TABLE OF CONTENTS APPENDIX B BEST PROSPECTS FOR INDUSTRY, SERVICE AND AGRICULTURAL SECTORS FOR U.S. EXPORTERS TO FRANCE Travel & Tourism . . . . . . . . . . . . . . . . . . . . . .1 Computer Software. . . . . . . . . . . . . . . . . . . . . .2 Industrial Chemicals . . . . . . . . . . . . . . . . . . . .3 Employment Services. . . . . . . . . . . . . . . . . . . . .4 Aircraft and Parts . . . . . . . . . . . . . . . . . . . . .5 Computer and Peripherals . . . . . . . . . . . . . . . . . .6 Security and Safety Equipment. . . . . . . . . . . . . . . .7 Insurance Services . . . . . . . . . . . . . . . . . . . . .8 Electrical Power Systems (SEP) . . . . . . . . . . . . . . .9 Operation/Maintenance Services . . . . . . . . . . . . . . 10 Electronic Components. . . . . . . . . . . . . . . . . . . 11 Medical Equipment. . . . . . . . . . . . . . . . . . . . . 12 Films, Videos and other Recordings . . . . . . . . . . . . 13 Jewelry. . . . . . . . . . . . . . . . . . . . . . . . . . 14 Defense Industry Equipment . . . . . . . . . . . . . . . . 15 Automotive Parts and Service Equipment . . . . . . . . . . 16 Audio-visual Equipment . . . . . . . . . . . . . . . . . . 17 Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Electronics Industry Production and Test Equipment . . . . 19 Automobiles and Light Trucks . . . . . . . . . . . . . . . 20 Pumps, Valves and Compressors. . . . . . . . . . . . . . . 21 Pollution Control Equipment & Services . . . . . . . . . . 22 Textile Fabrics. . . . . . . . . . . . . . . . . . . . . . 23 Building Products (SEP). . . . . . . . . . . . . . . . . . 24 Plastics Materials and Resins. . . . . . . . . . . . . . . 25 Telecommunications Services. . . . . . . . . . . . . . . . 26 Telecommunications Equipment . . . . . . . . . . . . . . . 27 Construction Equipment . . . . . . . . . . . . . . . . . . 28 Materials Handling Machinery . . . . . . . . . . . . . . . 29 Printing & Graphic Arts. . . . . . . . . . . . . . . . . . 30 Apparel (SEP). . . . . . . . . . . . . . . . . . . . . . . 31 Dental Equipment . . . . . . . . . . . . . . . . . . . . . 32 Agricultural Machinery . . . . . . . . . . . . . . . . . . 33 Non-ferrous Metals . . . . . . . . . . . . . . . . . . . . 34 Food Processing and Packaging Equipment. . . . . . . . . . 35 Household Consumer Goods . . . . . . . . . . . . . . . . . 36 Toys and Games . . . . . . . . . . . . . . . . . . . . . . 37 Books. . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Pleasure Boats and Accessories . . . . . . . . . . . . . . 39 Packaging Materials. . . . . . . . . . . . . . . . . . . . 40 Furniture. . . . . . . . . . . . . . . . . . . . . . . . . 41 Sporting Goods and Recreation Equipment (SEP). . . . . . . 42 Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Biotechnology. . . . . . . . . . . . . . . . . . . . . . . 44 BEST PROSPECTS FOR AGRICULTURAL SECTORS. . . . . . . . .45-46 APPENDIX B BEST PROSPECTS FOR INDUSTRY, SERVICE AND AGRICULTURAL SECTORS FOR U.S. EXPORTERS TO FRANCE (USD millions) A. Rank: 1 B. Name of Sector: TRAVEL & TOURISM C. ITA or PS&D Code: N/A 1993 1994 1995 D. Total Market Size 80,100 81,600 83,600 E. Total French Production 92,800 95,500 98,400 F. Total Exports 25,200 26,900 28,200 G. Total Imports 12,400 13,100 13,800 H. Total Imports from U.S. 2,900 3,2003,400 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French market has doubled since 1982 reaching about 844,000 visitors. Despite problems with the economy - especially an unemployment rate of approximately 12% - we anticipate growth of between five and six percent in 1994. A reassuring fact about the French market is that over the long term, growth has been steady and not subject to major ups and downs. In fact, USTTA's analysis of 15 potential markets ranks France in 5th position, topped only by Japan, Germany, Canada and Mexico. Seventy-seven percent of French travelers to all destinations did not use a travel agent. For travel to the USA, 50% of French travelers use a travel agent. The general perception of travel agents by consumers is that they are good at selling but don't often know much about the destinations they sell. In the general scheme of things, wholesalers and tour operators play less of a market role than elsewhere. An informal survey of French tour operators shows that between 50-70% of the French buy a package such as a plane ticket and one or two products (i.e.,hotel & rental car). Given the French bent for individualism (they spurn group travel unlike the Germans), tour producers ought to concentrate on products with plenty of opportunities for personal freedom to explore and satisfy individual interests. Many French tour operators and wholesalers are beginning to recognize that they can hope to maintain or expand their market share only by adapting their products creatively. That is where U.S. suppliers with innovative offerings should do well. In 1992, 60% of the French took a vacation. Of those, 50% took one, 24% two, and 25% three vacations. Annual paid vacation entitlement is 5 weeks. Even under adverse economic conditions, the French will see to it that they use them. A. Rank: 2 B. Name of Sector: COMPUTER SOFTWARE C. ITA or PS&D Code: CSF 1993 1994 1995 D. Total Market Size 17,279 18,503 20,020 E. Total Local Production 15,379 16,653 18,230 F. Total Exports 3,456 3,700 3,960 G. Total Imports 5,356 5,550 5,750 H. Total Imports from U.S. 2,765 2,775 2,820 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: French companies tend to outsource a greater proportion of software development than other major European countries. This enabled France to become a dominant world player in this field, with over 5,000 software services firms. Furthermore, French firms such as Bull (leading hardware manufacturer) and Cap Gemini Sogeti (leading software and services company) have helped ensure that adequate resources are invested in the software industry. The recent growth of the software industry at the expense of the hardware industry has led major hardware companies such as IBM, DEC, BULL, and UNISYS, to redirect their resources towards the software sector. In addition, an emerging trend for U.S. software firms is to enter into joint-venture agreements with French software services firms. These agreements allow for software package trade-offs and the marketing of products into both U.S. and French markets. In France, subsidiaries of American firms control the packaged software market. As leaders in innovative software, American firms dominate the French market with software products for databases, spreadsheets, utilities, CAD/CAM systems and word processing. In addition, the increasing availability of sophisticated off-the-shelf products as replacements for more expensive custom-made software is shifting the market in this direction. The U.S. technological edge in these areas, coupled with the anticipated growth of the PC software market, should facilitate a continued strong presence in the French market. A. Rank: 3 B. Name of Sector: INDUSTRIAL CHEMICALS C. ITA or PS&D Code: ICH 1993 1994 1995 D. Total Market Size 82,206 92,311 94,158 E. Total Local Production 64,716 65,937 67,225 F. Total Exports 25,886 36,374 26,901 G. Total Imports 21,490 21,192 21,615 H. Total Imports from U.S. 2,072 2,137 2,179 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: With 2 percent growth in production in 1993, the French chemical industry suffered from the current economic slowdown but remained strong in some sectors with healthy growth in sectors such as perfumes, cosmetics, plastics and pharmaceutical and the outlook is promising. 1994 market growth is expected to exceed 2-3 percent. Despite efforts at restructuring, activity remains cyclical and prices continue to be slashed. Environmental concerns are leading to more stringent legislation. In the general recession the demand for base chemicals remained stable with a 0.2 percent increase. On the other hand demand for mineral and organic chemicals have dropped seriously linked to the decrease in associated sectors (automobile, agriculture...) with almost a 7.0 percent decrease. Helped by a small rise in household consumption, the parachemical market registered a 1 percent growth in 1993. Chemicals for the pharmaceutical industry have not been affected by the downturn and show a stabilization of their growth rate around 4 percent. The drop in selling prices being stopped, experts say the industry will now experience an improvement in its profitability. A. Rank: 4 B. Name of sector: EMPLOYMENT SERVICES C. ITA or PS&D code: EMP 1993 1994 1995 D. Total market size 6,530 6,919 7,422 E. Sales by Domestic Firms: 5,332 5,676 5,348 F. Export sales: 695 740 697 G. Sales by Foreign-owned Firms: 1,893 1,983 2,771 H. Sales by U.S.