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“French people playing hurling – I didn’t expect that,” Taoiseach Micheál Martin said on November 24, sharing his impressions mid-way through an official visit to Paris in a room packed with over 170 businesspeople from France and Ireland at the landmark Ritz hotel.
Martin said he was “bowled over” by the growth of Gaelic games in the country and backed plans to expand the activities of the Irish cultural centre in Paris, two examples of the soft diplomacy deployed to strengthen bilateral ties already reinforced by Brexit – along with the recent appointment of new consular officers in Lyon and in Brittany.
But his audience on that night, worth billions of euros in business connections between France and Ireland, was more intently focused on other aspects of his engagements in Paris. “President [Emmanuel] Macron remarked how exponentially our trade has grown in recent times,” the Taoiseach reported, before witnessing the signature of contracts the next morning for a direct electricity interconnector between the coasts of Cork and Brittany. He and Macron now want their countries to go further and cooperate on developing offshore wind farms.
As a dual French and Irish national, I must declare an interest in being easily convinced by upbeat speeches on improving relations across the Celtic sea. Yet the boom in cross-border trade and investment touted by Martin and Macron is rooted in solid evidence. This is what the figures say, and what I heard from the people behind them.
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To get a sense of the growth in business between Ireland and France, the most up-to-date statistics at the time of writing are those of physical exports from each country until the end of September. From the French side, the acceleration of Irish-bound shipments is unprecedented. In the first nine months of this year, exports to Ireland were 61 per cent higher than during the same period last year.
This was not just exporters catching up after pandemic lockdowns. Following a marginal drop in 2020, French exports to Ireland had already jumped by one-third in 2021. This year’s acceleration is on top of that.
The latest figures suggest that Ireland is set to jump six places to 15th position among the top destinations for French exports this year. While there has been a steady improvement in France’s economy, with exports in general picking up, the Irish market is beating the trend for French exporters.
Part of this recent growth is attributable to Ireland acting as a global hub for the ownership of aircraft, and France for their manufacturing. A few deliveries from Airbus in Toulouse to Dublin-based leasing companies can skew trade figures – of the €2 billion increase in French exports to Ireland in the first nine months of 2022, aircraft and their spare parts alone accounted for €600 million.
Still, most other categories of French-made goods are seeing double, or even triple-digit, growth in the value of their shipments to Ireland this year, with inflation explaining only part of the jump. Irish-bound exports of French computer equipment have more than doubled, as have those of fuels. Electrical equipment is not far behind. Raw agricultural products and machinery shipments are up more than 50 per cent, cars 26 per cent, and so on.
There is no sign that the trend is abating. On December 2, Iarnród Éireann doubled an existing order from French manufacturer Alstom for 18 more Dart trains, worth €162 million.
French-made chemicals turn into Irish-made medicines
Basic chemical products remain the single largest source of French exports to Ireland. Their value was up 57 per cent in the first nine months of 2022 and is set to exceed €2 billion for the first time this year. This reflects the hunger for ingredients in Ireland’s pharmaceutical industry which, in turn, accounts for nearly half of Irish exports to France.
Seen from Ireland, shipments to France, too, are booming – their value was up 38 per cent higher in the first nine months of this year. Aside from medicines and medical devices, chemical products also flow that way, suggesting a growing integration of processing cycles between the industries of the two countries.
Irish food and drink products, especially meat and dairy, continue to grow their market in France. Meanwhile, multi-hundred-million-euro exports of phones, computers and electronic devices reflect the booking of French sales in Ireland by tech multinationals like Apple and Dell, without necessarily translating into physical trade.
Unlike the singular boom in French shipments to Ireland, the increase in exports from Ireland to France is representative of a broader expansion of Irish trade towards EU markets this year. In firm seventh position among the top ten destinations for Irish shipments, France shares the distinction of having attracted more exports in the first nine months of this year than during the whole of 2021 with Germany, Belgium and the Netherlands, as well as Japan.
These figures reflect exports of goods only, leaving aside the trade in services, for which no short-term statistics are available. According to the latest data for 2020 from the CSO and the World Trade Organisation, Irish firms sold €9.3 billion worth of services to French customers that year, more than half of which were computer services reflecting the sales booked in Ireland by the main US technology multinationals. France reported €7.7 billion worth of service exports to Ireland, led by technical and specialist services to business.
To get the full picture, you need to add over half a million visitors usually travelling in both directions each year. French tourists were the fourth-largest source market in Tourism Ireland’s league table before Covid-19, with 557,000 visitors spending €283 million here in 2019. The all-island state agency expects a recovery to 75 per cent of those figures this year.
