2016 ANNUAL REPORT - BUSINESS FRANCE

sectors supplying inputs to the exporting industry. Generally, the direct contribution of SMEs to domestic value-added exports is greater than their indirect contribution. However, the ratio of direct to indirect exports varies considerably across industries. Foreign direct investment plays an important role in the extent to which companies of any size participate in GVCs. Estimates indicate that foreign-owned SMEs have more links to GVCs than domestic SMEs. They import more inputs for use in production, which means greater upstream participation in GVCs. Moreover, they are also in a position to export more of their output (downstream participation), which holds true for nearly all manufactured goods. In the automotive industry, for example, direct and indirect exports account for more than 40% of the total sales of foreign-owned SMEs, compared with around 10% for domestic SMEs. Similarly, in the furniture industry, where direct exports represent a larger share of total sales than in any other, the same foreign-owned SMEs are the primary contributors.

THE KEY ROLE OF FRENCH BUSINESSES THE SHARE OF FOREIGN VALUE ADDED IN FRENCH EXPORTS HAS INCREASED IN NEARLY EVERY INDUSTRY.

he OECD/WTO ‘Trade in Value Added’ initiative provides indicators for estimating the import content of a country’s exports and determining its degree of integration.

FOREIGN VALUE ADDED IN FRENCH EXPORTS Between 1995 and 2011, the share of foreign value added in French exports increased in nearly all sectors, particularly for relatively sophisticated products. The share of foreign

value-added content in gross French exports of manufactured goods and services climbed from 17% in 1995 to a record 25% in 2011. As might be expected, the share of foreign value-added content in gross French exports in the manufacturing sector (33%) is higher than in the services sector (11%). Foreign value added is particularly high in sectors such as transport vehicles and equipment (41%), motor vehicles (37%), electrical machinery and equipment (32%), chemicals (32%), and textiles and clothing (32%). [cf. Fig. 3]

FIG. 3 Breakdown by sector of foreign value-added content of gross French exports

Other transport equipment Transport vehicles and equipment Motor vehicles, trailers/semi-trailers Electrical machinery and equipment Chemicals Textiles, clothing, leather goods and footwear Electronic equipment Rubber and plastic products Computer, electronic and optical products Base metals Machinery and equipment, not elsewhere classified Base metals and fabricated metal products Fabricated metal products Other non-metallic mineral products Food, beverages and tobacco Wood and cork products

43 41 38 32 32 31 30 30 29 29 28 28 26 23 23 22 22

Wood, paper and paper products, printing and publishing

Source: OECD

2016 ANNUAL REPORT - BUSINESS FRANCE / 147

CHAP. 4 / GLOBALIZATION OF THE PRODUCTION PROCESS

DIFFERENT TRADING PATTERNS WITH DIFFERENT PARTNERS

Analysis of value-added trade also sheds new light on French exports. More domestic value added is exported to North America and Asia than indicated by the gross customs export value (as measured by the French Customs Authorities). While Germany, France’s largest trading partner, accounted for 14% of gross French exports in 2011 and the United States 8%, these shares rise to 12% and 10%, respectively, when measured in value added. This is the logical consequence of France’s greater integration in regional value chains and the accordingly higher foreign content of French exports to Europe. [cf. Fig. 4]

A recent report by the French Customs Authorities1 highlighted the unique nature of French trade with the countries which with it shares borders: Germany, Spain, Italy, Belgium, Switzerland, the United Kingdom, Luxembourg and Andorra.

Études et Éclairages, No.71, January 2017.

FIG. 4 France’s exports to leading trade partners (2011) % of gross exports and value added 15

Gross exports Domestic value added in foreign final demand

Source: OECD

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y ke

na Ca

la er

Tu r

ia N eth

ss Ru

la er Sw itz

Ja p

a in Ch

m iu lg

n Be

Ki Un

ite

m ng do

ly Ita

d ite Un

The report reveals that French exports to border countries comprise a larger share of intermediate goods (14.7%, versus 10.7% to non-border countries), automotive industry sales (12.5%, versus 6.8%), and agri-food products. Conversely, aviation (9.2%, versus 16.5% to non-border countries), machinery, IT products, and pharmaceuticals account for proportionately more of French exports to more distant countries. This situation arises in part from the structure of global production: the aviation industry is concentrated in developed countries, encouraging sales to outside countries; however, in the automotive industry, waves of outsourcing have shifted parts of the production process to developing countries, with the result

that vehicles produced in France are exported primarily to its neighbors. The predominance of intra-branch trade among neighboring countries is another explanatory factor for the importance of intermediate goods in French trade with border countries. Intrabranch trade comprises either trade in products within the same industry but at different stages of production (vertical integration), or trade in end products within the same industry. The report shows a greater propensity towards intra-branch trade with border countries (87%) than with non-border countries (71%), except in the case of the automotive industry, where outsourcing to Eastern Europe and Northern Africa has encouraged intra-branch trade with those countries.

MEASURING TRADE IN VALUE ADDED The Trade in Value Added (TiVA) database is a joint OECD-WTO initiative. Its aim is to provide better tracking of global production networks and supply chains than can be achieved through conventional trade statistics. The TiVA database contains a range of indicators measuring the value-added

content of international trade flows and final demand. The indicators are derived from the 2015 version of OECDâ&#x20AC;&#x2122;s InterCountry Input-Output (ICIO) Database. The ICIO is fed by various national and international data sources, all drawn together and weighted subject to their limitations based on official (SNA93)

National Accounts by economic activity and chief National Accounts aggregates. However, the data produced are based on numerous assumptions, and any conclusions that may be drawn should therefore be treated with caution.

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FRENCH EXPORTS IN 2016 152 MAIN FEATURES OF FRENCH EXPORTS 155 EXPORTING COMPANIES 158 FRANCEâ&#x20AC;&#x2122;S EXPORT PERFORMANCE 161 SECTOR-SPECIFIC SPECIALIZATION

CHAP. 5 / FRENCH EXPORTS IN 2016

MAIN FEATURES OF FRENCH EXPORTS FRENCH GOODS EXPORTS TOTALED €453 BILLION IN 2016.

rench goods exports levelled out at €453 billion1 in 2016 (-0.6%) after healthy growth in 2015, while goods imports amounted to €501.1 billion (+0.1%). These figures come in the wake of a slowdown in global trade, which grew by 1.9% in real terms in 2016, versus 2.7% in 2015, according to the IMF. France retained its global export market share: 3.3% for goods in the first half of 2016, versus 3.1% in 2015 as a whole.2

FRANCE RETAINED ITS GLOBAL EXPORT MARKET SHARE IN 2016.

French exports were mostly concentrated in high value-added sectors. Four sectors accounted for two-thirds of exports: transport equipment (24% of the total); capital goods (19.2%); chemicals, perfumes and cosmetics (11.7%) and food products (10%).

A number of temporary sector-specific factors affected French exports in 2016, the foremost of which was the steep decline in agricultural exports (-8.9% in 2016, versus +6.6% in 2015) due to a historically small grain harvest and bad weather. Moreover, after strong growth in 2015 (+11.3%), aerospace exports were flat in 2016 (+0.1%) following delays in aircraft deliveries. Nevertheless, sales in the industry matched the record set in 2015 (€58.1 billion) and accounted for 13.1% of French exports in 2016. French exports were also hit by a new fall in exports of refined petroleum products and hydrocarbons, as well as dipping sales of intermediate goods (metallurgical products, basic chemicals) due to weak demand in Europe.

FIG. 1 Breakdown of French goods exports by sector (2016)

1.9%

4.5%

3.2% 3.2%

24%

4.1% 5.2%

■ Transport equipment ■ Capital goods ■ Chemicals, perfumes and cosmetics

■ Food products ■ Pharmaceutical products ■ Metal production, metal products

6.3%

■ Textiles, clothing,

6.6%

■ Rubber, plastics

leather and footwear

19.2%

10% 11.7%

and mineral productsx

■ Agricultural products ■ Energy ■ Wood, paper products ■ Miscellaneous

Source: French Customs Authorities. Gross estimates for FOB exports excluding military equipment.

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Source: French Customs Authorities. Estimated FOB/FOB gross data, including military hardware. 2 Market share calculated by dividing French exports by global exports. 1

Conversely, automotive exports rose in 2016 for the third year in a row, increasing 3.9%. This performance can be explained in part by the recently improved competitiveness of automotive manufacturing plants in France. In addition, sales in textiles, clothing, leather and footwear rose 4.2% in 2016, led by the luxury goods industry.

FRENCH EXPORTS BOOSTED BY DEMAND FROM NON-EU COUNTRIES Broken down by world region,3 French exports in 2016 were driven by demand from European countries outside the European Union (+5.2% to €32 billion), while sales to the EU and North America remained broadly unchanged (+0.3% to €265 billion for the EU, and 0.4% to €35.7 billion for North America). However, exports were skewed towards other major partner regions following the decline in aerospace sales. Exports to emerging economies in 2016 also suffered as a result of moderate growth in China and economic problems in Brazil, but were particularly buoyant to India, Singapore, Hong Kong, Saudi Arabia and Switzerland. As the market for nigh on 60% of French exports in 2016, the European Union remained by far France’s largest trading partner. Within the region, exports to Spain (+2%) and Poland (+6.2%) showed strong growth, with Spain reclaiming its standing as France’s second largest customer, lost in 2015 to the United States, which this year fell back to third place.

CHANGE IN FRENCH EXPORTS BY PRODUCT (€ BILLION) Products

2015

2016

Annual growth

Transport equipment

103.5

106.5

2.9%

Aerospace

58.1

0.1%

Automotive

42.5

44.2

3.9%

Capital goods

85.7

85.1

-0.7%

Chemical products, perfumes and cosmetics

53.3

52.0

-2.5%

Food products

44.4

44.5

0.0%

Pharmaceutical products

29.0

29.1

0.5%

Metal production, metal products

29.8

27.9

-6.2%

Textiles, clothing, leather and footwear

22.2

23.2

4.2%

Rubber, plastics and mineral products

18.1

18.3

0.8%

Agricultural products

15.7

14.3

-8.9%

Energy

17.4

14.2

-18.7%

8.4

0.3%

18.9

19.8

4.7%

Wood, paper products Miscellaneous Source: French Customs Authorities. Gross estimates for FOB exports.

FIG. 2 Breakdown of French exports by destination region (2016)

2.5% 2.8% 3.2% 3.2%

0.5%

■ European Union ■ Asia ■ North America ■ Non-EU Europe 59.8% ■ Northern Africa ■ Middle East ■ Central

7.2%

8.1%

and South America

12.7%

■ Sub-Saharan and Southern Africa

■ Other

Source: French Customs Authorities. FOB exports excluding military equipment.

Analysis by world region is based on gross estimates excluding military equipment.

2016 ANNUAL REPORT - BUSINESS FRANCE / 153

CHAP. 5 / FRENCH EXPORTS IN 2016

CHANGE IN FRENCH EXPORTS BY DESTINATION REGION (€ BILLION) Destination region

2015

2016

Annual growth

European Union

264.2

264.9

0.3%

Asia

57.0

56.3

-1.2%

North America

35.9

35.7

-0.4%

Non-EU Europe

30.3

31.9

5.2%

Northern Africa

16.4

14.3

-12.6%

Middle East

15.2

14.2

-7.1%

Central and South America

13.2

12.6

-4.0%

Sub-Saharan and Southern Africa

12.2

11.3

-7.7%

Source: French Customs Authorities. Gross estimates for FOB exports.

FIG. 3 Breakdown of French exports by destination country (2015-2016)

16.1%

Germany Spain

7.5%

United States

7.4%

Italy

7.3%

United Kingdom

7.1% 6.8%

Belgium

3.6% 3.6%

Netherlands China

3.5%

Switzerland Poland

1.9%

Turkey

1.6% 1.4%

Japan Singapore

1.4%

Hong Kong

1.2%

Algeria

1.1%

Sweden

1.1%

Russia

1.1%

Portugal

1.0%

Brazil

1.0%

Morocco

1.0%

Share of French exports (2016) Share of French exports (2015)

10%

Source: French Customs Authorities. FOB exports excluding military equipment.

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15%

20%

EXPORTING COMPANIES NUMBER OF REGULAR EXPORTERS UP AGAIN IN 2016.

THERE WERE 124,100 GOODSEXPORTING COMPANIES IN FRANCE IN 2016.

FIG.â&#x20AC;Ż4 French exporters over the last decade

ccording to the French Customs Authorities, 124,100 companies in France exported goods to international markets in 2016.4 Around 28,500, or 23%, were newcomers to international trade. Two-thirds of these new exporters were classified as first-time exporters (companies not having exported in the last five years). The list of exporters changes significantly from year to year. Every year, nearly one-quarter are first-time exporters, while a similar number cease exporting. However, since 2012 many

115 Baseline 100 = 2007

110

Regular : companies exporting in each of the last five years Established: companies exporting for at least two years in a row

105

Total exporting companies

100 95

Companies starting to export

90 85

Companies ceasing to export

80 2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: French Customs Authorities

2016 ANNUAL REPORT - BUSINESS FRANCE / 155

CHAP. 5 / FRENCH EXPORTS IN 2016

As in most advanced countries, a small number of companies are responsible for the bulk of French goods sold overseas, with a thousand exporters generating 70% of French exports. In 2016, the French Customs Authorities reported that nearly 17,000 longstanding exporters had exported every year since 1994.

FIG. 5 Breakdown of French exporters and export sales by company type (2016)

100%

95.4%

Number of French exporters Export sales

80% 60%

53.7%

40%

32.5%

20%

13.8% 4.2%

0.4%

Large corporates

Mid-size companies

SMEs and micro-enterprises

SMEs AND MID-SIZE COMPANIES OUTPACE LARGE COMPANIES IN 2016 The French export industry was dominated by SMEs in company numbers (95%) and by large and mid-size companies in export value (86%). Despite constituting the vast majority of exporters, SMEs and micro-enterprises contributed only 14% of export value in 2016. The proportions were reversed for large companies, which accounted for only 0.4% of exporters but generated 54% of export value. Mid-size companies (entreprises de taille intermédiaire – ETI) made up 4% of exporting companies while accounting for one-third of export value. Analysis of French exporters by company category reveals different trends depending on the size of the exporters. The number of midsize companies in 2016 edged up 0.3% (0.1% increase in export value), while the number of large companies slipped 0.6% (1.6% decrease in export value). The SME category proved the most dynamic, with export value up 2.1% in spite of a slight fall in the number of exporters (-0.7%).