-owned Firms: 1,327 1,400 2,170 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: Unemployment, expected to reach 13 percent this year, will remain a major economic problem in the near future despite the decline of the working population, in particular those under 25 years of age and women. American recruiting firms are mostly in the executive search business of which they represent some 25-30 percent and account for about 43 percent of this subsector's revenues. Of the four top companies in the temporary services subsector, one is American. Access to the French employment services market is relatively easy, as there are no trade barriers and U.S. firms are subject to the same regulations and standards as are local firms. Employment service agencies are changing their marketing strategies to adjust to current economic trends. Outplacement turnaround management and recruiters without boundaries are a few of the innovative areas for old as well as new firms entering the market. The most promising subsectors include industry, with an estimated 1994 market size of $2,903 million, and services, with an estimated 1994 market size of $2,573 million. A. Rank: 5 B. Name of Sector: AIRCRAFT AND PARTS C. ITA or PS&D Code: AIR 1993 1994 1995 D. Total Market Size 24,606 20,151 19,747 E. Total Local Production 16,404 16,075 15,753 F. Total Exports 8,202 8,037 7,876 G. Total Imports 4,160 4,076 3,994 H. Total Imports from U.S. 1,627 1,594 1,562 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: As of July 1993, there were 762 aircraft registered in France from some 128 different airlines, 231 belonging to the Air France Group (170 for Air France and 61 for Air Inter). Industry sources believe that demand for small and medium sized aircraft (12 to 130 passengers) should grow to meet increased demand in this sector. American firms are competitive in this market segment, however, 1994 forecasts for the overall market remain gloomy compared to 1993, with a five percent drop expected. Strategic alliances remain among the best solutions for getting through this stagnant period, which is expected to last until 1996. Commercial satellite launchings represent an average of 21 percent of the general market. Telecommunications applications launchings, which include telephone, images, television, radio and digital data, represent 75 percent of this market. Over the next three years, Arianespace's order books indicate 39 satellites pending launching, for a total of approximately USD 3 billion. World demand is estimated at 70 satellites. Order books already cover 90 percent of launchings for the coming three years with Arianespace (35), General Dynamics (14), McDonnell Douglas (6), Great Wall (China) (5), and Russia (1). Between 23 and 25 satellites will be placed in orbit annually from 1994 to 1996, substantially more than during the past six years. A. Rank: 6 B. Name of Sector: COMPUTER AND PERIPHERALS C. ITA or PS&D Code: CPT 1993 1994 1995 D. Total Market Size 8,147 8,437 8,740 E. Total Local Production 4,725 4,978 5,240 F. Total Exports 407 422 440 G. Total Imports 3,829 3,881 3,940 H. Total Imports from U.S. 1,210 1,254 1,300 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French computer equipment market is the fourth largest in the world and reflects the high priority given by the French government to the computerization of the country's institutions. Worldwide recession affected the French hardware market into early 1994, but some signs of recovery are now evident. Growth of personal computer sales from 1994-1996 are expected to reach 14 percent, with more modest growth anticipated for mid-range and mainframe systems. The six largest suppliers of hardware in France are IBM, BULL, DIGITAL, COMPAQ, ICL and APPLE. Four of these are American. Although large companies still dominate the micro-computer industry, smaller organizations are entering the market through innovative marketing methods such as mail-order and telemarketing. As the unified European market develops, the French computer and peripheral sectors will be increasingly challenged within a larger and more competitive arena. French high-tech companies are already acting to adjust to this imminent change by teaming up with other EU and foreign suppliers in joint ventures, mergers and other collaborative efforts. Changes that are now taking place will pave the way for new industries and blur market boundaries. All this offers exciting business opportunities for American companies in Europe. A. Rank: 7 B. Name of sector: SECURITY AND SAFETY EQUIPMENT C. ITA OR PS&D Code: SEC 1993 1994 1995 D. Total Market Size 5,216 5,373 5,566 E. Total Local Production 4,192 4,288 4,425 F. Total Exports 1,005 1,025 1,054 G. Total Imports 2,029 2,110 2,195 H. Total Imports from U.S. 981 1,018 1,047 I. Exchange rate: USD 1.00 = FF 5.70 Comments: Please note that the statistics for security and safety equipment do not include engineering, audit and technical control. 1994 market estimates show a modest growth over 1993. The rapid growth of this industry in previous years has slowed down due to the economic situation. It is expected, however, that by 1995, business will pick up again and reach an average growth rate of 4.2 percent through 1996. Some sectors, such as access controls, fire security and computer security, which have registered good results, will pursue their upward trend. The security problem is becoming a major national issue. Large investments in security reforms in public places are expected to be made by the Government, particularly in the area of fire security. According to a recent survey conducted for the National Ministry of Education, over 339 French school buildings throughout 73 departments are subject to fire hazards. Fire protection (fire-proof doors), fire detection equipment, extinguishing equipment (extinguishers and sprinklers) and rescue equipment will be in great demand. The demand for access controls is expected to maintain its growth in the coming years. Due to the absence of domestic and foreign competition and to the high degree of sophistication in access controls, American manufacturers are the leaders in this field. A. Rank: 8 B. Name of sector: INSURANCE SERVICES C. ITA or PS&D code: INS 1993 1994 1995 D. Total Market Size 96,200 105,050 114,715 E. Sales by Domestic Firms: 87,800 95,877 104,698 F. Export Sales: 1,160 1,266 1,382 G. Sales by Foreign-owned Firms: 9,560 10,439 11,399 H. Sales by U.S.-owned Firms: 859 I. Exchange rate: USD 1.00 = FF 5.70 Comments: Despite the difficult times in recent years, the French insurance industry has continued its development, with an overall growth rate of 9.2 percent. In particular, investment and pension-based life insurance contracts have continued high growth, making up over 50 percent of total premiums over the last two years. Income from bodily injury insurance, with over 9 percent of total premiums, has also been growing at an average of about 10 percent since 1987. Liability insurance has recently been faced with high losses because of frequency of claims due to natural disasters ( e.g., floods) and damage to property, industry, air and marine claims, and fraud. French insurance remains in fifth position globally after the United States, Japan, the United Kingdom, and Germany, and accounts for 5.7 percent of total premium. UAP and AXA are among the ten leading insurance companies worldwide. U.S. companies in France include Chubb, AIG, CIGNA, and Factory Mutual. The most promising subsectors include investment and premium based life insurance, with an estimated 1994 market size of $32,538, motor insurance, with an estimated 1994 market size of $10,017 million and bodily injury insurance, with an estimated 1994 market size of $6,125 million. A. Rank: 9 B. Name of Sector: ELECTRICAL POWER SYSTEMS (SEP) C. ITA or PS&D Code: EPS 1993 1994 1995 D. Total Market Size 11,000 10,200 9,000 E. Total Local Production 10,400 9,580 8.650 F. Total Exports 6,200 6,100 5,700 G. Total Imports 5,600 5,480 5,350 H. Total Imports from U.S. 960 930 910 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French market for electrical power systems has pursued its downward trend. Electricite de France (EDF) experts believe that it will continue to drop until 1995, as major projects have been already completed or cancelled. However, because of the increased concern and regulation surrounding environmental pollution from power stations, there will be a demand for Flue gas desulphurisation (FGD). Also, concerns over energy conservation and efficiency will lead to greater use of cogeneration systems (gas and steam turbine-driven and reciprocating engine-driven cogeneration systems). However, the strongest increases in cogeneration capacity are expected to occur in Germany and Scandinavia, and the least in France. In addition, the French industry for electrical power systems is largely dominated by EDF and its subsidiaries