KUALA LUMPUR: A rising number of small and medium enterprises (SMEs) in France are eyeing Malaysia as the destination to set up their regional base and research and development (R&D) centres, according to a senior economic official from the French embassy here.

Many SMEs from various sectors in France were shifting to Malaysia after learning that the China market is saturated, said Jean-Francois Bijon, the economic and commercial counsellor of the French Embassy.

"We've observed that there was an increasing number of SMEs setting up their businesses including manufacturing plants here early last year," he said at the Malaysian French Chamber of Commerce and Industry (MFCCI) luncheon yesterday.

"We've witnessed a slowdown in French investments in this country in October due to the global financial crisis but they are starting to come back, this time to set up their regional base," he added.

Currently, SMEs make up 70% of over 250 French companies operating in Malaysia.

French SMEs who previously set up their regional base in Singapore and China were now considering Malaysia as an alternative, Bijon said.

The total bilateral trade between France and Malaysia stood at 3.4 billion euros last year.

Total exports from Malaysia to France was 1.8 billion euros while imports to Malaysia from France was 1.6 billion euros.

As about one third of the bilateral trade between France and Malaysia was in the electrical and electronics sectors, the economic slowdown had resulted in a sharp decline of about 30% in bilateral trade up to May this year.

"We hope to attract more Malaysian companies to invest in France especially in the sectors of agrofood, furniture, information technology and Islamic finance," Bijon said.

Also present at the event was Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir, who said Malaysian companies were well-positioned to explore the sizeable halal market in France considering about 10% of its population was Muslim.

The size of the global halal market was worth some RM7.6 trillion annually, with at least 20% growth each year.

Meanwhile, MFCCI has appointed Naza group of companies executive chairman and chief executive officer SM Nasarudin SM Nasimuddin chairman.

MFCCI was established in 1991 to promote the development of business relations between Malaysian and French companies and to assist its members in liaising with the authorities of both countries to enhance bilateral business.

To date, the total accumulated assets of French companies in Malaysia stood at US$10bil.

For reports from the Statistics Department click here

Source:thestar online