There could be more cross-borders industries to develop yet. This week, the French and Irish governments signed a cinema co-production agreement, allowing films produced across the two countries to claim eligibility to national incentives in both jurisdictions. The deal will essentially allow French film producers to come over and make use of Ireland's burgeoning studio industry while retaining access to the €700 million annual pot of subsidies funded by levies on cinema tickets, broadcasters and streamers in France.
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The occasion for Martin’s recent speech before the assembled Franco-Irish business community in Paris was the annual awards ceremony organised by NetworkIrlande, a French-based chamber of commerce for those trading with Ireland. During the event, I was introduced to Cyril Perrin, managing director of Neoen in Ireland, a French renewable energy developer I had contacted for an interview three years ago. At the time, the company was dipping its toe in the Irish market through a solar farm joint venture and tentative plans for a Dublin office.
Catching up with Perrin, I realised that the company had since acquired multiple wind farms and was developing its own pipeline of renewable electricity projects here with a 13-strong Irish team. This was just one of many pieces of anecdotal evidence illustrating the acceleration of business between the two countries.
Another came from Kerry Group's chief corporate affairs and brand officer Catherine Keogh, whose own career started in France. She remarked that Kerry was involved in the country from its early years as a dairy exporter in the 1970s and now runs a factory in Grasse, a French town famous for its industry extracting scents from flowers for the perfume industry. This is where the group manufactures plant extracts served in cocktails around the world, Keogh said.
NetworkIrlande is chaired by Richard Dujardin, who secured the first contract to operate the Luas at the time he headed up the Irish operations of French infrastructure group Veolia two decades ago. (Veolia has since sold its transport business to Transdev, which is ultimately owned by France's state investment bank CDC and still holds the Luas contract.)
“Ireland was and remains a land of foreign investment, because of course, there was this incentive through the corporate tax for instance, but also because of the language, education – all that is good,” Dujardin said in an interview with The Currency, available to listen in full on this week's podcast. “But what I'm glad to see is more and more Irish companies exporting more and becoming more present here in France.”
Alongside industrial heavyweights like CRH, he noted the rise of Ecocem, another cement manufacturer founded by Irish people and developing in France on the back of new sustainable technologies. “Primark is a beautiful example and the model is just expanding – booming,” Dujardin added. The fashion retailer is planning to add five stores to its existing 20 locations in France, he said. Other Irish groups have grown in the French market through acquisitions, and he cited the examples of Kingspan and Smurfit Kappa.
Since his Veolia years in Ireland, Dujardin has moved home and he now heads up the central and western Europe division of Equans, an engineering and facilities management contractor with €17 billion in revenue recently acquired by the Bouygues construction conglomerate. I asked him how he views engineering firms like Jones, Winthrop and Mercury, which have emerged out of Ireland on the back of contracts with multinationals here and are now taking on Europe.
“Firstly, impressive, because from small contractors some of them became significant contractors. Secondly, I see them as competitors because we compete on some tenders,” he said. “But more and more, in every European country, and I would say even worldwide, human resources are getting scarce. So I see them also as potential partners, because they may get the engineering [contracts] from the [FAANGs] of this world based in Dublin or in Cork, but when they want to set up a data centre in a country, they may be lacking resources – and we are there, because our footprint in Europe is big.”
Deeper than pubs and rugby
The strong business stories now coming out of Ireland add to the positive image the country has always enjoyed in France. Dujardin is not afraid to attribute this goodwill to some clichés including the popularity of Irish pubs and the positive experience of many French tourists here. “As soon as NetworkIrlande organises events at the embassy, around a rugby game or things like that, it's very easy to get people because there's this appetite to come and meet with the Irish,” he said.
But there is more now happening in this foundational rubbing together of French and Irish people, he added. “It's good for the future of the relationship between our two countries, and to expand on business, that more and more you see Erasmus happening not anymore with the UK, but with Ireland – and [from] Ireland in France,” he said. “That should help get Irish people speaking a bit more French. Fortunately, we are getting better at languages in France, so we speak more and more English, especially the young generations.”
Dujardin added that French business people have been impressed by Ireland’s rebound from the financial crisis, and also place a high level of trust in their Irish counterparts. “Once you shake hands, you have a deal, which is not always true in other regions of the world,” he said. After a pause, he added: “Really, I don’t know bad stories of French investment in Ireland. They've always been quite successful.”
Conversely, I asked him whether his experience of Irish views on France had evolved from those of a bureaucratic country beleaguered by high unemployment and slow growth – an image Macron has vowed to change at the cost of controversial domestic reforms.
