Made in Poland 2011

A GUIDE TO POLISH EXPORT

Warsaw Business Journal’s Made in Poland 2011

ISSN 2083-0645 – PLN 79 (8% VAT included)

Warsaw Business Journal ’s

Co-organizer of the Polish Export Promotion Program g

Publication partner

The next edition of Trendbook Poland – a guide to business trends from Warsaw Business Journal

vol.2 P o l a n d Part of Warsaw Business Journal’s series of business guides

Circulation: 12,500. Distributed to business leaders, diplomats and investors interested in doing business in Poland

To order a copy of Trendbook Poland contact: Krzysztof Wiliński (kwilinski@valkea.com)

Made in Poland 2011

table of contents

MADE IN POLAND 2011 Table of Contents Introduction Table of Contents 1 Foreword from the Editor-in-Chief 2 Opening Statement from Deputy Prime Minister Pawlak 3 Interview with the President of the Polish Chamber of Commerce 4-6 Macroeconomics Exports & Poland’s Economy Partner Feature: Branding Partner Feature: Aid for Exporters Partner Feature: Investment in Poland Macroeconomic Analysis Transport Infrastructure

8-12 13 14 16 17-19 20-21

Pharmaceuticals 50 Largest Exporters Bilateral trade Introduction Statement from US Ambassador Lee Feinstein Poland-US Trade Statement from Chinese Ambassador Sun Yuxi Poland-China Trade Statement from German Economic Counselor Helmut Lüders Poland-EU Trade Statement from Russian Economic Counselor Ekaterina Belyakova Poland-Russia Trade

66 67-68 68-69 70-71 71-72 73-74 74-75 76-77 77-78

Mister & Junior of Exports Competition

Sector analyses Introduction Food & Agriculture Defense Clothing Furniture Automotive Cosmetics Yachts

Warsaw Business Journal’s

22 23-28 29-33 34-37 38-41 42-46 47-51 52-55

Competition Rules Registration Form Chambers of Commerce Government Agencies Importer/Exporter Events Publication Partners Index

ul. Elbląska 15/17 01-747 Warsaw, Poland (+48) 22 639 85 67-68 (+48) 22 639 85 69 6 NIP: 525-21-77-350

Publisher: Morten Lindholm Managing Director: Monika Stawicka

Deputy Editor: Gareth Price (gprice@wbj.pl)

Sales Department: Sales & Marketing Director: Agnieszka Brejwo (abrejwo@wbj.pl) Jowita Malich, Magdalena Karpińska, Małgorzata Anczewska, Katarzyna Pinkiewicz

Graphics/Design/DTP: Piotr Wyskok

www.wbj.pl

83 84 85 86-87 88

Editor-in-Chief: Andrew Kureth (akureth@wbj.pl)

Journalists: Remi Adekoya, E Blake Berry, Ewa Błaszczyńska, Roberto Galea, Jo Harper, Brendan Melck, Mark Ordon, Andrew Shale, Joanna Sopyło, Alice Trudelle

Valkea Media SA

79-80 81-82

Resources

Editor: E Blake Berry (bberry@wbj.pl)

www.valkea.com

56-61 62-65

PR & Marketing Specialist: Natalia Rogaczewska (nrogaczewska@wbj.pl)

Cover Design/Photo Editing: Łukasz Mazurek

Event Manager: Katarzyna Dragan (kdragan@wbj.pl)

All photos: courtesy of companies’ press materials; Shutterstock

Print & Distribution Coordinator: Krzysztof Wiliński (kwilinski@valkea.com)

foreword

Made in Poland 2011

Herein you’ll find expert commentary from those who know the market best – such as the Polish Chamber of Commerce, consulting firm KPMG, and Deputy Prime Minister and Economy Minister Waldemar Pawlak.

