When one EU door closes, another porte opens
France sells itself to SA firms as a new gateway to Europe in the age of Brexit
FRANCE has seized the opportunity presented by the UK’s Brexit vote to redirect companies doing business in Europe to its door.
The wooing has intensified and, besides trade and investment discussions, the French have tossed in opportunities to assist South African companies aiming for business not only in Europe but also in the Francophone regions of Africa, where the language barrier has been a great obstacle.
For the longest time, the UK has been the point of entry for South African businesses scouting for opportunities in Europe; at least 200 local companies have branches in the UK.
Of the 20 000 foreign companies operating in France, fewer than 0.1% are South African.
“This has to change,” said Muriel Pénicaud, CEO of Business France and France’s ambassador for international investment.
While South Africa can boast only 20 firms on French soil, of the top 40 companies listed in France, 29 have subsidiaries in South Africa. These include petroleum brand Total.
French brands are well known in South Africa and include vehicle manufacturers Citroën and Peugeot, transportation technology company Alstom, food producer Danone and cosmetics line L’Oréal, to name a few. Areva supplies nuclear fuel to South Africa’s only nuclear power station, Koeberg.
Last year, Pénicaud and her team helped 30 French entrepreneurs land in South Africa. Over the past two years interest from French companies looking to invest in South Africa has increased drastically.
More than 300 French firms do busiand ness in South Africa. “But we really want to do the opposite,” Pénicaud told Business Times between trade meetings in South Africa this month to show off France as an investment destination.
By July this year, when President Jacob Zuma and France’s Francois Hollande met, two-way trade stood at R33-billion in favour of France.
The countries have been great allies in COP 21 climate-change discussions the fact that South Africa has been very engaged in that “is part of putting South Africa on the table”, Pénicaud said.
Official visits between the heads of state have been regular over the past two decades and it was to France that former president Nelson Mandela first travelled after his release from prison in 1990.
This year, agreements were signed for collaboration between the countries on agriculture, maritime matters, higher education and arts and culture. The French technology hub in Cape Town, launched this year and one of 10 globally, promotes innovation and collaboration between start-ups from the two nations.
The embassy has also been encouraging French language lessons for South African business people and has been supporting discussions on investing in Francophone Africa.
Pénicaud has met with the Black Business Council to reinforce partnerships for small business.
The French island of Reunion has considerable expertise in applying information technology to health issues, and could advise South Africa on national health insurance. Tourism is another area for collaboration.
French business is shaking off its wary, conservative EU mindset. It ranks South Africa among countries in the world that are stable politically and economically despite recent domestic issues and anaemic economic growth.
“We think in the long term the fundamentals are very high,” said Pénicaud.
Since the UK’s June Brexit referendum, discussions with South African companies about investing in France have intensified, including with those firms based in the UK, she said.
France has been trending as a research and development destination for giants such as Facebook, Microsoft, Samsung, Cisco and SAP, taking advantage of a tax credit covering 30% of R&D costs. Another successful credit is the competitiveness and employment incentive, which reduces the tax burden for firms creating significant employment at the low wage level.
“France is the door to Europe for South African companies,” said Pénicaud. SYMBOLIC GESTURE: The Eiffel Tower in Paris is illuminated with the colours of South Africa’s flag in 2013 to launch South African Season in France
The embassy has also been encouraging French language lessons