PM 262 2016

PU B LISHED SIncE 199 6 252 /2016 :: www.polishmarket.com.pl

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POLAND INDIA Partnership for Future

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WHERE the mind is without fear and the head is held high, Where knowledge is free, Where the world has not been broken up into fragments by narrow domestic walls, Where words come out from the depth of truth…

here is only one embassy in Warsaw which uses poetry on its website – the Embassy of India. This subcontinent has always fascinated Europeans. Five hundred years ago Christopher Columbus discovered the “New World” seeking a route to India. Today, India itself announces a new opening – Make in India. Europe – including Poland - responds: Go India! The economy is the most durable and strongest driver of human endeavour.

The lack of global mechanisms of economic growth is a nightmare of all economists. And only India sticks to its global role. The world and the Hindus themselves see the country as the third-largest economy and continue to have arguments confirming these aspirations. The population of India exceeds 1.2 billion and this is a very young society, with more than 50% under the age of 25. Furthermore, it is the biggest English-speaking group of people in the world. India has already become one of the largest manufacturers and traders in consumer goods.

The retail sector is worth USD 800 billion. Thanks to the reforms in many branches of the Indian economy, including foreign direct investments and the launch of the “Make in India” programme the GDP in that country is again growing at a rate exceeding 7%.

The impulse contributed by India to the global economy has also been noticed by the Polish business community. We have a well-balanced and growing economy, the only one in Europe which has not succumbed to the waves of global recession. We responded with our “Go Global” programme, finding new markets and strengthening export expansion. All this makes us a serious and credible partner.

We are not a major exporter of capital, but India occupies the fifth place on the list of Polish foreign investments, and the second in Asia.

Poland’s offer includes attractive proposals of supplies, co-operation and joint ventures in areas such as mining and energy, agri-food and agricultural machinery, furniture, means of transport. We offer modern technologies - biotechnologies, environmental protection, materials engineering, pharmacy, medical equipment, etc. There are also good opportunities for developing co-operation in the armaments industry, oil and gas prospecting, modernisation of Indian coal mining and the power sector. The chances for success of shared projects are increased by active economic diplomacy confirmed by State visits at the highest level.

Rabindranath Tagore

Krystyna Woźniak-Trzosek Editor-in-Chief President Rynek Polski Publishers Co. Ltd.

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DEVELOPING POLAND Mateusz Morawiecki, Deputy Prime Minister, Minister of Economic Development and Finance, about Plan for Responsible Development

PLAN FOR RESPONSIBLE DEVELOPMENT Poland is a strong economy, open to foreign investors. The last 27 years were successful regarding our economic achievements.

However, every economy has its weaknesses. And it is the government’s duty to strengthen the country and to foresee traps awaiting it. Preventing is better than curing. That’s the reason why the Polish government and Ministry of Economic Development have introduced the Plan and Strategy for Responsible Development.

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Poland needs to fit in the next phase of development of the capitalist market. It is not the government that creates the biggest value added, it is the entire ecosystem based on entrepreneurs, research institutes, universities, national and local administration and employees. Only in such a bloodstream it is possible to create a modern economic system with a healthy macroeconomic and financial environment. The better these parameters work together, the healthier the industrial policy in a given country.

Some mechanisms used in Poland over the last twenty years may be less fruitful in the future. First, there is a rather

FIVE DEVELOPMENT TRAPS We have diagnosed five development traps to achieve our aim, which is to free the economy’s potential to develop and improve the quality of life.

-Demographic trap - the population is ageing. Forecasts indicate that the number of people in work is going to decrease systematically; -Week institutions trap - the main challenge facing the government is to coordinate public policies; -Lack of balance trap - in recent years Poland has based its development on foreign loans, inability to build a savings position and excessive consumption; -Middle income trap - Poland’s per capita GDP amounts to only 45% of that of the USA. Half of Poles earn less than PLN 2,500 net, which means that wages amount to one third of those earned in developed countries; -Average product trap - too little Polish companies are able to market innovations. R&D expenditures amount to less than 1% of GDP. Only six Polish companies are world-class champions.

The Polish government has prepared the Plan for Responsible Development – planning is the first step of every action. The Plan is setting out a number of pillars of responsible development, on which we should build a strong economy.

Reindustrilization is the first pillar of the Polish economy. Industry is a natural environment for innovation and expenditures on research and development. Industry should be the biggest value added possible and be able to absorb knowledge. Polish industry has a huge potential and can compete in the global markets.

The development of innovative companies is the second pillar of the Plan for Responsible Development. It is crucial to create innovative companies that operate in a business-friendly environment. The basic weakness of the Polish economic system is the inability to connect research institutes with innovative solutions. We must build bridges between science and business. At the ministry we are only creating a mechanism which should increase the efficiency of the ecosystem. In Poland only 7% of small enterprises co-operate with higher schools. The corresponding figure for the West is 21%. Polish Government policy is moving in the right direction. We must become more effective in

POLAND NEEDS TO FIT IN THE NEXT PHASE OF DEVELOPMENT OF THE CAPITALIST MARKET. IT IS NOT THE GOVERNMENT THAT CREATES THE BIGGEST VALUE ADDED, IT IS THE ENTIRE ECOSYSTEM BASED ON ENTREPRENEURS, RESEARCH INSTITUTES, UNIVERSITIES, NATIONAL AND LOCAL ADMINISTRATION AND EMPLOYEES.

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considerable increase of the debt. Today, Poland debt –including debts of households and businesses, and buyer credits - amounts to 160% of the GDP. There is no need to differentiate between public and private debt. The example of Ireland teaches us that a high private debt was converted into public debt because the state decided to underwrite the former.

The second mechanism is savings. Alas, we do not have any of them and we have not accumulated them over the last 25 years.

The last 25 years’ mantra was consumption. We are a powerhouse when it comes to consumption, but weaklings in terms of savings. Since our savings are low, we are unable to invest them.

The third fuel running out is the absence of the CO2 emissions costs. It is increasingly obvious that the climate policy of the EU is going to give us less and less leeway in this respect. We are still receiving aid funds, but in the coming years their stream is going to dry up to a large extent.

The ability of businesses to adopt technologies is another weekness of the Polish economy and companies. However, in previous years our entrepreneurs were able to successfully absorb Western technologies, resulting in strong increases of productivity.

commercialising individual ideas, inventions created at universities or institutes. We have 42 business incubators, 41 technology parks. Alas, not all of them are functioning as they should. The ministry’s task should be to ensure that laboratories and business incubators are properly utilised at various phases of industrial production and business.

Capital for development, which means increasing the level of investment is a key task and the third pillar of the government’s Plan. The measures that must be applied include: expanding financing instruments offered by the state , efficient use of the EU funds and encouraging Poles to build capital for the future. Attracting foreign capital is also significant.

International expansion is the fourth pillar on which a modern and healthy economy should be built. For a country such as Poland, for Polish entrepreneurs, international expansion offers prospects of greater benefits, the economies of scale, and lower unit costs per product. This, in turn, gives a higher margin on products and bigger profits, which can be used for research and development. The Polish companies which have already grown to a certain scale are finding the domestic market too small. We want to help them expand abroad.

Last, but not least, is social and regional development. We put emphasis on solidarity and social mechanisms. We want to create better conditions for development in more neglected areas, either by developing the infrastructure or by investments.

All those five pillars make up the programme of Poland’s economic development. This programme has no ambition to build a Byzantine-like state superpower. I strongly believe in the market economy and in the wisdom of our entrepreneurs. However, I am not naive and realise that there are more factors at work than just the invisible hand of the market. I think that this invisible hand of the market should be supported by a visible hand of a smart public administration. Only this combination can result in a strong economic system. Last month we were fleshing it out with first successes – for the benefit of Poland and all of • the investors. polish market

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WE HAVE A LOT TO DO! Prof. Piotr Gliński, deputy Prime Minister and Minister of Culture and National Heritage, talks to “Polish Market.”

The objective of every trade mission is to establish new contacts for Polish entrepreneurs. The mission to India is yet another such initiative. Are there any effects of the previous visits?

For a second time I am going to lead a delegation of the government and business to India. Indeed, the main objective is to establish new contacts for Polish companies, but also a very important part of such official visits is to promote Poland, Polish political and economic achievements over the past 27 years, and provide information about the prospects and directions of Polish economic development in the coming years. These directions have been defined in the Plan for Responsible Development prepared by the present government. The fourth very important pillar of the Plan is foreign expansion of Polish companies -support for exports and foreign investments of Polish companies, a reform of economic diplomacy and the promotion of Polish brands.

Another, no less important element of such visits and meetings are unofficial talks with key representatives of the governments of other countries. As in the case of this visit, which brings together high-level representatives of PM

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the governments of several countries, including Australia, France, Germany, Denmark, Portugal, the United Arab Emirates.

The effects can already be seen: Polish exports to the Indian market increased by 49% over the first 10 months of 2016 and the value of overall trade went up by 29%. We estimate that by the end of the year our bilateral trade may reach approximately USD 2.8 billion. Of course, there is still a huge area of economic relations to be explored and the current level of trade does not satisfy us, nor does it exhaust the capabilities of Polish companies and Poland’s export offer.

Is this mission going to be substantive? Can we expect specific contracts to be signed?

Certainly, this is both a prestigious and a business mission which means that it is substantive. Poland appears as a Partner Country in the 8th edition of the Vibrant Gujarat Global Summit 2017. Apart from us there will be 11 other countries afforded this status, including Australia, Canada, United Arab Emirates, Denmark, France and Great Britain. Delegations from the aforementioned countries will also be at a high government level. The Portuguese, Danish and Bulgarian delegations will be led by the respective PM

prime ministers, the delegation from Russia will be headed by a deputy prime minister and the USA by a high-ranking representative of the president-elect. The government delegation is accompanied by representatives of Polish business from major economic sectors, which we promote and support in their efforts to enter the Indian market. The government also promotes local governments, regions and supports their activities in new markets overseas. Our delegation is accompanied by officials of two regions: Podkarpacie and Mazovia. Both regions will sign Memoranda of closer co-operation with the state of Gujarat. India is a huge country and in my opinion establishing closer regional cooperation will create a larger grid of business connections.

India is a country of unlimited opportunities for Polish exporters and investors, the country is looking for new business partners and is very open to co-operation with Poland. Poland is working to benefit from its co-operation with the Indian market, especially using the “Make in India” economic strategy implemented by the Indian Prime Minister.

India is not an easy market, which is why Polish companies that have a good export and

I get the impression that the Indian army is in the process of replacing its old, post-Soviet equipment with modern, highly advanced arms. Do you see an opportunity for our armaments sector here?

