Security and Safety Equipment
This sector represents 25 different security segments in France, which can be loosely grouped into the following areas: anti-terrorism, electronic security, monitoring, guarding, physical security, health and safety products, fire security and cash in transit. The total market was valued at approximately 18.3 billion euros in 2006.
Currently, segments enjoying the highest growth rate are anti-terrorist equipment (+27.1% in 2006), personal protection services (+21.3%), industrial security materials (+14.2%), and private investigation services (+13%). Segments such as fire equipment, retail theft protection, remote industrial monitoring services, access controls, airport security equipment, anti-intrusion alarms and guard services remained flat or even declined in 2006. Overall growth is expected to rise by about 5 percent in 2007 and 2008. This growth is mainly driven by just a few segments of the market and price wars are common in this highly competitive environment. In fact, only about 67% of companies operating in the security sector in France in 2006 turned a profit. In many segments such as fire protection and guard services, there are simply too many players on the market; fierce competition coupled with low prices continues to drive a high number of firms out of business.
The evolution of this market is closely linked to France’s general economic growth, which is not strong. While over the last few years France has invested heavily in security infrastructure and has caught up to her European neighbors, that spending is now slowing, especially in segments such as monitoring or anti-intrusion equipment. The sector has also suffered from a price war over the last several years, driven by competition from Asia, which has slowed growth in several areas, such as access controls and video surveillance where price is usually the deciding factor, according to industry studies. The safety and security market in France is thus divided into two distinct parts: a small number of relatively healthy segments and a large number of areas where the situation is morose. The birth of security industry giants which have greater financial resources and which are capable of deeply influencing the market have shut out many of the smaller players. The homeland security/anti-terrorism segment is driving the market; but contracts for port, airport and other highly sensitive sites require complex, sophisticated systems that integrate technologies from diverse origins.
Penetration of the security market by foreign companies has stabilized in France, but at an extremely high level. Entire sub-sectors of French private security industry in France are dominated by foreign groups, as opposed to less than 20 percent overall ten years ago. For example, in the cash in transit sector, non-French groups control 89 percent of market share. Similar ratios exist in equipment/services for, professional monitoring and many other market sub-sectors. Overall, foreign firms control about 43 percent of the industry.
Fortunately, there are a few bright spots; homeland security equipment demand is expected to be sustained, as with residential monitoring, CCTV, especially for digital systems, and industrial security materials (lighting, gas detectors, hazmat warehousing equipment, etc).
U.S. equipment and security technologies are well known for their innovation and quality. Imports should remain strong, although competition is extremely severe from both French and third country sources.
Best Products/Services
Homeland Security products, including those for the police and other public order entities, enjoyed a spectacular growth rate, at 27.1%. The persistence of terrorist threat has fed the need to pursue investment in protective measures. The market is sustained by sales of global solutions, integrating several types of equipment (cameras, biometric access controls, physical barriers, for example), which are interconnected by customized software also able to manage vast databases of information on individuals – travelers, employees, etc. While this sector represents the most opportunity for sustained growth in the industry, it is largely served by French giants such as EADS, Thalès, Sagem, Gemalto or Canberra (Areva Group), making it very competitive for American firms.
Amongst the many technologies, the French are particularly interested in automatic facial recognition systems, tracking video systems that analyze behavior and intelligent cameras.
Closed Circuit TV (CCTV), especially for digital systems, represents one of the few ongoing growth areas in the industrial security market in France. Recent changes in French regulations will require that many existing systems be updated (cameras must be linked to a video and a recording system; data must be stored in numerical format if the system has more than 7 cameras; the video quality must be guaranteed if the images are to be exported).
In the mid to long-term, the residential market represents an enormous potential for suppliers of surveillance services – far fewer French homes are equipped as opposed to in other EU countries. The high growth in high-speed Internet connections is driving demand, as the major French telecom service providers are now teaming with home monitoring service firms to provide widespread marketing and low cost services via high-speed connections. The lack of equipment in French homes is equally applicable to basic protective devices such as anti-intrusion alarms, fire alarms or fire extinguishers, none of which are required by French home insurance policies and with which few French homes are equipped at this time.
Opportunities
The market in France is extremely fragmented and competitive, and it is very important to work with a local partner or through a local sales office, which many U.S. firms choose to establish. Some kind of local presence becomes essential when working with government ministries or responding to public tenders.
Resources
Expoprotection/Feu
International Safety & Security and Fire Fighting & Rescue
Paris, France - November 4-7, 2008
http://www.expos-protection.com/expoprot/
Electronic and Physical Security Show
Paris, France – September 22-24, 2009
Milipol International
Internal State Security
Paris, France – October 2009
Milipol is devoted to security and anti-criminal technologies and the one meeting point for all international decision-makers for public and industrial security. To participate in the U.S. Pavilion, please contact http://www.kallman.com
Information on the French Security Market
En Toute Sécurité
Embassy U.S. Commercial Service Trade Specialist: Cara.Boulesteix@mail.doc.gov
Phone: 33-1 43 12 70 79
For data tables and additional information corresponding to this prospect please contact: Cara.Boulesteixi@mail.doc.gov