Source: French Customs Authorities

FIG. 6 Concentration of French exporting companies by product group (2016)

Average export sales (€ million) per company

Concentration of exporters

Refined petroleum products, coke Pharmaceutical products

EXPORTER PROFILES VARY BY SECTOR AND MARKET A breakdown of the number of exporters by export product points to significant sectorspecific differences. According to the French Customs Authorities, six sectors – food, industrial/agricultural machinery, textiles, transport equipment, metal/metallurgy, and IT/electronic equipment – accounted for more than 10,000 exporting companies, while the French energy industry (petroleum products and hydrocarbons) accounted for less than 800.5

Transport equipment

Natural hydrocarbons, other mining products

Chemical products, perfumes/cosmetics Diversification IT, electronic, optical products

of exporters

Metal/metallurgy Industrial/agricultural machinery Electrical/household Food Rubber, plastics, minerals appliances Textiles, clothing, leather, footwear Wood, paper Agricultural, forestry, fishery products

0 0

2,500

10,000

15,000

20,000

25,000

Number of exporters by product category Based on export sectors. If a company exports goods in several categories, the French Customs Authorities counted it several times.

Source: French Customs Authorities; Business France calculations

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THERE ARE MORE THAN 19,000 FOOD PRODUCT EXPORTERS IN FRANCE.

Average export values (exports/number of exporters) show pharmaceutical and petroleum product exports were concentrated among a small number of exporters. Conversely, food and machinery industry exports were spread across a large number of exporters with low-value exports.

Mirroring more general French trade patterns, the largest number of exporters exported to Europe (an estimated 69,000 companies according to the French Customs Authorities). However, despite Africa’s low share in French exports (6%), more companies exported to Africa (38,156) than to America (33,485) or Asia (30,740).

FIG. 7 Number of French exporters by world region (2016)

80,000 70,000

68,864

60,000 50,000

46,156 38,154

40,000

33,485

30,000

30,740

20,000

15,683

10,000 0

European Union

Non-EU Europe

Africa

Americas

Asia

Middle East

Source: French Customs Authorities

2016 ANNUAL REPORT - BUSINESS FRANCE / 157

CHAP. 5 / FRENCH EXPORTS IN 2016

FRANCE’S EXPORT PERFORMANCE AGAINST A BACKDROP OF SLOWING WORLD TRADE, FRANCE HAS RETAINED ITS GLOBAL EXPORT MARKET SHARE SINCE 2012.

lobalization has entailed the rapid integration of emerging economies into world markets, resulting in lower global market shares for developed countries. The share in global exports of goods exported by European Union countries fell from

FIG. 8 Global goods export market share1 of leading European countries (2011-2016)

10% 8.7% 8%

2011

2014

2012

2015

2013

H1 2016

3.6%

3.3%

3.0%

2.6%

2.6% 1.9%

n ai Sp

iu Be lg

gd Ki n Un

ite

Ita

ce an Fr

er eth N

an y

Source: IMF, DOTS database; Business France calculations

Key: In the first half of 2016, France accounted for 3.3% of global goods exports, the United Kingdom for 2.6%, and Spain for 1.9%. 1 Global market share = national goods exports divided by total global goods exports (in dollars). Based on data on the trade in merchandise goods from the IMF DOTS database.

158 / 2016 ANNUAL REPORT - BUSINESS FRANCE

45% in 1990 to 33% in 2015, while China advanced from 2% to 14%. In this context, France’s market share crept down until 2012 before levelling out in 2015 at 3.1% of global goods exports and 3.5% of goods and services exports. According to initial estimates, France had a 3.3% global market share of goods exports in the first half of 2016. This stabilization can also be seen in the export volume data, confirming that this is due to a definite improvement over recent years in France’s competitiveness, rather than simply to more favorable exchange rates. A similar pattern can be discerned for all of France’s European neighbors except Germany, whose global market share started to recover in 2013 but remains some way below its pre-crisis level. By way of comparison, Germany and the United Kingdom accounted for 8.1% and 2.8%, respectively, of global goods exports in 2015. France’s export performances also vary in different markets. A breakdown by export market confirms that French goods enjoy larger market share in bordering countries than in more distant Asian and American markets. In 2015, France had 3.5% of the global market in Europe, 1.6% in North America, and 1.3% in Asia’s emerging markets.

These figures reflect the importance of crossborder trade in intermediate goods between neighboring countries – a growing trend driven by increasingly fragmented production chains – as well as the fact that it remains less costly to trade with neighbors than with faraway countries, despite falling international transport costs. As such, France’s market share in 2015 with its border partners was 12.1% in Spain, 9.7% in Belgium, 8.7% in Italy, 7.7% in Germany and 6.2% in Switzerland. By world region, France’s market share is at its highest relative to its European competitors in Africa, where it is the leading European supplier (6.6% market share in 2014). This performance can be explained primarily by the special trade relationship between France and North Africa. France’s 2015 market share was particularly high in Algeria (14.6%), Morocco (12.6%) and Tunisia (21%), whereas in Sub-Saharan Africa, it was only 4%. In 2015, France gained market share in Brazil, Spain, Italy, the Netherlands, Singapore, Tunisia and Turkey, while also maintaining its position with its primary Asian customers: China, Japan, Hong Kong and South Korea.

FIG. 9 Goods export market shares of leading European exporters by world region (2015)

18% Germany

16%

Netherlands France

14%

United Kingdom Italy

12%

Belgium Spain

10% 8% 6% 4%

4.0%

3.9%

3.5%

3.1% 2%

1.6%

1.3%

0% World

Europe

North America

Middle East and North Africa

Sub-Saharan Africa

Emerging Asia

Source: IMF, DOTS database; Business France calculations

Key: France accounted for 4% of global exports to Sub-Saharan Africa, Germany 4.8%, and the United Kingdom 2.6%.

FIG. 10 France’s market share in its largest goods export markets (2015)

Algeria Austria Belgium Brazil China Czech Republic Germany Hong Kong Hungary India Italy Japan Mexico Morocco Netherlands Poland Portugal Romania Russia Saudi Arabia Singapore South Korea Spain Sweden Switzerland Tunisia Turkey United Arab Emirates United Kingdom United States 0%

14.6%

2.6%

9.7%

3.3% 1.4% 3.1% 0.8%

Falling Rising

7.7%

Stable

4.3%

1.1%

8.7%

1.2% 1.0%

12.6%

3.7% 4.2% 2.8% 2.6% 2.1% 1.3%

7.2% 5.5%

12.1%

4.4% 6.2% 1.9%

21%

4.2%

1.7% 5%

5.6% 10%

15%

20%

25%

Source: IMF, DOTS database; Business France calculations

Key: Percentages indicate France’s market share in its 30 largest export markets. Countries where France’s market share has grown (+0.1 percentage points or more from 2014 to 2015) are in pink; countries where market share has fallen are in light purple. Countries where market share has changed less than 0.1 percentage point are considered “stable”, and are in dark purple.

2016 ANNUAL REPORT - BUSINESS FRANCE / 159

CHAP. 5 / FRENCH EXPORTS IN 2016

A MORE COMPETITIVE FRENCH ECONOMY SINCE 2014 France’s price and cost competitiveness visà-vis its OECD competitors have improved considerably since the start of 2014. Cost competitiveness rose 6.9% from the first quarter of 2014 to the third quarter of 2016, due in no small part to the competitiveness and employment tax credit (CICE).2 The introduction of the CICE has enabled businesses to claim social security exemptions since January 1, 2013.3 This initiative has slowed the rise of labor costs in France and improved France’s cost competitiveness compared with its leading

European rivals.4 As such, between the fourth quarter of 2012 and the first quarter of 2016, labor costs grew less sharply in France than the euro zone average, not only in manufacturing, construction and services (+3.5% in France, versus +4.7% in the euro zone), but also in manufacturing once construction is excluded (+4.2% in France, versus +5.8% in the euro zone). Set against productivity, unit labor costs have increased less quickly in France than in the euro zone over the last three years, which is also due to high manufacturing sector productivity gains that have enhanced the impact of falling labor costs. French foreign trade in 2016, a report by the Treasury and Economic Policy Directorate (DGTPE), February 2017 3 In 2016, the CICE tax credit amounted to 6% of gross payroll (excluding all salaries exceeding 2.5 times the statutory national minimum wage), resulting in a total annual tax saving for companies of €20 billion per year. The tax credit rate rose to 7% of gross payroll in 2017. 4 France Attractiveness Scoreboard, 2016, Business France 2

FIG. 11 Trends in cost competitiveness (2004-2015)

France

Germany

Spain

Italy

United Kingdom Euro zone (15 countries)

130 120 110 100 90 0

Baseline 100 = 2010 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: OECD; Business France calculations

NB: Increases in the indices represent declining cost competitiveness

METHODOLOGY An economy’s competitiveness is its ability to compete in international markets. Price competitiveness is defined as a country’s ability to offer goods of similar quality to its competitors’ at lower prices. France’s export price competitiveness is measured as the ratio between the export price of foreign goods and services and the export price of French goods and services. Cost competitiveness measures the relationship between unit labor costs in France (cost of labor adjusted for productivity) and those of its competitors. Costs are measured across the economy for both high- and low-export sectors.

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SECTOR-SPECIFIC SPECIALIZATION FRANCE IS A GLOBAL LEADER IN A NUMBER OF ITS SECTORS OF EXCELLENCE.

nlike some countries that specialize heavily in a small number of specific sectors, France has a diversified export base. Four sectors accounted for two-thirds of exports in 2016: transport equipment (24% of the total); capital goods (19.2%), chemicals, perfumes and cosmetics (11.7%) and food products (10%).

Franceâ&#x20AC;&#x2122;s export strengths can be appreciated by breaking down its global export market share. Since 2012, French global trade has held steady at 3.1% of global exports. However, this percentage is significantly larger in sectors where France is very competitive internationally.

FIG.â&#x20AC;Ż12 French global export market share5 by product (2015) 16.6% 15.9%

Aerospace industry Beverages, spirits and vinegar

13.8%

Essential oils, perfumes, cosmetics

9.2% 8.5%

Dairy products, eggs, honey Leather goods, handbags

7.8% 6.9% 6.1%

Cereals Miscellaneous chemical products Pharmaceutical products

3.9% 3.9% 3.9% 3.6% 3.3%

Paper, paperboard Rubber Iron and steel Plastics Vehicles, bicycles, and parts

3.1% 3.1% 3.0% 3.0% 2.9% 2.8% 1.7% 1.2% 1.0%

Organic chemicals Articles of iron or steel Aluminum, articles thereof Boilers, machinery, parts Optical, photo, medical/surgical instruments Apparel articles, accessories Electric machinery, TV/audio equipment Natural pearls, precious stones/metals Mineral fuel, oil, wax, bitumen 0%

2% 3.1% 4%

10%

12%

14%

16%

France's overall global export market share

18%

Source: UN Comtrade, HS 02 commodities nomenclature; Business France calculations. Graph of all sectors responsible for more than 1% of French exports in 2015, together amounting to 81% of all French exports.

Key: In 2015, France accounted for 16.6% of global aerospace exports and 15.9% of global beverages and spirits exports. 5

French global market share = French exports divided by total global exports (in US$)

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CHAP. 5 / FRENCH EXPORTS IN 2016

As such, France’s global export share is 16.6% in the aerospace industry, 15.9% in beverages and spirits, 13.8% in perfumes and cosmetics, 9.2% in dairy products, 8.5% in leather goods and handbags and 6% in pharmaceuticals. These figures reflect both international recognition of its traditional expertise in wines, champagne, cheese and leather goods, for example, and the competitiveness of its cutting-edge and hightech industries, such as aerospace, chemicals, cosmetics and pharmaceuticals. In 2015, France was the world’s leading exporter of beverages, along with perfumes and cosmetics. It was second only to the United States in aerospace, and was the third largest exporter of leather goods. With regard to food other than beverages, France was the second largest exporter of cereals and the fourth largest exporter of dairy products (UN Comtrade, HS 02 classification).

We can also identify France’s principle export strengths by analyzing its trade balance by sector.6 France’s main trade surpluses are in aerospace (largest trade surplus in 2016, at close to €18.5 billion), beverages (€11.4 billion), perfumes and cosmetics (€9.3 billion) and pharmaceuticals (€3.7 billion). Despite bad harvests in 2016, France maintained an agricultural trade surplus in several areas, including crops and livestock products. In most of these sectors, France has had a trade surplus for the last 10 years.

The trade balance is a calculated by subtracting annual imports from annual exports. A positive balance indicates a trade surplus, while a negative balance indicates a deficit.

18.5

Aerospace

11.4

Beverages

9.3

Perfumes, cosmetics

3.7

Pharmaceuticals

3.0

Dairy products, ice cream

2.3

Misc. chemicals (except basic chemicals)

Trade balance 2007

1.3

Measuring, testing, navigation instruments; watches/clocks

1.2

Crops and livestock products

0.6

Steel products and alloys

0.6

Automotive parts 0

Key: France ran a trade surplus of €11.4 billion on beverage exports in 2016.

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Trade balance 2016

2.0

Electronic components and boards

€ billion 5

Source: French Customs Authorities, official nomenclature, CIF/FOB balances (€ billion). Graph of sectors responsible for more than 1% of French exports in 2016.

FIG. 13 France’s largest trade surpluses (2016 vs. 2007)

HIGH VALUE-ADDED SECTORS ACCOUNT FOR A GROWING SHARE OF FRENCH EXPORTS The economic turmoil over the past decade has affected the sector-specific composition of French exports, which is increasingly dominated by more high-tech exports. Today, French exports are concentrated in mid-range and high-end products, led by aviation and pharmaceuticals. Driven by increased global demand for airliners, aerospace industry sales climbed from 8.3% of French exports in 2007 to 13.1% in 2016. Similarly, pharmaceutical exports rose from 5.4% in 2007 to 6.6% in 2016. These sectors have the advantage of being less sensitive than others to competition and price (price elasticity).

Conversely, there has been an erosion of exports in low-tech sectors, where the emergence of new, more competitive players in this segment of the value chain has rendered it highly competitive. For example, the automotive and metals industries have experienced a steady decline in their share in French exports. However, after bottoming out in 2011, motor vehicle sales are regaining ground (+3.9% in 2016). In more traditional industries such as clothing and accessories, French products are also positioned in the high-end segments, as illustrated by the export performance of the luxury sector (perfumes, jewelry, luggage), which has accounted for an increasingly large share of French exports over the last 10 years. Driven by the luxury industry, leather, luggage and footwear sales rose from 1.1% of French exports in 2007 to 2.1% in 2016.

FIG.â&#x20AC;Ż14 Sector-by-sector breakdown of French goods exports (2007 vs. 2016) % of French total exports 13.1%

Aerospace industry

10.0%

Automotive industry

8.6% 8.3%

Chemicals Industrial/agricultural machinery

6.7% 6.6%

Food products (except beverages) IT, electronic, optical products

6.6% 6.3%

Pharmaceuticals Metal/metallurgical products

4.3% 4.1%

Electrical/household appliances Rubber/plastics products

3.4% 3.2% 3.2%

Beverages Agricultural/fishery products Textiles, apparel

Share of French exports in 2016 Share of French exports in 2007

3.1%

Perfumes, cosmetics

2.1% 1.9%

Leather, handbags, shoes Wood, paper products

1.6% 1.6%

Hydrocarbons, mining, electricity Refined petroleum products, coke

1.0%

Other transport equipment

3.6%

Other manufactured products 0

Source: French Customs Authorities

Key: Aerospace products accounted for 13.1% of French exports in 2016, versus 8.3% in 2007.