In my opinion the co-operation of Polish companies of the defence sector with Indian companies in this sector has a huge potential. This sector also requires the support of both the government and the financial system. We want to present to Indian companies what we have to offer in both these areas. What Polish companies offer in this sector is at a high technological level and we have a very good chance of starting effective, mutually beneficial co-operation.

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The Polish Development Fund which forms part of the Programme for the International Expansion of Polish Businesses is to offer companies modern and comprehensive financial instruments. Will such schemes encourage Polish entrepreneurs to operate in foreign markets?

The Strategy for Responsible Development will be the principal document setting out the directions of Poland’s mid-term development. The main principle of the Strategy is sustainable economic, social, environmental and territorial development of the entire country and the assumption that all citizens are to benefit from the effects of the Strategy. It is based on five pillars: re-industrialisation, development of innovative companies, capital for development, foreign expansion and social and territorial development.

The Polish Development Fund is a key instrument in the strategy of increasing foreign expansion. Polish entrepreneurs will receive strong systemic-organisational and financial support. This support will be extended to many areas: small and medium-sized enterprises, investments, infrastructure, exports, promotion and innovation. Close co-operation with local authorities and professional trade associations will make it possible to increase foreign expansion of Polish companies.

We have good experience in promoting and supporting exports of Polish companies. These tasks will be implemented by a specialised unit located in the structure of the Polish Development Fund called the Polish Trade of Invest Agency, which will combine the existing resources and promotional export-oriented, pro-investment opportunities. It will also integrate the activities of economic diplomacy. This will both expand the promotional potential and export support, as well as simplify and make it easier for Polish entrepreneurs to invest in foreign markets.

The development of modern technologies will be supported by the use of National Smart Specialisations and special development programmes implemented by the Ministry of Economic Development and the Polish Development Fund in various sectors, such as aviation, armaments, shipbuilding, chemical, food, transport and IT. India is an area of great opportunity in the international expansion of exports and investments of Polish companies.

I am convinced that the planned and implemented initiatives and economic programmes in both countries will help to increase mutual economic and trade relations, as well as sectoral cooperation links between Polish and Indian industry and boost the volume of direct investments of Polish companies in the Indian market as well as Indian investments in Poland.

A VERY IMPORTANT ELEMENT OF BILATERAL RELATIONS BETWEEN OUR TWO COUNTRIES IS CULTURAL COOPERATION. POLISH-INDIAN CULTURAL CO-OPERATION HAS BEEN CONTINUING FOR OVER 50 YEARS AND IS PRESENT IN ALMOST EVERY ARTISTIC DISCIPLINE.

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investment offer for this market will benefit from the support and involvement of the government and the financial resources put towards promotion.

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A very important element of bilateral relations between our two countries is cultural co-operation. Polish-Indian cultural co-operation has been continuing for over 50 years and is present in almost every artistic discipline. One should mention here the Polish Days in India held in the September 2006 – November 2007 period. The occasion was used to present cultural events complemented by presentations concerning science and the economy.

The main effect of the “Days” was the comprehensive restoration of the works of Stefan Norblin in the Umaid Bhawan Palace in Jodhpur (Rajasthan) financed by the Ministry of Culture and National Heritage in the years 20062011. Currently, the palace in Jodhpur is open to visitors and is among the biggest tourist attractions of Rajasthan.

We also co-operate with Indian publishers. Owing to Poland’s participation as a guest of honour in the World Book Fair held in New Delhi in 2014, contacts have been established. They are now being successively extended by the Book Institute. We want books of Polish authors to be published in India both in English and in other official languages of this country.

The signing of the “Audiovisual Co-production Agreement” in 2012 increased the interest in joint film projects. The Polish Film Institute received applications from movie producers and finalised deals during film fairs, especially the Film Bazaar in Goa. Every year, Polish films and film-makers are represented at international festivals in India and often receive awards.

The co-operation with the National School of Drama is the most important element of collaboration in the field of theatre.

Every January, this Delhi-based school organises a drama festival inviting artists from Poland.

In the area of design, the “Eye on Poland” modern graphic design exhibition, highly appreciated by the public in Asia, has had a further edition. Between June and July 2016, it was presented in Mumbai.

Presentation of Indian culture in Poland takes place in two different areas: during international theatre festivals where interesting modern productions from India are invited. They are seen by a small group of viewers: seasoned festival-goers. At the same time, the interest in traditional Indian dance and films produced in Bollywood observed in recent years means that they are often presented in Poland, in the form of reviews organised by the Embassy of India, or as accompanying events organised

by Indian-Polish cultural and economic organisations.

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POLAND – INDIA

PARTNERSHIP TO FUTURE India is among the five prospective markets which in the next three years will be included in a special general promotion programme. This project is an important element of the Strategy for Responsible Development and is a confirmation of our commitment. One of the priorities of the Ministry of Economic Development is providing support to Polish businesses in their international expansion.

Tadeusz Kościński, Deputy Minister of Economic Development

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oland attaches great importance to strengthening economic cooperation with India, which is the economic leader in the region of South Asia and a market with a great development potential and prospects for Polish exports and investment. We are interested in systematically increasing economic relations with India, and in the near future we would like to raise our cooperation to the level of strategic partnership.

India is a country with wide opportunities for Polish exporters and investors looking for new business partners and is open to cooperation with Poland. This is confirmed by the economic programme of the Indian government - Make In India. It is a broad programme addressed to foreign companies encouraging them to cooperate with Indian companies. Poland should take advantage of these intentions to be among the countries deriving large benefits from their cooperation with the Indian market.

In this regard, the Ministry of Economic Development has chosen India as one of the five prospective markets, which will be covered in the next three years by a special general promotion programme.

The aim of the project is to support and encourage Polish entrepreneurs to boost initiative in exports and to boost cooperation with the Indian market and businesses. The international expansion of Polish companies is fourth pillar of the Strategy for Responsible Development. With no doubt, this is also proof of the commitment of the economic administration of the Polish government to supporting Polish companies in their international expansion.

The achievements of the Polish economy in the past 27 years, the current level of performance indicators of economic development and a very positive outlook and prospects for further development of the country based on the Plan and Strategy for Responsible Development are a good basis for closer cooperation with India and the promotion of Polish exports in the Indian market. For this strategy to succeed it is necessary to have entrepreneurial activity. At this point, we have a very good offering for the Indian market in many

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sectors of the economy, such as coal mining and extractive industry, machinery and mining equipment, agro-industry, renewable energy, transfer of Polish technologies in the field of environmental protection (technologies of waste treatment, rubbish incineration technologies, water purification), defence industry (co-operation in the field of production for the defence industry).

Support for the international expansion of Polish companies is also one of the ways to multiply domestic capital. Exports by themselves are not everything - our companies should conquer foreign markets via direct investment, mergers and acquisitions. We will strengthen our activity in the promising markets outside the EU, which is also the Asian market. We will support our companies, for example through dedicated financial products and the promotion of Polish goods.

We have good experiences in promoting and supporting exports of Polish companies. However, skills and potential are scattered over many institutions. Therefore, there is a need for comprehensive and co-ordinated action to increase foreign expansion of Polish businesses. These tasks will be implemented by a special unit located in the structure of the Polish Development Fund. This way we will combine the existing resources with the promotion, pro-export and of pro-investment opportunities. We will also integrate the actvities of economic diplomacy. This will both expand the promotional programme and export support, as well as simplify and make easier the investments of Polish entrepreneurs in foreign markets.

Economic and cultural ties between Poland and India have a long and positive tradition. Currently, both countries need partnerships based on solid economic and business relations. We are on track to build them in the area of economic co-operation and political dialogue. The best proof of this are the visits of Polish delegations at the highest level planned for 2017. The excellent relations with the administration of the federal government of India will be another important step towards building new solid partnership relationships.

•

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WE PLAN TO DOUBLE INDO-POLISH TRADE & INVESTMENT Ajay Bisaria, Ambassador of India in Poland and Lithuania

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ndia, the fastest growing large economy in the world, has embarked on a tenacious path of innovative reform and rapid deregulation which is throwing up huge business opportunities for global partners. The World Economic Forum has ratcheted up India’s place to 39 out of 138 countries, in the Global Competitiveness Index for 2016-17.

The economic reforms unspooling over the last two years have wrought dramatic changes in the business and investment climate, making India the most open economy in the world for Foreign Direct Investment.

Radical economic reforms continue apace. Most clearances can now be obtained online, labour laws are being rationalised, taxes are being streamlined and consolidated under a Goods and Services Tax, which would present India as a unified market of 1.2 billion people. Infrastructure growth with dynamic industrial corridors and the planned 100 new smart cities are multiplying business opportunities. Foreign investors now encounter red carpets in almost all industries, with increased FDI limits across the board, most recently in sectors like Defence, Railways, Civil Aviation and Pharmaceuticals. India saw a record FDI inflow of USD 55 billion in two years, marking an increase of more than 50% at a time of general global slowdown.

The Government’s flagship schemes like Make in India seek domestic and foreign investments to transform India into a global manufacturing hub. Digital India aims to electronically empower India; we already have more than a billion unique identities, as many cell phones and more than 300 million bank accounts.

Skill India endeavors to enhance the employability of the country’s nearly 500 million youth. This is an India unleashing transformational reforms, with aspirations to catapult its economy on a path of sustained double digit growth.

Poland is a promising partner in India’s new journey. It is India’s largest trading partner in Central Europe, with bilateral trade growing at more than 20% and likely to touch USD 3 billion in 2016, and an ambitious agenda of touching a trade level of USD 5 billion by 2018. India’s investments in Poland total over USD 3 billion. Poland’s investments in India are also rising

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POLAND IS A PROMISING PARTNER IN INDIA’S NEW JOURNEY. from the current level of USD 600 million. We saw renewed vigour in the economic relationship in 2016, with the visit of a highpowered business delegation led by Deputy Prime Minister Piotr Gliński, at the Make in India Week in Mumbai in February 2016.

Since then, we have witnessed an exchange of multiple regional and sectoral business delegations. We have also seen serious fresh investment proposals, including from Solaris for the manufacture of eco-friendly buses, from Ekolog for water & sewage treatment plants, as also proposals to double investment levels from TZMO (hygiene products) and Canpack (tin cans).

A new dimension to the economic partnership is the emerging ties between Indian states and Polish regions, with several sub-national agreements in place (Andhra-Małopolska, Punjab-Lublin, Karnataka-Wielkopolska) and more in the pipeline (Gujarat-Podkarpackie, Uttarakhand – Opole). The opportunities for business have diversified beyond traditional sectors like food processing; coal & mining; and IT; to new sectors like healthcare, green technologies, furniture and renewable energy.