Andrew Kureth Editor-in-Chief Made in Poland

Dear reader,

We’ve packed Made in Poland with useful information: analysis of the Polish economy and how international trade fits into it, as well as an overview of Poland’s infrastructure, allimportant for international trade. There is also a catalog of the 50 largest exporters in Poland and a calendar of important export-related events. Moreover, we’ve added some useful contacts for both exporters and importers of Polish products. Central to Made in Poland, however, are analyses of what we see as eight crucial sectors in Polish export, with overviews of the development of the exporters themselves, their success stories and the solutions they use. It is in these sectors that Polish firms are finding particular success abroad and in which they will make the biggest waves in the near future.

oland’s economy continues to power along at a healthy pace as the world recovers from the global financial crisis. Poland, as is now well-known, never entered recession during that period, though its GDP growth slowed significantly. In 2010, the country’s economy grew by a healthy 3.8 percent, and this year it is expected to grow by over four percent. Poland continues to stand out as a haven of growth and stability in Europe.

We’ve also included a large section on bilateral trade analyses with four of Poland’s key trading partners, and statements from the diplomats and trade representatives from those countries – including from Ambassador Lee Feinstein of the United States. It is the US, China, Europe and Russia that constitute, in our minds, Poland’s four most important bilateral trading partners.

Now Polish firms are using this momentum to increase exports – 20 years of market economy have brought Polish products to a point where they are extremely competitive in terms of both price and quality. Exporters were able to make significant gains in many foreign markets during the crisis period and, having gained recognition for their products, they are ready to make an even bigger splash.

With the launch of Made in Poland, we also launch the Polish Export Promotion Program in cooperation with the Polish Chamber of Commerce. This program will, in turn, bring back the “Mister and Junior of Export” awards contest after a three-year absence. Exporters interested in entering the contest can find the rules and an application form on pages 79-82. The awards will be handed out at a festive gala in June 2011.

That’s why we are launching this inaugural edition of Made in Poland, the most extensive guide to Polish exports that you’ll find in English. Our intention with this publication is to give you a detailed overview of the current state of Poland’s export market, and where it’s headed in the future.

It is our fervent hope that Made in Poland serves as the ultimate guide to Poland’s export market. In its scope, detail, and engagement with exporters and the organizations that support them, it provides a comprehensive look at one of the most important elements of Poland’s economy. v

Made in Poland 2011

opening statement

given sector. We will be setting aside nearly zł.168 million to execute this concept.

Waldemar Pawlak Deputy Prime Minister, Minister of Economy

Ladies and Gentlemen,

rogressing globalization and the dynamic growth of civilization has led to a situation where raising the quality of products and services has become the best way of creating a competitive advantage on the international market. A good reputation of domestic enterprises that can boast of implementing modern quality-management technologies and systems has become a significant element in creating the image of our country and its economic potential.

We are aware of how vital exporters are in this area and to what extent their activities affect the condition of all aspects of economy. That is why the Ministry of Economy undertakes promotional activities whose goal is to globally popularize the positive image of Polish companies, their products and services, as well as the growing economic collaboration with foreign countries. We are designing these activities with the aim to increase the volume of Polish export and the dynamic influx of direct foreign investments to Poland. Image studies will be conducted in the countries constituting priority target markets for Polish export. Based on their results we will develop the concept of promotion to determine the most effective lines and tools of communication. These promotions will also indicate the most important characteristics of the brand of Poland and we will also design a logo and a promotional slogan. As part of this project we will conduct an informational and promotional campaign in foreign media. Its main message will be to present Poland as a modern country that is open to new investments and contacts, and offers attractive export specialties. Industrial programs of promotion will support creating Polish export specialties. Within the framework of this project we will be supporting promotional activities of selected sectors and product or service groups characterized by high export potential. At the Ministry of Economy we have selected 15 such groups. To realize this goal we will set aside as much as zł.198 million before the year 2015. We will also be providing financial support for the activities promoting individual branches of the industry as a whole. This component has been designed in such a way that the effect of the promotional activities implemented will affect all entrepreneurs in the

