French President, Francois Hollande, insists this week's Renault agreement to build vehicles in Algeria will not be at the expense of domestic employment.

The deal will see Renault and Algeria's Entreprise Nationale des Vehicules Industriels (SNVI), in collaboration with the country's Fonds National d'investissement (FNI), produce cars in the country from 2014, but Hollande's comments add to those made by his Economic Redevelopment Minister, Arnaud Montebourg, who is also looking to head off any union unease surrounding so-called 'delocalisation.'

The Renault announcement formed an important part of the State visit to Algeria by the French President, who highlighted the importance of building bridges with Algeria some 50 years after the end of colonial rule from Paris over its southerly neighbour.

"Renault has signed an important agreement to produce a car in your country destined for the local and regional market and I was going to say even international," Hollande said during his State visit to Algeria, which ended yesterday (21 December).

"This is not delocalisation, no French business has come to work [here] to the detriment of French jobs, Renault is looking to build vehicles so there are more jobs in Algeria and more jobs in France.

"This is a good agreement we have been able to conclude on the economic side and it is within the declaration of productive partnership that marks this idea of co-production between our two countries."

Hollande also hinted more deals could be in the pipeline as France looks to improve relations with its Mediterranean neighbour some fifty years after its colonial rule ended.

"450 French businesses, large groups, but also SMEs, directly employ 40,000 people, even 100,000 indirectly, in Algeria [and] we can do more," added the President.

"France is the number one investor on Algerian territory, that I congratulate, but we can do even better."