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CHAP. 5 / FRENCH EXPORTS IN 2016

EXPORTING REGIONAL EXPERTISE

France) in 2016 were in the aerospace industry, while more than one-third of Brittany’s exports were in the food sector. In the north and east of France, automotive exports predominated, while in Nouvelle-Aquitaine (south-west France), 18.5% of exports were beverages, driven by the wine industry. Provence-Alpes-Côte d’Azur, Auvergne-Rhône-Alpes, Centre-Val de Loire and Normandie all specialize in chemical and pharmaceutical exports.

French exports are the work of companies and industries located throughout France. In 2016, two-thirds of French export sales came from five of France’s 13 regions: Ile de France (Paris region) (19%), Grand Est (13.5%), AuvergneRhône-Alpes (12.8%), Occitanie (12.4%) and Hauts de France (10.3%). Some regions clearly specialize in specific sectors. More than threequarters of exports from Occitanie (south-east

FIG. 15 Regional breakdown of French exports (2016) Hauts de France 10.3% Normandie 6.9% Bretagne (Brittany) 2.4% Pays de la Loire 4.1%

Grand Est 13.5%

Ile de France (Paris region) 19%

CentreVal de Loire 4.2%

Nouvelle-Aquitaine 5.1%

BourgogneFranche-Comté 4.3%

FIG. 16 Sector-specific export specialization of France’s regions (2016) Export share (% of regional total) of the two largest export industries

Auvergne-Rhône-Alpes 12.8%

13.2% Occitanie 12.4.%

Provence-AlpesCôte d’Azur 4.6%

12.6%

18.2% Corse ‘Corsica) 0.01%

Source: French Customs Authorities

Key: Normandie accounted for 6.9% of French exports in 2016.

35.2%

14.2%

15.1%

14.8%

12.2%

14.1%

8.7%

21.5%

15.8%

23.4% 17%

13,6%

13.1%

13.3% Automotive

Aerospace

IT, electronic, optical products

Metal/metallurgical products

Pharmaceuticals

Perfumes, cosmetics

Chemicals

Agricultural products

Food products (except beverages)

Oil products

Industrial/agricultural machinery

Beverages

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18.5%

13%

10.2%

74% 4.4%

22.1% 9.5%

Source: French Customs Authorities

Key: In 2016, chemicals accounted for 18.2% of Normandie’s exports, while pharmaceuticals accounted for 14.2%.

19.3% 17.7%

FRANCE: AN EXPORT HUB 168 FRANCE: A GATEWAY TO EUROPEAN MARKETS

CHAP. 6 / FRANCE: AN EXPORT HUB

FRANCE: A GATEWAY TO EUROPEAN MARKETS FRANCE’S STRATEGIC LOCATION MAKES IT A NATURAL EXPORT HUB FOR EUROPE.

hile multinationals can have many reasons for establishing themselves in foreign countries, access to new markets remains the primary motivation for international business expansion. In France as elsewhere, the foreign operations of multinationals focus heavily on manufacturing. When a manufacturer chooses a country in which to locate, it expects to serve not only the local market but also the surrounding

FIG. 1 Access to EU-27 markets (2015) In comparison with France (Index France = 100)

180.5 164.4 150

100

95.5

FOREIGN COMPANIES ACCOUNT FOR 40% OF FRENCH GOODS EXPORTS

89.2 75.3

72.4 55

46.5

43.6

42.5

Source: France Attractiveness Scoreboard; IMF, 2016; CEPII, 2012; Business France calculations.

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Finland

Spain

Italy

Sweden

Poland

Ireland

Austria

United Kingdom

Germany

France

Netherlands

Belgium

Through its location and the size of its domestic market, France is a natural export hub into other European countries. It is in a foreign company’s interest to set up in a country where domestic demand is high and where it can enjoy easy access to neighboring countries. In terms of proximity to EU-27 markets, France was ranked third on this criterion in 2015, ahead of Germany and the United Kingdom. Furthermore, the World Bank’s Doing Business 2017 ranks France first in the world for ease of trading across borders, ahead of Germany (38th) and the United Kingdom (28th), due to simplified customs procedures.

200

100

markets, to which it will have easy export access. This strategy explains why, on average, French subsidiaries of foreign companies export more than domestic French companies.

Foreign-owned companies operating in France contribute heavily to French exports. According to the French National Institute for Statistics and Economic Studies (INSEE), foreign companies generated 30% of French goods and services exports in 2014.

GOODS EXPORTS OF FOREIGN-OWNED FRENCH SUBSIDIARIES BY PARENT COMPANY NATIONALITY (2015)

The French Customs Authorities, which track only trade in goods, consider 40% of goods exported from France to be exported by foreign-owned companies. These 12,166 companies accounted for around 10% of France-based exporters in 2015, and exported on average one-quarter of their French output to foreign markets.1,2

Number of exporting companies in France

Export value (€bn)

Average export percentage of exporting companies (Export Turnover/Turnover)

United States

1,328

45.0

26.8%

Germany

1,242

22.4

20.0%

Switzerland

606

20.7

29.5%

Italy

551

4.2

14.9%

United Kingdom

498

12.4

20.8%

Parent company nationality

In 2015, exporting foreign subsidiaries in France included 1,328 American companies, 1,242 German companies, 606 Swiss companies and 551 Italian companies. These companies’ export behaviors were driven by a variety of internationalization strategies.

Consolidated figures from Treasury Directorate calculations based on French Customs Authorities data for 2015. 2 The average export percentage of goods exporting companies is the exporting companies’ export turnover (export revenue) divided by their total turnover (revenue). 1

Belgium

482

3.9

27.6%

Japan

444

11.1

19.4%

Netherlands

360

5.5

32.9%

Spain

221

1.6

15.6%

Sweden

202

5.0

20.0%

Source: French Customs Authorities; Treasury Directorate calculations.

Key: In 2015, 1,328 American subsidiaries in France exported part of their output. Together, these exports amounted to €45 billion and accounted, on average, for 27% of total company turnover.

FIG. 2 Destination of foreign subsidiary exports by parent company nationality (2015) % 80

5 70

5 2 3 4 5

6 1

3 2

4 3

6 7

15 12

5 2

10 1 6

6 4

9 20

7 20

11 16 5

4 1 9

18 9

6 6

3 2 5 2

27 13

9 7

31 10

Export market share Netherlands Switzerland Belgium United States United Kingdom Italy Spain Germany

19 8 Sweden

Spain

Japan

Netherlands

Belgium

United Kingdom

Switzerland

Italy

United States

Germany

Nationality of exporters’ parent company

Source: French Customs Authorities; Treasury Directorate calculations.

Key: German subsidiaries in France exported primarily to European markets, and in particular to their source country. Germany received 31% of the exports of German subsidiaries in France in 2015. Similarly, Spain received 9% of exports by Spanish subsidiaries in France, Italy 7%, and the United Kingdom 6%.

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CHAP. 6 / FRANCE: AN EXPORT HUB

Analysis by export destination region shows that, like French exporters as a whole, these companies exported mostly to European markets. However, the subsidiariesâ&#x20AC;&#x2122; source country is generally their largest export market. For example, in 2015, 31% of exports by Germanowned French subsidiaries were shipped to Germany, 27% of exports by Spanish-owned French subsidiaries were shipped to Spain, 26% of exports by Belgian-owned French subsidiaries were shipped to Belgium, and 20% of exports by Italian-owned French subsidiaries were shipped to Italy.

FIG. 3 Breakdown of goods exporters and exports by company category and ownership type (2016) Exporting companies

% 100

47%

37% 72%

53% 20

58%

7% 21%

Large corporates Mid-size companies SMEs and micro-enterprises

Export value

100

Intra-group trading is less prevalent among the exporting subsidiaries of non-European groups, such as American or Japanese subsidiaries, whose purpose in France is to serve the European market. As such, only 12% of exports of US-owned companies are to the United States, and only 1.6% of exports of Japaneseowned companies are to Japan.

FOREIGN SUBSIDIARIES GENERATED MORE THAN HALF OF MID-SIZE COMPANY EXPORT SALES IN 2016

This pattern can be explained by the importance of intra-group trading in Europe, particularly between neighboring countries, and may reflect a form of vertical integration of production chains. The company produces intermediate or end products, corresponding to different stages of production or distribution, in different countries.

31%

29%

55%

25%

69%

45%

46%

Large corporates French-owned groups

Mid-size companies

SMEs and micro-enterprises

Foreign-owned groups

Independent legal entities

Source: French Customs Authorities

Key: In 2016, 55% of mid-size company export sales were generated by foreign-owned subsidiaries. These subsidiaries accounted for 37% of exporting mid-size companies.

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Provisional French Customs Authorities data for 2016 indicate that the impact of foreign companies on French exports varied by company size, with mid-size companies contributing the most. Although foreign subsidiaries in France generated around one-third of exports by large corporates and one-quarter of exports by SMEs in 2016, they accounted for 55% of export sales by mid-size companies. However, in terms of numbers, foreign-owned companies were most prevalent among large corporate exporters (47% of exporting large corporates), accounting for 37% of mid-size company exporters and 7% of SME exporters. Three-quarters of exporting SMEs were independent companies that did not belong to a group.

FRANCE AS A BASE FOR EMEA HEADQUARTERS In 2016, more foreign companies decided to grow their European and African businesses from a base in France. These investment decisions might take the form of establishing a first European sales office in France, or an EMEA headquarters to manage the company’s expansion or operations in Europe and Africa. These forms of foreign investment also reflect France’s strategic location in Europe. Mirroring French exports in general, 5% and 6% of the goods exported by Japanese and American companies from France were exported to African markets. One example is Vietnam’s largest mobile telephone network operator, Viettel, which opened a Paris subsidiary in 2016 to manage its expansion in Europe and Africa. This first European venture is an integral part of the group’s dynamic international development strategy. Another is Aptus Health, a subsidiary of American pharmaceutical company Merck & Co. specializing in digital solutions for healthcare professionals and doctors, which chose Paris’ La Défense business district for its European headquarters. This investment, due to create 70 jobs initially, will enable the company to manage its expansion in Europe from Paris.

They chose

FRANCE

as an export base AstraZeneca PHARMACEUTICALS

Anglo-Swedish company AstraZeneca has more than 1,500 employees and several manufacturing facilities in France. The plant in Dunkirk (Hauts de France region), which makes asthma medicines, is its only inhaled aerosol production facility in the world. Ninety percent of its output is exported globally from France.

Mars AGRI-FOOD

This American agri-food group invests regularly in its eight French plants, including its principal European M&M manufacturing plant in Haguenau (Grand Est region). This plant accounts for 80% of the M&Ms made in Europe and exports to around fifty different countries.

Novo Nordisk PHARMACEUTICALS

METHODOLOGY The contribution made by foreign subsidiaries to the French economy as a whole has been measured using INSEE data on foreign-owned resident company employment, turnover, investment in tangible assets and foreign trade for the year 2014 (latest year available). Data are taken from the INSEE Financial Links Between Enterprises Survey (LiFi) and Annual Business Statistics Program (ESANE). Data published by the French Customs Authorities, which tracks only trade in goods, provide further information on foreign goods exporters, such as their number by nationality, export sales by market, and company size. The Customs Authorities’ annual report on foreign trade operators gives figures for all trade in declared goods with countries in and outside the European Union. The company categories used are based on Article 51 of the French Economic Modernization Act (LME) of August 4, 2008, which distinguishes between micro-enterprises (companies with fewer than 10 employees), SMEs (fewer than 250 employees), mid-size companies (between 250 and 4,999 employees) and large corporates (at least 5,000 employees).

Danish Novo Nordisk’s production facility in Chartres (Centre-Val de Loire region) employs 1,100 people. According to the group, more than seven million diabetics worldwide are treated with insulin made at the Chartres plant, which exports almost all of its output to more than 40 countries. Its main customers are Russia, Germany, Algeria, Egypt, Japan and Argentina. In 2016, Novo Nordisk announced an additional investment of €100 million in France to upgrade its manufacturing facilities.

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SMEs AND STARTUPS 174 OVERVIEW OF FRENCH SME EXPORTERS 177 FRENCH STARTUPS GOING GLOBAL

CHAP. 7 / SMEs AND STARTUPS

OVERVIEW OF FRENCH SME EXPORTERS EXPORT SALES BY FRENCH SMEs WERE UP 2.1% IN 2016.

n most major developed economies, small and medium-sized enterprises (SMEs) account for the majority of exporters but only a small percentage of export sales.1 French SMEs and micro-enterprises were responsible for 95% of goods exporting companies in 2016 but only 14% of export sales.

companies, 16%; and agricultural companies, 11%. The commerce sector includes both the business subsidiaries of manufacturing companies and international trading agents handling exports for companies with neither the money or the resources to market their products abroad.

In France, as in other developed countries, there is generally a positive correlation between company size and participation in international trade. According to the French National Institute for Statistics and Economic Studies (INSEE), French companies have an export percentage (export turnover divided by total turnover) of 3% for micro-enterprises, 10% for SMEs (excluding micro-enterprises), 20% for mid-size companies, and 22% for large corporates.2

HIGH RENEWAL RATE OF MICRO-EXPORTERS

However, these overall trends mask a variety of exporter profiles and trade development strategies. While few smaller companies, statistically, would appear to operate in international markets, they often export indirectly. A number of indirect export modes have been identified, including sales to international trading companies and production of parts or components for larger exporting manufacturers.

MICRO-ENTERPRISES AND SMEs COMPRISE 95% OF FRANCE’S EXPORT BASE.

Analysis of France’s export structure by company business sector sheds additional light on this subject. According to the French Customs Authorities, in 2016, commerce-sector companies accounted for 44% of exporters; manufacturing companies, 25%; service

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Analysis by the French Customs Authorities highlights the healthy export performance of SMEs and micro-enterprises in 2016: SMEs with 10 to 250 employees accounted for one-third of French exporting companies and 12.5% of French exports. Export sales by SMEs were up 2.1% from 2015, while those by large corporates fell 1.6%. In 2016, SMEs exported on average to six or seven countries, even though one-quarter of their number exported to only one country. Export sales by micro-enterprises (0 to 9 employees) were even healthier, rising 2.9% from 2015. Micro-enterprises accounted for 63% of French exporters but only 1.4% of export sales.

World Trade Report 2016: Levelling the trading field for SMEs, WTO, 2016. Unlike French Customs Authorities export data, which is estimated from customs declarations and involves only goods, INSEE data is based on tax information and covers both goods and services.

According to the French Customs Authorities, 90% of companies entering and exiting the export market in 2016 employed fewer than 20 people. Micro-exporters had a particularly estimated high entry and exit rate: one-third of micro-enterprises exporting in 2016 did not export in 2015, while one-third of those exporting in 2015 were no longer exporting in 2016. This entry/exit rate was 2.5 times greater than for SMEs (excluding microenterprises) and five times greater than for mid-size companies. However, since 2011, the number of companies exporting again the following year has increased steadily (positive average annual growth rate of 1.6% for 2011-2016) after declining significantly during the previous decade (negative average annual growth rate of 0.7% for 2001-2010). Similarly, the number of companies exporting every year for at least five years has risen annually ever since 2012. This positive trend shows that French companies are increasingly able to keep their export business going from one year to the next and stay in the export market.