Another Ministry of Economy project that will enable Polish entrepreneurs to use EU funds is through sub-measure 6.2.1 of the Innovative Economy Operational Programme – increasing the level of internationalization of Polish companies. Its aim is to make it easier for entrepreneurs to access comprehensive, high-quality information services required for planning, organizing and conducting export or investment activities outside the territory of Poland. This goal will be realized by the domestic network of 16 Investor and Exporter Support Centers operating within the structures of voivodship Marshals’ offices. Nearly zł.78 million has been set aside to perform the services rendered by these centers. In the budget of the Ministry of Economy, the funds for promoting and supporting specific export initiatives of Polish manufacturers and service providers also constitute an important item. Most importantly, these funds are used for financing the Program of Promotion realized by the Ministry of Economy’s Trade and Investment Promotion Departments located around the world. The main task of these agencies is to identify export niches in the given country and to provide economic and trade information to the entrepreneurs who wish to establish economic collaboration in the given country. As part of the program, promotional seminars and conferences are organized, trade missions are supported, and meetings with companies and investors are organized. To make it easier for entrepreneurs to access business information, the Ministry of Economy also maintains the Polish Export Promotion Portal. This is an online, public database containing updated information about foreign markets, instruments supporting Polish export, and the possibilities of establishing trade contacts with foreign contractors. Through the portal it is also possible to promote enterprises and their export offers free of charge. The Ministry of Economy also helps to cover the costs of obtaining export certificates. Owners of companies may make use of a subsidy covering 50 percent of the costs of consulting services associated with obtaining confirmations, as well as certificates and attestations required by foreign markets. The annual limit for an entrepreneur is zł.50,000. The Ministry of Economy may also cover part of the expenses of organizing conferences, seminars and other promotional events incurred by entrepreneurs. We also subsidize releases of publications and materials promoting Polish export. I am convinced that the solutions we have prepared will help Polish exporters in conquering successive foreign markets and improve their competitive position. I also trust that with their help our companies will be able to create strong Polish brands, contributing in this way to strengthening the positive image of the Polish economy around the world. To all Polish entrepreneurs, I wish many a successful contract. Employees of Trade and Investment Promotion Departments in 47 countries around the world are at your disposal. v

interview

Made in Poland 2011

Treat us like partners The president of the Polish Chamber of Commerce (KIG), Andrzej Arendarski, tells Made in Poland what it would take to help Polish exporters reach their full potential Another issue which would be helpful for exporters is an effective system of financing exports which would be profitable in economic terms (loans, guarantees, warranties, insurance policies), which would facilitate entering foreign markets. There are already mechanisms introduced in Poland for supporting export, but in many cases taking advantage of them is still a cause of many problems and is often too expensive. What could the Polish government do to help exporters? MiP: What are the biggest issues facing Polish exporters? Andrzej Arendarski: Putting aside all the other problems that Polish entrepreneurs have to face, such as excessive bureaucracy, a poor legal system and complicated tax regulations, special attention should be paid to the negative effect that the lack of a common concept and strategy for economic promotion abroad has on Polish exports. This fact results in, among other issues, there being no Polish brands that would be widely recognized around the world and which would positively reflect the potential of our exports. Another issue is also the political support of exports, which is critical if we want to do business in regions where business is closely tied to politics. Polish exporters, while battling on foreign markets, realize that they are not only battling with competition strictly on business terms, but on terms which are often backed by politics, such as in the form of governmental loans. A serious barrier to the development of exports is the fluctuation of the exchange rate, which does not allow Polish enterprises to plan a stable and safe export policy. A solution to this would of course be entering the euro zone.

First of all, the authorities should create a beneficial and friendly economic legal system and in general â&#x20AC;&#x201C; a positive business climate. This relates to all enterprises, not only exporters. In the recognized ranking entitled â&#x20AC;&#x153;Doing Business,â&#x20AC;? published by the World Bank, which compares the conditions of doing business around the world, Poland is ranked somewhere around the 70th position. This means that in terms of conditions for doing business, a lot remains to be changed. First of all, Poland needs a reform of the system of creating legislation. Polish enterprises feel that Polish law, instead of improving, is getting worse. One of the reasons for the poor quality of the bills is a defective legislation process, which forces legislators to frequently correct mistakes. Besides, it is necessary to carry out some real regulatory reform. Limiting the regulatory power of the state is one of the most effective methods of freeing the development and potential of entrepreneurship in a country. The regulations which are currently in force in many cases too deeply and often in an unjustified manner interfere with running different types of business activities. If a good economic legal system existed in Poland, there would be less temptation to go around it.

