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France and the shipbuilding industry
Property of Belon Trade Consulting 118.5.2018
France
• 5th strongest world power (US, China, Japan and Germany)
• 5th strongest military power (US, China, India with UK)
• France is the 2nd largest maritime domain in the world after USA
France is doing great!
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In January 2018• French growth of GDP was announced 1,9% growth of GDP at its highest level since 2011 (Insee)
• French public deficit has dropped under the 3% threshold for the first time since 2007 (2,6% in March 2018, Insee)
• Paris stock exchange was at its highest level since 2007 (Insee)
Investment is thriving.• The International Private Equity Market held in Cannes in January attracted more than 1,400 investors from 27 countries.
• FDI inflows : in top 10 of FDI host economies in 2017 (UNCTAD, January 2018)
• Private equity is booming: 16,5 billion€ in 2017 (+12% since 2016, France Invest)
Source: Invest in France
In 2017, for the first time ever, France leads with €2.7 billion funds raised, vs. €2.3 billion in the UK
Paris is more attractive
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Paris hosts thriving capital markets: 1st European stock market 1st European bond market 1st European insurance market
Paris is the 2nd European financial hub after London,hosting 29 of the top 500 corporate HQs and almostall CAC40 listed enterprises.
Paris is the new centre for European regulation Paris has been hosting the ESMA since 2011 After the Brexit, the EBA leaves London to settle in
ParisSource: Invest in France
France is reforming
In 2017, the new government initiated series of reforms to
modernize French ecosystem, to boost its industry, and to promote research and
innovation.
• Improve labor market flexibility• Reform tax system• Simplify business environment• Promote research and innovation
Improve social dialogue:•A new Social and Economic Council, promoting inclusive negotiations, based on simplified majority agreements•Rules adapted to SMEs, with sector‐specific agreement•Tailor‐made contracts for specific needs (fixed‐term contracts, project‐based contracts)
Reduce social conflict:•More transparent procedures for work incapacity and harmonization of deadlines for termination of contract (1 year)•Appeasement of dismissal procedures, with financially‐beneficial solutions
Simplifying the labor code:•More accessibility, thanks to a digital labor code and standard form •More flexibility, with the right to work from homeMore security, with simplified prevention account for occupational risks
Employmentreforms
Source: Invest in France
Taxation Reforms
Faster schedule to reduce corporate tax: ‐ from 33,33% today to 25% by 2022Tax‐relief for the employer: ‐ no more payroll tax, 3% tax cut on inter‐company dividendReplacement of the CICE by a ‐ permanent reduction in employer social security contributionLower taxation on investment income: ‐ a single flat rate of 30%Suppression of the ISF and ‐ reduction of withholding tax rates on income paid out to non‐residents‐ Reduction of taxes on acquisition gain
Source: Invest in France
Preparing the futurewith a great
investment plan
• Accelerate the ecological transition: €20 billion
• Build a society of knowledge and savoir‐faire : €15 billion
• Increase innovation : €13 billion• Build a digital state : €9 billion
Competencies and employment Innovative entrepreneurship Digitalization of health sector Housing renovation Green mobility Green finance
Priorities for the future
Source: Invest in France
Shipbuilding industry in France9,5 billon € ‐ 42 000 persons
• Newbuild: 3,5 billions• Retrofit/repair/maintenance : 1,2 billion €• Shipbuilding/ship repair – passenger/cruise ships and ferries:
• STX France, PIRIOU, SOCARENAM, CMN: Chantiers naval de Normandie, CNM: ChantiersNavals de Marseille.