“I’m not in politics but I would say that over the recent years, efforts have been made to simplify – a bit, we still have a lot of progress to make – the way you can work in France, employ people, dismiss people. Let’s say we are becoming a bit more flexible,” he said. “Overall, people see France as easier to work than before,” he added, with better assistance also available from agencies like Enterprise Ireland and his own organisation NetworkIrlande to help Irish newcomers navigate the country.
Governments on both sides have made deliberate efforts to bring their countries closer together since one major triggering event: Brexit. Martin told business delegates that within days of the UK’s exit from the EU becoming effective, he received a mug in the post from the French ambassador to Ireland imprinted with the slogan: “France, your closest EU neighbour”.
“It’s not politically correct, but Brexit is a great opportunity for our two countries to develop this relationship.”
Richard Dujardin, NetworkIrlande
Diplomatic efforts go both ways: “We can feel that the agenda of the Irish government, through its ambassador in Paris, is really pushing to develop even further the strong relationship we have been having for many years now,” said Dujardin, adding that this extended to local authorities in France’s north-western coastal regions.
He added: “I shouldn’t say it this way because it’s not politically correct, but Brexit is a great opportunity for our two countries to develop this relationship. De facto, the fact that goods are going through the French harbours will mean more contact, more people knowing each other, discovering each other and seeing, together, business opportunities.”
One of the people grabbing this opportunity is Yvan Gomel, business development manager at Dunkirk Port on France’s northern coast. From zero before Brexit, the port’s direct Irish connections started in 2019 with container traffic on CMA-CGM ships to and from Dublin and Cork. Then the ferry operator DFDS added a roll on-roll off (Roro) service for freight lorries in January 2021.
These new shipping lines have partly replaced the traffic that traditionally used the UK landbridge from Ireland to northern Europe – an option essentially killed off by border formalities and waiting times since Brexit. Existing direct routes to France have absorbed more, with Cherbourg Port reporting a three-fold annual increase in Roro traffic with Ireland just a few days ago. Irish sailings have now overtaken British ones at Cherbourg, ahead of Stena Lines adding more capacity to Rosslare next year.
Gomel spent the last week of November in Ireland touting Dunkirk Port to more Irish exporters and transporters, the latest of multiple visits by French port executives here this year. While he said the bulk of Dunkirk’s traffic is with long-haul destinations such as Asia and Latin America, it had been developing European business in recent years, only to see this thwarted by the fall-off in UK traffic and Russian sanctions. But Brexit also offers a chance to offset this with more Irish business.
Irish exports such as milk powders made by Kerry Group and Glanbia now come to Dunkirk to avail of container capacity on ships that have made deliveries from Asia and return empty via Gulf countries or West Africa. “This has also been an opportunity for Irish companies to regain control of the distribution of their products,” Gomel told The Currency. Many Irish-made products were previously exported to British distributors, who then dealt with customers around Europe. Since Brexit, he said there has been an “insourcing of EU distribution by [Irish] manufacturers, without exporting to the UK”.
DFDS’s Roro service currently runs five times a week between Rosslare and Dunkirk, increasing to six or seven times during peak periods. The service started as a direct response to the demise of the UK landbridge. “When Brexit happened, all the trade shifted to Ireland direct” Filip Hermann, the Danish ferry operator’s vice president in charge of the UK and Ireland, told The Currency. “We had three months to get ready. We had no other business in Ireland and started from scratch.”
Hermann added that avoiding formalities to save time was a priority for the pharmaceutical and food industries, which will keep them away from the UK landbridge into the future. “It will remain that way,” he said. “If you come with food into the EU, you have to go through checks.”
Inside the French-Irish boom: the view from three award-winning companies
The winners of this year’s Ireland-France business awards operate at the heart of expanding trade and investment between the two countries. Kingspan was recognised as the best Irish company in France and the head of the group’s insulated panels division in the country, Cédric Bruge, summarised its achievements in one revenue figure: “In 2013, when I joined, we were talking about a few hundred thousand or a few million euro. In 2021, we passed the €1 billion mark.”
Bruge used to work for an Italian trader of construction materials, Duferco, which wanted to add insulation products to its catalogue. “The world leader with the best recognition for quality was Kingspan and we went to knock on Kingspan’s door to ask whether we could be their exclusive distributor in France,” he told The Currency. “We struck a deal with annual targets. We met every year, imported the panels and after volume grew year after year, we set up that entity. I led it from 2013 to develop further and make acquisitions.”