or partner firms. Because of EDF's near-monopoly, it is very difficult for American companies to penetrate the French market. A. Rank: 10 B. Name of Sector: OPERATION/MAINTENANCE SERVICES C. ITA or PS&D Code: OMS 1993 1994 1995 D. Total Market Size 31,542 32,158 32,802 E. Sales by Domestic Firms 31,200 31,242 31,867 F. Export Sales 1,248 1,250 1,274 G. Sales by Foreign Owned Firms 1,590 1,601 1,634 H. Sales by U.S. owned Firms 620 629 642 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French market for industrial maintenance, which encompasses cleaning, repair and modernization of production equipment, reflects the strength and the versatility of French industry. In 1993, French manufacturers spent approximately 4 percent of their income on maintenance expenses. For 1993, the operation/maintenance services market was valued at USD 32,790 million, with an estimated annual growth rate of 2 percent for 1994. On average, three quarters of the maintenance sales volume corresponds to in-house maintenance (valued at USD 23,500 million for 1993) and the remaining 25 percent is sub-contracted (valued at USD 7,700 million for 1993). Real opportunities based on partnerships or joint-ventures do exist, especially in the fields of after-sales services, facility management, and technical management of civil engineering and in sectors such as agricultural, food, para-chemistry, pharmaceutical, plastics. A. Rank: 11 B. Name of Sector: ELECTRONIC COMPONENTS C. ITA or PS&D Code: ELC 1993 1994 1995 D. Total Market Size 4,750 4,940 5,140 E. Total Local Production 3,780 3,930 4,025 F. Total Exports 3,500 3,640 3,285 G. Total Imports 4,470 4,650 4,850 H. Total Imports from U.S. 570 581 587 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The market figures are based on official trade statistics for electronic components including: capacitors, resistors, printed circuits, tubes, integrated circuits, and micro-assemblies. They do not include switchgear, relays, connecting elements and other miscellaneous electronic hardware which are distributed over numerous unspecific product categories. Also, imports from the U.S., as released by French customs, reflect direct imports only and mask the actual penetration of the French market by U.S. firms. Many U.S.-made products transit through third-party countries before reaching France, and do not appear as U.S.- origin imports. In addition, many major U.S. electronic components manufacturers may have located subsidiaries in France. Total French demand for electronic components is distributed among the following products: 31 percent for semiconductors, 17 percent for printed circuits, 10 percent for connectors, 9 percent for passive components, 8 percent for tubes, 4 percent for hybrids and 21 percent for other miscellaneous components. Numerous French OEM's in consumer electronics are experiencing very severe difficulties because of both low demand and increased Asian competition. Electronic OEMs are also are affected negatively by shrinking French public expenditures and diminishing export orders. French sales of electronic components had mixed results in 1993, depending on the sector. Office and other professional equipment, for instance, fell by 9.7 percent to USD 6.7 billion, while medical equipment grew by 9 percent to USD 600 million. Although the French economy is expected to revive in 1994, the best medium-term rate of growth will probably not exceed 4 percent. However, some segments boosted by emerging new end-user markets, such as mobile telecommunication systems and automobile electronics experience growth rates averaging 7 percent. A. Rank: 12 B. Name of Sector: MEDICAL EQUIPMENT C. ITA or PS&D Code: MED 1993 1994 1995 D. Total Market Size 2,025 2,086 2,150 E. Total Local Production 1,045 1,042 1,040 F. Total Exports 501 526 550 G. Total Imports 1,481 1,570 1,660 H. Total Imports from U.S. 370 392 415 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French medical equipment sector continues to grow at levels commensurate with the population increase and extended life expectancy. Technological advances now permit same-day surgery and have created a market for home health-care equipment. Since up to 70 percent of all French medical costs are reimbursed, there has been a historical tendency by health-care providers and patients to overconsume and pay little attention to costs. Such overconsumption has endangered the social security system and caused health-care professionals to become more price-sensitive. This shift in priorities provides opportunities for suppliers of price-competitive products. The medical equipment sector depends highly on imports, mainly from the U.S., followed by Germany, Japan and Italy. A. Rank: 13 B. Name of Sector: FILMS, VIDEOS AND OTHER RECORDINGS C. ITA or PS&D Code: FLM 1993 1994 1995 D. Total Market Size 556 567 577 E. Total Local Production 206 210 214 F. Total Exports 75 76 78 G. Total Imports 425 433 441 H. Total Imports from U.S. 390 398 406 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: In 1993, France produced 137 films, of which 101 were totally French and 15 were co-produced with Eastern European countries. The French film market share amounted to 34.2 percent against 34.9 percent in 1992. The U.S. film industry is stable with nearly 58 percent of market share. France imported 226 foreign films, of which 126 were from the United States. In 1993, 133 million people filled France's 4,397 movie theaters. Household expenditures on video cassettes amounted to $464 million, including rentals ($57.5 million) and sales ($406.5 million). Household expenditures on laser disks represented over 4.4 percent on video cassette sales, amounting to $18 million. The film industry in France and other European countries is at a crossroad. The European film market is comparable in size to that of the U.S. domestic market and is still growing in many countries. In marked contrast, the production industry is in a state of crisis. Consequently, the increase in demand in Europe benefits the U.S. film industry. The most promising subsector is films videos and other recordings with an estimated 1994 total market size of $616 Million. A. Rank: 14 B. Name of Sector: JEWELRY C. ITA OR PS&D Code: JLR 1993 1994 1995 D. Total Market Size 1,218 1,230 1,242 E. Total Local Production 819 827 836 F. Total Exports 346 350 353 G. Total Imports 399 402 406 H. Total Imports from U.S. 7 7 7 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French jewelry market is difficult to assess as there are many small companies as well as small manufacturers acting as subcontractors. However, for the first time, the French jewelry trade association did a small survey in November 1993 on the 1991 French jewelry market. Please note that the above mentioned figures account only for French companies employing at least 20 persons. The 1993 French jewelry market was made up of 155 French companies employing 11,343 persons. The French jewelry industry suffered from the 1993 global recession. French consumers changed their spending habits, spending less on luxury items. Consequently, 1993 sales of jewelry showed a 2 percent decrease in comparison with 1992. However, analysts expect a 1 percent increase in 1994 sales as well as a 1 percent increase in total imports. Imports for costume jewelry and for semi-precious jewelry are still mainly dominated by South-East Asian countries. In 1993, U.S. imports represented 1.8 percent of total imports. They were mainly dominated by U.S.