• Shipbuilding ‐ Leasure boats: Jeanneau –Beneteau: 20 000 persons
• Shipbuilding ‐military defense : Naval Group (TO: 1 billion € in 2016)
• oil & gas industry: about 30 000 persons(Source: baromètre LCL and GICAN June 2017)
8
ExportsCruise Ships 95%Défense 40%Leasure 70%
MAIN FRENCH SHIPYARDS
• STX France – future FINCANTIERI St Nazaire
• Naval Group (ex.DCNS)
• PIRIOU/KERSHIP
• OCEA
• CNM
• SOCARENAM
Source: GICAN
Geographically speaking…
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Shipowners – Carnival, RCCL , MSC, French Navy, …French shipowner ‐ Bourbon off‐shore ‐CMA CGM Marseille Head Office ‐ Louis Drefus
armateurs ‐ Ponant SA ‐ Setaf‐Saget – Unishipping ‐EVERGAS/JACCAR
Cruise and passenger shipbuildersSTX St Nazaire PIRIOU CMN : Constructions mécaniques de NormandieNeopolia
ClustersCluster maritime Français (national,incl. shipping and harbor issues)GICAN (national)Néopolia (local: St Nazaire area)BPN (local: Bretagne area)PNM (local: Mediterranean area)
Marine consultants AMERALYS : Interior fitting management supportEUROTECHNIA : Project management supportEmobilia: assistance to settle down in France
Oil & Gas TOTAL SA MAUREL et PROM PERENCO
Other shipbuilder typeLeasure boats: Beneteau JeanneauMega yatchs: Ocea et Couach
Defense – Military technologiesShipbuilders: Naval Group, KERSHIP, SOCARENAM, CMNOthers: MBDA, Airbus, Thales, Technicatome International
InstitutionsBusiness FranceInvest in FranceFinnish EmbassyCCIR International
Ship repair yardsChantiers navals de Marseille Damen‐France, Clemessy‐Services‐Marine, Piriou, Socarenam
Big Turn Key Contractors Leroy VINCI CONSTRUCTION
SOFRESIDEiffel Industrie Marine
GESTALAD Industrie
SNEFNAVTIS CNIMDesigner &
engineeringSTX SolutionsAD IndustrieSegola TechnologiesSHIP‐ST ALPHA TECHNIQUESArco Marine
InstitutionsState, region, department, research institutes etc…
Maritime business in France
Exhibitions in France
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Fair/Exhibition Description Dates Where
Navexpo(every year)
« Live » Exhibition on the atlantic shore 15‐18 May 2018 Lorient
Euronaval(every other year)
shipbuilding / Military and defense fair 23‐26 October 2018 Paris Le Bourget
La MerXXL Sea submit and exposition 29th of June – 10th of July 2018 Nantes
Euromaritime 2019(every other year)
Shipbuilding industry fair for subcontractors
January/February 2019 Maybe delayed till 2020…
Paris Porte de Versailles
STX France, the new configuration, requirements and warnings
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STX France SA Fincantieri France?
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• Specialist in Cruise ships or big sized ship for the French Navy (working as subcontractor for Groupe Naval ex DCNS).
• Customers: MSC, RCCL‐RCI and energy park managers such as DONG energy
• Staff: 2.600 employees and rising all the time
• Subcontractors: over 5.000 companies
• Turn over 2016: 1.356 Million €
STX to become Fincantieri???
Property of Belon Trade Consulting 1515
Fincantieri
St Nazaire Shipyard
French State
STX France SA
France Solutions
France Services
Shipbuilding site ‐ Big size ships
Maintenance
Engineering and design
50 % 33,3 %
Sister companies
Orders of big sized cruise ships till 2026…
Design for STX France but not only
Maintenance of the French Mistral ships
Naval GroupEx DCNS
+1 %
Employees
MRE‐ Electrical sub station & jackets
2 %13,6 %
Source: ouest France/Le monde articles
What impact will the new configuration have?
Negotiations have taken place and everyone seem to agree on the official configuration given in the News papers shown on the earlier slide.
Fincantieri has promised not to change much and still does not hold the majority for now.
The French states still hold 33% of the shares and will keep the VETO right if needed forbidding Fincantieri to eliminate a competitor or delocalize the production in Italy or China.
Why is that not official yet?
The French competitionauthority (autorité de la concurrence)
has not given its approval yet…
The Autorité de la concurrence supports corporate efforts to develop a genuine
competition culture, and publishes a framework‐document on compliance programs to help them move in the
right direction*
The Autorité de la concurrence also submits draft guidance on its
settlement procedure, in order to maximize corporate incentives to cooperate to the swift resolution of
antitrust cases*
Answer is supposed to be released in June 2018**.
At the moment the cruise shipbuilding industry market is hold by 3 players:‐Meyer shipyards‐ STX France SA‐ Fincantieri
Should Fincantieri acquiring STX France is to end up with only 2 players in Europe for Cruise shipbuilding and a
major French‐Italian consortium without forgetting the involvement of Group Naval (global military yard)… To
be continued…
*Quotes from the autorité de la concurrence website** Ouest France newspaper article published on the 2nd
STX France order book for cruise ships
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Types of ship Owner Code name Confirmed/options Characteristics Delivery dates
Oasis series RCCL/RCI B, C34 confirmed 360 m 6360 passengers2700 PAX cabins
April 2018‐ mid 2021
Meraviglia / plus series MSC cruises E,F + G,H 34 2 + 2 (+17 m +200 cabins) confirmed 315,83 m5714 passengers2244 PAX cabins
Summer 2017 … 2020
Edge class RCCL/RCI J,K + L,H 34 4 confirmed + 1 option 300 m 2 900 passengers1 450 cabins ‐
Autumn 2018 … 2022
World class MSC cruises WC (no code yet) 1 + 3 options 335 m 5 400 passengers2 750 cabins
Mid‐2022…2026
STX France order book for other projects
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Code name Confirmed/options
Period of time Type of project
Order in July 2015 to be delivered in 2016 Confirmed order for 2 offs‐shore electrical substations – P34 typeCustomer: unknown but from Northern Europe
2017‐2020 On going projects : more than 20 off‐shore maritime renewable energy project are quoted per year : either jackets or entire substation. Projects for northern Europe are confirmed, delayed in France due to modification in the projects and validation processes.