Made in Poland 2011

interview

“Poles are a friendly and an open nation – I don’t think that foreign partners should have a problem with establishing positive relations” It is also crucial to create a common system of Polish economic promotion abroad. Until now we have not seen such a system, which leads to the fact that the potential of Polish exports in many fields still remains unexploited.

multinational corporations, work in the Western style. This also has its practical consequences. The negotiation process will be much longer in the public sector – at least this is how we are seen abroad.

What should foreign importers keep in mind when dealing with Polish exporters?

“Poles will be rather distrustful at the first meeting. During business meetings Poles will not joke around to ease the atmosphere for discussion. They are direct and focused. Jokes are left for after work” – this is a quote from one of the foreign websites dealing with business culture. Experts advise that instead of jokes, a good presentation should be well-prepared and – something which is crucial – eye contact should be maintained throughout the whole meeting.

Poles feel appreciated when they are treated like partners. Within the past years a number of foreign businesspeople have come to the countries of Central and Eastern Europe with the “I will show you how business should be done” approach. With such an approach it will be difficult to come to an understanding with a Polish partner. Poles are a friendly and an open nation – I don’t think that foreign partners should have a problem with establishing positive relations. Our managers are perfectly well-educated and know how to operate in the world of international business. Contacts with Polish exporters should not differ from the standards of Western Europe. It is also worth taking a look at what is written about us in foreign business-culture guidebooks. They emphasize that the Polish management style is characterized by hierarchy. Therefore, before the meeting it is important to identify the person who makes the decisions – this will greatly speed up the talks. Those who know the Polish market also point to the fact that in state-controlled institutions the working model has not changed since democracy was introduced. People working for the private sector, especially those who work for the large

In the eyes of foreigners we are a nation which will not hide it if something bothers us, and potential partners might even feel offended with such an expression. In contrast to, for example, the Japanese, we do not take advantage of hidden meanings, context, and so on. We also do not like bargaining and raising one’s voice during negotiations, nor banging on the table. This is the kind of information on Polish businesspeople that can be read in foreign publications. How is it in real life? The best thing is to come to Poland and find out for yourself. Which sectors of the economy may not be great exporters now, but have strong potential for export? There are several excellent companies, products and services in Poland which have a strong potential for export. Reports prepared for the Economy Ministry indicate that such sectors

interview

Made in Poland 2011

as engineering, IT, transportation, jewelry, medical equipment, machines, goods made of glass, boats, plastics, cosmetics, as well as several others have a significant export potential.

mistic forecasts also relate to the export sector. Over 45 percent of the polled entrepreneurs are planning an increase in export volume.

It is worth keeping in mind however that Poland’s traditional export specialties are still agricultural and food products, raw materials as well as the end products, or furniture.

The research of the Polish Chamber of Commerce also shows a significant boom in the field of investment plans. In the current year almost 48 percent of entrepreneurs are planning on increasing investments, while 40 percent plan to maintain them at their current level.

The truth is that thanks to the inflow of foreign investments in the previous years we have also become a significant player in terms of exports in the automotive and home electronics sectors, but the fact remains that Polish export is still far from being innovative. The level of innovation of the Polish economy for years has been behind the European and global standards. In international rankings which compare the level of innovativeness of economies, Poland is ranked in the last positions. The level of investment on research and development, one of the fundamental indicators of innovation, in Poland amounted to only 0.59 percent of GDP in 2008. For comparison, in Spain this sum stood at 1.2 percent, in Germany 2.53 percent, and in Sweden around 4.0 percent. The situation also does not look too bright in terms of the number of registered patents. This situation is reflected in Polish foreign trade, where hi-tech goods account for only a fraction of the total exports. We should aim at changing the structure “The fact remains of Polish exports in the that Polish export direction of increased innovation at any price. is still far from being Thanks to EU funds for the years 2007-2013, innovative” we are capable of significantly increasing the innovation-related potential of the Polish economy and become increasingly competitive on foreign markets. In June this year the Polish Chamber of Commerce will organize the 2nd Innovative Economy Congress. Within a group of prominent politicians, entrepreneurs and academics, we will be attempting to answer the question, among others, of how to direct Polish exports to the path of increased innovation. Are exporting companies in the chamber feeling the economic recovery? Polish enterprises remain optimistic and believe that this year will be another phase in the return of the beneficial economic situation. At least this is the result of the European Economic Survey 2011 carried out by the Polish Chamber of Commerce last year. The study indicated that over 66 percent of Polish entrepreneurs are planning to increase turnover this year, while only 10 percent are expecting a decrease. Almost two thirds of the entrepreneurs are planning to see an increase in sales. Opti-