-made Indian and western-style jewelry. According to analysts, the U.S. share should remain stable in 1994. The United States has already penetrated the French market via wholesalers and distribution chains which sell products under their own names or trade-marks. A. Rank: 15 B. Name of Sector: DEFENSE INDUSTRY EQUIPMENT C. ITA or PS&D Code: DFN 1993 1994 1995 D. Total Market Size 34,200 34,805 35,435 E. Total Local Production 33,300 34,005 34,685 F. Total Exports 13,230 13,602 13,847 G. Total Imports 900 800 750 H. Total Imports from U.S. 525 416 400 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: France has the largest and most sophisticated armed forces in Europe. The budget to sustain this force structure and the size of the French defense industry point to a potentially huge export market. On the other hand, national defense is at the core of an established industrial policy that favors indigenous development over procurement from non-French sources. Actual exports to the French defense establishment are mainly European exports in the scope of common european defense programs. Imports increased by more than 100 percent over the past ten years -- much of the increase benefiting U.S. suppliers. But the current economic difficulties are changing France's attitude toward importing military equipment from non-european countries. However U.S. export opportunities are still viable in cases where French concerns cannot justify parallel development. A. Rank: 16 B. Name of Sector: AUTOMOTIVE PARTS AND SERVICE EQUIPMENT C. ITA or PS&D Code: APS 1993 1994 1995 D. Total Market Size 19,371 22,276 23,389 E. Total Local Production 12,885 14,817 15,557 F. Total Exports 9,019 10,371 10,889 G. Total Imports 6,486 7,459 7,831 H. Total Imports from U.S. 272 372 391 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: French automobile equipment industry sales dropped 7.3 percent in 1993. However, thanks to governmental measures, prospects look better for 1994: experts expect a 4 percent increase this year. Aftermarket sales, particularly since the implementation of mandatory inspections for vehicles over 5 years old, are expected to profit from this increase. Since 1993, tire replacement is mandatory for tires that do not meet inspection quality and security standards. Trade association reports indicate that 21,230,000 tires and 284,000 wheels were sold in 1993. In 1993, the volume of replacement parts sold by independent networks, agents, and distributors rose 10 percent, while those sold by manufacturers declined 3.2 percent. Because of lower overhead costs, auto centers have become very popular with DIY car repairers as part prices are very competitive and on-the-spot servicing is also available. There has been an increasing development of auto centers specializing in tire and oil replacement in large supermarkets and malls. A. Rank: 17 B. Name of Sector: AUDIO-VISUAL EQUIPMENT C. ITA or PS&D Code: AUV 1993 1994 1995 D. Total Market Size 5,854 6,088 6,332 E. Total Local Production 3,657 3,714 3,769 F. Total Exports 759 789 821 G. Total Imports 2,956 3,163 3,384 H. Total Imports from U.S. 312 324 337 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French market for audio-video/broadcast equipment is undergoing major technological changes, and has become a competitive growth industry. The continued demand for professional audio-video equipment, the emergence of new products and services, and the growing array of equipment available to the consumer will ensure the continued expansion of this market. The French government has put its full weight behind the development of multimedia technology, and intends to play an integral part in its development. They hope that such involvement will stimulate job creation, as well as ensure that the majority of the French population will benefit from this technology. Additionally, France Telecom recently created a new subsidiary, France Telecom Multimedia. France Telecom Multimedia will establish joint venture and partnership projects for the development of new audio-visual services, such as pay-per-view, home shopping and video games. The dynamism of the French market as a whole is reflected in the transmission equipment sector where the ambitious Fiber-To-The- Home cabling program and expanding satellite, microwave and cable networks have precipitated rapid market growth. Furthermore, the launching of new television channels, such as M6, Arte, and the forthcoming M7 have further stimulated the development of communication networks. U.S. exporters need to ensure that their equipment is compatible with European norms. In some cases, government approval must be obtained prior to introducing products into the market. Major competition comes from Japan, as most European companies do not manufacture equipment or accessories on a large scale. A. Rank: 18 B. Name of Sector: COAL C. ITA or PS&D Code: COL 1993 1994 1995 D. Total Market Size 1,569 1,589 1,540 E. Total Local Production 682 691 552 F. Total Exports 73 74 60 G. Total Imports 960 972 1,039 H. Total Imports from U.S. 300 304 334 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: As French coal production is decreasing and will cease entirely by the year 2010, the French import market appears increasingly attractive for U.S. coal companies. France is the largest coal importing country of the Economic Union; two thirds of all its coal is imported. The year 1993 was marked by a slight decline in French coal consumption which decreased by roughly 11 percent. This 1993 decrease in demand was partly a result of the high levels of existing coal stocks. Faced with the high costs of French coal production, the government has scheduled the closure of all remaining coal production sites. The reasons for increasing U.S. presence in the market are many. First of all, although overall consumption is expected to decrease, the market for steam coal will continue to expand and represents a worthwhile investment for U.S. firms. Furthermore, French imports reached 22.7 Mega tons (Mt) in 1993, an increase of 0.2 percent compared to the previous year. U.S. coal producers and exporters should find in France a receptive export market. A. Rank: 19 B. Name of Sector: ELECTRONICS INDUSTRY PRODUCTION AND TEST EQUIPMENT C. ITA or PS&D Code: EIP 1993 1994 1995 D. Total Market Size 2,500 2,575 2,700 E. Total Local Production 4,173 4,352 4,570 F. Total Exports 2,873 3,017 3,170 G. Total Imports 1,200 1,240 1,300 H. Total Imports from U.S. 300 310 320 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: It is important to note that foreign trade figures for electronic industry production equipment do not reflect the significant market penetration by U.S. subsidiaries in France. The output of these subsidiaries is not included in French import figures. While a small recovery is expected in 1994, demand for EIPT equipment should progress steadily in certain key sectors: automotive electronics, telecommunications equipment, and potential high-definition television. Open circuits have appeared as a new challenge, requiring the implementation of new and more efficient testing techniques (boundary scan). As more components are added to ever smaller boards, traditional testing techniques will become obsolete. The French market for semiconductor manufacturing equipment alone is estimated to have been USD 280 million in 1993. A. Rank: 20 B. Name of Sector: AUTOMOBILES AND LIGHT TRUCKS C. ITA or PS&D Code: AUT 1993 1994 1995 D. Total Market Size 78,013 79,275 82,672 E. Total Local Production 58,596 59,770 62,160 F. Total Exports 25,095 25,701 26,728 G. Total Imports 19,417 19,905 20,512 H. Total Imports from U.S. 194 298 304 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: In 1993, the French vehicle fleet represented 22,857,600 automobiles. France manufactured 2,836,280 private cars in 1993, a 14.8 percent decrease from 1992. Of these, 1,815,668 were exported. During the same period, France imported (and registered) 683,578 vehicles, representing 39.71 percent of the country's 1,721,222 registered vehicles. Industry experts expect car sales to remain stable in 1994 and slightly increase in the near term. Major market trends include small city cars and electric vehicles. French car manufacturers Automobiles Renault and Peugeot PSA, as well as their American and German competitors including GM (Opel), Ford, Mercedes-Benz, BMW, and VolksWagen (VAG), will be launching city cars in the next two years. To date France has approximately 1,500 electric vehicles equipped with either lead-acid or nickel-cadmium batteries. Four separate manufacturers supply the cars currently used in France, including Peugeot PSA, Renault, Volta and Jeanneau-Microcar. Trade specialists predict that 200,000 vehicles will be operating in major European cities within 10 years, and that sales of electric cars will reach 50,000 units annually by the year 2000. A. Rank: 21 B. Name of Sector: PUMPS, VALVES AND COMPRESSORS C. ITA or PS&D Code: PUC 1993 1994 1995 D. Total Market Size 2,605 2,704 2,785 E. Total Local Production 2,782 2,908 3,088 F. Total Exports 2,261 2,188 2,423 G. Total Imports 2,084 2,163 2,228 H. Total Imports from U.S. 255 262 270 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: Measuring USD 1.3 billion, the French valve market is the largest in Europe and certainly one of the most competitive. The industrial valves market represents approximately 60 percent of total French valves market and the building equipment valves market represents the remainder. Domestic production reached USD 1.50 billion in 1993. In the same time period, France's pump, valve, and compressor market exports totalled USD 1.10 billion and imports totalled USD 940 million. French companies still control the domestic market for regulation valves and high security valves. On the other hand, the building equipment valves market is 55 percent supplied by foreign imports. With USD 850 million the French pump market is the largest in Europe and certainly one of the most competitive vis-a-vis the number of firms present as well as the level of technology requested. Cutback in the nuclear program have