VARIOUS WAYS OF GOING GLOBAL International business is undeniably an important spur to growth for recently founded companies. In most countries, a specific profile of exporting companies can be discerned: they are generally more productive and more innovative, and employ more people than nonexporting companies of similar size.

FIG. 1 Export growth by company category (2016)

% 2.9%

3.0 2.5

2.1%

2.0 1.5 1.0 0.5

0.1%

0.0 -0.5 -1.0 -1.5 -2.0

Micro-enterprises

SMEs

Mid-size companies

-1.6% Large corporates

Source: French Customs Authorities

Exporting STARTUPS Famoco Established in 2010, Paris-based startup Famoco specializes in contactless technology. Its NFC (near field communication) card reader can securely manage applications of all kinds via an open platform, without any data leaks. After selling 10,000 card readers in its first year and nearly 30,000 the next, Famoco is anticipating sales of 60,000 to 70,000 readers in the 25 countries where its products are sold. It recently opened sales offices in Taiwan and India,

and now has its sights set on new markets, including the United States.

power enable it to interact perfectly with its surroundings without a driver.

In late 2016, the company completed a €30 million capital increase, with French groups Valeo and Keolis and Qatari firm Founded in Villeurbanne, near Lyon (Auvergne-Rhône-Alpes region) in 2014, Group8 all acquiring stakes. Navya then Navya develops 100% autonomous, made its first foray into the American driverless vehicles for passenger and market in December 2016. Its product is goods transport. the only European electric shuttle to be Its shuttle is the product of decade-long selected for the prestigious Mcity, an research and expertise. The vehicle’s artificial mini-city built by the University multiple sensors and onboard computing of Michigan to test self-driving cars.

Navya

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CHAP. 7 / SMEs AND STARTUPS

However, each company sets its own exporting pace based on the sector and competitive environment in which it operates. In a gradual internationalization process, a company moves little by little from conducting limited, low-risk foreign business to larger and larger operations in more distant markets. However, high-tech SMEs operating in niche markets may choose to enter the domestic market and the international market simultaneously. Nevertheless, SMEs face specific, sizerelated barriers to entry and survival in foreign markets. Exporting generally requires more resources than selling to just the domestic market, and may also involve high fixed costs (for market exploration or compliance with local laws, for example) that can be more burdensome for small companies. SMEs also encounter practical obstacles such as insufficient manpower or unfamiliarity with international trade. To limit extra costs, SMEs sometimes enter the international markets on

the coattails of major groups, by supplying large corporates operating in other countries. Generally speaking, SMEs relying on a group do better than independent SMEs. In 2016, exporting SMEs and micro-enterprises mainly comprised independent companies (72%), with the remaining quarter operating as part of a group. However, the percentages were reversed for export sales. Seventy-one percent of export sales were made by group-owned SMEs, including 25% by foreign-owned SMEs. Small companies also have advantages though that allow them to seize the opportunities offered by foreign markets, seeming at times to be more flexible and better able than larger companies to adapt their export products (faster decision-making and lower coordination costs). The growth of electronic commerce promises to further expand export opportunities for SMEs by giving them easier and cheaper access to international customers.

Exporting STARTUPS BlaBlaCar Originally launched as Covoiturage.fr in 2006, ridesharing platform Blablacar has now spread to 22 countries, establishing itself as a global leader in less than 10 years. In addition to its strong presence in Europe, the startup has operations in Turkey, Russia, India, Brazil and Mexico, and is expanding quickly, launching services under its own name, and taking over existing local sites. Its top priorities today are Latin America and Asia.

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FRENCH STARTUPS GOING GLOBAL “LA FRENCH TECH” HAS SPREAD ITS WINGS OVERSEAS, AND NOW ENJOYS BURGEONING GLOBAL RECOGNITION.

rench startups are increasingly breaking into international markets, and stand out as symbols of France’s innovation prowess and thriving entrepreneurial ecosystems. Meanwhile, their foreign counterparts can increasingly be found heading to France to build their businesses.

RAPID INTERNATIONALIZATION Often defined as innovative newly formed companies with strong growth potential, startups generally cross borders rapidly by exporting or operating abroad, sometimes from the outset, developing simultaneously in foreign markets and their own domestic market. A number of startups – generally those operating in niche markets and high-tech sectors – can even be said to be “born global”; scarcely have they been established before they look abroad with an eye to wider markets. Going global represents a significant investment for these fledgling companies, which do not yet have the financial resources needed to grow. Their success depends on their ability to raise capital and diversify their sources of funding. As such, access to a network of venture capital investors can be decisive for innovative startups in their initial stages of development.

FRANCE: AN IDEAL ENVIRONMENT FOR STARTUPS TO GROW France offers companies a flexible, innovative ecosystem that makes it easy for startups to grow and access funding. The many business incubators and accelerators throughout France can provide startups with customized support, including coaching, tailored advice and access to a network of professionals. Furthermore, given their liquidity constraints and the difficulty of qualifying for bank loans, startups need investors to fund their international operations. The most recent CB Insights report on tech funding trends in France confirms an increase in the number and value of funding deals with early-stage companies in France in 2016. According to the report, the number of annual transactions more than doubled from 226 in 2015 to 486 in 2016. French tech companies raised nearly US$2.1 billion in 2016, up 62% from US$1.3 billion in 2015. This healthy venture capital market boosted France to second place in Europe for the number of deals in 2016, preceded by the United Kingdom (909 deals) but ahead of Germany (450). Although the funds raised by British companies (US$6.7 billion) still outpace investment in continental Europe, France (US$2.1 billion) is now closing in on Germany (US$2.3 billion).

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CHAP. 7 / SMEs AND STARTUPS

Foreign STARTUPS

This funding remains concentrated primarily in and around Paris, where 231 deals worth a total of more than US$1 billion took place in 2016. However, dynamic ecosystems are emerging in several large French cities, including Montpellier (11 deals), Lille (8), Grenoble (8), Lyon (7), Nantes (7) and Marseille (6).

Elum Energy This Franco-Moroccan startup was one of the inaugural winners of the ‘French Tech Ticket’ in March 2016. Elum Energy is developing Energy OS, an artificial intelligence platform that enables industrial and commercial buildings to produce and consume energy simultaneously. Its algorithms optimize energy flows and allow customers to reduce both their electricity bills and their greenhouse gas emissions. With the support of the “La French Tech” initiative, Elum has been able to join Paris-based incubator Construction & Energie – Impulse Partners, which is helping the startup with its development in France.

“LA FRENCH TECH” ATTRACTING EVER MORE FOREIGN VC INVESTORS French tech companies are attracting foreign investors in growing numbers. According to a report by Chausson Finance, the number of funding deals in France involving at least one foreign venture capital fund has doubled in the last four years from 28 startups in 2011-12 to 61 in 2015-16. The most active foreign VC investors in France were Index Ventures (Switzerland), Accel Partners (United States), Point Nine (Germany) and Global Founders Capital. The report notes that this funding often took the form of joint investments with French funds like Alven Capital, Idinvest and Partech Ventures.

Deliveroo Founded in 2013, British meal delivery specialist Deliveroo has already found success in more than ten countries in Europe, Asia and Oceania. The company has grown rapidly since its arrival in France in 2015, and by the first quarter of 2016, it already had more than 1,000 partner restaurants and had delivered more than one million meals. In August 2016, the startup raised US$275 million from its incumbent investors and two investment funds, General Catalyst (United States) and Bridgepoint (United Kingdom).

The growing interest of foreign funds in French startups reflects not only the health of the French entrepreneurship ecosystem but also the maturity of innovations developed in France. Foreign investors are now sharing with domestic investors in the growth of French companies.

FRANCE WELCOMES FOREIGN STARTUPS

FIG. 2 Number and value of VC funding deals in France (2012-2016)

486 Deals Investments (US$ million)

226 138

171 133

659

604

1,485

1,268

2,053

2012

2013

2014

2015

2016

Source: CB Insights, La French Tech

178 / 2016 ANNUAL REPORT - BUSINESS FRANCE

France has launched numerous initiatives to consolidate and promote the French ecosystem to foreign startups. For example, the French Tech Ticket, introduced in 2015, aims to attract international entrepreneurs to France by providing them with a welcome pack to help them start and grow their business in France. It offers winning foreign applicants a grant for each founding team member as well as fast-track residence permits, masterclasses and 12 months’ residency in a business incubator. In 2017, 70 winning startups will arrive in France, up from just 23 in 2016. They will be located throughout the country in 45 incubators hosting startup teams from around the world.

Attractive STARTUPS for foreign VCs Drivy

OVH

Sigfox

This Paris-based startup, founded in 2010, offers a peer-to-peer car rental platform. In 2016, the company raised €31 million from its incumbent investors, Bpifrance (Environmental Technologies Fund), Via ID (Mobivia group) and Index Ventures, as well as investment funds Cathay Innovation and Nokia Growth. Drivy plans to invest in developing its technology platform and Drivy Open service, which enables users to open a vehicle securely via a smartphone without having to physically collect the keys from the owner. The funds raised have also enabled the firm to enter the Belgian and Austrian markets, after Germany in 2014 and Spain in 2015. Today, Drivy has one million users and more than 40,000 private cars and vans available for hire in Europe.

OVH is a web hosting specialist with 20 data centers on four continents. In 2016, this startup based in Roubaix (Hauts de France region) raised nearly €250 million from American investors KKR and TowerBrook in a fundraising operation – the largest undertaken by a French startup in 2016 – that took the value of the firm to more than €1 billion, giving it ‘unicorn’ status. OVH is already Europe’s leading web hosting company and now plans to develop its business in the United States with the support of its new partners.

Founded in 2010, Sigfox offers a communication solution for the Internet of Things (IoT). In late 2016, this Parisbased startup completed a record €150-million fundraising operation to step up its international expansion and achieve global coverage. The money came from incumbent Sigfox shareholders (Bpifrance, Elliott, Intel Capital, Air Liquide, Idinvest Partners and iXO), as well as new investors, including Salesforce Ventures, Alto Invest, Henri Seydoux, SWEN Capital Partners, Tamer Group and Total. Sigfox already has operations in 26 countries and plans to extend its network to cover 60 countries by 2018.

Devialet Since it was founded in 2007, audio engineering specialist Devialet has won more than sixty awards worldwide for its flagship product, the Phantom wireless speaker. Its expertise and development potential have attracted interest from a number of prominent entrepreneurs: Xavier Niel (Free), Bernard Arnault (LVMH), Marc Simoncini (Meetic), and JacquesAntoine Granjon (vente-privee.com) all acquired stakes in Devialet back in 2012 and have supported the company in its efforts to capture global audio market share. In 2016, Devialet raised €100 million from a variety of partners: French automaker Renault; Taiwanese manufacturer Foxconn (via its European investment fund, Ginko); Japanese tech firm Sharp; and Andy Rubin, the American creator of the Android operating system. The funds raised will allow Devialet to move into new markets, such as television and motor vehicles.

“LA FRENCH TECH”: CONNECTING A NETWORK OF STARTUP ECOSYSTEMS Numerous government and state bodies underpin support for startups in France: the Ministry for the Economy and Finance (Businesses Directorate, Treasury Directorate), the Ministry of Foreign Affairs and International Development (Businesses and International Economy Directorate), the National Investment Commission, the Caisse des Dépôts, Bpifrance and Business France. Together, their pro-startup efforts are coordinated under the banner of “La French Tech”, a public/private initiative and accreditation launched in late 2013 to encourage the creation of successful French startups and help innovative entrepreneurs build their businesses. The three strands of the French Tech international strategy are: • Building French Tech Hubs to group French entrepreneurs in foreign countries

into ecosystems to accelerate the foreign development of French startups, and promoting France as an attractive business location for entrepreneurs and local investors. After New York, Israel, Tokyo, San Francisco and Moscow in 2015, six new French Tech hubs were accredited in 2016. • Launching a €15 million French Tech international promotion platform, to support various initiatives, particularly by private-sector stakeholders, to highlight and showcase France’s innovation prowess. • Introducing the French Tech Ticket, a bespoke support package to attract young entrepreneurs to France by providing a welcome pack (residence permit, individual grant, accommodation, and customized advice) to help them set up and expand their business.

2016 ANNUAL REPORT - BUSINESS FRANCE / 179

08 FRENCH EXPORTS OVERVIEW BELGIUM 182 CHINA 184 GERMANY 186 ITALY 188 JAPAN 190 NETHERLANDS 192 SPAIN 194 SWITZERLAND 196 UNITED KINGDOM 198 UNITED STATES 200

CHAP. 8 / FRENCH EXPORTS OVERVIEW

BELGIUM FRENCH EXPORTS TO BELGIUM FRENCH EXPORTS (2016)

More than 45,800 companies exported to Belgium from France in 2016. The value of their exports was €30.1 billion (6.8% of all French exports). Against a backdrop of sluggish growth in the Belgian market (+1.4% in 2016), French exports to Belgium fell slightly in 2016 (-0.9%), though the decline was less pronounced than in 2015 (-2.7%) and 2014 (-5.1%). Belgium’s share of all French exports remained unchanged at 6.8%. Having been France’s second largest customer in 2014, Belgium was ranked sixth in 2015 and 2016, receiving 11.4% of French exports to European Union countries. France’s export market share in Belgium was 9.7% in 2015, much higher than its share in global goods exports (3.1%).1 Belgian statistics ranked France as Belgium’s third largest supplier in 2015, after the Netherlands and Germany. [Fig. 1]

45,818 French companies exported to Belgium €30.1 billion in French goods exports to Belgium -0.9% growth in French exports to Belgium 6.8% of all French exports Sixth largest customer for French exports FRENCH IMPORTS (2016) €34.5 billion in Belgian goods imports to France -6.5% growth in Belgian imports to France 6.8% of all French imports Fifth largest supplier of French imports CONTRIBUTION OF BELGIAN SUBSIDIARIES IN FRANCE

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO BELGIUM

482 Belgian exporting companies in France (2015) 28% average export ratio of Belgian exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to Belgium (€ billion; percentage of total French exports)

35 30

30.0

31.2

29.3

30.3

32.9

31.9

31.2

30.4

30.1

25.7

6% 5%

Four sectors accounted for over half (56%) of French exports to Belgium in 2016: transport equipment (18%), food (16%), chemicals and perfumes (11%), and capital goods (11%). Sales of transport equipment (+10.1%) and capital goods (+5.9%) grew particularly sharply in 2016, while food exports to Belgium were also back on the rise (+1.7%), having fallen slightly the previous year. Conversely, exports of pharmaceuticals (-11.2%) and chemicals (-1.1%) continued to decline. Belgium was a particularly important market for exporters in the agricultural and food products, pharmaceuticals, and wood and paper products sectors, which sold over 10% of their exports to Belgian customers. [Fig. 2]

2007

2008

2009

2010

2011

2012

2013

2014

Belgium’s share of total French exports Value of French exports to Belgium

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

182 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

2016 1 France’s market share expresses its goods exports to any one country as a proportion of global goods exports to that country (in US$). Market shares are calculated based on data from the IMF DOTS database.