2015 – 2020 Maintenance contract with DCNS: 3 BPC military ships (helicopter carriers built in St Nazaire)
Fincantieri and Naval Group
• Naval Group (Ex.DCNS) is the military shipyard the “famous” BPC (Russian helicopter ships…that were sold to Egyptians) were under their order book but have been build in St Nazaire because of their big size.
• Fincantieri and Naval Group already has a common agenda and range of product such as the Horizon frigates for the Canadian Navy.
• Fincantieri is becoming partners with the French companies on 2 sites one for the military and St Nazaire Cruise ship.
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Source: French medias/newspapers : Ouest France – Le telegramme – Le Monde
Naval Group The French military shipyard
• Main activities: shipbuilding for defense and military
• Owners: state 64% ‐ Thalès: 34% • Services for naval shipyards and bases.• Civil nuclear engineering • Marine renewable energy• Where: all over France and worldwide presence.
• Global group – Presence all over the world• Staff: 13 000 persons• Annual revenues: 2,6 billon €
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News and Business Opportunities
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GOOD NEWS FOR NAVAL GROUP
Argentina has placed an orderThe Argentine Navy would be about to order to Naval Group (the French military shipbuilding yard) four military patrol ships (OPV 90) GowindClass. Ships should be build in Lorient (Britany site: KERSHIP) at least for three of them and the forth one called L’Adroit, a prototype, first of he GOWIND Serie will be tested and approved by the French Navy first before sold to the Argentinian Navy.The mount of the contract would be around 300 millions €.
PIRIOU YARD IN CONCARNEAU –BRITANNYAREA
New orders of TUG boatsBoluda Corporacion Maritima has ordered more ships to Piriou yard to be delivered in Vietnam. This new order comes after the first Serie of 8 ships, 70 tons traction ships built between 2007 and 2009; then 6 units have been delivered between 2015 and 2017. The 2 first ones of this new Serie will be delivered in 2019. These Tug boats will be sister ships from the model « OST 30 » (Omni Stern Tug), their length will be 30,30 m and will be able to pull 77 tons.Created in 1864 in Le Havre (France), Boluda France has a fleet of 75 Tug boats and 30 service ships on 15 harbors in France, Africa and Indian ocean.
SOCARENAM IN BOULOGNE SUR MERThe ship yard is now mastering LNG propulsion technologySpecialist of fishing boats, has up to 27 ships in its order book, 7 are well on their way to be delivered during the spring.The company has now 5 shipyards of production in Boulogne, Calais, Dunkerque, Etaple and St Malo and has now well diversified its production from traditional fishing boats to tenders, patrol ships, fire fighters used by the customs, fire departments and the army.Now the range of boats is wide from 28m up to 62 m.The company employs 250 persons and has a turnover of about 70 million €.
Posted workers and tax issues
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Things you need to know
Posting workersRespecting the French employment law means
You must have a company representative in France: a French speaking partner who will sign a document testifying that he/she will represent you and has the competence to do so!
You must produce an important list of documents showing that your workers are well treated and well covered socially speaking.
The yard do not automatically require all the papers, only the minimum
All this takes time and you must prepare the paper work at least 1 or 2 weeks prior arrival
What is new
A1 is nowadays compulsory to have, this can take months to get, apply straight away for all the workers you suspect might go abroad
Medical certificate of aptitude is very highly recommended, meaning that the workers must go to their doctors before they are coming to France to get this certificate.
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Long term presence in FranceTax authorities
There is a European agreement in EU , though you still have to declare your activity in each country where you have production or service
In France, in some cases you can work about 12 months + 12 months without registering in the French system.
After that you must have a permanent establishment, this will generate extra costs :
Registration costs
Preventive tax to the company on every worker’s salary
Activity tax on the profit generated in France
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Marie‐Zoé Belon‐LaitinenPyydyskalliontie 2520660 LittoinenFinland
Tel: +33 6 14 17 23 31Tel: +358 405 271 [email protected]
www.belontradeconsulting.fi
