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(Stock image for illustration purposes) With a more modest 3.4 per cent growth in French exports to Malaysia, this country registered an almost RM2 billion trade surplus with France, an increase of 73 per cent compared with 2017.

PARIS recently published new statistics for France-Malaysia bilateral trade which showed a remarkable increase of 11.4 per cent for Malaysian exports to France last year, reaching more than RM11 billion.

With a more modest 3.4 per cent growth in French exports to Malaysia, this country registered an almost RM2 billion trade surplus with France, an increase of 73 per cent compared with 2017.

Beyond trade relationship, the flow of French direct investment into Malaysia has also built up to a level where significant industrial clusters are emerging as direct contributors.

The most recent trends from French investors show growing confidence in an environment where governance is expected to improve, whether in terms of public finance, transparency and the fight against corruption, or overall macroeconomic policies.

One of the most prominent clusters is the already well-established aeronautics sector. Airbus alone accounts, directly and indirectly, for more than 4,000 highly skilled jobs in Malaysia.

Airbus is also increasing the sourcing of its parts in the country. Each plane built by Airbus today contains “Made in Malaysia” components.

Other French aeronautics companies have also chosen Malaysia for their production, such as Safran Landing Systems in Negri Sembilan, producing carbon brakes for planes, and high-tech parts manufacturer WeAre Group that just announced its arrival in Melaka for a new 4000sq m production site.

The world’s leading automotive component manufacturer, Valeo, set foot in Malaysia in 2016, whereas Group PSA, which owns the Peugeot and Citroen brands, last year took a majority stake, teaming with Naza Corp, in a car manufacturing plant in Gurun, Kedah.

While PSA aims to bring the world’s best standards in competitiveness to the plant, it also strives to nurture a network of local providers, as illustrated in the first “Suppliers Day” held in Gurun last month.

The equation is simple: make the best of Malaysia’s good production environment to be competitive in the Asean market.

The agro-food sector is a third example. French presence here is definitely not new — the beloved, iconic Ayam Brand, whose products are made in Perak, was founded by Monsieur Alfred Clouet in 1892.

The arrival in Selangor, in January, of French worldwide leader Lactalis complements the chilled dairy sector of Danone production in the infant nutrition sector (Negri Sembilan), and the expanding activity of Arkema in the thiochemical and animal nutrition sector (Terengganu).

The latest trend now brings to Malaysia mid-size French companies with very strong brands that take root here to produce halal-certified or organic products: Monin syrups have been produced in Selangor for a few years, while Metarom (food aromas) and Entofood (organic feed for aquaculture) will start production this summer.

Finally, industry 4.0, the digital sector and start-ups from France are also developing in Malaysia. ST Microelectronics, the French-Italian semi-conductor giant, thrives in Muar with over 4,300 skilled jobs.

Since last year, industrial gas provider Air Liquide controls remotely, from Kuala Lumpur, its production centres in Asia.

Malaysia’s Xperanti is covering the whole Malaysian territory with an Internet of Things network from the French Sigfox, preparing the country for the next industrial leap.

Lastly, cybersecurity whiz kids from Parisian start-up Alsid have established a technical delivery team for Asia in Kuala Lumpur.

These, after the launch of the French Tech Community Malaysia last July, are but a few samples of a deep trend, fuelled by cooperation with Mida, MDEC, InvestKL and other agencies here, and by the incubating environment offered by the Chamber of Commerce and Industry France-Malaysia, which has just opened its third business centre in Kuala Lumpur and its new office in Johor Baru, all dedicated to making French investment in Malaysia even smoother.

To foster direct contacts between business leaders of both countries, the French Business Confederation has just appointed a chairman for its France-Malaysia Council of CEOs — Jean-Marc Chéry, CEO of ST Microelectronics.

In such a dynamic ecosystem, I am committed, with the team at the French embassy, to promoting even more depth and diversity in future industrial cooperation between France and Malaysia.

Frederic Laplanche, French Ambassador to Malaysia

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