FIG. 2 Sector-by-sector breakdown of French exports to Belgium (2016)

18%

8% 4%

6% 4%

7% 5%

10% 5%

11%

13% 11%

11%

10%

12%

11%

14%

16%

18%

In 2015, 482 Belgian subsidiaries in France exported part of their output. Together, these exports amounted to €3.9 billion and accounted, on average, for 28% of total company turnover. These firms exported primarily to their source country Belgium, which received 26% of the exports of Belgian subsidiaries established in France, and to Germany.

CONTRIBUTION OF BELGIAN SUBSIDIARIES IN FRANCE

5% 3%

According to the French National Institute for Statistics and Economic Studies (INSEE), Belgian subsidiaries: • Employ 7% of the workforce of all foreign-owned companies in France. • Account for 5% of the turnover of all foreign-owned companies in France. • Generate 4% of the export turnover of all foreign-owned companies in France.

Tra nsp o

rt e qu (in ipm Ch c l u em din en ica t g be ls, ver pe r fu ag es) me s, co sm eti cs Ca pit al g Ph arm oods ac eu Me tica ls t al Ag p rod ric ult u ct ura lp s Tex rodu tile cts s, Pe tro Rubb clot hin leu er g m, a na nd p tu la W oo ral g stics da a nd s, mi nin pa g pe Pe r pro t Ot he roleu duct rm s m p an ufa rodu cts ctu r ed g Mi ood s sc e lla ne ou s

Belgium's share of total French exports in the sector Sector's share of all French exports to Belgium

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR BELGIAN SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Belgium

26%

Germany

16%

Italy

Spain

United Kingdom

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE BELGIAN EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

RHODIA OPERATIONS

Manufacture of other inorganic basic chemicals

POLYCHIM INDUSTRIE

Manufacture of plastics in primary forms

>90%

UMICORE BUILDING PRODUCTS FRANCE

Lead, zinc and tin production

<50%

SOLVAY SPECIALTY POLYMERS FRANCE

Manufacture of plastics in primary forms

>90%

AGFA-GEVAERT SA

Manufacture of other chemical products

>90%

70%-90%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 183

CHAP. 8 / FRENCH EXPORTS OVERVIEW

CHINA FRENCH EXPORTS TO CHINA FRENCH EXPORTS (2016)

In 2016, 11,650 companies exported to China from France. The value of their exports was €16 billion (3.6% of all French exports). Having expanded rapidly in 2014 and 2015, French exports to China fell sharply in 2016 (-10.7%) as Chinese growth slowed. China was France’s eighth largest customer, and its largest Asian customer, receiving 28% of French exports to Asia. France’s export market share in China remained steady at 1.4% in 2015.1 According to initial estimates based on Chinese statistics, France was China’s second largest European supplier in 2016, after Germany. [Fig. 1]

11,647 French companies exported to China €16 billion in French goods exports to China -10.7% growth in French exports to China 3.6% of all French exports Eighth largest customer for French exports FRENCH IMPORTS (2016)

€46.4 billion in Chinese goods imports to France -1.4% growth in Chinese imports to France 9.1% of all French imports

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO CHINA

Second largest supplier of French imports

FIG. 1 French exports to China (€ billion; percentage of total French exports)

10%

18.0

18 16

15.1

16.0

14.7

13.5

16.2

7% 6%

11.0 9.1

9.0

The lion’s share of French exports to China in 2016 took place in two sectors: transport equipment (34%) and capital goods (22%). Falling sales of transport equipment (-25%), together with a sharp drop in agricultural exports (-79%), explain the decline in France’s exports to China in 2016. Having tripled in 2015, sales of agricultural products fell back to their 2013 levels. Exports of food (+18%) and pharmaceuticals (+18%) continued on the upward trajectory they began in 2015, while sales of chemicals, perfumes and cosmetics maintained a 5% annual growth rate. China is emerging as a growing export market for French food, which accounted for 12% of French exports to the country in 2016, compared with 5% in 2007. [Fig. 2]

7.9

1% 0%

2007

2008

2009

2010

2011

2012

2013

2014

China’s share of total French exports Value of French exports to China

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

184 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

FIG.â&#x20AC;¯2 Sector-by-sector breakdown of French exports to China (2016)

It is estimated that 55 Chinese subsidiaries exported goods from France in 2015. According to the French National Institute for Statistics and Economic Studies (INSEE), Chinese subsidiaries generate 1% of the exports of all foreign-owned companies in France.

40% 35% 34% 30% 25%

22%

10%

Tra nsp o

rt e

qu ipm en Ca t pit a ( inc lg Ch lud oo em ds ing ica l s, be pe ver r fu a ge me s) s, co sm Ph arm etics ac Tex eutic als tile s, clo t h Me tal ing Pe tro Rubb prod l eu u m, er an cts dp na tur l Ot a st a he r m l gas ics , an ufa mini ng c Ag tured go W ricult od oo u s d a ral pr nd pa oduc pe ts rp ro Mi ducts sc e l Pe tro laneo l eu us m pro du cts

5% 0%

12%

10%

15%

20%

CONTRIBUTION OF CHINESE SUBSIDIARIES IN FRANCE

China's share of total French exports in the sector Sector's share of all French exports to China

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

TOP FIVE CHINESE EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

ADISSEO FRANCE SAS

Manufacture of other inorganic basic chemicals

MSL CIRCUITS

Manufacture of loaded electronic boards

USINE DE VALENCIENNES (VALDUNES)

Manufacture of railway locomotives and rolling stock

N/A

NFM TECHNOLOGIES

Manufacture of machinery for mining, quarrying and construction

70%-90%

NIDERA FRANCE

Wholesale of grain

>90% 50%-70%

<50%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 185

CHAP. 8 / FRENCH EXPORTS OVERVIEW

GERMANY FRENCH EXPORTS TO GERMANY FRENCH EXPORTS (2016)

More than 40,356 companies exported to Germany from France in 2016. The value of their exports remained stable at €71.5 billion (16% of all French exports). Against a backdrop of moderate growth in the German market (+1.7% in 2016), French exports to Germany remained steady, much like French exports in general. As the destination for 16% of French exports in 2016, Germany maintained its traditional status as France’s largest customer, well ahead of Spain (7.5%) and the United States (7.4%), receiving 27% of French exports to European Union countries. France’s export market share in Germany was 7.7% in 2015, much higher than its share in global goods exports (3.1%).1 German statistics ranked France as Germany’s third largest supplier in 2015, after China and the Netherlands. [Fig. 1]

40,356 French companies exported to Germany €71.5 billion in French goods exports to Germany 0.0% growth in French exports to Germany 16.1% of all French exports Largest customer for French exports FRENCH IMPORTS (2016)

€85.9 billion in German goods imports to France -1.3% growth in German imports to France 16.9% of all French imports Largest supplier of French imports CONTRIBUTION OF GERMAN SUBSIDIARIES IN FRANCE

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO GERMANY

1,242 German exporting companies in France (2015) 20% average export ratio of German exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to Germany (€ billion; percentage of total French exports)

18%

80 70 60

62.4

70.3

66.0

71.8

70.6

71.0

71.5

63.9

16% 14% 12%

55.6

10%

The transport equipment sector led the way in 2016, accounting for one-third of French exports to Germany (35%), followed by capital goods (19%) and chemicals (11%). After a slowdown in 2015, exports of transport equipment to Germany bounced back in 2016, rising 4.3% to €24.7 billion thanks to the aerospace and automotive sectors. Conversely, sales of chemicals and pharmaceuticals, metal products and electronic/ IT equipment all declined in 2016. Germany stood out as a major export outlet for transport equipment companies, which sold nearly one-quarter of their exports to German customers.2 It was also a major trading partner for exporters of metal products (accounting for 20% of French exports in the sector), rubber and plastics (18%), and wood and paper products (18%). [Fig. 2]

2007

2008

2009

2010

2011

2012

2013

2014

Germany’s share of total French exports Value of French exports to Germany

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

186 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

FIG. 2 Sector-by-sector breakdown of French exports to Germany (2016)

In 2015, 1,242 German subsidiaries in France exported part of their output. Together, these exports amounted to €22.4 billion and accounted, on average, for 20% of total company turnover. These firms exported primarily to European markets, and in particular to their source country, Germany, which received one-third of the exports of German subsidiaries established in France.

35%

Ch em

Tra nsp o

rt e qu ipm en C t ica ap ita ls, lg pe oo r fu ds me s, co sm Fo eti Me od cs ta (in clu l pro din du c g ts Ru beve bb er rage s) an d Ph plast arm ics ac eu tica Tex Ot he ls r m tiles, an clo u fa thi ng ctu r ed Ag go W ricult oo ura ods lp Pe d an r tro leu d pa oduc p ts m, na er pr tur od al uc t ga s, s Pe m tro leu ining m pro Mi ducts sc e lla ne ou s

6% 4%

14%

11%

10%

According to the French National Institute for Statistics and Economic Studies (INSEE), German subsidiaries: • Employ 18% of the workforce of all foreign-owned companies in France. • Account for 17% of the turnover of all foreign-owned companies in France. • Generate 14% of the export turnover of all foreign-owned companies in France.

18%

20% 11%

10%

19%

11%

15%

20%

16%

25%

18%

30% 23%

CONTRIBUTION OF GERMAN SUBSIDIARIES IN FRANCE

Germany's share of total French exports in the sector Sector's share of all French exports to Germany Source: French Customs Authorities, gross figures, FOB, excluding military equipment

This is mainly attributable to the trading of intermediate goods between the French and German subsidiaries of the Airbus group. 2

MAIN EXPORT DESTINATIONS FOR GERMAN SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Germany

31%

Spain

Italy

United Kingdom

United States

Source: French Customs Authorities; French Treasury Directorate calculationsr

TOP FIVE GERMAN EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

DAIMLER AG

Manufacture of motor vehicles

BAYER SAS

Manufacture of pesticides and other agrochemical products

50%-70%

MILLIPORE (MERCK KGAA)

Manufacture of other general-purpose machinery

70%-90%

THYSSENKRUPP PRESTA FRANCE SAS

Manufacture of other parts and accessories for motor vehicles

>90%

CONTINENTAL FRANCE

Manufacture of rubber tires and tubes; retreading and rebuilding of rubber tires

<50%

N/A

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 187

CHAP. 8 / FRENCH EXPORTS OVERVIEW

ITALY FRENCH EXPORTS TO ITALY FRENCH EXPORTS (2016)

In 2016, 34,200 companies exported to Italy from France. The value of their exports was €32.5 billion (7.3% of all French exports). Against a backdrop of moderate growth in the Italian market (+0.8% in 2016), French exports to Italy (+1.4%) grew at a faster rate than French exports in general. Italy was France’s fourth largest customer in 2016, just after the United States, receiving 12% of French exports to European Union countries. France’s export market share in Italy was 8.7% in 2015, significantly higher than its share in global goods exports (3.1%).1 Italian statistics ranked France as Italy’s second largest supplier in 2015, after Germany. [Fig. 1]

34,204 French companies exported to Italy €32.5 billion in French goods exports to Italy +1.4% growth in French exports to Italy 7.3% of all French exports Fourth largest customer for French exports FRENCH IMPORTS (2016)

€38.4 billion in Italian goods imports to France +1.4% growth in Italian imports to France 7.4% of all French imports

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO ITALY

Third largest supplier of French imports CONTRIBUTION OF ITALIAN SUBSIDIARIES IN FRANCE

551 Italian exporting companies in France (2015) 15% average export ratio of Italian exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to Italy (€ billion; percentage of total French exports)

10%

40 35

36.4

36.0 31.6

34.2

32.1

30.4

28.5

31.0

32.0

32.5

The capital goods sector (16%) was the chief source of French exports to Italy in 2016, followed by transport equipment (15%), chemicals and perfumes (14%), and food (10%). French exports to Italy were boosted by growing sales of transport equipment (+23.4%), pharmaceuticals (+8%), and textiles and clothing (+8%). Conversely, exports of chemicals (-2.3%) and food (-1.8%) fell once again. Italy stood out as the main export outlet for the French agricultural sector (which sold 14% of its exports to Italian customers) and the textiles industry (12%). It was also the second largest foreign buyer of French chemical and metal products in 2016. [Fig. 2]

2007

2008

2009

2010

2011

2012

2013

2014

Italy’s share of total French exports Value of French exports to Italy

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

188 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

FIG. 2 Sector-by-sector breakdown of French exports to Italy (2016)

According to the French National Institute for Statistics and Economic Studies (INSEE), Italian subsidiaries: • Employ 4% of the workforce of all foreign-owned companies in France. • Account for 4% of the turnover of all foreign-owned companies in France. • Generate 3% of the export turnover of all foreign-owned companies in France.

10% 8% 6% 6%

10%

14%

12%

15%

14%

16%

14%

12%

16%

10%

18%

16%

20%

In 2015, 551 Italian subsidiaries in France exported part of their output. Together, these exports amounted to €4.2 billion and accounted, on average, for 15% of total company turnover. Half of all these exports went to Italy (20%), Germany (16%) and the United Kingdom (15%).