With this positive energy in the bilateral economic partnership, we are confident of doubling our trade and investment levels in the foreseeable future. India welcomes Polish companies! •

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POLAND A RELIABLE AND REPUTABLE

PARTNER

Tomasz Łukaszuk, Ambassador of the Republic of Poland to India

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ndo – Polish relations have intensified significantly over recent years. This is best measured by the number of high-level visits as well as visits of business delegations on both sides. I must emphasize strongly that India is one of Poland’s most important strategic partners globally and we are connected by the intensive economic and cultural cooperation as well as political dialogue.

Figures regarding economic relations between India and Poland this year are promising. In the first ten months of this year our bilateral trade reached over USD 2.3 billion. I strongly believe that these numbers can be even higher in the near future. And my optimism is very well founded as our exports to India are growing significantly.

Recognizing the status of India as a global economic power, Poland wishes not only to strengthen our economic cooperation, but also intends to identify the most profit-bringing areas in our bilateral contacts, especially in the energy sector, food processing industries, advanced technologies as well as in research and development. We put big hopes on ambitious and diversified investments in both directions in order to make the presence of Indian companies much stronger in Poland as well as Polish companies more competitive in India. We offer a large number of incentives to the Indian business community, with whom we have invariably excellent relations.

When reviewing only the last two years of Polish economic activity in India, we have seen numerous official visits to India as well as participation in many significant events in this country. At the time we witness three official visits at the level of Deputy Prime Minister of Poland to India, not counting eleven other visits of Polish ministers and deputy ministers visiting India. Poland for the second time participates in Vibrant Gujarat Summit, this time as a Partner Country. Last year we were a Partner Country during India – Central Europe Business Forum in Bangalore and also a Partner Country during Progressive

IN THE FIRST TEN MONTHS OF THIS YEAR OUR BILATERAL TRADE REACHED OVER USD 2.3 BILLION. I STRONGLY BELIEVE THAT THESE NUMBERS CAN BE EVEN HIGHER IN THE NEAR FUTURE.

Punjab Investors Summit. This month we are also going to be a Partner Country for West Bengal Investment Summit.

Our participation in all these events is just taking a unique opportunity to promote Poland and companies from Poland as reliable and reputable business partners. Our aim is also the presentation of investment opportunities in Poland to business from India and particularly from Punjab.

I should also mention that during the time a few agreements between our regions were signed – between Punjab and Lubelskie, Karnataka and Wielkopolskie and today we are witnessing signing of Memorandum of Understanding between Gujarat and Podkarpackie.

I always remain committed to strengthening and diversifying Indo-Polish business relations. I am deeply convinced that this publication will enable you to explore Poland as the land of unlimited opportunities where your creativity and entrepreneurial spirit can be materialized in the best possible way. • polish market

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INDIA IS BECOMING STRONGER J. J. Singh, President of Indo-Polish Chamber

of Commerce and Industry (IPCCI)

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n the surface it might seem that Poland and India don’t really have much in common. Statistics and history at first glance do not speak in favour of the development of mutual relations based on synergy potential.

India is the Asian subcontinent, an area ten times larger than Poland, with a population today exceeding 2.5 times the

NEW BILATERAL INVESTMENTS IN THE IT SECTOR IN THE YEAR 2016 REFLECT THE GREAT POTENTIAL WHICH IS STILL THERE TO EXPLORE. number of EU citizens. Poland is only 38 million people, a little less than the half of the Indian state of Gujarat, one of the 29 states and 7 territories of the Indian Union.

Poland , however, is much closer to India than it seems, because the people are similar. Common features include: smartness, resourcefulness and entrepreneurship, as well as centuries of experience of struggling against foreign influences. Diplomatic relations between the two countries date back to the 1930s and were officially established in 1954.

Poland and India are also connected by business. There are several sectors with particularly promising entrepreneurs from both countries: mining , information and communication technologies, BPO services, the food industry, health industry,

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chemical industry and the luxury good markets. Two years ago Prime Minister Narendra Modi came to power in India. His comprehensive plan of reforms that began in the subcontinent in the second half of 2014 falls under the slogan “Make In India”. It is a campaign aimed to encourage global companies to shift production to the subcontinent. Bureaucratic barriers are being brought down, as are stereotypes of the Indian officials as being anti-business. According to the Prime Minister, India is eliminating “red tape” and is laying out the “red carpet” for business people.

Increasing foreign investment and capital inflows will enable a more dynamic economy, at the same time boosted by large public-including transport- corridors, a high-speed rail network, creating smart solutions in the cities and building industrial centres with high energy efficiency.

India is becoming stronger and more open to business and provides great opportunities for Europe and that includes Poland. The trade between the two countries has grown year over year by 24%, which reflects the result of the hard work done by the government and non-government institution like IPCCI in promoting trade and relations between the two countries.

New bilateral investments in the IT sector in the year 2016 reflect the great potential which is still there to explore.

Today, emerging economies like India are geared to achieve sustained high single-digit GDP growth. Poland due to its sustained and successful efforts to restructure its economic edifice, is ideally primed to partner with India to collectively reap the economic benefits.

IPCCI remains committed to assisting all stakeholders in realising the intended goals and is confident that the government , the business sector and citizens will benefit.

• Contact: www.ipcci,pl jjsingh@ipcci.pl

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ACADEMIA-INDUSTRY INTERLINKED MODEL OF BUSINESS COOPERATION:

POLAND-INDIA PERSPECTIVE Dr Pradeep Kumar, President IndoEuropean Education Foundation (IEEF)

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ducation is the main source of knowledge and skilled labour forces, which creates a link between educational institution’s and industries. In recent years, education has become the most advanced form of investment to increase the capital flow of any organisation and support in choosing location for foreign capital (FDI) in order to receive skilled labour forces. In general, if the profit rate is more productive and higher, investment has been considered as more advanced for the identified locations. It gives quick and stable cash flow by using a large number of skilled human resources. Thus, education has not only been identified as profitmaking business but it is the best novel profession, which is connecting educational institutions and industries, and supporting to improve social living standards. It has been seen that education is playing a very wide and important role not only in the development of socio-economic relations but also bridging the gaps between nations.

Trade between India and Poland – countries which are among the world’s top 20 economies, with minimal two-way FDI flows and a trade turnover of USD2.2 billion in 2015 - does not measure up to the true potential of the two nations. During the last decades, while Polish business concentrates the majority of its activities in the EU and close neighbourhoods, Indian experts admitted that Poland was not yet fully recognised in India as a business destination. Trade relations between these two countries have not reached the certain figure where it supposes to be after 61 years of diplomatic relations. Although a chair of Sanskrit was set up in the Jagiellonian University of Kraków in 1893.

In spite of the fact that both economies are experiencing growth and willingness towards new trade relations, still there are many barriers that are creating hurdles for trade flows and destabilise academic-industrial relations. There are no strong approaches made for academic -industrial ties focused on Indian-Polish universities.

On the one hand, where Poland as a country has more than 500 universities with 36.5 million population with decreasing demography figures, getting trouble to fulfil their places at educational institutions and largely depending on public funds or EU grants, India is overcrowded with 1.28 billion people and every

year thousands of students go abroad for higher education on the basis of full tuition fee payment. India has ver 650 million people below the age of 25 years. Over 32% of the 1.28 billion population is in the age group of 0-14, which means the number of people in India needing primary and secondary education alone exceeds the entire population of the USA. By 2020, India will have one of the youngest populations in the world, with an average age of 29 years, and 25 million people will be seeking higher education abroad with the capacity to expend EUR 15000- 20000 per year. In other words, Poland can get a number of well qualified students for their well esteemed institutions and millions of euros as direct capital flow to the Polish economy. Not only that, such approach will bring industrial interest from both countries to start close ties with academic institutions and provide many different services such as industrial training, internships and full employment in their perspective department and locations.

Today, less than 800 Indian students are studying in Poland at all Polish universities (the number has been increased since 2014, from 209 students) and in a similar manner less than 50 Polish students are studying in Indian universities. What is more, we are not able to find all together even 60 companies from both countries working as foreign investors. Thus, certainly there is a gap between these two entities that is affecting business ties between India and Poland. And I believe this gap must be bridged through spreading knowledge about Poland in India and India in Poland based on educational-industrial ties, which will fulfil each others requirements in the interest of both countries. • About Indo-European Education Foundation- IEEF We are a Polish NGO, registered and located in Warsaw. We understand the need of academia and industries in today’s changing world and connect them to fulfil each others requirement based on “Academia-Industry Interlinked Model of Business Cooperation”. We also address the need of today’s Polish educational institutions and support them in various sectors such as recruitment of students from India, joint conferences, joint publications, seminars, exchange of students and scholars, and industrial cooperation etc.

Contact: www.ieef.pl p.kumar@ieef.pl, r.zukowska@ieef.pl polish market

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INDIA INFORMATION ON ECONOMIC RELATIONS WITH POLAND GENERAL INFORMATION Area:

3 287 590 km2

Population:

1 236 344 631

Capital:

New Delhi

Currency:

Indian rupee (INR)

President

Pranab Mukherjee, since July 25, 2012

Prime Minister

Narendra Modi, since May 26, 2014

Minister of Trade and Industry

Nirmala Sitharaman, since May 26, 2014

Minister of Foreign Affairs

Sushma Swaraj, since May 26, 2014

Ambassador of India to Poland

Ajay Bisaria, since January, 2015

Ambassador of Poland to India

Tomasz Łukaszuk, since July, 2014

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SELECTED MACROECONOMIC INDICES OF THE INDIAN ECONOMY: 2010

2011

2012

2013

2014

2015

GDP growth (%)*

10.3

6.6

5.1

6.9

7.3

7.3

Nominal GDP (in USD billions)**

1 729.0

1 729.0

1 843.0

1 758.0

2 048.0

2 182.6

GDP per capita (in USD)**

3 500

3 800

5 300

5 500

5 800

6 209

Inflation

10.2

10.2

9.7

10.0

5.9

5.4

Unemployment

*

*

9.5

9.1

8.6

-

FDI abroad

*

*

109.7

119.8

129.8

-

Exports of goods and services (in USD billions)

353.9

353.9

301.9

317.8

317.8

-

Imports of goods and services (in USD billions)

436.7

436.7

503.5

515.1

515.1

-

BASIC INFORMATION, INDIA’S ECONOMIC SITUATION India is a parliamentary republic and member of the British Commonwealth. India is divided into 29 states and 7 territories (6 union territories and one national capital territory. The states and territories are divided into districts numbering 640 in 2011. The head of state is President Pranab Mukherjee, and the Prime Minister is Narendra Modi, elected in general elections in 2014. India is the 7th largest country in the world and second most populous.