reduced the demand for large industrial pumps, but nuclear applications still represent 28 percent of the global market. Focus has been shifted to water treatment applications, which represent 50 percent of the market and which are expanding due to the continuous need for infrastructure and public funds directed to those programs. In 1993, France pump imports represented more than USD 950 million. Germany is by far, with USD 480 million, the largest supplier, leading the U.S. (110 million), Spain (100 million) and Italy (66 million). France 's compressor market is valued at USD 400 million. This sector is largely dominated by foreign firms that often have production facilities in France or control French firms. The U.S. has a strong position thanks to world-wide leading companies such as Ingersoll-Rand and Dresser. A. Rank: 22 B. Name of Sector: POLLUTION CONTROL EQUIPMENT & SERVICES C. ITA or PS&D Code: POL 1993 1994 1995 D. Total Market Size 12,000 12,600 13,230 E. Total Local Production 19,050 19,943 10,875 F. Total Exports 10,000 10,500 11,025 G. Total Imports 2,950 3,157 3,380 H. Total Imports from U.S. 230 246 260 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: While the French market for pollution control equipment has been expanding steadily, growth figures have been revised downward due to several factors: the French recession; uncertainty about the outcome of the 1995 Presidential elections, and a wait-and-see attitude in response to fast-evolving legislation. However, as a result of European directives, French authorities have been required to develop a long-term plan to bring France's environmental protection up to a level comparable to all the E.U. countries. Massive investment programs in infrastructure, equipment and services will be spent over the next ten years. The pollution control equipment sector includes a board category of goods and services for measuring, preventing, limiting, or treating environmental damage including the pollution of water, air, and land, noise pollution, and waste. A. Rank: 23 B. Name of Sector: TEXTILE FABRICS C. ITA OR PS&D Code: TXF 1993 1994 1995 D. Total Market Size 51,228 51,740 52,257 E. Total Local Production 27,544 27,819 28,097 F. Total Exports 17,192 17,365 17,538 G. Total Imports 23,684 24,157 24,398 H. Total Imports from U.S. 245 250 253 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: Please note that the statistics for 1993/1994 include the entire textile industry (apparel, household and technical textiles), whereas last year's report indicated only a small portion of the apparel textile market. The French textile fabrics industry is made up of 5,400 companies employing 600,000 persons. The global recession in 1993 cost the industry 95,000 jobs. The industry is composed of apparel textiles (47 percent), household textiles (35 percent) and technical textiles (18 percent). Technical textiles are gaining in importance. By 1993, the French technical textiles market comprised 250 companies employing 30,000 people. Technical textiles are used in many sectors, such as aeronautics, medicine, sports, building and transport industry. U.S. imports for 1993 represented 1.03 percent of total imports. U.S. imports are mainly in apparel and technical textiles. Cotton remains the principal fabric of import in the textile industry. According to analysts, U.S. imports are expected to increase at an estimated rate of 1 percent per year, especially in the field of technical textiles. A. Rank: 24 B. Name of sector: BUILDING PRODUCTS (SEP) C. ITA OR PS&D Code: BLD 1993 1994 1995 D. Total Market Size 13,600 13,750 14,000 E. Total Local Production 15,710 16,020 16,400 F. Total Exports 5,490 5,920 6,160 G. Total Imports 3,380 3,650 3,760 H. Total Imports from U.S. 135 139 155 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The overall growth of the French construction sector was flat in 1993. However, the construction sector is expected to begin to grow in 1994, albeit at a slow rate. Private housing construction - a key indicator of new demand for construction products - was estimated at 256,000 units in 1993, down 7.4 percent versus 1992. New government residential incentives, along with the constant demand by homeowners for better quality and comfort, will generate demand in the refurbishment and "do-it-yourself" products subsectors. U.S. firms may find it difficult to penetrate the French market due to legal impediments, comprehensive building, housing codes and difficult product standards. The "do-it-yourself" sector is an important and rapidly expanding market and has maintained steady growth at an annual average rate of 5 percent since 1990. The market is very receptive to new and innovative products. Best prospects include environment-friendly products, tools and hardware, wall covering, bathroom accessories, wood for interior decorating, wood maintenance and renovation products. A. Rank: 25 B. Name of Sector: PLASTICS MATERIALS AND RESINS C. ITA or PS&D Code: PMR 1993 1994 1995 D. Total Market Size 5,676 6,066 6,248 E. Total Local Production 5,520 5,915 6,003 F. Total Exports 3,269 3,581 3,637 G. Total Imports 3,425 3,732 3,881 H. Total Imports from U.S. 137 148 154 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: With production of 4.25 million tons, France is the 4th largest producer of synthetic resins in the world after U.S.A., Japan and Germany. However, France's leading position is mitigated by its weakness in technical and semi-technical plastics. Total market demand is about 3.25 million tons, of which 2.65 million tons are imported, mostly from other E.U. countries. Imports from the U.S. represent only 105 thousand tons, yet several American firms have large production facilities in France or other E.U. countries. Consequently, it can be estimated that the U.S. share is close to 20 percent. The last three years, 1991 through 1993, have not been very profitable for plastics producers in France. Although volumes have not been affected by France's economic slow down, prices have dropped steadily to a point where some products are sold under cost. Producers are restructuring to increase productivity and to alleviate the problem of overcapacity. France is only one of many countries being affected by an adverse global market for plastics. However, France remains one of the most promising markets in terms of development potential. Current per capita consumption of plastics in France is 145 pounds, compared to 206, 224 and 292 for Japan, the U.S. and Germany, respectively. A. Rank: 26 B. Name of Sector: TELECOMMUNICATIONS SERVICES C. ITA or PS&D Code: TES 1993 1994 1995 D. Total Market Size 22,500 23,175 23,870 E. Total Local Production 19,832 20,478 21,646 F. Total Exports 72 73 74 G. Total Imports 2,740 2,770 2,798 H. Total Imports from U.S. 136 138 139 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: Modernization of telecommunications services is a high priority in France. Today, France boasts a wide range of services and advanced products that have no equal in Europe. After a decade of re-structuring and change, the French telephone network is now one of the most up-to-date and efficient in the world. In 1992, the telecommunications sector in France represented revenues of 180 billion francs, 263,800 jobs, investments of over 40 billion francs and a foreign trade surplus of 4.5 billion francs. This sector is dominated by France Telecom, which accounts for 98.5% of service revenues. France Telecom is a national operator and the sole provider of basic voice telephone and telex services to the general public. However, it also operates in a competitive environment. The French government understands that the telecommunications market must begin to prepare for the deregulation of the European telecommunication industry in 1998. Those markets not reserved exclusively for France Telecom are now open to outside operators either under conditions of regulated competition or in fully open competition. In early 1994, the DRG (Directorate of Regulatory Affairs) and the DSP (Public Service Directorate) merged to create the General Directorate of Posts and Telecommunications (DGPT). The DGPT handles licensing and is working to prepare the French telecommunications market for deregulation. There are significant opportunities for U.S. companies as new technologies spawn new services and new market segments develop. Furthermore, as European operators approach deregulation in 1998, French companies will seek to establish an international presence through mergers with foreign companies. U.S. companies, both within and outside France, are advised to enter joint ventures or partnership agreements with European companies to facilitate expansion. A. Rank: 27 B. Name of Sector: TELECOMMUNICATIONS EQUIPMENT C. ITA or PS&D Code: TEL 1993 1994 1995 D. Total Market