Kingspan’s acquisition of German-based ThyssenKrupp Construction in 2012 included an initial footprint in France. Bruge said he had since overseen the addition of Isocab, an insulation manufacturer with two factories in France; Bacacier, a roofing materials group covering metal sheeting, waterproofing and solar panels; and just this year, Ondura and Belgian-based Derbigum, adding “one of the last cards missing in our game for flat roofs,” he said.
There are more deals in the pipeline, which he will not discuss at this point. Successive acquisitions have broadened the group’s manufacturing and distribution reach in France, but “all the R&D has remained in Ireland at the Ikon centre in Kingscourt” in Co Cavan, Bruge said.
“Not to be chauvinistic but in France today, you need to be French to work with the French.”
Cédric Bruge, Kingspan
Kingspan has used the full range of outright acquisitions, joint ventures and phased deals to expand its French footprint. “The most important to me is not whether we acquire 51 or 100 per cent, but that we retain the men and women. The skills are in existing employees,” Bruge said. “We constantly train people, we have opened a training centre in Clermont-Ferrand to upskill our staff, but when we make acquisitions we also want to retain the management, and even the senior executives and board members.”
Our interview dwelled for a moment on this quest for staff who are familiar with the requirements of the French market.
Cédric Bruge (CB): When Kingspan first came to France in 2009 with Duferco as its first client, the people overseeing it were not French and they lasted between one and two years. Not to be chauvinistic but in France today, you need to be French to work with the French, just like in Belgium, Spain or Ireland at times. This does not mean that we prefer working between French people, but you need to understand the rules and regulations.
Standards and certifications are specific to France, along with audits and checks. The timeline to obtain certification is several months or quarters – almost always over one year. Even though we are in Europe, we like our French certificates, including Environmental Product Datasheets (EPDs) which in France are called FDES [Health and Environment Declaration Sheets].
I wouldn’t say that we go further, but France digs deeper and tries new things. New commercial building regulations are now mandating the retrofitting of energy-inefficient buildings. That is commonly done for housing – France is now doing it for industrial buildings. I would like it to go even faster, but France can act as an example.
Thomas Hubert (TH): Conversely, do these more precise or advanced French requirements trickle up the group to help develop new products?
CB: With these new commercial building regulations, other markets are now asking us in France how we are responding. Bacacier has patented new systems for outside insulation that will certainly be used in other countries within the Kingspan group. There is also a new regulation mandating solar roofing on all car parks over 80 spaces from next summer – not only new but also existing ones. So we’re developing new systems. We learn a lot from Kingspan, and where we are now is thanks to the know-how within the group. But France can also be an example in some market segments where our thinking is advanced because French regulations are stricter.
TH: One piece of negative news for Kingspan has been the Grenfell fire in London and the ongoing investigation into the role of Kingspan material in the blaze. Do you get questions about it and have to give answers here on what happened in the neighbouring British market?
CB: It has not been discussed in France. It has been disappointing information for all of us and conclusions will come, but there has been no impact in France or questions regarding Grenfell.
“We've been very, very fortunate to have found a French partner that understands what we do.”
Martin O’Donnell, Terra NutriTech
The Co Kildare-based ag tech start-up Terra NutriTech, meanwhile, won NetworkIrlande’s rising star award, with France its biggest export market, according to commercial director Martin O’Donnell.
“If you look at the farming structures within both countries, there's quite a lot of grass-based dairy in Ireland and, likewise, in regions of France we have a similar type of farming. So when livestock are at grass, it's very, very difficult to get them the mineral supplementation they require. And what Terra NutriTech has developed is a way to do that cost-effectively,” he said. “We manufacture liquid minerals, we manufacture electronic dosing systems. And then we can put the minerals that the animals require each day through the water so, as they drink, they get the minerals.”
The company is now turning over €3 to 4 million and employing 22 people, O’Donnell said, with self-funding available for further expansion. France accounts for “a significant part of that revenue”, he added, generated for the past three years through a local distributor called Global Grazing Services. At the time of our interview, the two firms were finalising a contract to grow French sales further over the next five to ten years.
“We've been very, very fortunate to have found a French partner that understands what we do,” O’Donnell said. “They have a very embedded sales force at farm level who can explain the technology, because liquid minerals are quite different for a lot of people. They don't understand them that well so it's not something you can just put on the shelf and expect it to sell on its own. You need a sales effort behind it. And the guys that we work with do have that expertise and are trusted by farmers.”