CONTRIBUTION OF ITALIAN SUBSIDIARIES IN FRANCE

Ch em

Ca pit al Tra go nsp od ort s ica ls, eq pe uip r fu m e Fo me nt od s, co (in sm clu e din tics gb eve rag Me tal es) p Tex rodu cts tile s, Ag clo ric th ult ura ing lp Ph rodu arm c ac ts R Ot ubbe eutic he r m r and als Pe an p tro leu ufac lastic tur m, ed s n go W atura o oo l d a gas ds ,m nd ini pa ng pe Pe r pro tro d u l eu m cts pro Mi duct s sc e lla ne ou s

Italy's share of total French exports in the sector Sector's share of all French exports to Italy Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR ITALIAN SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Italy

20%

Germany

16%

United Kingdom

15%

Belgium

Spain

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE ITALIAN EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

FERRARI FRANCE

Chartering and transportation organization

VERSALIS FRANCE SAS

Manufacture of other inorganic basic chemicals

RIVA ACIER

Metals and metal ores

LAMINES MARCHANDS EUROPÉENS (BELTRAME)

Manufacture of basic iron and steel and of ferro-alloys

PRYSMIAN CÂBLES ET SYSTÈMES FRANCE

Manufacture of other electronic and electric wires and cables

<50% 50%-70% <50% 50%-70% <50%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 189

CHAP. 8 / FRENCH EXPORTS OVERVIEW

JAPAN FRENCH EXPORTS TO JAPAN FRENCH EXPORTS (2016)

More than 10,900 companies exported to Japan from France in 2016. The value of their exports was €6.3 billion (1.4% of all French exports). Against a backdrop of slow growth in the Japanese market (+0.5% in 2016), French exports to Japan remained stable in 2016, having contracted markedly in 2015 (-7.7%). Japan was France’s twelfth largest customer in 2016, receiving 1.8% of all French exports and 11% of French exports to Asia. France’s export market share in Japan was 1.2% in 2015, lower than its share in global goods exports (3.1%).1 Japanese statistics ranked France as Japan’s second largest European supplier in 2016, after Germany. [Fig. 1]

10,907 French companies exported to Japan €6.3 billion in French goods exports to Japan -0.5% growth in French exports to Japan 1.4% of all French exports 12th largest customer for French exports FRENCH IMPORTS (2016)

€9.4 billion in Japanese goods imports to France +11.4% growth in Japanese imports to France 1.8% of all French imports

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO JAPAN

Tenth largest supplier of French imports CONTRIBUTION OF JAPANESE SUBSIDIARIES IN FRANCE

444 Japanese exporting companies in France (2015) 19% average export ratio of Japanese exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to Japan (€ billion; percentage of total French exports)

7.4 6.9

6.5 6

5.8

6.8 6.3

5.9

5.6

6.3 3%

Six sectors accounted for nearly 85% of French exports to Japan in 2016: food (18%), pharmaceuticals (16%), capital goods (16%), transport equipment (14%), chemicals and perfumes (11%), and textiles and clothing (10%). After a slowdown in 2015, buoyant sales of capital goods (+18.4%) and pharmaceuticals (+12.6%) boosted French exports to Japan in 2016. In contrast, exports of chemicals, transport equipment, and luggage and handbags fell in 2016. Although French sales of luxury luggage and handbags to Japan declined sharply in 2016, the Japanese market has traditionally been an important export outlet for the sector. [Fig. 2]

4.8 4

2007

2008

2009

2010

2011

2012

2013

2014

Japan’s share of total French exports Value of French exports to Japan

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

190 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

FIG. 2 Sector-by-sector breakdown of French exports to Japan (2016)

In 2015, more than 440 Japanese subsidiaries in France exported part of their output. Together, these exports amounted to €11.1 billion and accounted, on average, for 19% of total company turnover. These firms exported primarily to European markets, with Germany and Belgium leading the way.

18% 16%

16%

16% 14%

14% 12%

11%

10%

(in clu

din gb eve rag Ph es) arm ac eu tica Ca ls pit al Ch Tra go em nsp od ica s ls, ort e q pe rfu uipm me en s, t co Tex smet Ot ics he t i l es, rm c an ufa lothi n ctu r ed g Me good tal s Pe tro Rubb prod leu uc er ts m, a na nd p tur al lastic ga s s, mi W nin Mi oo g sc da nd ellan pa eo u Ag per p s ric rod ult ura ucts lp Pe ro tro leu duct s m pro du cts

3% 2%

3% 1%

4% 1%

4% 2%

3% 1%

According to the French National Institute for Statistics and Economic Studies (INSEE), Japanese subsidiaries: • Employ 3% of the workforce of all foreign-owned companies in France. • Account for 4% of the turnover of all foreign-owned companies in France. • Generate 5% of the export turnover of all foreign-owned companies in France.

18%

CONTRIBUTION OF JAPANESE SUBSIDIARIES IN FRANCE

Japan's share of total French exports in the sector Sector's share of all French exports to Japan

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR JAPANESE SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Germany

18%

Belgium

16%

Spain

Italy

Netherlands

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE JAPANESE EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

TOYOTA

Manufacture of motor vehicles

N/A

NTN SNR

Manufacture of bearings, gears, gearing and driving elements

N/A

BEAUTÉ PRESTIGE INTERNATIONAL (SHISEIDO)

Perfume and cosmetics

CONTINENTAL PHARMACEUTIQUE (TOYOTA TSUSHO)

Pharmaceutical products

JTEKT EUROPE

Parts and accessories for motor vehicles

70%-90% >90% 70%-90%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 191

CHAP. 8 / FRENCH EXPORTS OVERVIEW

NETHERLANDS FRENCH EXPORTS TO THE NETHERLANDS

FRENCH EXPORTS (2016)

In 2016, 27,750 companies exported to the Netherlands from France. The value of their exports was €16.1 billion (3.6% of all French exports). Despite 1.7% growth in the Dutch market, French exports to the Netherlands fell sharply in 2016 (-8%). The Netherlands was France’s seventh largest customer in 2016, ahead of China, receiving six percent of French exports to European Union countries. France’s export market share in the Netherlands was 3.7% in 2015, similar to its share in global goods exports (3.1%).1 Dutch statistics ranked France as the Netherlands’ sixth largest supplier in 2015 (up one place from 7th in 2014, when it finished after Russia). [Fig. 1]

27,751 French companies exported to the Netherlands €16.1 billion in French goods exports to the Netherlands -8.0% growth in French exports to the Netherlands 3.6% of all French exports Seventh largest customer for French exports FRENCH IMPORTS (2016)

€23.2 billion in Dutch goods imports to France +7.4% growth in Dutch imports to France 4.6% of all French imports Seventh largest supplier of French imports CONTRIBUTION OF DUTCH SUBSIDIARIES IN FRANCE

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO THE NETHERLANDS

360 Dutch exporting companies in France (2015) 33% average export ratio of Dutch exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to the Netherlands (€ billion; percentage of total French exports)

10%

16.7

18.0

17.1

18.4

17.6

16.2

17.5

16.1 6%

13.9

In 2016, three sectors accounted for more than half of French exports to the Netherlands: capital goods (25%), chemicals and perfumes (17%), and food (15%). The slump in exports to the Netherlands in 2016 can be attributed to declining sales of transport equipment (-31%) and chemicals (-12%). Falling oil prices also took their toll, with exports of petroleum products, the fourth largest source of French exports to the Netherlands, down 35%. Conversely, after two years of dwindling sales, exports of metal products were on the rise again in 2016 (+6.5%), while a buoyant textiles and clothing sector also boosted France’s export performance. The Netherlands stood out as the leading export destination for the refined petroleum products sector, which sold 15% of its exports to Dutch customers. [Fig. 2]

2007

2008

2009

2010

2011

2012

2013

2014

The Netherlands’ share of total French exports Value of French exports to the Netherlands

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

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2015

CONTRIBUTION OF DUTCH SUBSIDIARIES IN FRANCE

FIG. 2 Sector-by-sector breakdown of French exports to the Netherlands (2016)

In 2015, 360 Dutch subsidiaries in France exported part of their output. Together, these exports amounted to €5.5 billion and accounted, on average, for 33% of total company turnover. From France, these firms primarily exported to Italy and Germany. Ten percent of their foreign sales were exported to their source country, the Netherlands.

25%

17% 15%

15%

20%

2% 4%

Ch em

ica ls,

pe rf

Ca pit al go od um Fo s es, od co (in sm clu eti din cs gb eve Pe rag tro es) l eu m Ag pro ric d ult uc ur ts Tra al pr od nsp uc ort eq ts uip me Me nt tal pro Ot he Phar duct s rm m an ace u u fa ctu ticals re Ru bb d go od er s an d Tex plas W oo tics t i l Pe d an es, c tro lot dp h leu m, aper ing na pro tur du al ga cts s, mi ni Mi sce ng lla ne ou s

According to the French National Institute for Statistics and Economic Studies (INSEE), Dutch subsidiaries: • Employ 6% of the workforce of all foreign-owned companies in France. • Account for 7% of the turnover of all foreign-owned companies in France. • Generate 8% of the export turnover of all foreign-owned companies in France.

6% 6%

10%

The Netherlands' share of total French exports in the sector Sector's share of all French exports to the Netherlands Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR DUTCH SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Italy

18%

Germany

17%

Netherlands

10%

Spain

Belgium

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE DUTCH EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

LYONDELL CHIMIE FRANCE

Manufacture of other inorganic basic chemicals

BASELL POLYOLEFINES FRANCE

Manufacture of plastics in primary forms

<50%

PHILIPS FRANCE

Installation of electrical equipment, electronic and optical equipment or other equipment

<50%

INFINEUM FRANCE

Manufacture of other chemical products

CNH INDUSTRIAL FRANCE

Wholesale of agricultural machinery, equipment and supplies

70%-90%

70%-90% <50%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 193

CHAP. 8 / FRENCH EXPORTS OVERVIEW

SPAIN FRENCH EXPORTS TO SPAIN FRENCH EXPORTS (2016)

In 2016, 35,665 companies exported to Spain from France. The value of their exports was €33.2 billion (7.5% of all French exports). As the Spanish market recovered (growing 3.1% in 2016), French exports to Spain (+2%) continued to grow at a faster rate than French exports in general. Spain once again moved up a place in the list of France’s largest export customers in 2016, coming in second, ahead of the United States, receiving 12.6% of French exports to European Union countries. France’s export market share in Spain was 12.1% in 2015, higher than its share in global goods exports (3.1%).1 Spanish statistics ranked France as Spain’s second largest supplier in 2015, after Germany. [Fig. 1]

35,665 French companies exported to Spain €33.2 billion in French goods exports to Spain +2.0% growth in French exports to Spain 7.5% of all French exports Second largest customer for French exports FRENCH IMPORTS (2016)

€32.5 billion in Spanish goods imports to France +2.8% growth in Spanish imports to France 6.4% of all French imports Sixth largest supplier of French imports

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO SPAIN

CONTRIBUTION OF SPANISH SUBSIDIARIES IN FRANCE

221 Spanish exporting companies in France (2015) 16% average export ratio of Spanish exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to Spain (€ billion; percentage of total French exports)

16%

37.9 34.2

35 30

27.1

29.2

30.5

29.4

29.1

30.4

32.6

33.2

14% 12%

10%

Four sectors accounted for more than 60% of French exports to Spain in 2016: transport equipment (25%), capital goods (17%), chemicals and perfumes (11%), and food (9%). The growth in exports to Spain in 2016 can be principally attributed to buoyant sales of transport equipment (+8.6%) as well as electrical and electronic equipment and industrial machinery (+3.6%). The textiles and clothing sector saw its sales to Spain grow 5.3% in 2016. Conversely, sales of food continued to decline ( 2%), while exports of chemicals and pharmaceuticals fell 6.4% and 5.1%, respectively. Spain represents an important market for French agriculture, with sales of €1.7 billion in 2016, 12% of the sector’s total exports. The country is also a major trading partner for French companies in the wood and paper products sector, accounting for 12% of their foreign sales. [Fig. 2]

2007

2008

2009

2010

2011

2012

2013

2014

Spain’s share of total French exports Value of French exports to Spain

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

194 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

FIG. 2 Sector-by-sector breakdown of French exports to Spain (2016)

25%

25% 23%

In 2015, 221 Spanish subsidiaries in France exported part of their output. Together, these exports amounted to €1.6 billion and accounted, on average, for 16% of total company turnover. These firms sold 27% of their exports to their source country, Spain, 19% to Germany and 11% to the United Kingdom.

20%

Ch em

Tra nsp o

rt e qu ipm en C ica t ap ls, ita pe lg r fu oo Fo ds me od s, co (in sm clu e din tics gb eve rag Me es) tal pro d Tex tile ucts A s Pe tro gricu , clot h leu l m, tural ing na pro tur d uc al ts g Ru as, m bb i nin er g an d Ph plas W arm tic oo s da nd aceu tica Ot pa he p ls er rm pr an ufa odu cts ctu Pe red g tro leu ood s m pro Mi duc sce ts lla ne ou s

6% 5%

12% 9% 8% 7%

According to the French National Institute for Statistics and Economic Studies (INSEE), Spanish subsidiaries: • Employ 3% of the workforce of all foreign-owned companies in France. • Account for 3% of the turnover of all foreign-owned companies in France. • Generate 3% of the export turnover of all foreign-owned companies in France.

11% 7%

10%

12%

17% 15% 8%

CONTRIBUTION OF SPANISH SUBSIDIARIES IN FRANCE

Spain's share of total French exports in the sector Sector's share of all French exports to Spain

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR SPANISH SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Spain

27%

Germany

19%

United Kingdom

11%

Italy

Belgium

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE SPANISH EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

FERROPEM

Manufacture of other inorganic basic chemicals

N/A

ACIÉRIE DE L’ATLANTIQUE (ADA) (CELSA FRANCE)

Manufacture of basic iron and steel and of ferro-alloys

>90%

PANZANI (EBRO FOODS)

Manufacture of macaroni, noodles, couscous and similar farinaceous products

<50%

INTERFORUM

Wholesale of other household goods

N/A

SOFEDIT (GESTAMP)

Cutting, pressing

N/A

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 195

CHAP. 8 / FRENCH EXPORTS OVERVIEW

SWITZERLAND FRENCH EXPORTS TO SWITZERLAND

FRENCH EXPORTS (2016)

In 2016, 39,250 companies exported to Switzerland from France. The value of their exports was €15.3 billion (3.5% of all French exports). As in 2015, French exports to Switzerland grew considerably (+10.8%), boosted by the rising value of the Swiss franc against the euro. Switzerland remained France’s ninth largest customer in 2016. France’s export market share in Switzerland was 6.2% in 2015, higher than its share in global goods exports (3.1%).1 According to initial estimates based on Swiss statistics, France was Switzerland’s fifth largest supplier in 2016, after Germany, the United Kingdom, the United States and Italy. [Fig. 1]

39,255 French companies exported to Switzerland €15.3 billion in French goods exports to Switzerland +10.8% growth in French exports to Switzerland 3.5% of all French exports Ninth largest customer for French exports FRENCH IMPORTS (2016)

€14.0 billion in Swiss goods imports to France -1.1% growth in Swiss imports to France 2.8% of all French imports Ninth largest supplier of French imports

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO SWITZERLAND

CONTRIBUTION OF SWISS SUBSIDIARIES IN FRANCE

606 Swiss exporting companies in France (2015) 29.5% average export ratio of Swiss exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to Switzerland (€ billion; percentage of total French exports)

15.3

14 12

13.2 12.0 10.5

13.7

13.1

12.9

13.8

7% 6%

11.4 10.1

The defining feature of French exports to Switzerland is the predominance of the jewelry sector, which accounted for 15.4% of total sales in 2016, followed by capital goods (13%) and transport equipment (11%). Rising sales of pharmaceuticals (+22%), transport equipment (+56%) and metal products (+12%) fueled much of the growth in French exports to Switzerland in 2016, while jewelry sales remained steady. Another unique characteristic of the Swiss market is the importance of art and antiques (counted under ‘Miscellaneous’ exports), which accounted for seven percent of French exports to Switzerland in 2016, compared with two percent in 2015. Half of all French exports of art, antiques and collector’s items in 2016 went to Switzerland. [Fig. 2]

2007

2008

2009

2010

2011

2012

2013

2014

Switzerland’s share of total French exports Value of French exports to Switzerland

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

196 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

CONTRIBUTION OF SWISS SUBSIDIARIES IN FRANCE

FIG. 2 Sector-by-sector breakdown of French exports to Switzerland (2016)

In 2015, 606 Swiss subsidiaries in France exported part of their output. Together, these exports amounted to €20.7 billion and accounted, on average, for 29.5% of total company turnover. Germany, Switzerland and the United Kingdom were the main export destinations for these firms.

