ST 001-11 Lohr, 2011-02-24

Outlook and Trends for the French Engineering Industry

Dr. Karl Tragl

Dr. Karl Tragl

France is famous for its haute couture, sophisticated cuisine, varied landscapes and world-famous works of art. But this great nation also has a lot to offer from an industrial perspective. Today, France is among the five largest industrial nations in the world, and the second-largest by far in Europe. Not only that, France is considered one of the most influential growth drivers in Europe alongside Germany.

In 2009, France responded quickly to counteract the effects of the global economic crisis. The government set aside an economic package worth over EUR 39 billion, which helped to increase the gross domestic product (GDP) by an estimated +1.5% in 2010, with a 2% increase forecast for 2011. In 2009, France's population of around 65 million generated a GDP of almost EUR 1.919 billion (nominal), a decrease of 2.6 % from the previous year. In comparison, Germany generated a GDP of EUR 2.397 billion in 2009, but had to compensate for a decrease of 4.7 % (price-adjusted, chain-linked) in comparison to the previous year. Since 1980, France has quadrupled its GDP and, as a result, has risen from sixth to fifth place in international rankings. The development of industrial solutions for sustainable approaches to the environment and resources has also been a major growth driver.

A "large government loan" of EUR 35 billion was also passed at the start of 2010, with EUR 11 billion earmarked for universities and education, EUR 8 billion for research, EUR 6.5 billion for providing targeted encouragement to industrial sectors, EUR 5 billion for sustainable development and EUR 4.5 billion for digitalization within homes and businesses. Education remains a crucial focus within France, one result being that well-trained French engineers and scientists are held in high esteem all over the world.

Future Energy and Environmental Issues

France is one of the countries that have recognized the signs of the times. Between 2009 and 2020, France intends to invest over EUR 440 billion in its environmental program (Grenelle de l'environnement). The focus of this program is to improve the energy efficiency of older buildings, social housing and public buildings (EUR 192 billion) and promote the use of renewable energy (EUR 115 billion). The plan is to increase the proportion of renewable energy generated by 23 % during this period.

Hydropower: A Constant Trend

Hydropower as a sustainable source of energy accounts for a significant proportion of France's total energy consumption. In fact, almost 12% of the country's energy requirement is covered by this renewable source of power. France generates 70 TWh of hydroelectricity on average, making it the second largest supplier of the resource in Europe, surpassed only by Norway. The proportion of energy produced through hydropower is set to increase to 23 % by 2020. To support this, representatives from the fields of politics, water management and environmental protection signed an agreement in mid-2010 regarding the sustainable consumption of hydropower in France.

Strong Growth for the Photovoltaic Market

The French photovoltaic market has recorded rapid growth in recent years. The capacity installed increased from 81 MW in 2008 to 850 MW in 2010; according to the environmental plan, this should increase to 1.1 GW in 2012 and to as much as 5.4 GW in 2020. According to the audit and advisory firm PricewaterhouseCoopers (PwC), this helped France to improve its international ranking (in terms of installed capacity) in 2009, moving from twelfth to seventh place. This growth should continue as there are currently projects for 4.8 GW in the pipeline — this is a massive amount that would already bring them close to their 2020 objective.

Promoting Offshore Wind Energy

Wind energy has not traditionally been a priority in France, a country that focuses heavily on nuclear power. For this reason, there are not yet any offshore wind farms in the country. However, this will soon change. Since the end of 2010, France has issued several invitations to tender for offshore wind energy plants, the total scope of which will constitute 6 GW by 2020.

The capacity of France's existing wind energy plants was around 5.6 GW in 2010, and has more than doubled since 2006. In 2020, installed capacity should reach 25 GW according to French government plans. A market study carried out by Capgemini Consulting for the environmental agency Ademe therefore expects the number of employees in the wind energy sector to increase from 10,000 to 60,000 by 2020. Total investment during this period is estimated at between EUR 20 billion and EUR 30 billion. The French wind energy market is currently divided between around 140 manufacturers and suppliers, including Bosch Rexroth, which specializes in transmission systems and hydraulic drives.

Growth Trends for Mechanical Engineering and Plant Construction

The latest publications regarding the business climate indices in France and Germany, which are showing significant growth, mirror the strong growth trend in both countries. The most important commodities for both countries in terms of import and export are automobiles and automotive parts, machines, materials, electrotechnical and electronic products, pharmaceuticals and chemicals. For this reason, Dr. Karl Tragl, Chairman of the Executive Board of Bosch Rexroth AG, is extremely positive about future prospects in France: "France is a very important market for Bosch Rexroth. It has a strong automotive industry, numerous medium-sized machine manufacturers and a well-positioned consumer goods industry. French food products, pharmaceuticals and cosmetics have excellent access to growth markets. Even in 2009, the year of the crisis, France received investment of around EUR 65 billion — the third largest sum internationally."

Other important industries in French mechanical engineering and plant design are energy and environmental technology, construction, rail transport, aerospace and offshore plant design.

Bosch Rexroth in France

According to Dr. Karl Tragl, Bosch Rexroth sees an optimistic future in France. Over 700 associates manufacture hydraulic and pneumatic components at two sites. Demand for tailor-made solutions from Bosch Rexroth continues to grow. In this respect, numerous development partnerships strengthen our close cooperation with French companies.

Bosch Rexroth's consulting services for the efficient industrial use of energy are also in great demand in France. For example, Bosch Rexroth was able to work as a system partner in cooperation with a French plant, run by one of the world's leading food manufacturers, to produce drastic improvements in the energy efficiency of its production processes. This has resulted in considerable energy savings and a reduction in CO2 emissions. The short-term financial results speak for themselves: In the first year alone, the amount saved is double the amount invested in improving efficiency.

The foundation of this success was the use of an unusual system. Under the name Rexroth 4EE (For Energy Efficiency), the complete drive technology manufacturer is bundling a range of approaches aimed at minimizing the energy consumption of machines across different technologies and over their entire service life.

Bosch Rexroth is one of the world's leading specialists in drive and control technologies. The company has been established in France since 1938 and currently employs around 1000 associates. Bosch Rexroth supplies the French market with tailor-made drive, control and movement solutions in the mobile applications, industrial applications, engineering, factory automation and renewable energy sectors.


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