The parliamentary elections in 2014 resulted in a change of government. The new Indian Prime Minister Narendra Modi announced a return of the Indian economy to the path of fast growth (in the last two years of the previous administration the rate of growth had fallen significantly).

The most important drivers of growth include the following sectors: mining, industrial manufacturing, construction, trade, hotel sector, transport services and telecommunications.

LEGAL AND TREATY FRAMEWORK OF ECONOMIC CO-OPERATION EU – INDIA • EU – India Strategic Partnership Agreement of November 2004, • on August 6, 2015 the government of India announced the suspension of the negotiations regarding a Free Trade Agreement (FTA) between the EU and India initiated in 2007.

POLAND – INDIA • Agreement between the Government of the Republic of Poland and the Government of the Republic of India on the Promotion and Protection of Investments,

Source: OECD data – Economic Outlook, November 2015; IMF - World Economic Outlook Database, October 2015; * except GDP growth, data given according to tax year commencing in April; ** World Bank data.

• Economic Co-operation Agreement between the Government of the Republic of Poland and the Government of the Republic of India, 2006

TRADE BETWEEN POLAND AND INDIA Positive changes in the commodity structure of Polish exports to India have been observed in recent years. The share of relatively highly processed and more modern goods, such as electrical machinery, has been increasing.

In the years 2010-2016, exports of electrical machinery increased almost two-fold, exceeding USD 230 million. The biggest growth in this group was seen with regard to:

• mechanical plant and machinery and their parts, where sales increased by more than 200% (to USD 146 million), and the share in the overall exports went up to 26.1%, and • electrical plant and machinery and their parts, where exports increased three-fold to nearly USD 90 million and the share in the global exports grew to 16.13% in 2016.

The second-largest export item are metallurgical products (16.2% in 2016). In the years 2010-2016 their sales went up by 50% exceeding USD 90 million. They are dominated by iron, pig iron and steel, and their exports went up significantly by 77.0%. This group also saw increased sales of tools, utensils, knives, spoons, forks, cutlery, etc. (by 35.0%), and copper and copper products (by 14%).

On the other hand, sales of products of the chemical industry - taking in the first 10 months of 2016 the third place in exports to India-increased by 24%, to nearly USD 80 million (14.2% share in total exports).

The biggest changes in Poland’s import from India in the years 2010-2016 were observed in respect of:

• chemical products, whose imports increased almost three fold, to USD 710.0 million, and the share increased from 18% to approx. 40%. Among the goods of this group the fastes growth in imports was seen in organic chemicals, which in the period of 10 months in 2016 amounted to nearly USD 570 million and increased by 51% compared to the same period of the year 2015.

• light industry products, whose imports grew much slower than the average, i.e. by 16% (to over USD 430 million), which resulted in a decrease in their share from

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TRADE BETWEEN POLAND AND INDIA (IN USD MILLIONS)

Source: Data from the INSIGOS – MR system

2012

2013

2014

2015

Change 2015/2014

Jan.-Oct. 2016

Change Jan.-Oct. 2016/ Jan.-Oct. 2015

TURNOVER

1 905.9

1 956.3

2 261.8

2 207.0

97%

2 341.8

127.0%

EXPORTS

665.8

491.2

550.6

464.7

84%

560.6

149.0%

IMPORTS

1 240.1

1 465.2

1 711.2

1 742.3

101%

1 781.3

121.0%

BALANCE

- 574.3

- 911.6

- 1 160.6

- 1 277.5

x

- 1 220.7

x

37.6% to 24.2% in the first 10 months of 2016.

• electromechanical products, whose imports increased by 18% (up to nearly USD 250 million), and the share in total imports amounted to almost 14%.

In the first 10 months of 2016 a dynamic increase of trade with India was observed.

Exports to that market grew by 49% (to USD 561 million) compared with the same period of 2015, while imports amounted to USD 1,781 million – an increase by 21%. During that period total turnover went up by 27% against the same period of 2015. The increase in exports to India in the analysed period was due to the growing exports of the most important product groups, meaning metallurgical products (by 29%), chemical industry products (by 24%), mineral products (more then two fold), ceramic products (by nearly 80%) and electrical machinery (by 56%). However, the biggest increase was recorded in precious metals, whose exports in the first 10 months of 2016 exceeded USD 40 million, more than twice the figure for the same period of 2015.

INVESTMENTS AND CAPITAL CO-OPERATION According to the National Bank of Poland, Indian capital investments in Poland at the end of 2014 amounted to USD 45.4 million.

At the end of 2014, there were 122 companies with Indian capital operating in Poland. Most of them (99) employed up to nine persons.

Investments of these companies calculated according to the GUS methodology totalled USD 93.1 million, representing 0.05% of the total foreign capital. During that period there were seven Indian companies with investments in the Polish market exceeding USD 1 million.

In recent years we have seen growing interest of Indian businesses in the Polish services sector. Indian companies invested in business services centres supporting Western European markets. The following companies opened their centres in Poland: Tata Consultancy Services (Warsaw), Infosys BPO (takeover of the BPO service centre from Philips, including the centre in Łódź), HCL

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Technologies (Kraków), Wipro (Wrocław), MphasiS (Wrocław), ZenSar Technologies (Gdańsk). Other Indian companies trading in Poland include: Sharda Group (fabrics and bed linen), Videocon (kinescopes), Escorts (agricultural tractors), Eurobatt (batteries, household appliances), Essel Propack (packaging), Rishabh Instruments Pvt. Ltd. (85% shares in Lubuskie Zakłady Aparatów Elektrycznych Lumel S.A.), Uflex (plastic packaging plant in Września).

Statistics of the NBP do not classify investments of Arcelor-Mittal in Poland as Indian capital, because the company is incorporated in Luxembourg. Arcelor-Mittal Poland is the largest steel manufacturer in our country, employing more than 11,000 people at six branches in Śląskie, Małopolskie and Opolskie provinces. In the years 2004-2013, the company invested in Poland approximately PLN 4.8 billion.

India is the number-one location for Polish direct investments in Asia (the other places are occupied by Singapore, Malaysia and China).

The balance of receivables from Polish foreign direct investments in India at the end of 2014 reached USD 258.3 million, and in 2014, India attracted 31.8 million on account of Polish FDI. Polish investors in India are therefore the more active party in terms of capital commitment compared with Indian investors in Poland.

The majority of Polish investments went to the manufacturing industry. The largest Polish investments in India include: the Can Pack plant producing cans, dressing materials factory belonging to TZMO (trading through Bella India - a joint venture with an Indian partner). Also the company Bioton is present in India (construction of a factory in Pune).

Polmor has also invested In India, setting up Hyderabad company producing welded structures for rail vehicles with a partner from India.

MARKET ACCESS Despite several years of gradual liberalization and opening of the economy to external competition, India still hardly counts as a country with free access to the market. In the ranking of the World Bank concerning

the ease of doing business, India occupies a distant 120th place. India has not signed the WTO Agreement on Government Procurement and maintains high preferences for local stateowned manufacturers (10-15%), as well as for local small businesses (15%). There is still a list of goods that can be purchased through public procurement only from local small businesses (small scale industries - SSI), although it has been significantly reduced, from 839 items in 1991 to 326 in 2006 and 114 now. There are state price controls on food commodities, pharmaceuticals and fuel. In September 2007, gas prices for individual consumers were capped below the prices on the international market, which may prevent private companies from further exploration and exploitation of gas deposits. A similar situation exists in the case of investments in the energy sector, to which foreign companies approach with caution. Subsidies to agriculture - water, energy and fertilizers - account for nearly 2% of budget expenditures and are a major obstacle to increasing budget spending on infrastructure and the energy sector.

Access to the Indian market is not easy. On the one hand, the consistent opinion of all the EU countries is that border procedures are cumbersome and lengthy, and problems with corruption are significant. On the other hand, the size of the internal Indian market means that almost everything can be produced here locally on an economically viable scale. Added to this are protective market mechanisms, the largest in the field of agri-food products, such as the obligation to import cereals only by the state monopoly - “Food Corporation of India”, the obligation of special labelling of goods and the provision of market goods with a shelf life of at least 60% of the original period, which is a serious obstacle in the case of goods with not a very long shelf life.

ACTIONS TAKEN TO DEVELOP BILATERAL ECONOMIC COOPERATION In recent years a number of actions have been taken aimed at stimulating exports to the Indian market. In January 2015, a Polish delegation of government and business

chemical sector, organised by the Indian Chamber of the Chemical Industry, visited Poland.

On January 10-13, 2017 a Polish government and business delegation led by Deputy Prime Minister Prof. Piotr Gliński and including deputy Minister of Economic Development Tadeusz Kościński and a deputy minister of foreign affairs will visit India.

POTENTIAL AREAS OF COOPERATION The relatively rapid growth of the Indian economy, its great economic potential, as well as the observed increase of its importance in the world economy, allows one to foresee a great potential growth in Polish trade with this market and an increase of Indian investors’ interest in Poland. According to the Ministry of Economic Development, all this opens up new opportunities for co-operation in traditional industries in which Polish companies have already achieved a good standing, such as:

• mining – underground and open-cast, with regard to building new facilities (including mines and coal enriching plants), supply of mining machinery and equipment and services and works for India’s coal mining; • power sector – supply of services and sets, components and spare parts used for overhauls and modernisation (improved energy efficiency) of power plants built in India in the 1970s and 1980s by companies such as Elektrim and Megadex; • defence industry – co-operation, transfer of technologies and development of research co-operation (R&D); • pharmaceutical industry and medical apparatuses and equipment – in view of the expanding Indian health care system, both State-owned and private, with a market of more than one billion potential patients and consumers of medical and hygiene materials and drugs; • food processing machinery and equipment; • installations and transfer of environmental protection technology; • co-operation between research and development institutions (R&D).

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representatives participated for the first time in the Vibrant Gujarat Summit 2015 conference.

During the visit the official delegation met with Indian Prime Minister Mr Narendra Modi, Prime Minister of Gujarat and four ministers from the economic ministries in the federal government of India (Ministers of Mining, Steel, Agriculture and Food Processing).

On 12 -17 June 2015, the 4th Plenary Session of the Polish-Indian Joint Commission on Economic Cooperation was held. At the same time, on June 12 this year, three Joint Working Groups on Coal, Food Processing and IT and ICT, established under the provisions of the Protocol of the Third Session of the Polish-Indian Joint Commission on Economic Cooperation, held a debate. On June 16, 2015 an Indian delegation took part in the Business Forum in Katowice, which was organized by the Ministry of Economic Development in cooperation with the Chamber of Commerce and Industry in Katowice and the Marshal Office of Śląskie Province.