32%

35% 30% 25%

According to the French National Institute for Statistics and Economic Studies (INSEE), Swiss subsidiaries: • Employ 8% of the workforce of all foreign-owned companies in France. • Account for 8% of the turnover of all foreign-owned companies in France. • Generate 8% of the export turnover of all foreign-owned companies in France.

15%

19%

20% 19%

13% 11%

go od s pit al Tra g nsp oo ds ort 2% eq Ch uip em me ica nt ls, Misc 2% e pe rfu llane Fo m od es, ous (in clu cosm din e g b tics 2% eve r a Ph arm ges) 2% ac e Me utica ls 4% tal p Tex rodu cts tile s, 3% Pe tro Rubb clot hin leu er g 4% m, an dp na tur las al ti g as, cs 3% Ag ric mi ult ura ning 8% lp P W etrol rodu oo d a eum cts 4% pr nd pa oduc pe r p ts 5% rod uc ts 3%

10%

ufa

ctu

red

Switzerland's share of total French exports in the sector Sector's share of all French exports to Switzerland

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR SWISS SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Germany

21%

Switzerland

12%

United Kingdom

12%

Italy

10%

Netherlands

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE SWISS EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

CARTIER JOAILLERIE INTERNATIONAL (RICHEMONT SA)

Manufacture of jewelry and related articles

>90%

SOCIÉTÉ D’AFFRÈTEMENT ET DE TRANSIT

Chartering and transportation organization

N/A

LGI – LUXURY GOODS INTERNATIONAL

Retail of luxury goods

N/A

SYNGENTA

Seeds and plant health products

NESTLÉ/NESPRESSO

Manufacture of cocoa, chocolate and sugar confectionery

50%-70% <50%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 197

CHAP. 8 / FRENCH EXPORTS OVERVIEW

UNITED KINGDOM FRENCH EXPORTS TO THE UNITED KINGDOM

FRENCH EXPORTS (2016)

In 2016, 30,660 companies exported to the United Kingdom from France. The value of their exports was €31.2 billion (7.1% of all French exports). Against a backdrop of moderate growth in the British market (+1.8% in 2016), French exports to the United Kingdom declined slightly (-1.2%). The United Kingdom’s share of total French exports remained steady at 7.1%, making the country France’s fifth largest customer in 2016, after Germany (16%), Spain (7.5%), the United States (7.4%), and Italy (7.3%). The United Kingdom was the recipient of 12% of French exports to European Union countries. France’s export market share in the United Kingdom was 5.6% in 2015, higher than its share in global goods exports (3.1%). According to initial estimates based on British statistics, France was the United Kingdom’s fifth largest supplier in 2016, after Germany, the United States, China and the Netherlands. [Fig. 1]

30,660 French companies exported to the United Kingdom €31.2 billion in French goods exports to the United Kingdom -1.2% growth in French exports to the United Kingdom 7.1% of all French exports Fifth largest customer for French exports FRENCH IMPORTS (2016)

€19.6 billion in British goods imports to France +0.1% growth in British imports to France 3.9% of all French imports Eighth largest supplier of French imports CONTRIBUTION OF BRITISH SUBSIDIARIES IN FRANCE

498 British exporting companies in France (2015) 21% average export ratio of British exporting companies in France (export turnover as a proportion of total turnover)

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO THE UNITED KINGDOM

FIG. 1 French exports to the United Kingdom (€ billion; percentage of total French exports)

10%

40 35

33.2

32.0

24.5

26.3

27.9

29.3

29.5

30.4

31.6

31.2

7% 6% 5%

2007

2008

2009

2010

2011

2012

2013

2014

The United Kingdom’s share of total French exports Value of French exports to the United Kingdom

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

198 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

Four sectors accounted for two-thirds of French exports to the United Kingdom in 2016: transport equipment (20%), capital goods (17%), food (15%) and chemicals and perfumes (13%). Sales of transport equipment (+2.1%) and textiles and clothing (+9.3%) were once again buoyant in 2016, while sales of pharmaceuticals remained stable. Exports of petroleum products to the United Kingdom rose sharply (+26%), bucking the global downward trend in the sector’s exports caused by falling oil prices. Conversely, exports of machinery and electrical equipment (-3.9%), food (-4%) and chemicals (-2%) declined in 2016. The United Kingdom stood out as an important export outlet for the food sector, which sold 10% of its exports to British customers. [Fig. 2]

FIG. 2 Sector-by-sector breakdown of French exports to the United Kingdom (2016)

In 2015, nearly 500 British subsidiaries in France exported part of their output. Together, these exports amounted to €12.4 billion and accounted, on average, for 21% of total company turnover. From France, these firms exported mainly to Germany (17%) and Belgium (12%). Only nine percent of their exports went to their source country, the United Kingdom.

25% 20%

20% 17% 15%

According to the French National Institute for Statistics and Economic Studies (INSEE), British subsidiaries: • Employ 9% of the workforce of all foreign-owned companies in France. • Account for 10% of the turnover of all foreign-owned companies in France. • Generate 6% of the export turnover of all foreign-owned companies in France.

5% 2%

Tra nsp o

rt e qu ipm en C t ap od ita (in lg clu Ch oo din em ds ica gb ls, eve pe rag r fu es) me s, co s m Tex Ot eti he r m tiles, cs clo an u fa thi ng ctu r ed g Ph o o arm ds a Ru bb ceut ica er l an dp s W Me lastic oo s tal da pr nd pa oduc Ag per p ts ric rod ult ura ucts lp Pe P r e tro od leu trole uc ts u m, na m pr tur od al uc ts ga s, m Mi inin g sc e lla ne ou s

8% 6%

6% 6%

11% 6%

10%

13% 8%

10%

15%

CONTRIBUTION OF BRITISH SUBSIDIARIES IN FRANCE

The United Kingdom's share of total French exports in the sector Sector's share of all French exports to the United Kingdom

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR BRITISH SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Germany

17%

Belgium

12%

United Kingdom

Spain

United States

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE BRITISH EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

GLAXOSMITHKLINE TRADING SERVICES LTD.

Pharmaceutical products

N/A

ASTRAZENECA DUNKERQUE PRODUCTION

Manufacture of other inorganic basic chemicals

>90%

PETROINEOS MANUFACTURING FRANCE SAS

Manufacture of refined petroleum products

50%-70%

GLENCORE AGRICULTURE FRANCE

Wholesale of grain, seeds and animal feeds

50%-70%

DELPHI FRANCE SAS

Manufacture of engines and turbines, except aircraft, vehicle and cycle engines

<50%

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 199

CHAP. 8 / FRENCH EXPORTS OVERVIEW

UNITED STATES FRENCH EXPORTS TO THE UNITED STATES

FRENCH EXPORTS (2016)

In 2016, 23,655 companies exported to the United States from France. The value of their exports was €32.7 billion (7.4% of all French exports). Swift growth had seen French exports to the United States hit record levels in 2015, and those levels were maintained in 2016, with exports rising 0.2%. Buoyant French exports to Spain pushed the United States down from second to third in the list of France’s largest export customers in 2016. France’s export market share in the United States was 1.7% in 2015, lower than its share in global goods exports (3.1%).1 According to initial estimates based on American statistics, France was the United States’ eighth largest supplier in 2016 – as it had been in 2015 – and its third largest in Europe. [Fig. 1]

23,655 French companies exported to the United States €32.7 billion in French goods exports to the United States +0.2% growth in French exports to the United States 7.4% of all French exports Third largest customer for French exports FRENCH IMPORTS (2016)

€36 billion in American goods imports to France +2.8% growth in American imports to France 7.1% of all French imports Fourth largest supplier of French imports CONTRIBUTION OF AMERICAN SUBSIDIARIES IN FRANCE

1,328 American exporting companies in France (2015) 27% average export ratio of American exporting companies in France (export turnover as a proportion of total turnover)

FIG. 1 French exports to the United States (€ billion; percentage of total French exports)

32.6

30 25

25.0

26.5 24.0

22.1

32.7

12%

27.4

26.9

10%

23.4

19.7

14%

2% 0%

2007

2008

2009

2010

2011

2012

2013

2014

The United States’ share of total French exports Value of French exports to the United States

Source: French Customs Authorities, gross estimates, FOB, excluding military equipment

200 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2015

2016

SECTOR-BY-SECTOR BREAKDOWN OF FRENCH EXPORTS TO THE UNITED STATES Five sectors accounted for more than threequarters of French exports to the United States in 2016: transport equipment (30%), capital goods (18%), food (12%), chemicals (10%) and pharmaceuticals (9%). Exports of food (+8.7%), chemicals (+6.7%), pharmaceuticals (+7.1%) and agricultural products (+17.9%) remained buoyant in 2016, although growth was slower than the previous year. Conversely, sales of industrial machinery ( 7.3%), metal products (-16.8%), and rubbers and plastics (-3%) waned in 2016, while sales of transport equipment remained stable (due to declining sales in the aerospace sector). In line with the national trend, energy exports (petroleum and natural gas) were down. The United States constituted a particularly important market for exporters of pharmaceuticals and transport equipment, which sold more than nine percent of their exports to American customers. [Fig. 2] 1 France’s market share expresses its goods exports to any one country as a proportion of global goods exports to that country (in US$). Market shares are calculated based on data from the IMF DOTS database.

FIG. 2 Sector-by-sector breakdown of French exports to the United States (2016)

In 2015, 1,328 American subsidiaries in France exported part of their output. Together, these exports amounted to €45 billion and accounted, on average, for 27% of total company turnover. The firms’ main target market was Germany, which received 17% of the exports of American subsidiaries established in France, followed by their source country, the United States, with 12%.

30% 30% 25% 18%

qu ipm en C t ap od 9% ita (in lg clu Ch oo din em d s ica gb 7% l s, eve pe rag r fu es) me s, 9% co Ph smet arm ics 7% ac Tex eutic als tile s, 9% cl Ot M othi he r m etal ng 5% p an ufa rodu cts ctu r 4% Ru e bb d go er an ods 8% d Pe tro plas tics l eu m 6% pro W Mi ducts oo sc da 8% nd ellan eo pa u p s er A 12% Pe tro gricu prod l eu l u m, tural cts 5% pro na tur du al ga cts s, 1% mi nin g

20% 15%

12%

10%

Tra nsp o

rt e

According to the French National Institute for Statistics and Economic Studies (INSEE), American subsidiaries: • Employ 22% of the workforce of all foreign-owned companies in France. • Account for 25% of the turnover of all foreign-owned companies in France. • Generate 29% of the export turnover of all foreign-owned companies in France.

CONTRIBUTION OF AMERICAN SUBSIDIARIES IN FRANCE

The United States' share of total French exports in the sector Sector's share of all French exports to the United States

Source: French Customs Authorities, gross figures, FOB, excluding military equipment

MAIN EXPORT DESTINATIONS FOR AMERICAN SUBSIDIARIES ESTABLISHED IN FRANCE (2015) Destination country

Share of exports

Germany

17%

United States

12%

United Kingdom

Italy

Belgium

Source: French Customs Authorities; French Treasury Directorate calculations

TOP FIVE AMERICAN EXPORTERS IN FRANCE (2015) Share of export turnover

French subsidiary

Economic activity

LILLY FRANCE

Manufacture of pharmaceutical preparations

ESSO SOCIÉTÉ ANONYME FRANÇAISE

Manufacture of refined petroleum products

<50%

LABORATOIRES MERCK SHARP & DOHME CHIBRET

Manufacture of pharmaceutical preparations

>90%

GE MEDICAL SYSTEMS

Manufacture of medical equipment

AMAZON EU SARL

Retail sale via home-shopping by specialized catalogue

70%-90%

70%-90% N/A

Sources: French Customs Authorities ranking of exporting companies

2016 ANNUAL REPORT - BUSINESS FRANCE / 201

CHAP. 8 / FRENCH EXPORTS OVERVIEW

They export from

FRANCE

DEUERER PET CARE FRANCE PET FOOD

Based in Villeneuve-sur-Lot in the Nouvelle Aquitaine region, Deuerer Pet Care France is the French subsidiary of German family business Deuerer. It specializes in producing canned food for dogs and cats, with exports already accounting for 50% of its turnover. In 2016, the firm announced fresh investment in its French production facilities with a view to making premium products for new export markets.

LANXESS CHEMICALS, RUBBER

Arlanxeo Emulsion Rubber France, owned by German chemicals group Lanxess, has an industrial facility near Strasbourg (Grand Est region) specializing in nitrile butadiene rubber (NBR), a synthetic rubber used in cables, seals, pipes, brake discs and safety shoes, among other applications. The La Wantzenau plant has a 300-strong workforce and sells its products to 600 customers in 70 countries. The site also houses an NBR research and development center.

AGFA-GEVAERT IMAGING PRODUCTS

Belgian image processing specialist Agfa-Gevaert has a sales office in the Paris region and a production facility near Lille (Hauts de France region), whose workforce of nearly 230 produces printing plates for the global market. Exports accounted for more than 90% of the French subsidiary’s turnover in 2015.

SOLVAY CHEMICALS

France is the most important industrial base in Europe for Belgian chemicals firm Solvay. The Solvay group doubled in size with its 2011 acquisition of French company Rhodia, expanding its horizons and its customer portfolio in the process. With 6,000 employees across 14 production sites, the group exports nearly 70% of its French output, and generated turnover of €820 million in France in 2015. Solvay also has six R&D centers in France.

CORIOLIS ROBOTICS AND SOFTWARE

Coriolis develops robots and software for fiber placement in composite materials. Established in

202 / 2016 ANNUAL REPORT - BUSINESS FRANCE

2001 and based in Quéven in the Bretagne (Brittany) region, the Coriolis group has around 110 employees, generating €19 million in turnover in 2015, 57% of it from exports. The company has filed around fifty patents, and already has operations in Germany, the United Kingdom and Canada, developing in other countries via partners such as ATEQ in China. To step up its presence in the Chinese market, Coriolis has negotiated two contracts with aircraft manufacturers COMAC (Commercial Aircraft Corporation of China) and AVIC (Aviation Industry Corporation of China).

PIKOLIN BEDDING

Cofel, the French subsidiary of Spanish bedding and mattress specialist Pikolin, has five plants in France, with a combined workforce of 950. In late 2016, Cofel set up a new mattress plant for the Epéda brand in Criquebeufsur-Seine, Normandie. The plant will produce goods for export as well as for the French market, as the group seeks to expand its as yet limited export operations. It is primarily targeting countries surrounding France – Belgium, Germany, Switzerland and Austria – and aims to generate 20% of its turnover from exports.

ARDAMEZ MANUFACTURER OF HIGH-END FURNITURE

Founded in 2011 and based near Nantes (Pays de la Loire region), Ardamez makes high-end furniture for cafés, hotels and restaurants. The company employs around ten people and generates 60% of its turnover from exports, chiefly through its flagship product, the iconic Parisian bistro table. Ardamez has prestigious customers in nearly 50 countries, and exhibited its products in 2016 at WantedDesign in New York.