Size 3,585 3,692 3,803 E. Total Local Production 4,520 4,759 4,971 F. Total Exports 1,463 1,653 1,818 G. Total Imports 528 586 650 H. Total Imports from U.S. 104 120 138 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: In the early 1970's, only 15 percent of the French population subscribed to the phone system. Since then, enormous investments have yielded one of the most modern and sophisticated telecommunications systems in operation. France is now the world's fourth largest market for telecommunications equipment, behind the United States, Japan and Germany. Today the French system provides telephone service to 97 percent of the country's households. In 1992, over 29 million main phone lines were in service and 26 million of them were electronically switched. At the end of the 1991 fiscal year, state-owned France Telecom had 543,000 leased lines which provided turnover of USD 1,310 million before taxes. In addition, more than 70 percent of the French system is digital. Finally, France's Minitel videotext system, one of the most advanced on-line information systems in Europe includes 6.2 million terminals and 23,000 services. With the anticipated privatization of France Telecom and increased competition in the service sector, U.S. companies must be positioned to enter the French telecommunications market and to take advantage of its opportunities. Since January, 1991, France Telecom has been considered an autonomous state-owned entity under common law, required to follow private procurement practices to compete more effectively. As such, it is now easier for U.S. companies to compete with third country suppliers. A. Rank: 28 B. Name of sector: CONSTRUCTION EQUIPMENT C. ITA OR PS&D Code: CON 1993 1994 1995 D. Total Market Size 2,180 2,200 2,290 E. Total Local Production 3,220 3,250 3,300 F. Total Exports 2,050 2,110 2,160 G. Total Imports 1,010 1,060 1,150 H. Total Imports from U.S 122 126 130 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The years 1992 and 1993 were exceptionally difficult ones for the French construction sector. However, most economic indicators are pointing to a gradual recovery in 1994. Purchase of new construction equipment will be facilitated due to the expected increase in loans available from the banking sector which are gradually reducing their short-term interest rates. US construction machinery enjoys a good image in France, and French companies are very receptive to innovative U.S. products. An efficient way to enter the French market is through a joint- venture or a manufacturing licensing agreement; many French firms in this sector can be considered as first class joint-venture partners. Large U.S. companies are already present in the French market. Among products that offer best prospects are: backhoe loaders, buckets and shovels, mini-excavators, small construction machines of all kinds with electronic controls (controlled vibration, reduced noise and dust and fuel economy), parts and accessories for heavy construction machines. A. Rank: 29 B. Name of Sector: MATERIALS HANDLING MACHINERY C. ITA or PS&D Code: MHM 1993 1994 1995 D. Total Market Size 3,053 2,960 2,901 E. Total Local Production 2,111 2,047 2,006 F. Total Exports 1,098 1,065 1,043 G. Total Imports 942 913 895 H. Total Imports from U.S. 131 126 124 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French industry for material handling machinery suffered greatly from the recession in 1993. An overall 14.7 percent drop in the industry resulted in a 23.5 percent drop in imports. The largest end-users of materials handling machinery in France include airports, harbors, public works, and auto and food industries, all of which have been affected by the recession. Equipment renewal and new investments have thus been postponed, strongly affecting the entire industry. The French material handling sector represents 305 companies. Because of the economic downturn, employment in this sector decreased by 6 percent in 1993. French production is currently running at 64 percent of capacity. The French market is still importing about forty per cent of its needs. Recovery in parallel sectors (e.g. automobile, construction) is awaited in order to induce an upturn in the materials handling machinery industry. A. Rank: 30 B. Name of Sector: PRINTING & GRAPHIC ARTS C. ITA or PS&D Code: PGA 1993 1994 1995 D. Total Market Size 11,273 11,587 11,819 E. Total Local Production 11,250 11,564 11,794 F. Total Exports 351 364 375 G. Total Imports 374 388 400 H. Total Imports from U.S. 112 117 120 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French printing and graphic arts industry is comprised of pre- press, printing (editing and publication) as well as the media. The activity in this industry is proportionately related to the strength of the overall economy. In recent years, the printing and graphic arts industry in France suffered as a result of the overall slowdown of the economy. This trend continued in 1993, but the industry is expected to recover in 1994, attaining an estimated market size of USD 11,770 million. In the sector, imports represent 3.35 percent of the total market size, 30 percent of which are imports from U.S. firms. The French import market appears increasingly attractive for U.S. firms. The reasons for an increasing U.S. presence in the market are many. First of all, French firms plan to make substantial capital and equipment investments in the next few years in order to integrate new technology and to compete with new techniques such as electronic printing. Furthermore, a significant number of printing firms are developing pre-press activities. The market demand for pre-press machines and technology is growing steadily. Finally, competition is now quality-based, and American companies can provide the French market with high quality machines at competitive prices. A. Rank: 31 B. Name of Sector: APPAREL (SEP) C. ITA OR PS&D Code: APP 1993 1994 1995 D. Total Market Size 12,863 12,991 13,120 E. Total Local Production 7,791 7,868 7,947 F. Total Exports 2,826 2,854 2,897 G. Total Imports 5,072 5,173 5,250 H. Total Imports from U.S. 102 104 105 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French apparel industry continued to suffer from the global economic slowdown throughout 1993, generating much unemployment. French consumers changed their spending habits and began to pay more attention to prices. As a result, the 1993 collections were less successful than expected and apparel distributors were very cautious in placing their orders. According to industry analysts, however, the economy should improve in 1994, with sales expected to grow at an estimated rate of 2 percent. North African countries, Eastern European countries and Southeast Asian countries will continue to have a strong presence in the French market due to low production costs. The U.S. share of 1993 imports represented 2 percent of total imports. U.S. imports are expected to increase in the next few years because of U.S. companies' growing interests in the French market, especially in the children's wear market. The French are fashion conscious and are strongly influenced by American trends. U.S. companies should also explore the possibility of further development of new materials, such as microfiber fabrics. It is important to continue to associate comfort with fashion in order to successfully penetrate the French market. A. RANK: 32 B. Name of Sector: DENTAL EQUIPMENT C. ITA or PS&D Code: DNT 1993 1994 1995 D. Total Market Size 468 482 500 E. Total Local Production 151 156 166 F. Total Exports 85 88 91 G. Total Imports 402 414 425 H. Total Imports from U.S. 91 94 97 I. Exchange rate: USD 1.00 = FF 5.70 Comments: The French dental market is dominated by imports from Germany and Italy. Nevertheless, the U.S. has managed to capture a significant part of the import market. French importers are principally interested in high-quality, state-of-the-art equipment and by smaller sized equipment with few maintenance requirements. Many of the 37,931 dentists practicing in France have been exposed to U.S. dental technology through trade shows in the U.S., as well as during their dental studies. This often gives U.S. suppliers an advantage over their European competitors. A. Rank: 33 B. Name of Sector: AGRICULTURAL MACHINERY C. ITA or PS&D Code: AGM 1993 1994 1995 D. Total Market Size 2,429 2,522 2,623 E. Total Local Production 2,936 2,966 3,040 F. Total Exports 1,492 1,488 1,513 G. Total Imports 985 1,044 1,096 H. Total Imports from U.S. 86 90 94 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: France is the largest consumer of agricultural machinery in Europe ($2.5 billion) but only the fourth largest producer after Germany, Italy and the United Kingdom. In 1993, agricultural machinery sales in France continued to decrease by 13 percent, compared