On February 13-15, 2016 a businessgovernment mission visited India (participation in Make In India Week in Mumbai). It was led by Deputy Premier, Professor Piotr Gliński. The Ministry of Economic Development was represented by deputy Minister Radosław DomagalskiŁabędzki.

During this visit Deputy Prime Minister Piotr Gliński in talks with Indian Prime Minister Narendra Modi and Ministers of Trade and Industry, Coal and Agri-Food Processing, confirmed the continuation of Poland’s expansion in foreign markets, saying that India remained a prospective market for Polish exporters and investors.

On June 6-10, Poland was visited by a delegation representing the Indian Ministry of Coal interested in increasing the involvement of the Polish mining sector in the manufacturing of plant and machinery and modern exploitation and coal processing technologies in India.

As a result of this visit, following talks at the Ministry of Economic Development and talks and meetings with Polish companies (such as Famur, Węglokoks and Kopex) and at the AGH University of Science and Technology and the Central Mining Institute (GIG), a study visit was organised by the Ministry of Economic Development for academics (AGH and GIG) and business in India on an invitation of the Ministry of Coal and The Coal India Ltd. We expect the co-operation in this sector between Polish and Indian companies and scientific institutions to develop further.

In September and October, delegations from the states of Gujurat, Karnataki and West Bengal and business delegations from Maharashtra – industrial and from the

Section Head-Counsellor 50 M (Gate 4) Shantipath, Chanakyapuri 110021 New Delhi

Tel.: +91 11 414 96 959 Fax: +91 11 268 89 215 e-mail: newdelhi@trade.gov.pl website: www.india.trade.gov.pl Consulate General of the Republic of Poland in Mumbai Mr Leszek Brenda – Consul General Nirmal Building, 11A, 11th Floor, 241/242 Backbay Reclamation, Nariman Point, Mumbai 400021 Tel.: +91 22 2285 2631, +91 22 2285 2641 Fax:+91 22 2285 2638 Honorary Consul of the Republic of Poland in Kolkata Mr. Mohan Goenka – Honorary Consul 687 Anandapur, EM Bypass, Kolkata 700 001 West Bengal, India Tel.: 0091 33 6613 6264; Fax: 0091 33 6613 6800, 6613 6400 e-mail: pol_con_kol@emamigroup.com Honorary Consul of the Republic of Poland in Bangalore Mr. Abhishek Poddar – Honorary Consul Sua House, 26/1 Kasturba Cross Road, Bangalore - 560 001, Karnataka, India Tel.: 0091 80 41120782; Fax: 0091 80 22128189 Honorary Consul of the Republic of Poland in Colombo, Sri Lanka Mr. Desamanya Kandiach Ken Balendra – Honorary Consul General Phoenix Ventures Ltd, 409 Galle Road, 2nd floor, Colombo 3, Sri Lanka Tel.: 009411 2565612; Fax: 009411 4727060 e-mail: CherylD@brandix.com Honorary Consul of the Republic of Poland in Kathmandu, Nepal Mr. Lokmanya Golchha - Honorary Consul General Golchha House, Ganabahal, P.O.Box-363, Kathmandu, Nepal.

Tel.: 00 9771 4250001, 4249114; Fax: 00 9771 4249723; e-mail: lmg@golchha.com lub polishconsulatenepal@gmail.com Honorary Consul of the Republic of Poland in Dhaka, Bangladesh Mr. Reshadur Rahman – Honorary Consul Erectors House (10th Floor), 18 Kemal Ataturk Avenue, Banani Dhaka – 1213, Bangladesh Tel.: 00 88 02 9821426; 00 88 02 9821422-23 Fax: 00 88 02 8822244 e-mail: polcondhaka@gmail.com

POLISH MISSIONS IN INDIA

MISSION OF INDIA IN THE REPUBLIC OF POLAND

Polish Embassy in New Delhi

Embassy of India in Warsaw

Mr Tomasz Łukaszuk

Mr Ajay Bisaria

Ambassador of Poland to India

Ambassador of India to Poland

50-M Shantipath, Chanakyapuri, New Delhi - 110 021

ul. Myśliwiecka 2

Tel.: 00 91 11 414 96 900 Fax: 0 91 11 268 719 14

00-459 Warszawa

e-mail:newdelhi.polemb.info@msz.gov.pl

Tel.: +48 22 540 00 00

website: www.newdelhi.msz.gov.pl/pl

Fax: +48 22 540 00 01

Trade and Investments Promotion Section of the Polish Embassy in New Delhi

website: www.indembwarsaw.in

Karol Pęczak

Author: L. Jaremczuk, DWM, December 2016.

polish market

15

PROGRAMME FOR SUPPORTING THE INTERNATIONAL

EXPANSION OF POLISH BUSINESSES

E

stablishing the Polish Trade & Invest Agency and replacing Trade and Investment Promotion Sections at Polish embassies with a new network of Trade Offices are the key aspects of a new system for supporting exports and Polish investment abroad.

“It is necessary for the management of the business support system to be coordinated and integrated by a central institution.

This is why we are setting up the Polish Trade & Invest Agency, which will start operating in January 2017. It will be established on the basis of the Polish Information and Foreign Investment Agency and will be included in the Polish Development Fund,” said Mateusz Morawiecki, deputy prime minister and minister of economic development and finance. “As a key element of the new system, it will be responsible for the development of the

16 polish marketspecial edition 2016

scale of exports by Polish firms and for enhancing their investment activity abroad. I count on the new support system to help create premium export brands,” stressed Minister Morawiecki.

“It will be a completely new and unique model based on ambitious institutional changes and modern financing and advisory services. It will be adjusted to the level of businesses’ internationalization, the potential of public administration and the available budget resources. Businesses will get professional and comprehensive support comparable to the one offered by highly developed countries.”

The foreign expansion of Polish businesses is one of the five pillars of the Strategy for Responsible Development. The Programme for the International Expansion of Polish Businesses is carried out by the Polish Development Fund company (PFR

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SA). Exports financing packages to be offered by PFR Group will have a combined value of up to PLN60 billion.

The Polish Development Fund will be responsible for pursuing the programme under the new model for supporting Polish exports. It will be managing advisory services and financial products, and creating support instruments tailored to the needs of businesses on the basis of institutions integrated within the group.

“The share of technologically advanced products in Polish exports is low,” said Paweł Borys, president of the Polish Development Fund. “Only around one third of the exports are products made by Polish-owned firms and the absence of strong Polish brands is evident. We will be supporting the international competitiveness of Polish businesses, offering them a comprehensive range of financial and advisory instruments.”

The institutions responsible for the programme will be the Export Credit Insurance Corporation (KUKE), whose role will be significantly strengthened, Bank Gospodarstwa Krajowego (BGK), and the Polish Trade & Invest Agency (PAHI), which will be established as a result of the transformation of the Polish Information and Foreign Investment Agency (PAIiIZ). PAHI will manage a network of Trade Offices abroad providing support to Polish businesses on individual target markets. The Foreign Expansion Fund is to be responsible for co-financing foreign investment by Polish businesses.

with a strong business and managerial culture. In 2017, the Agency will have a budget of around PLN100 million while its predecessor, the Polish Information and Foreign Investment Agency, has a budget of only PLN12 million.

TRADE OFFICES

The Polish Trade & Invest Agency will run a network of Trade Offices abroad. They will replace the 49 Trade and Investment Promotion Sections which now operate at Polish embassies. Ultimately, 69 Trade Offices will be established.

The Trade Offices network will be tailored to the needs of businesses and adjusted to the directions of development of the global economy. This is why the institutional presence on promising non-European markets will be increased. The activity of the Trade Offices will contribute to optimizing the costs and minimizing the risks involved in entering foreign markets.

The Trade Offices will be able to conduct commercial activity for, for example, state-owned companies on foreign markets.

A system of paid services supported by financial instruments – services like market research and strategies for the development of exports and foreign investment – will be established. Businesses will have an opportunity to use Trade Offices for commercial purposes, for example as a virtual office.

FOREIGN EXPANSION FUND

PILLARS OF THE NEW SYSTEM POLISH TRADE & INVEST AGENCY (PAHI)

The Agency will combine the existing pro-exports, pro-investment and promotional resources and potential. It will integrate economic diplomacy measures and will be responsible for creating a strategy for supporting exports and foreign investment.

Additionally, it will be pursuing the policy of promoting the Polish economy.

The Agency will be responsible for the development of advisory services for Polish exporters and investors. As the coordinator of operational instruments, it will: • be organizing trade missions and fairs on foreign markets; • create support programmes dedicated to individual markets and sectors; • offer Polish businesses strategies for their entry onto foreign markets; • enable businesses to gain knowledge about the business culture of their target market, will help the client gain an insight into the regulations and regulatory barriers present on the market; and will check the foreign partners.

Through these activities, the Agency will help businesses reduce costs of foreign market entry as these costs often result from insufficient knowledge of the rules governing trade and distribution in the country or economic region they want to enter.

Managing financial instruments designated for pro-exports and pro-investment measures will be an important element of the Agency’s activity. The Agency will provide new exports financing opportunities for small and medium-sized enterprises and large export contracts. It will be a goal-oriented organization

The Foreign Expansion Fund will be co-financing Polish investment on foreign markets, sharing the risk involved in foreign projects. The Fund will be taking over shares or equities in foreign companies controlled by Polish partners or will be granting loans to the foreign companies without recourse for the Polish partner. The standard amount to be contributed by the Foreign Expansion Fund for a project will be up to EUR12.5 million.

FLEXIBLE FINANCING AND PROFESSIONAL ADVISORY SERVICES CAPITAL INJECTION FOR KUKE

The programme of export credit guarantees is a system of guarantees for small and medium enterprises aimed at building their competitiveness, innovation and potential for international expansion. “Coverage for the Whole World” with KUKE is a package of trade receivables insurance for micro and small businesses.

Subsidies for export credits will make it possible for commercial banks to finance investment goods exports on the basis of a fixed CIRR rate. The development of foreign factoring services will consist in buying export receivables from high risk markets and European markets.

The system of financing large export projects on foreign markets involves joint financing through government loans and by the banking sector using KUKE insurance. Providing financing to buyers of Polish exports will be possible thanks to closer cooperation among BGK, KUKE and PKO Bank Polski (the banking sector) in the direct financing of large projects on polish market

17

foreign markets. KUKE will act as reinsurer for commercial companies insuring trade receivables in high-risk countries, within activity guaranteed by the state. It will also be offering additional services like, for example, risk evaluation and debt recovery on foreign markets.