VIDCOIN MOBILE VIDEO ADVERTISING SOLUTION

Vidcoin offers a zero-latency solution for mobile video advertising. Founded in 2013 in Lyon (AuvergneRhône-Alpes region) the company has around ten employees and is already generating turnover in excess of €1 million, almost 70% of it from exports. In a bid to tap into the American market, the three co-founders took part in the Ubi i/o accelerator program (renamed Impact in 2017), meeting leading players in the sector and signing four contracts during their trip. The company is planning to open a New York office in 2017.

FERRERO AGRI-FOOD

This Italian firm has had a base in Rouen (Normandie region) since 1959 and now employs 1,200 people in France, 750 of them in Normandie. Ferrero France’s growth is founded on constant investment in all of its production facilities, totaling more than €40 million since 2013. Its Villers-Ecalles site in the same region, which produces Nutella and Kinder Bueno, exports one-third of its output to European Union countries, and is the largest Nutella plant in the world.

EPTA REFRIGERATION SYSTEMS

EPTA is a Milan-based firm offering a range of commercial refrigeration solutions, primarily for large retailers. It has two production facilities in France, in Saint-Quentin-Fallavier (Auvergne-Rhône-Alpes region) and Hendaye (Nouvelle Aquitaine region), with the Hendaye site also housing the head office of the French subsidiary. In 2015, EPTA France’s foreign sales amounted to €42 million (22% of total turnover).

SHISEIDO PERFUMES, COSMETICS

Founded in 1872, Japanese luxury cosmetics and skincare firm Shiseido chose Paris as the location for its European headquarters as it seeks to grow its business in Europe. Both of the group’s European production facilities are located in France, in Ormes and Gien (Centre-Val de Loire region). The Gien site also houses an innovation center. Exports accounted for 80% of Shiseido’s turnover in 2015.

(Hauts de France region), was acquired by Dutch metallurgy specialist AMG in 2007. The firm posted turnover of more than €75 million in 2015, nearly 80% of that figure coming from exports.

MANUT LM MACHINERY

Based near Nantes (Pays de la Loire region), Manut LM designs manual load-handling assistance solutions (manipulators and lifting devices), aimed primarily at the construction, chemicals, wood and food sectors. The company has a strong international footprint, particularly in Europe and Asia, and has recently moved into the UK market, securing a partnership deal with British reseller Scott+Sargeant Woodworking Machinery after exhibiting its products at a Birmingham trade show.

TRIUMPH INTERNATIONAL LINGERIE

Swiss-based lingerie and swimwear specialist Triumph International has built its development in France around its site in Obernai (Grand Est region), which has now become a European distribution center, offering logistics and services in addition to its longstanding production operations. Exports accounted for 70% of the French subsidiary’s turnover in 2015.

SANDEN HEATING AND COOLING TECHNOLOGIES

Japanese automobile air conditioning specialist Sanden has around 1,000 employees in France, chiefly at its site in Rennes in the Bretagne (Brittany) region, which exports 90% of its output. In 2014, a new entity was established at the Rennes site to step up growth in Sanden’s heat-pump sales in Europe, the Middle East and Africa.

ADVANCED METALLURGICAL GROUP MANUFACTURE OF BASIC METALS

The antimony trioxide manufacturer SICA (Société industrielle chimique de l’Aisne), based in Chauny

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APPENDICES 206 JOB-CREATING PHYSICAL INVESTMENT SELECTION CRITERIA 209 BUSINESS FRANCE

CHAP. 9 / APPENDICES

JOB-CREATING PHYSICAL INVESTMENT SELECTION CRITERIA THE ANNUAL REPORT ON FOREIGN INVESTMENT IN FRANCE IS A METHOD FOR ANALYZING FOREIGN INVESTMENT PROJECTS AND THEIR CONTRIBUTION TO THE FRENCH ECONOMY.

stablished in 1993 in partnership with France’s regional economic development agencies, the Annual Report provides a summary of all foreign investment projects creating sustainable employment in France, listing confirmed projects and detailing the number of jobs that each project generates. It provides detailed statistical analysis by business sector, business activity, investment type, source country and host region. Data concerning the amounts involved in specific investment projects are not always made available by companies, and so form no part of the analysis.

COMPANY NATIONALITY Initial analysis of company nationality depends on the location of its registered office, which determines the jurisdiction that applies. This principle is refined by the notion of a company’s genuine registered office under French law, which is established through jurisprudence. This concept involves determining the place where, inter alia, meetings of the company’s

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management bodies are held, strategic decisions are taken, and key contracts are signed. Accordingly, and in line with European Union guidelines, INSEE (the French National Institute for Statistics and Economic Studies) considers that the controlling country of a multinational corporation is defined by the country in which the entity possessing operational control is established and where financial information concerning all of its subsidiaries is usually consolidated. For certain firms, this entity may not necessarily correspond to the head of the group or parent company. Under this definition, the nationality of the firm’s leading shareholders has no bearing on that which is assigned to the firm as a whole. The initial analysis is refined by the notion of control over the activities of the firm’s subsidiaries. The statistical criterion chosen for data collection is majority control (ownership of more than 50% of the firm’s shares with voting rights). It is assumed that share ownership of more than 50% confers genuine control over the firm, even though in certain cases control may be exercised with less than this amount.

JOB NUMBERS The Annual Report is based on the publicly announced number of jobs to be created or maintained over the next three years, which is the approximate time frame that companies use when planning investment.

DATA GATHERING AND VALIDATION Three methods were used to select the projects in the Annual Report: > An analysis of the competitive environment by consulting observatories of globally mobile investment that track public announcements of job-creating foreign investments in France and Europe. > Projects detected by Business France, primarily through its network of international offices. > Data collected by France’s regional economic development agencies for their areas through contact with economic stakeholders and foreign investors. Based on these sources, the Annual Report is compiled using a cross-validation process of each identified project between Business France, France’s regional economic development agencies and other regional partners.

PROJECT COMPLETION RATE Reports and rankings published by investment promotion agencies provide a list of investment decisions (or public announcements for some consultants). Business France conducted a retrospective study in 2010 of projects in the 2007 Annual Report to analyze the impact

of challenging economic conditions on the project completion rate. In the study sample 320 projects), almost 90% of the decisions recorded in 2007 had been executed. The completion rate for takeovers of ailing companies was 98%. Concurrently, the study shows that the distinction of being foreign did not protect companies investing in France against the risks inherent in starting a business and the economic climate. As such, 20% of the investment projects reported in 2007 experienced problems and in some cases ceased trading altogether.

DISPARITIES BETWEEN THE DATA PUBLISHED BY BUSINESS FRANCE, FDI MARKETS AND EY The way in which information is recorded in the Annual Report makes it a uniquely reliable database offering unrivalled coverage of recorded investments compared with publications by private consulting firms, such as IBM/ PLI, fDi Markets and EY. Differences in scope and calculation methods – such as the exclusion of retail outlets, the hotel sector, takeovers of ailing sites and expansions following takeovers – offer a partial explanation of the significant disparities observed between these different data sets. However, beyond such methodological differences, most disparities arise from the fact that numerous investment projects receive no coverage by way of a press article or press release. These projects are not identified by business intelligence tools, but rather by Business France’s overseas offices and regional partners.

THE FOLLOWING ARE NOT INCLUDED IN THE ANNUAL REPORT: > Temporary or seasonal jobs. > Jobs transferred to another location when a company relocates within France as a result of reorganizing, regrouping or restructuring its business activities. > Diplomatic missions, unless they are internationally mobile (an international organization’s registered office, for example).

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CHAP. 9 / APPENDICES

CLASSIFICATIONS USED IN THE ANNUAL REPORT The classifications used are designed to reflect the characteristics of the international investment market. The classification by business sector is based on a 26-item classification compatible with that used by the French National Institute for Statistics and Economic Studies INSEE (NAF 700, revision 2), but which has been adapted to the specificities of the international investment market. Projects are categorized according to the type of goods or services that they contribute to designing, producing or distributing. These classifications evolve over time to take new market trends into account.

Agri-food, agriculture and fishing

Textiles, industrial textiles, clothing and accessories

Pharmaceuticals and biotechnologies

Perfumes, cosmetics

Furnishings, household goods

Consumer electronics

Automotive industry

Aerospace, naval and railway equipment

Machinery and mechanical equipment

In order to operate effectively, companies rely on various types of business activity. Aside from production/manufacturing are tertiary activities such as business services and consumer services, logistics, retail outlets, headquarters, decision-making centers, and R&D, engineering and design. A specific index is used in the report to categorize projects by the business activity they fulfill.

PROJECT BUSINESS ACTIVITY

CLASSIFICATION BY BUSINESS SECTOR 1

PROJECT BUSINESS ACTIVITY

R&D, engineering, design

Site whose purpose is to advance scientific knowledge, perfect or apply new technologies or products.

Decision-making centers

First-time investments in France and French headquarters.

Headquarters

Global or European Headquarters. An autonomous site that is responsible for ensuring administrative support activities within the company (human resources, accounting, etc.).

Production / Manufacturing

Site which combines human resources, capital, goods and services to manufacture goods or provide services.

Logistics

Site which contributes to the delivery and storage of goods.

Business services

Site whose purpose is to provide market services to businesses (consulting, marketing, banking services, data centers, etc.)

Consumer services

Site whose main purpose is to sell products and services to consumers (hotels, banking services).

Retail outlets

All sites where goods are sold.

10 Electronic components 11 Electrical, electronic, IT equipment 12 Medical/surgical equipment and devices 13 Glass, ceramics, minerals, wood, paper 14 Chemicals, plastics 15 Metals, metalworking 16 Transport, storage 17 Construction, building materials 18 Telecoms, internet service providers 19 Software and IT services 20 Consulting, engineering and business services 21 Energy, recycling, other concessions 22 Hotels, tourism and restaurants 23 Financial services, banking and insurance 24 Commerce and retail 25 Media, publishing 26 Other services

PRODUCING THE ANNUAL REPORT SOURCES > Business France offices > Regional economic development agencies > France Observatory

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CROSS-VALIDATION OF DATA Data processed: > Verification that project meets the Report’s criteria > Additional information for some projects

ANNUAL REPORT Regional economic development agencies and Business France validate projects

BUSINESS FRANCE CONNECT – FAST-TRACK – SUCCEED

usiness France supports the international development of the French economy, advancing and promoting business throughout France, and by French companies abroad. It is a key player in fostering competitiveness, growth and employment in France, offering clear and efficient access to all corporate development stakeholders and services for all companies, irrespective of their size, sector and nationality. From exports to investments through to multinational partnerships, from identifying contacts and making connections to providing peace of mind, Business France supports French and multinational companies throughout the lifetime of their projects, and is driven by an efficient, result-oriented working culture. Thanks to its extensive network and dynamic team of 1,500 professionals, both in France and in 70 countries throughout the world, Business France is involved not only in getting projects off the ground but also in following up and ensuring their long-term success.

With specialisms in different areas of expertise and business sectors, Business France personnel are highly committed and passionate about their work, serving not only individual companies but France as a whole. “Founded to serve companies and the nation as a whole, Business France sends out a loud, clear message about the open nature of the French economy. Our agency operates where it counts, pulling out all the stops for businesses to grow and succeed, both in France and abroad.” Muriel Pénicaud, Ambassador for International Investment, CEO of Business France.

OUR MISSIONS: >  Supporting the international development of businesses set up in France – mid-size companies and SMEs in particular – and their exports to foreign markets. >  Promoting and facilitating foreign investment in France. >  Promoting France’s companies, business image and nationwide attractiveness as an investment location. >  Running, promoting and developing the VIE international internship program, thereby enhancing the training received by young French professionals through international experience.

OUR COMMITMENT: Being able to count on the people supporting and guiding you on the ground to bring your plans to fruition is key to the success of any project. This is the role played by Business France, whose personnel will do all they can to help make your ideas reality. Business France provides end-to-end support and can stand by you every step of the way, offering legal and tax advice, help with administrative formalities, and guidance in choosing a market or investment location. Business France and its partners have a wide array of resources at their disposal. We can provide you with a dedicated team to harness all the necessary expertise and solutions to build your international projects stage by stage and oversee their development in the long term.

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CHAP. 9 / APPENDICES

Standing firmly by your side, Business France’s comprehensive network, spanning 70 of the world’s largest countries, can get to the heart of your requirements. You can also depend on a focused personal contact among the personnel who staff Business France’s 92 offices worldwide.

OUR PRIORITY: Simplifying and fast-tracking project delivery Business France offers a holistic approach to your international business project, from decision-making and market analysis to successful completion. Business France can provide advice in line with your project’s strategic, sector-based and human specificities. Business France is ready to be your partner of choice, an interface for all the data you need to deliver your project. From the moment you first make contact, you can ask Business France to serve as your single port of call.

Calling upon Business France gives you access to: >  The number one provider of customized services for French and foreign businesses, supporting them and the success of their international projects from start to finish. >  Objective and detailed market analysis, macroeconomic analysis, benchmarks, observatories, maps, etc. We provide you with all the tools you need to make the best choice. >  S upport and expertise from a partner network of international development experts and a fully-fledged community of stakeholders, including chambers of commerce in France and abroad, Bpifrance, Coface and France’s foreign trade advisors (CCEF), as well as banks, auditing firms, expert consultants, transport companies, lawyers, etc.

OUR VALUES:

> Proximity > Efficiency > Pride

THE EXPORT OVERVIEWS were written with assistance from the French Treasury Directorate (DG Trésor), which advises on and oversees French economic policy under the authority of

the Minister for the Economy and Finance. It also promotes French policy in Europe and throughout the world. The Treasury Directorate lends its expertise in matters relating to forecasting and consulting, regulation, international negotiations, developmental aid, export assistance and foreign investment. It oversees the French government’s accounts and debt management through the French Treasury Agency (Agence France Trésor – AFT) and monitors government shareholder interests through the Government Shareholding Agency (Agence des participations de l’État – APE). For further information, please visit www.economie.gouv.fr

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Publication Director: Muriel PĂŠnicaud, CEO Chief Editors: Sylvie Montout (Senior Economist), Fany Robin (Economist) Contributors: Romain Guillard, Yann Letessier Editorial coordination: Promotion and Communications Division English Language Editor: David Williams Designed and produced by:

agence@spherepublique.com â&#x20AC;&#x201C; March 2017

Printed in March 2017, by ISI Print, 93210 Saint-Denis, France

Business France is the national agency supporting the international development of the French economy, responsible for fostering export growth by French businesses, as well as promoting and facilitating international investment in France. It promotes France’s companies, business image and nationwide attractiveness as an investment location, and also runs the VIE international internship program. Founded on January 1, 2015 through a merger between UBIFRANCE and the Invest in France Agency, Business France has 1,500 personnel, both in France and in 70 countries throughout the world, who work with a network of public- and private-sector partners. CONNECT – FAST-TRACK – SUCCEED For further information, please visit: www.businessfrance.fr

Business France 77, boulevard Saint-Jacques 75680 Paris Cedex 14 Tel.: +33 1 40 73 30 00