French equipment sector booming on back of exports
processing equipment according to ANVAR, the French agency for
innovation that operates under the aegis of the French Minister of
Finance, Trade and Industry.
And with IPA 2004 coming up in Paris next month, FoodProductionDaily.com decided to take a look at some of the factors driving the food processing equipment market in France.
At present, the country trails Germany, Italy, the United States and the Netherlands in terms of exports. The global market that these countries operate in has become highly concentrated - just 12 countries account for over 85 per cent of the world's exports.
However, global trade has been steadily increasing in the past few years with exports exceeding €6 billion in 2001. This has provided room for expansion for a number of equipment manufacturers.
As a result, France has been able to increase its market share to 6.7 per cent.Last year, 157 companies employing more than 20 people achieved a turnover of nearly €1.7 billion.
And while business slowed down in 2001 and 2002, ANVAR claims that the French equipment manufacturers' situation remains rather good, since the trade balance shows a 150 per cent surplus.
French equipment suppliers are relatively specialised with positive trade balances for bakery-confectionery, wine-making, dairy, brewing and pasta-making equipment. However, meat processing, fruit and vegetable preparation machines, beverage filtration and purification equipment have shown a deficit.
ANVAR thinks that the market has now reached maturity, but remains dynamic in particular due to the regulatory pressure related to safety requirements and due to the search for innovations. However, competition is getting tougher, with major food companies tending to reduce the number of their suppliers and negotiate global contracts for all their factories.
The French food processing industry itself enjoyed a turnover of €136 billion in 2003, up 1.6 per cent from the previous year according to the Association Nationale des Industries Alimentaires (ANIA). It is mostly includes small and medium sized companies, although there is a tendency to concentration: in the 10,841 food companies, 3,600 have a workforce of less than 10 employees.
The leading French groups are: Danone, Lactalis, Pernod-Ricard, Nestlé France and Nestlé Waters, Bongrain and Unilever France. The food industry is the third French exporting sector after the automotive and capital goods industries.
While the meat sector remains the most important one in volume, beverages have registered the strongest growth. In terms of investment prospects the most optimistic sectors are alcoholic drinks, grocery and ready-made meals, followed by bakery-confectionery and dairy products, which are the most innovative.
ANVAR promotes and finances innovation in French industry particularly for SMEs. It has an annual budget of €289 million that is comprised chiefly of state grants and the reimbursement of previous financial assistance.
