French 'emerging market' beckons

 

WHEN MIKE Stack wants to explain how Ireland and France do business differently, he sketches a sales scenario. “If we were to sell a sewage treatment system to a builder in Ireland, he would buy it off us, he’d stick it into the ground and he’d plug it in,” he explains. “That would be it.

“If it was a French builder, he would take the manual and he would read it from front to back first. If there was something in the manual that didn’t read right, he would phone you and let you know about it.”

Stack has grown to respect such thoroughness since his clean-tech company, Killarney Plastics, entered the market in France last year. Having seen sales fall off in Ireland with the end of the building boom, the company – which employs 260 people – moved to make up the business farther afield.

It was already established in the UK, but this week, at a ceremony attended by Ireland’s Ambassador to France, Paul Kavanagh, Killarney Plastics officially opened a factory in the western city of Poitiers, the base for its first foray into France.

It plans to ship its high-quality plastic sewage treatment systems to France in flatpack, assemble them in Poitiers and distribute them through a network of partners across the country.

With the help of Enterprise Ireland and its own newly hired French-speaking staff, the company has already taken a foothold in the market, and Stack is excited about the venture.

“When you look at it, in a country with a population of 65 million, the possibilities are huge,” he says.

As policymakers and business leaders in Ireland spend more time trying to figure out ways of exploiting emerging markets such as China and Brazil, companies such as Killarney Plastics are proof of the huge untapped potential much closer to home.

France is Ireland’s fourth-largest trading partner, the destination for €700 million worth of Irish exports last year. But despite long-established connections and relatively easy access, it accounts for just 5 per cent of Ireland’s total outward trade.

The relationship is dwarfed by the UK, Ireland’s biggest market, which is worth about €5.5 billion each year to the Irish economy.

Gary Fallon, manager of the Enterprise Ireland office in Paris, says there is a “massive opportunity” in France for Irish companies that have the discipline and patience to establish themselves there.

Traditionally, when Irish small and medium-sized enterprises (SMEs) decide to export, they choose the UK, the Netherlands or the Scandinavian states, where English is widely spoken and the business culture is relatively similar to Ireland’s.

In France, Fallon says, becoming established takes longer but the payoff is more loyalty and long-term stability. “Once you have jumped through the hoops, you’re an approved supplier and they will not turf out an existing supplier unless there is a really compelling reason. It’s too much work.”

“Relationships are very important in France,” says Liam Kelly, chief executive of Nualight, which specialises in LED lighting for food retail displays.

“They’re important in the UK as well, but it probably doesn’t take as long to build them up.”

Exports account for 95 per cent of Nualight’s business, and it has been working successfully with major French retail chains for the past year.

The reward for Irish exporters in France is a market that is bigger and more diversified than the UK, and one whose relatively weak SME sector gives savvy Irish operators an advantage.

And the myth that the French give preference to French suppliers is no more than that, Fallon says.

For the notoriously monoglot Irish, there is, of course, a language barrier to surmount.

“There are cultural differences here that need to be accommodated,” says Nualight’s Kelly. “You’re not going to be able to develop the business by having English-speaking staff located in Ireland travelling over now and again.”

The language is not an obstacle if a company is serious about making a go of the French market, Fallon adds. “Most of the markets we are trying to do business in speak a different language – look at the Bric [Brazil, Russia, India, China] countries or anywhere in continental Europe.

“But there are ways of bridging it. The key question is: will they put they put the resources into the market so that it can deliver its rewards?”

Those emerging economies will be vital in widening Ireland’s export base and reducing its heavy dependence on the UK. But only a select group of companies are capable of selling into those markets, given distances, scale and import trade policies, for example.

In some respects, Fallon remarks, even France and Germany could be considered emerging markets for Ireland.

“Call them an emerging market if you want – in terms of our market penetration, that’s what they are.”

Award-winning Irish firm making waves in france

AN IRISH company that makes tidal energy technology has won a prize for outstanding achievement at the Ireland-France Business Awards in Paris.

OpenHydro was selected as “the best Irish company in France”, with the judging panel praising its major advances in designing and building seabed turbines that generate renewable energy from tidal streams. The panel said the company showed “how new ideas backed by capital investment can provide revolutionary solutions to the global energy crisis”.

A separate award for “best French company in Ireland” was given to Egis Projects Ireland, an engineering and consulting group which has invested heavily in Ireland’s transport infrastructure. The Irish-based subsidiary of Egis Projects, a French multinational that employs 11,000 people worldwide, accounts for 25 per cent of the mother company’s overall revenue.

Gerry Halpenny, president of the Ireland France Chamber of Commerce, said the entries showed that, despite a difficult economic climate, significant Franco-Irish business opportunities still existed and there was “excellent scope” for further growth.

The annual awards ceremony, organised by the Ireland France Chamber of Commerce and Network Irlande, a French-based group, took place at the Irish Embassy in Paris. It was hosted by Ireland’s Ambassador to France, Paul Kavanagh, and France’s ambassador in Ireland, Emmanuelle d’Achon.