Financing exports and investment is equally important as the products and services one has to offer on foreign markets.

This is why funding for these purposes is to be made more available for businesses under the new system. The Polish Development Fund will be managing financial instruments, both debt and equity instruments, designated for supporting pro-export and pro-investment activities of Polish businesses. A special focus will be given to the development of financial services intended for small and medium enterprises. Large export contracts will also be supported.

The new financial instruments for supporting exports and foreign investment offered to businesses by the Polish Development Fund will have a combined value of up to PLN60 billion, of which PLN36 billion will be set aside for financing, PLN8.2 billion for guarantees, PLN9.6 billion for insurance and factoring, PLN3.5 billion for settlement limits, and PLN1.5 billion for the foreign expansion fund. The products will be distributed by KUKE, BGK and commercial banks. PKO Bank Polski is the strategic partner of PFR Group in providing financial and advisory products to businesses. Also important is their efficient distribution and making financial institutions more flexible and less averse to risk. This is why the system of pro-export investment insurance will be operating in a more flexible risk model.

We need a policy more market-oriented and making assistance more available. Meanwhile, in practice, it is only safe transactions that are insured at present.

Under the reform, the Polish Development Fund is to provide KUKE with a capital injection of around PLN200 million.

At present, KUKE has an 8% share in the market for commercial export credit insurance. The goal is to raise the appetite for risk on the part of the government export credit insurance programme and increase the limit for countries with a lower rating – Africa, Asia and South America. The development of factoring and the international debt recovery system is planned. It is necessary for KUKE to get a rating at a level acceptable by commercial banks. To this end, there are plans for the Polish Development Fund to inject PLN200 million to KUKE. Also planned is investment in a modern operating platform to improve the quality of services provided to businesses and financial institutions, and the development of KUKE’s reinsurance activity. The goal of the Ministry of Economic Development within the programme for supporting the international expansion of Polish businesses is to enhance their competitiveness on foreign markets on the basis of product quality and financial services, improve the quality and scope of advisory services for Polish exporters and investors abroad, ensure quicker and easier access for businesses to products supporting exports, increase the potential for financing large projects abroad, open new export markets and increase exports to existing markets.

“We plan to modernize KUKE and strengthen its capital base, increase export financing at BGK, and combine financial and advisory products of the Polish Trade & Invest Agency,” said Paweł Borys, president of the Polish Development Fund.

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EASIER ACCESS TO INFORMATION

An integrated IT system will be developed to provide access to the resources at the disposal of the public administration. As a result, every entrepreneur will be able to adjust the field of their activity to the export potential.

The system will be updated on a current basis with information about tenders held in various countries, and entry barriers, certificates required and business culture on individual markets.

Users will be able to profile their business or product in terms of export and investment potential. The system will direct the users across foreign markets and relevant public institutions, providing them with information about available financial and advisory instruments.

WHAT WE HAVE NOW

P

Support for Polish businesses provided on foreign markets by the existing development institutions is not efficient because it is dispersed among various agencies.

Poland’s competitive advantage has been based to a large extent so far on low labour costs. As a result, Polish exports are dominated by products with a low innovation level. The share of technologically advanced products is in the order of 8.5%. In this respect, Poland comes out worse than Western European countries and its partners in the Visegrad Group.

The poor internationalization of Polish businesses is also reflected in their strong concentration on simple forms of relations with foreign partners. Nine in 10 Polish businesses operating on international markets are involved in strictly trade operations.

Few of them undertake more advanced forms of activity, such as subcontracting, R&D cooperation and joint ventures. Only 0.6% of Polish businesses invest abroad.

WHAT WE WANT TO ACHIEVE

We would like to develop the scale of exports and increase the investment activity of Polish businesses abroad. It is important to stimulate Polish investment in other countries and maintain a high rate of growth in exports while at the same time making them more innovative. This means the need to encourage Polish businesses to develop advanced forms of cooperation, for example in the research and development sector, and increase the share of technologically advanced exports.

The new export policy will ensure the support of the public administration for the development of business activity on promising markets, especially in Asia and Africa. They are more difficult and demanding than EU markets, but offer new business opportunities for Polish firms. The state needs to play an active role so as to reduce the investment risk for Polish exporters and investors.

We give priority to supporting small and medium enterprises as they have the biggest potential for the development of international activity, shape their development visions by themselves and have a great capacity to adapt to the changing market conditions.

•

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OUR CLIENTS SEE US AS A PREDICTABLE

COMPANY

Piotr Stolarczyk, Vice-President of the Export Credit Insurance Corporation (KUKE SA), talks to Ewelina Janczylik-Foryś.

The Polish Development Fund plans to strengthen the role of KUKE in the programme for supporting exports by providing it with a capital injection of PLN200 million. In what way can it be helpful?

It may enhance our insurance capacity and enable us to insure larger contracts. As the only insurer in Poland, we offer bothcommercial insurance and export insurance backed by the state, enabling safe trade on high-risk markets.

In the latter case, the risk is borne by the state.

The capital injection is important for our commercial operations, within which we insure trade receivables on the domestic market and export receivables. The companies we directly compete with in the area of financial insurance have a stronger capital base than KUKE. The capital injection will strengthen our position and make it possible for us to increase our support for Polish businesses.

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How does KUKE differ from other companies?

At the time of the global financial crisis in 2009, our competition reduced insurance limits.

As a result, Polish businesses had to face a higher trade risk because they were unable to insure their receivables to the same extent as before the crisis. The result was increased interest in KUKE products. Many businesses started to use our services then and have remained our clients to this day. Our clients see us as a predictable company. We give them stability.

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Are Polish businesses more active on foreign markets now than in the past?

They are. Polish firms penetrate foreign markets increasingly boldly. We encourage exporters to contact us at the early stages when PM

they are only considering signing a foreign contract. We are able not only to help the exporter in the negotiations, but also assess whether the deal and its financing makes sense at all.

You take exporters under your protective umbrella.

We want KUKE to be treated as a professional financial institution. This is why we are undergoing changes and adjusting to the requirements of businesses and banks. In the case of long-term insurance, we conduct business negotiations with the importer in parallel with the exporter and the bank. Together, we shape the deal to make it optimal for the exporter’s business model. We customize our solutions, combining insurance and financial products such as long-term loans, letters of credit and short-term financing. We invite banks to take part in financing. Many transactions are so large that no bank is able independently to offer a loan for the full amount needed. In such cases, it is necessary to set up a consortium. We have changed our philosophy and are now more active.

We take part in the talks which exporters hold with their customers. We try to be as close to our client as possible. Terms of the transaction and financing conditions are among the key factors determining the exporter’s competitiveness. This is why we jointly try to propose solutions making what Polish businesses offer on foreign markets sufficiently attractive for them to secure contracts.

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Who exports more – large or small firms?

We work to a large extent with small and medium businesses.

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“Coverage for the Whole World” with KUKE is a package of trade receivables insurance for micro and small businesses. But do you

think that micro and small businesses are able to compete on foreign markets?

Of course. It is true, however, that it is more difficult for a small firm. There is the question of costs associated with penetrating the market and ensuring trade security. Hence the idea to support micro and small businesses and reduce the barriers they encounter. KUKE offers them insurance products which effectively reduce the financial risk involved in the sale of their products and services.

This enhances trade security, supports sales and makes it easier to finance expansion. Insurance enables avoiding payment backlogs. Apart from damages in the case of non-payment for goods or services, our insurance also guarantees checking the reliability of the trading partner and debt recovery by a financial institution, which increases the buyers’ readiness to pay. In other words, thanks to our insurance products, a small firm exporting products to foreign markets may feel secure.

How do you see the Indian market? It is mentioned as one of the markets offering the biggest potential for exports growth in the coming three years.

We hope that this interest in India will be translated into concrete transactions. India is present in our portfolio – we insured the first transaction with India in 1995 – but the country is not among the top markets when it comes to our exposure. However, we have noticed some growth here and more interest in this market. Data for January-November 2016 show a 5% growth in short-term insurance and a 45% growth in terms of bonds issued compared to the same period of the previous year. India is a huge and receptive market.

KUKE is fully operationally prepared to offer full support to Polish businesses on this market. The range of financial products to choose from is very wide.

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Ladies and Gentlemen, Mazovia is a central and largest region in Poland. It is crossed by commercial and transport routes linking Eastern and Western Europe. Mazovian region with the capital of Poland, Warsaw, plays host to hundreds of the largest Polish and foreign companies. It is where the most important State authorities and institutions can be found.

For a number of years Mazovia region has been the leader in economic transformation and the fastest-developing region not just in Poland, but also in Europe. This is where the dynamics of Poland’s transformation can be seen most clearly and a place much favoured by foreign investors.

Mazovia is a highly diverse region with almost all branches of industry present. One of the strongest pillars of the local economy is agriculture. The region is Poland’s biggest exporter of fruits and vegetables. Food from Mazovia enjoys huge popularity in other countries of the European Union, but is also exported to more than 20 countries outside the EU. Petrochemical industry is also well established in the region, along with the energy, IT and military arms technology.

For many years Mazovia has been placing strong emphasis on innovation and the development of technology. More than 30% of its export is accounted for by products of the mechanical, electronic and electrical industry. We stimulate links between businesses, higher schools and the R&D sector. We continuously increase the competitiveness of the Mazovia market through process, organisational and production innovations.

We boldly enter foreign markets guided by the conviction that business and technology do not recognise any geographical boundaries. We realise that maintaining dynamic development of the region is contingent not only upon supporting the development of innovative research facilities, but also upon both local and international co-operation. On the interregional level, direct relations allow us to support and co-ordinate the mechanism facilitating international relations of our entrepreneurs. Trade fairs and international trade missions are means of supporting the exchange of experiences, establishing trade contacts and searching efficient business solutions. Our entrepreneurs return from international voyages richer not only in foreign practice knowledge.

In this context establishing economic relations with India is very important to us. I have in mind not just trade, but also co-operation in the area of science and research, industrial technology and mutual support mechanisms. Mazovia is an excellent place for investments. We have investment sites which owe their attractiveness to the proximity of the capital, but also to the geographically strategic location of Mazovia. Our investors highly value these advantages.

Ladies and Gentlemen, today development of any region would not be possible without listening closely to the needs of local communities. Creating platforms for co-operation of entrepreneurs, investors and political organisations both locally and abroad, may substantially influence creation of strong economic relations and, above all, meet the needs of common people.

As a leader of domestic progress we are open to international opportunities and encourage investors to discover the potential of the region.

Adam Struzik Marshal of Mazovia Region

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MAZOVIA

THE HEART OF POLAND

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azovia is the largest and richest economic region in Poland.