to 21 percent per year for the two previous years. Domestic sales, as well as imports, declined over the last four years due to the global economic down-turn, however, we now see signs of economic recovery. The U.S. firms, which enjoy an 8.7 percent market share, should directly benefit. The other main suppliers are U.K. (8.9 percent), Italy (23.4 percent) and Germany (33.5 percent.) A. Rank: 34 B. Name of Sector: NON-FERROUS METALS C. ITA or PS&D Code: NFM 1993 1994 1995 D. Total Market Size 11,763 10,725 10,400 E. Total Local Production 6,919 6,309 6,120 F. Total Exports 3,426 3,220 3,123 G. Total Imports 4,844 4,416 4,280 H. Total Imports from U.S. 95 91 89 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: France continues to reduce and close down non-ferrous metal production (the remaining bauxite and lead mines were closed in 1991), making France almost entirely dependent on foreign sources of supply. Eastern European and ex-Soviet block countries have increased their exports of metals in their search for hard currency, driving down the prices of several metals such as aluminum, nickel, lead and zinc. The economic crisis in industrial sectors such as aerospace, automobiles and nuclear equipment strongly affects the total market demand for non-ferrous metals. Although short term projections call for negative growth, opportunities may develop for new U.S. suppliers able to offer more attractive products. A. Rank: 35 B. Name of Sector: FOOD PROCESSING AND PACKAGING EQUIPMENT C. ITA or PS&D Code: FPP 1993 1994 1995 D. Total Market Size 3,350 3,421 3,523 E. Total Local Production 1,820 1,860 1,915 F. Total Exports 1,128 1,153 1,187 G. Total Imports 1,530 1,561 1,007 H. Total Imports from U.S. 61 63 64 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: French industry continues to be receptive to new technologies and sophisticated process systems in spite of a market that recently has been flat. Industry contacts hope for a rebound of as much as 4 percent during the current calendar year. This could represent potential for U.S. exporters since 70 percent of the market is imported. Food processing manufacturers in France face a stricter regulatory environment as a number of new safety and hygiene standards are coming into force. The food packaging equipment industry is also concerned with new environmental standards, recycling requirements, as well as a change in the labeling and language requirements in France. All of these new changes represent potential new markets for American suppliers. A. Rank: 36 B. Name of sector: HOUSEHOLD CONSUMER GOODS C. ITA OR PS&D Code: HCG 1993 1994 1995 D. Total Market Size 4,940 5,100 5,250 E. Total Local Production 4,200 4,290 4,400 F. Total Exports 2,360 2,440 2,500 G. Total Imports 3,150 3,250 3,350 H. Total Imports from U.S 56 58 60 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: A recovery in consumer spending is expected in 1994, albeit at a slow rate. Consumers who deferred purchases of household consumer goods during the previous year are expected to return to the market. The household appliances industry in France is well-established with an on-going need for sophisticated equipment with the latest technology and design. Imports remain strong in absolute terms. Demand centers mainly on the high end of the product range where quality and design are the determining factors. Since 1992, the French market for housewares has declined. However, markets experts anticipate that its recovery will begin in 1994. Many sectors of the houseware market have been virtually recession-proof as the products are in constant demand, and relatively inexpensive. Opportunities for U.S manufacturers of quality products are good. A. Rank: 37 B. Name of Sector: TOYS AND GAMES C. ITA or PS&D code: TOY 1993 1994 1995 D. Total Market Size 2,257 2,302 2,348 E. Total Local Production 1,157 1,180 1,203 F. Total Exports 386 394 401 G. Total Imports 1,486 1,516 1,546 H. Total Imports from U.S. 58 59 60 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: France is Europe's second largest consumer toy market, with more than 20 percent of European toy sales, and the world's fourth largest producer, after Japan, the United States and Germany. The toy industry consists of 160 French manufacturers employing nearly 10,000 persons. Toys and games represent 73 percent of the global children's goods market, childcare items represent 18 percent and baby carriages represent 9 percent. The average family budget per child for the purchase of games and toys is $317 (compared with $307 in Germany and $253 in Italy). In 1993, French production increased by nearly 3 percent and exports by 8 percent, while imports decreased by 4 percent. U.S. direct imports decreased by nearly 17 percent. During the last decade, France's total toy imports have been multiplied by 2.3 and France's exports by 1.6. The video and electronic game sectors have lost popularity. Retail sales registered a 30 percent decrease in video games and a 10 percent decrease in electronic games. U.S. firms such as Mattel/Fisher Price, Tyco/Matchbox, Texas Instruments, Hasbro/Playskool/Kenner-Parket, Revell, Toys'R Us and Little Tikes, have set up French subsidiaries in France and continue to invest. The 1993 turnover for the American leaders Hasbro, Mattel and Tyco amounted to $230 Million. Toys'R Us, with 25 toy supermarkets in France, announced a $245 million turnover and claims a 6 percent share of market. However, Toys'R Us sales include 80 percent of French-manufactured toys and 14 percent of toys manufactured in other European countries. A. Rank: 38 B. Name of Sector: BOOKS C. ITA or PS&D Code: BOK 1993 1994 1995 D. Total Market Size 3,900 4,116 4,302 E. Total Local Production 3,878 4,087 4,270 F. Total Exports 593 622 649 G. Total Imports 615 651 681 H. Total Imports from U.S. 49 55 58 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French book industry is comprised of over 375,000 available titles. More than 38,000 books are published each year. The French book industry has been experiencing continuous growth for the past decade (with the exception of 1991). In 1993, even though the production of new publications and new editions dropped, turnover increased by 4.5 percent. In 1993, 33 publishing firms with a turnover in excess of 18 USD million represented 72.1 percent of the total sector turnover. French market demand has evolved considerably in recent years. Most noticeably, the number of small readers (from 1 to 9 books per year) has progressed from 28 percent to 32 percent of the population, whereas the number of big readers (more than 25 books per year) has only decreased from 19 percent to 17 percent of the population. The global reading volume continues to increase as the diversity of books available on the French market continues to grow. A. Rank: 39 B. Name of Sector: PLEASURE BOATS AND ACCESSORIES C. ITA or PS&D Code: PLB 1993 1994 1995 D. Total Market Size 428 387 368 E. Total Local Production 405 364 345 F. Total Exports 209 213 217 G. Total Imports 232 236 240 H. Total Imports from U.S. 42 44 46 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French pleasure boat industry is the largest in Europe with a sales volume of USD1.25 billion, including boats, engines, equipment and accessories. It represents one third of Europe's sales volume. It consists of 1,200 firms, including one hundred boatbuilders, with a workforce of 8,500. The French nautical sector is the second largest worldwide, after the United States, and the largest worldwide in sailboat and inflatable sectors. French boat production alone amounted to USD 328 million in 1985, reaching a peak of USD563 million in 1990. Boat production for 1993 was back to 1988 figures, however, amounting to USD405 million. Domestic needs represent 48.4 percent of the production. France's principal clients are European countries (25.7 percent), other non-European countries (17.3 percent) and French overseas territories (8.6 percent). For the third consecutive year, the pleasure boat industry continued its adjustment to the general economic crisis. However, the readjustment of the French franc vis-a-vis the other European currencies and the lowering of interest rates seem to have restored confidence among boat manufacturers and dealers. The United States accounts for 18.2 percent of France's total imports. Trade sources seem confident that the U.S. market share in France will continue to grow as a result of the superiority of U.S. technology and the fact that American boat builders are able to adapt their production to the European market. A. Rank: 40 B. Name of Sector: PACKAGING MATERIALS C. ITA or PS&D Code: PKM 1993 1994 1995 D. Total Market Size 17,950 19,311 19,403 E. Total Local Production 16,620 16,950 17,628 F. Total Exports 9,806 10,002 10,400 G. Total Imports 