In the past, a company like Terra NutriTech would typically have turned to the UK for its first attempt at exporting, but the world has changed. “The growth in Terra NutriTech would have been concurrent with a lot of the developments around Brexit,” O’Donnell said, making the company cautious not to become too dependent on the UK market. “We do sell into the UK and we do buy some product from the UK but we've had a European focus for a few years now. We would have built a liquid mineral plant in Ireland on the back of the decision that was taken in the UK to leave the European Union because we knew, legislatively, it was important that we would have an EU base for manufacturing the liquid minerals going forward.”
As an Irish company, O’Donnell said Terra NutriTech benefits from the reputation of Irish grass-based farming. “A lot of French farming tours come to Ireland now to understand and learn how Irish farmers actually approach grazing and they're adopting some of the paddock rotation systems that we would have in Ireland,” he said. While he has not yet seen in France the level of scrutiny applied to Irish dairy farming when it comes to climate change, he expects increased sustainability pressure there to create more awareness of performance areas such as cow fertility among French farmers.
“If you can increase the efficiency of the herd by bringing those metrics more in line with what we're doing in Ireland, that will improve farmer incomes and it'll improve the outcomes for no environmental impact – they're carrying the same number of cows anyway, it's just you will get more out of the same resource,” O’Donnell said.
And this, he added, is where the precision technologies sold by Terra NutriTech cah help.
“Access to milk” and climate targets for Danone in Ireland
French food group Danone exports €600 million worth of infant formula out of Ireland annually, according to its managing director in this country, Killian Barry. Last year, this alone accounted for over 4 per cent of Irish food and drink exports.
“We've got our head office in Dublin, we've got two factories – one in Macroom, Co Cork and one in Wexford – so that's a large footprint with over 700 ‘Danoners’ working in Ireland. And our contribution to the dairy industry is we buy over €100 million worth of dairy products every year,” Barry said Barry. “In industrial terms, we've invested over €250 million in the last 10 years in Ireland, so our commitment to the Irish agri-food sector and, more specifically the Irish dairy industry is really important both ways.”
This earned Danone the title of best French company in Ireland at NetworkIrlande’s awards.
A portion of Danone’s Irish production is sold domestically through the healthcare system as specialist foods for medical purposes. The company also imports French foods branded under the Danone banner, such as Activia or Actimel, or other brands owned by the group, such as Evian and Volvic waters. Danone generates €160 million from annual sales in Ireland, Barry said.
The group’s investment in Irish manufacturing took off in 2007 with the acquisition of infant formula maker Nutricia. There was no talk of Brexit at the time. “Basically, it’s the access to milk,” Barry said. “It's the quality of it, the farming practices being very sustainable, grass-fed cows most of the year, and also our ease of doing business. Ireland is a typical small open economy, an easy place to do business, part of the EU with very good trade relationships with the rest of the world also.”
Among global multinationals, Danone has been a pioneer of corporate social responsibility – Barry mentions the famous quote from former chief executive Antoine Riboud, who assembled the group from various French food processors in the 1970s, saying that “corporate responsibility does not end at the factory gate or the office door”. Yet dairy expansion has been singled out as a major environmental challenge for Ireland, and I asked Barry about the tension between the two.
“Our Wexford infant formula factory is certified carbon neutral by the Carbon Trust, the first of its kind in the world,” he replied, including the installation of a biomass boiler fueled with woodchip from forestry grown by local farmers. He added that Danone was now moving up the supply chain in Macroom with a programme called Project Clover to support the production of renewable gas from biomass grown on farms. “What that involves is basically anaerobic digestion at farm level, which produces methane, which we can inject back into the grid. It also produces organic fertiliser,” he said. “That will go a long way to Ireland meeting its targets and commitments that it made on the impact of the dairy industry on the environment.”
The project draws from the French experience, where farmers already produce biogas at scale, with Danone also importing other learnings on regenerative agriculture to improve soil health and carbon capture on farms.
The group’s involvement in farm sustainability is unusual in that it does not work directly with farmers, instead buying milk from Irish co-ops. Barry is clear that Danone does not intend to get directly involved in the renewable energy industry either. For him, Irish biomass and biogas production are just ways of achieving carbon neutrality along its entire supply chain. “Looking at our commitments to be carbon net-zero by 2050, we have scopes one, two and three,” Barry said. “We have to go and tackle the grassroots first, help, be as collaborative as we can with our partners, the co-ops and farmers, to meet those ambitions.”
Further reading
Seven years on, Dawn Meats begins to reap rewards from its investment in French beef
A €150m lightbulb moment: Shining light on Amarenco’s solar business