It is located in the central-eastern part of the country, at the crossroads of important trade and transport routes connecting western with eastern and northern with southern Europe. Mazovia occupies an area of 35,500 km2, representing 11.4% of Poland’s territory. It has nearly 5.4 million inhabitants.

This region has been a part of Poland for a thousand years, since the inception of the Polish State. Over the centuries it has been exposed to many trials and tribulations. In the modern era, Mazovia has benefited from the opportunities offered by the democratic changes. It is now the leader of change in Poland, both economic and political, and the fastest developing part of the country.

Mazovian Voivodeship is the most competitive region in Poland. This is attested by figures reflecting economic growth, such as the GDP level (it contributes 22% of the total GDP of the country), a rate of employment clearly higher than the national average, or a positive migration balance. The average per capita income in the

region exceeds the EU average and in this regard Mazovia has been named the fastest-developing region of the European Community in recent years.

Although Mazovia is characterised by considerable internal diversity, the highest potential in the country can be seen here in almost every walk of life: science, research, education, industry or infrastructure. Mazovia comes first in terms of the rate of economic development and business activity in Poland. Foreign companies make their investments mostly in this region. Thanks to its central location, Mazovia is home to hundreds of the most important Polish and international companies. Studies confirm that one in every five foreign investments in Poland can be found here.

The main advantages of Mazovia include: the highest economic potential (among all the provinces), high rate of development, highest outlays on research and development (R&D). In the context of investments we must also mention the human potential of the region, including the availability of highly trained personnel. This is due mostly to the access to the best scientific and academic centres, including the highest number of higher schools (in excess of 100) in the country and the attractiveness of Warsaw, Poland’s capital city.

Beautifully situated on the banks of the River Vistula, Warsaw is the largest and most important centre of science, culture, politics and business. The metropolis attracts foreign investors building financial centres, hotels, and shopping and entertainment centres. Warsaw is also the largest Polish city in terms of population and area. The Polish capital has a strong position in generating Poland’s GDP. It also has great economic, intellectual, capital and institutional potential.

Warsaw is the administrative centre and a business seat of the most important public offices and international corporations. In Warsaw there is a concentration of innovative businesses in Mazovia, including transnational corporations.

In the international context, the position of Mazovia alongside transport corridors, with their hub in Warsaw is important. A large number of sites offered to investors in the region may constitute an advantageous proposition in the context of manufacturing, industrial technology, and trade with other countries. An additional advantage is the proximity of two international airports (Modlin and Warsaw), which ensure convenient connections on the internal European and intercontinental routes.

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MAZOVIA STRONG ECONOMY M

azovian Voivodeship is the largest, richest and most robustly growing region of Poland. As a region, Mazovia is Poland’s largest exporter and importer, exchanging goods with other European Union Member States as its main trading partners. It also maintains commercial relations with countries outside the European Community, mostly in Eastern Europe, Africa and Asia. Its strong advantage originates from Mazovia’s location along transnational transport corridors and the presence of Warsaw – the capital city and the key business transfer centre of Poland.

The local industry is highly diversified in terms of sectors, production branches and structure. There are more than 1,100 large companies, over 5,000 medium-sized and 25,500 small enterprises, and in excess of 650,000 micro-enterprises. The great industrial and entrepreneurship diversity causes that the Mazovian economy is not so strongly dependent on economic fluctuations, also in international context.

MANUFACTURING AND INDUSTRY RANGES Almost all branches of industry have developed in Mazovia.

The leading sectors are: means of transport (automotive industry and production of agricultural tractors), electronic, fuel, chemical (including pharmaceutical and cosmetics), food and machine industry.

The petrochemical industry is strongly established, exemplified by Poland’s largest refinery in Płock. Other sectors, such as energy and power (thermal power stations in Kozienice, Ostrołęka, Warsaw and Płock), steel, precise engineering, paper, clothing, textile, printing industry or metal industry, including tools and armaments, are also present.

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Due to the agricultural area and the volume of agricultural production in the region the agri-food industry plays the dominant role in Mazovia. Here one finds the largest acreage of agricultural land and orchards in the country. More than half of the apples and a quarter of the strawberries are produced in Mazovian region. All this contributes to Mazovia’s leading role as an exporter of fruits from domestic production (over 45%). Mazovia is also a leading producer of vegetables and the second largest producer of cereals in Poland. It is also a leader in the production of milk, and another of its strong points is the production of meat. The main food-processing sectors are: fruit and vegetables, meat, dairy, sugar, fat and tobacco.

Mazovia also witnesses rapid development of modern innovative sectors. They include financial and insurance services, telecommunications and information technology (IT) and research and development (R&D) activity. The region hosts numerous research and development institutes operating in areas such as: photonics, optoelectronics, biomedicine, biotechnologies and nanotechnologies.

Mazovia also possesses rich mineral resources. This allows it to occupy a leading position in the construction industry. Its advantages include not just the availability of aggregates such as sand, gravel and clays, but also deposits of lignite, phosphorites and fireclay.

INVESTMENTS

Mazovia is a very attractive destination for foreign investments.

One in five foreign investors coming to Poland settles in Mazovia.

They are attracted by the size of the region’s market and its strategic geographic location in terms of manufacturing and service activity. A significant role is also played by the good transport infrastructure of the region – its network of roads and railway lines, as well as direct access to international airports in Warsaw and Modlin. The pro-business attitude of the regional authorities is also not without importance.

In order to support economic development and innovation of the region, the local authorities together with the private sector

HUMAN POTENTIAL, SCIENCE AND TECHNOLOGY

Mazovia’s human resources are crucial to culture and social structure and to the region’s economic development. The number of graduates in Mazovia is constantly growing. A well-educated workforce is available in the region, here lives the highest percentage of young people with higher education in the country. The region owes this to its great number of higher schools.

The most important include: Warsaw University, Warsaw University of Technology, Warsaw School of Economics and Warsaw University of Life Sciences. The best educated people can be found in Warsaw and in areas close to the main urban centres.

One of the forms of communication between the manufacturing sector, science and business in Mazovia is collaboration within the frameworks of industrial, scientific and technology clusters. They focus on areas such as: education, biotechnologies, aviation, space and space exploration technologies, energy (including research into renewable energy sources), information and communication technologies, medical and biomedical, chemical and biochemical sciences, photo technologies. There are also clusters operating in: the construction, aviation (including environmentally friendly cars), fruit and vegetable and furniture sectors.

Flagship examples of areas of co-operation between research teams and industry groups are the technology and industry parks in Mazovia: Płock Industry and Technology Park (PPPT) and the Science and Technology Park Świerk (PNT Świerk) set up together with the National Centre for Nuclear Research. Through their co-operation with science and research centres, private and public enterprises, regional authorities and administration, business environment institutions and international organisations these entities build effective co-operation networks and greatly support and initiate R&D activities.

As an organised investment site, PPPT offers its customers attractive sites for investment projects and modern offices. PPPT

investors may rely on attractive local government support programmes including real estate tax exemptions, support for new investments in the PPPT and new investments in the area of innovation or research and development. The PPPT is also the coordinator of the Mazovia Chemical Cluster. The PNT Świerk operates in the field of nuclear technologies development and their use in industry, medicine, power industry, environmental protection, biology and materials engineering.

Mazovia also boasts Poland’s most advanced Energy Conversion and Renewable Sources Centre (KEZO) in Jabłonna, one of the most advanced facilities of this type in Europe. It is a centre of laboratories of the Polish Academy of Sciences working on the utilisation of renewable energy.

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offer foreign businessmen and investors a number of facilitating opportunities. They include: tax breaks and facilities for enterprises operating within five Special Economic Zones situated in Mazovia; a wide range of possibilities of adjusting the local infrastructure to investment requirements, use of structural programmes and support of the European Union for external investments in co-operation with local Mazovia-based entrepreneurs. The support tools offered by the EU are particularly important in the context of building joint venture structures for small- and medium-sized enterprises.

WHY IS IT WORTH INVESTING IN MAZOVIA? Mazovia has a very receptive market. It also has a large and wealthy population and easy, direct access to the Central and Eastern European markets.

We have a very well developed education system at every level, which also allows education of foreigners. This results in the availability of highly qualified personnel.

At the level of Mazovian local authorities we are able to present to our investors a well-tailored set of investment offers ranging from the large projects of strategic importance to Poland to the smaller projects suitable for small and medium-sized enterprises.

The local authorities in Mazovia are investor-friendly, and Warsaw plays host to the Polish Information and Foreign Investment Agency and the Mazovia Development Agency – institutions directly supporting foreign investors at the national and regional level.

You are welcome to contact directly the units responsible for economic co-operation and promotion – supporting the investment process in Mazovia: Marshal Office of Mazovian Region in Warsaw 26 Jagiellońska Str., 03-719 Warsaw Phone +48 22 59 07 785 Fax +48 22 59 07 725 Email: economic.cooperation@mazovia.pl www.mazovia.pl Mazovia Development Agency Plc 9 Świętojerska Str., 00-236 Warsaw Phone +48 22 566 47 60 Fax +48 22 843 83 31 Email: coie@armsa.pl www.armsa.pl polish market

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PODKARPACKIE

ABOVE ALL, INNOVATION

Władysław Ortyl, Marshal of Podkarpackie Region talks to “Polish Market”.

Podkarpackie region is going to co-operate with India. The local government has established co-operation with the state of Gujarat. Is the economic summit in India, attended by Podkarpackie, the best opportunity for developing these contacts?

I am very glad that we are going to participate in the Vibrant Global Gujarat Summit. We received an invitation to the summit in October. Indian entrepreneurs visited us as part of their trade mission. During our meeting we found numerous areas in the economy rife with opportunities for a fruitful and mutually beneficial collaboration.

I can say this is a renewal of our co-operation because many years ago the PZL Mielec company used to export the Iskra aircraft to India. History has made a circle, because our mission to India will include Janusz Zakręcki, the president of PZL Mielec. Currently, India is the fastest growing economy in the world, developing at a rate of 7.5% per year. Thanks to reforms, the country has opened up to foreign investment. This makes India a very interesting proposition.

THANKS TO REFORMS, THE COUNTRY HAS OPENED UP TO FOREIGN INVESTMENT. THIS MAKES INDIA A VERY INTERESTING PROPOSITION.