1,330 1,361 1,415 H. Total Imports from U.S. 41 42 45 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: With a market size estimated at USD 17.9 billion for 1994, the packaging materials industry is a key sector in the French economy. This sector in France has 1,500 registered companies employing 130,000 people (it includes companies which are leaders of both world and European market such as Pechiney, CMB Packaging, Saint Gobain, and American Can). The estimated annual volume of packaging wastes in France amounts to 50 million tons for which household waste represents 50 percent, services waste 30 percent and industry waste 20 percent. Despite a slowdown of activity, analysts forecast a growth of 4 percent over the next 2 years in the packaging industry. This expected growth is mainly due to the increase in home consumption for basic consumer goods such as food, beverages, pharmaceutical goods. Paper and paper board remains the principal packaging material used in France (34 percent of packaging consumption), followed by plastic materials (25 percent), glass materials (18 percent) and metal (14 percent). A new EC directive came into effect on Jan. 1, 1993, stipulating that within 10 years, 75 percent of all packaging waste must be recovered either by re-use, incineration or recycling. New French and EC regulations, coupled with rising ecological awareness, should create opportunities for U.S. exports. For example, companies with products to be packaged will encounter great difficulty in establishing their own recycling programs because approval will have to be sought from three different agencies (the Ministries of Agriculture, Environment, and Trade and Industry). Consequently, they will most probably rely on outside recyclers, further increasing demand for new investments in packaging recycling. A. Rank: 41 B. Name of sector: FURNITURE C. ITA OR PS&D Code: FUR 1993 1994 1995 D. Total Market Size 8,350 8,500 8,670 E. Total Local Production 6,960 7,070 7,200 F. Total Exports 1,660 1,710 1,760 E. Total Imports 3,050 3,140 3,230 H. Total Imports from U.S 34 36 38 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: Demand for furniture was depressed during 1993, as the overall economy and key indicators for the industry slowed down. Furthermore, new housing constructions have declined since 1992, reinforcing the sluggish demand for furniture. While the U.S. market share is negligible, the French market holds many unexplored opportunities for U.S. companies. Aggressive advertising campaigns, coupled with changing consumer habits favorable to U.S. product lines (such as comfortable upscale seats and ready-to-assemble furniture), should open up lucrative "niche" markets to U.S. furniture manufacturers. A. Rank: 42 B. Name of Sector: SPORTING GOODS AND RECREATION EQUIPMENT (SEP) C. ITA or PS&D Code: SPT 1993 1994 1995 D. Total Market Size 563 596 632 E. Total Local Production 691 704 718 F. Total Exports 504 514 524 G. Total Imports 376 406 438 H. Total Imports from U.S. 30 31 32 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The French market for sporting goods, including sportswear and sports shoes was evaluated at nearly USD4.8 billion in 1993. The sporting goods equipment market is estimated at USD551 million. French production represents USD691 million, of which 73 percent is exported. Imports represent 68 percent of the sporting goods market. The economic recession, together with bad weather conditions, resulted in a 10-15 percent decrease of retail store sales during the summer season. The large discounts proposed by retailers have permitted them to sell last year's stocks. Sports such as tennis, golf and squash continue to lose market shares. Certain niche markets such as kites, beach volley balls, and surfboards continue to progress. The kite market, particularly, is expanding and has practically doubled every year since 1988. A. Rank: 43 B. Name of Sector: SHOES C. ITA OR PS&D Code: FOT 1993 1994 1995 D. Total Market Size 2,771 2,784 2,811 E. Total Local Production 789 797 804 F. Total Exports 947 966 976 G. Total Imports 1,982 2,001 2,021 H. Total Imports from U.S. 29 29 30 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: The 1993 French footwear market is made up of 270 companies, employing 32,000 persons. Due to continued recessionary pressure, 1993 employment further decreased 7.5 percent in comparison with 1992. Total imports for 1993 amounted to $1,982 million, representing a 6 percent decrease in comparison with 1992. U.S. imports represented a market share of 1.46 percent. These U.S. imports are predominantly represented by sports shoes. This is mainly due to the success of American sports (basketball, baseball) among teen-agers as well as the growing interest in outdoor activities (hiking and mountain sports). Additionally, shoes made by American manufacturers, such as Nike and Converse, are used by all age groups and are very popular among teen-agers. Sports shoes should offer the consumer performance and technical innovation as well as comfort. The sports shoes market represents about 32 percent of the total footwear market. U.S. sports shoes imports are expected to grow in subsequent years because of their good image. The U.S. market is also represented by southwestern-style boots. However, high prices limit growth in this sector. The most promising subsector is sports shoes. A. Rank: 44 B. Name of Sector: BIOTECHNOLOGY C. ITA OR PS&D Code: BTC 1993 1994 1995 D. Total Market Size 126 130 134 E. Total Local Production 119 123 127 F. Total Exports 24 25 26 G. Total Imports 31 32 33 H. Imports from U.S. 8 8 9 I. Exchange Rate: USD 1.00 = FF 5.70 Comments: Biotechnology products are often intermediary products used in several other market sectors. There are three major applications for these products: - Human health: this category includes prevention (vaccines and diagnostics) and therapy (drugs) applications. - Agriculture: scientists use gene identification and manipulation methods to improve both plants and animal products. Biotechnology permits researchers to select or suppress specific genetic characteristics. Biotechnology products can also replace the need for certain chemical pesticides, fertilizers, etc. - Tests kits: used in both medicine and agriculture, this sector biotechnology for both R&D test equipment as well as for quality control. These kits can permit increased crop yields by providing inexpensive and quick tests for potential diseases and pets. Most French companies involved in biotechnologies are young (less than 10 years in business) and are closely linked to U.S. counterparts through trade publications and scientific journals. BEST PROSPECTS FOR AGRICULTURAL SECTORS (USD millions) Listed below are 6 agricultural sectors which FAS France considers "best prospects" for U.S. business; A. Rank: n/a B. Name of Sector: MISCELLANEOUS FOOD PREPARATIONS; INCLUDING SOUPS, SAUCES AND ICE CREAMS C. HS Code: 21 1993 1994 1995 D. Total Market Size 4,261 4,304 4,476 E. Total Local Production 5,093 5,144 5,350 F. Total Exports 1,477 1,492 1,552 G. Total Imports 645 651 677 H. Total Imports from U.S. 59 62 65 I. Exchange Rate: USD 1.00 = FF 5.70 A. Rank: n/a B. Name of Sector: PROCESSED FRUITS AND VEGETABLES, INCLUDING FRUIT JUICES C. HS Code: 20 1993 1994 1995 D. Total Market Size 4,462 4,507 4,642 E. Total Local Production 3,966 4,006 4,126 F. Total Exports 775 783 806 G. Total Imports 1,271 1,284 1,322 H. Total Imports from U.S. 62 65 68 I. Exchange Rate: USD 1.00 = FF 5.70 A. Rank: n/a B. Name of Sector: FISH AND SEAFOOD, FRESH OR FROZEN C. HS Code: 03 1993 1994 1995 D. Total Market Size 2,601 2,627 2,706 E. Total Local Production 1,386 1,400 1,442 F. Total Exports 709 716 737 G. Total Imports 1,924 1,943 2,001 H. Total Imports from U.S. 110 115 120 I. Exchange Rate: USD 1.00 = FF 5.70 A. Rank: n/a B. Name of Sector: WOOD C. HS Code: 44 1993 1994 1995 D. Total Market Size 2,819 2,847 2,932 E. Total Local Production 2,636 2,662 2,742 F. Total Exports 1,413 1,427 1,470 G. Total Imports 1,596 1,612 1,660 H. Total Imports from U.S. 102 103 111 I. Exchange Rate: USD 1.00 = FF 5.70 A. Rank: n/a B. Name of Sector: BEVERAGES, INCLUDING MINERAL WATER, BEER, WINE AND SPIRITS C. HS Codes: 22.01 to 22.06 and 22.07 + 22.08 1993 1994 1995 D. Total Market Size 12,316 12,439 12,688 E. Total Local Production 17,721 17,898 18,256 F. Total Exports 6,580 6,646 6,779 G. Total Imports 1,175 1,187 1,211 H. Total Imports from U.S. 8 9 10 I. Exchange Rate: USD 1.00 = FF 5.70 A. Rank: n/a B. Name of Sector: FRESH AND DRIED FRUITS; INCLUDING NUTS C. HS Code: 08 1993 1994 1995 D. Total Market Size 3,120 3,151 3,182 E. Total Local Production 1,880 1,899 1,918 F. Total Exports 956 966 976 G. Total Imports 2,196 2,218 2,240 H. Total Imports from U.S. 103 108 113 I. Exchange Rate: USD 1.00 = FF 5.70