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You plan to sign a special agreement during the summit…

Yes. It will be a memorandum between the Government of the State of Gujarat and Podkarpackie region concerning economic cooperation. It outlines the preliminary plans of this co-operation. It also specifies the areas in which we are going to collaborate. They include advanced manufacturing technologies, aviation, ICT and information technologies, education, agri-food processing, research and development, tourism, life sciences. We want to sign the memorandum on January 11, 2017. This is “Poland’s Day” during the summit. A similar agreement will be signed by Mazowieckie region. I am glad that we are part of a large oficial Polish delegation headed by deputy Prime Minister Piotr Gliński. During “Poland’s Day” we want to present Podkarpackie region. Of course, there will also be numerous B2B meetings.

PM

Which advantages of the region do you want to present in particular?

Above all, innovation. We are a conservative region attached to traditional values, but this does not stop us from occupying top positions in innovation rankings. The areas of co-operation listed in the memorandum have not been chosen by accident. These are out smart specialisations contained in our Regional Innovation Strategy.

Nothing is left to chance. Our delegation will also include a representative of the Podkarpacie Film Commission. We want to emulate the example of other regions which successfully collaborate with Indian regions in this particular area.

We must develop and promote the branches of the economy mentioned above and for this reason our participation in this prestigious Gujarat summit is very important and strategic • to us.

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PODKARPACKIE INFINITE POSSIBLITIES

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spot where the borders of three States: Poland, Slovakia and Ukraine meet, the external border of the European Union, a transport corridor linking the West with the East – these are just some of the advantages of Podkarpackie region, a leader among a regions of Eastern Poland.

The economic development of Podkarpackie region is inseparably linked with the establishment of the Central Industrial District (COP) which began before the Second World War. The COP is the birhplace of many industrial plants of today, such as Pratt & Whitney Rzeszów, PZL Mielec Sikorsky Lockheed Martin Company or Huta Stalowa Wola S.A. Due to the opening in 1854 in Bóbrka near Krosno of the first crude oil mine in the world the region is considered the cradle of the oil industry.

Today, Podkarpackie region is the area most frequently chosen by investors setting up their projects in the Eastern Poland macro-region. The reasons include the availability of investment sites, offers of preferential trading conditions and transport routes which make the region easily accessible. The latter include the A4 motorway linking

the western and the eastern border of the country, the S19 dual carriageway which is nearing completion, modernised railway lines, including the wide-gauge LHS, as well as the airport in Rzeszów-Jasionka where the number of passengers continues to increase rapidly.

The region is characterised by a high concentration of companies from the aviation industry (it accounts for nearly 90% of its domestic production), research and development centres and a well developed network of schools and training facilities. However, the economic strength of Podkarpackie region is not determined solely by the aviation sector. Another important element is the IT sector, which is among the fastest growing industries in the region. The same holds true in the case of the automotive industry with many global giants establishing their factories here. The picture would not be complete without mentioning the chemical, electrical machinery, glass and timber industry, and agriculture. The region successfully deploys pioneering methods of supporting businesses, and in terms of outlays on research and development Podkarpackie region occupies a prominent position in the country.

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Podkarpackie region has based its success on innovation. One of the priorities of the region government is providing assistance to businesses for research work.

The G2A Arena exhibition and congress centre has been a showpiece of Podkarpackie region since June. The 590 Congress, attended by the Polish President, was held there in November.

RZESZÓW AIRPORT

– A NEW GATEWAY TO CENTRAL AND EASTERN EUROPE Michał Tabisz, President of the board of Rzeszów Airport talks to “Polish Market”.

Why Rzeszów Airport wants to develop the cargo operations?

First, we respond to the needs of the region. The pillars of our economy are the aviation, automotive and IT industry. Over the last decade many international corporations have invested in Podkarpacie, setting up their branches or modernising the existing factories. Some of them, such as the companies in the Aviation Valley cluster, export technologically advanced components by air. They should begin their journey into the world at Rzeszów Airport.

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Is the current infrastructure sufficient?

We have something that sets us apart from all other airports in Poland. Our 3,200 m long runway enables takeoff and landing of the largest cargo aircrafts in the world. We are also a leader when it comes to statistics concerning weather conditions. Soon, we are going to switch on a second category ILS navigation system. These are key parameters from the point of view of aviation operations.

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But fast and safe shipment of cargo also requires something else…

Of course, the standard of cargo handling and the conditions in which it takes place is of paramount importance to our customers – freight forwarding companies. This is the main reason why we decided to co-operate with Waimea Holding in the construction of a modern, multimodal cargo terminal located in the immediate vicinity of Rzeszów Airport.

I am convinced that this facility will meet the highest requirements of our customers, enabling us to significantly increase the volume of cargo shipped from our airport.

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Which services are to be offered at the new terminal?

It will enable comprehensive handling of all types of goods, including dangerous goods (subject to the Dangerous Goods Regulations), PM

perishable goods, valuable shipments and shipments with non-standard dimensions. The facility will be provides with cold stores and specially designed warehouses for storing food products. We place strong emphasis on safety and our state-of-the-art equipment will meet all the relevant standards in this respect.

The infrastructure alone is not enough. You also need people.

We have an experienced team which we intend to strengthen even further so as to fully utilise the possibilities offered by the new terminal. Our business partners often stress the quality of service in Rzeszów as one of the most important criteria determining the choice of our airport. In the cargo industry the ability to approach every customer individually and adjust to his expectations is particularly important.

This is an advantage of smaller airports such as Rzeszów and we try to gain competitive advantage this way.

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Can we expect regular cargo connections in the future?

This is our long-term goal and the opening of the new terminal is another important step towards its attainment. A lot depends on the rate of economic growth, not just of our own region, but also the entire Central and Eastern Europe.

Rzeszów Airport is just 100 km from the border PM

with Ukraine and Slovakia, 250 km from the border with Hungary, 300 km from the border with Belarus. We have the potential to service these markets and are open to co-operation with forwarding companies interested in this part of Europe. Rzeszów may also be used as a transit port for freighters operating intercontinental routes. I am glad that Podkarpackie Voivodship is beginning its co-operation with Gujarat.

I hope that it will also open new possibilities for our airport, both in terms or passenger and cargo traffic.

What, apart from cargo services, distinguishes you among the other regional airports in Poland?

In recently years Rzeszów has been strengthening its position as the business heart of south-eastern Poland. Our airport is adjacent to a special economic zone with many innovative companies operating globally. Fibre optics, photovoltaics, drones, advanced IT systems, aviation components – all this is manufactured right next to our airport. Several months ago, the local authorities opened a modern exhibition and congress centre located within a walking distance from the passenger terminal. Soon, a hotel will be opened there as well. I believe that these initiatives will attract even more international business, undoubtedly also to the benefit of our airport.

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Source: Kacper Kowalski / Port of Gdansk Authority S.A.

THE PORT OF GDANSK THE MAIN GATEWAY TO THE

LARGEST MARKET IN CENTRAL AND EASTERN EUROPE

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he Port of Gdansk is currently the largest Polish seaport complex, and one that particularly in recent times has enjoyed great success. In just eight years it has doubled the quantity of goods that it handles via maritime transport, and has become the sixth largest port and the second largest container port on the Baltic Sea. For six years it has consistently recorded steady growth in goods turnover, with further growth expected in the coming years. In the near term, i.e. by 2020, the total transshipment volume at the port is expected to increase by another 50%, from the current 37 million metric tons of goods to almost 55 million metric tons.

These results recorded by the port, but also the good economic prospects of Poland, which is the sixth largest market in Europe and together with its hinterland represents an area inhabited by over 100 million people, make the Port of Gdansk one of the most interesting areas for investment among domestic and foreign investors.

Over the past three years, the total capital invested in the port has amounted to €665 million. In subsequent years, i.e. by 2020, the value of investments planned both by public and private investors will reach €1.3 billion, which confirms the great attractiveness of the Port of Gdansk as an investment opportunity.

The greatest increase in the importance of the Port of Gdansk and its position in Central and Eastern Europe (CEE) came in the year 2010, when the largest container ships in direct service from Asia, including China, South Korea, Malaysia and Singapore, began to call at the port. Seven years later, Gdansk handles a total of 7 million TEU, the great majority being containers to and from Asia.

In 2016, the potential of Gdansk was also noticed by other Asian countries such as Saudi

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Arabia and the United Arab Emirates, whose ships regularly call at Gdansk to pick up Polish products, including railway wagons and military transporters. From 2017, Gdansk will also become an important distribution centre for the Korean automotive industry, because starting in January and for a period of at least three years, the Korean company Hyundai plans to use Gdansk as the distribution point for its cars produced in the Czech Republic and Slovakia.

This does not exhaust the long list of the port’s advantages. The Port of Gdansk is naturally capable of handling the largest ships that can sail to this part of Europe. At the same time, uniquely among Baltic Sea ports, it is free from ice and tidal phenomena. It also has over 100 hectares of vacant land ready for the construction of new projects, including factories, processing and refining plants.

Of importance especially for producers and entrepreneurs from outside the European Union is an extraordinary advantage of the free port areas dedicated to new investments – the possibility of creating a duty-free zone giving potential investors a number of customs and tax benefits, including: • exemption from customs duties and taxes on goods imported from abroad to the dutyfree zone until they leave the warehouse and enter the customs territory of the European Union; • no need to obtain permits for trade in goods supplied from abroad to the duty-free zone and vice versa; • exemption from so-called non-tariff control, i.e. sanitary and phytosanitary checks, until goods leave the free zone; • storage of goods in the duty-free zone with no need to obtain the consent of the customs office or secure customs duties for a period of storage; and many others.

However, the central location of Gdansk on the European continent, its accessibility by the largest ships in the world, and the very large market from a European perspective are not the only factors that determine its high investment potential. Gdansk is also regarded as one of the most accessible Polish ports by both rail and road.

The huge success of the Port of Gdansk means that it currently requires further expansion of its cargo handling capacity, which will be achieved with the construction of the Central Port.

The Central Port is the largest concept for expansion of the Port of Gdansk since the 1970s, which will ultimately lead to the creation of further deepwater terminals in the port dedicated to handling the largest vessels entering the Baltic Sea. It will also provide basic infrastructure enabling the further development of the distribution function of the port for the whole of Central and Eastern Europe.

The project is to be implemented in stages on a modular basis, in accordance with agreements concluded with the partners participating in the project. Ultimately the project will include the construction of approximately 5 to 8 deep-water terminals having storage facilities with access to modern overland infrastructure – roads and railways – ensuring the port’s full delivery and pick-up capacity based on the main axis of overland connections in Poland.

The final choice of the types of terminals in the project will depend on the interest of potential investors who express their intention to participate in the construction of terminal infrastructure at the Port of Gdansk and in the implementation of its largest investment project – the Central Port.

All parties interested in cooperation with the Port of Gdansk and wishing to invest in Europe are encouraged to contact us at marketing@portgdansk.pl or on +48 58 737 93 00.

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