Unfortunately, Polish entrepreneurs show much less optimism when it comes to the area of business climate. Optimism in this field is the lowest as compared to all researched forecasts in the previous years. Only 27 percent of entrepreneurs believe that the conditions of doing business will improve. Meanwhile, 28 percent believe that they will worsen. According to 43.6 percent of the polled entrepreneurs, the business climate will not change. This ranks Poland among the countries with the lowest evaluation of the expected conditions of doing business. The entrepreneurs’ sentiment could get worse. We have to remember that the issue of the deficit in the euro zone countries and the resulting crisis still remains a great unknown. The situation in Europe can negatively affect the moods of Polish business. We have to hope that the decisions made in Brussels aimed at preventing the growth of the crisis will bring about the expected results. This year’s business sentiment will greatly depend on this issue. Where does the chamber stand in terms of early or later adoption of the euro in Poland? Does the chamber feel it would help or hurt Polish exporters? For many years the Polish Chamber of Commerce has been arguing for early adoption of the common currency. In several cases we have criticized the postponing of the adoption date of the euro. Postponing the date of entering the euro zone undermines the competitive position of Polish companies and does not allow the entrepreneurs to plan on a stable level and to become fully involved in foreign trade. The risk related to exchange-rate fluctuations is recognized by the entrepreneurs as one of the most significant barriers to their development and functioning on the European market. Currently around 70 percent of Polish export goes to EU countries, of which a majority is in the euro zone. In fact, being left out of the euro zone and the weakening of the value of the złoty during the crisis was an additional factor stimulating growth and allowed us to avoid the effects of the financial crisis. The crisis however is an exceptional situation and a business strategy cannot be planned with an upfront assumption that taking a risk is not worth it, because the global economy sooner or later will once again find itself in a crisis situation. Therefore we retain our stance that Poland should adopt the euro as soon as possible, of course at the most convenient moment. v

W E a s a

Th • •

•

T S

Warsaw Business Journal Group and the Polish Chamber of Commerce, under the patronage of the Economy Ministry, have undertaken a new initiative called the Polish Export Promotion Program, aimed at promoting Polish exporters and their products abroad. Through this project we will shine a spotlight on Poland's export market, as well as the companies and products that it comprises, and draw attention to their achievements. The project will include: • Made in Poland – A guide to Polish export • Mister and Junior of Exports, a competition to award Poland’s best exporting companies and export products – those which distinguish themselves by a high level of quality and innovation • A gala, on June 14th 2011, at which the awards will be given out

The entry form and competition rules are available on pages 79-82 To get more information about the project, please contact Sales Director Agnieszka Brejwo at abrejwo@wbj.pl

exports & poland’s economy

Made in Poland 2011

Protected from shock That Poland isn’t overdependent on exports has helped it to maintain economic stability

t is well-documented that Poland’s economy was the only one in the European Union to grow in full-year 2009. Stronger GDP expansion in the following year served to confirm the country’s solid fundamentals and helped distinguish it from other developing economies on the EU’s eastern border. Economists identified domestic demand and a timely influx of EU structural funds as two key drivers of Polish growth in 2009. Inventory rebuilding was added to the equation in the following year. But what part did trade play in helping Poland dodge a downturn?

Trade deficit

Poland’s economy is not export-oriented, but instead relies on domestic demand for growth – net exports, as a result, rarely have a significant positive impact on the country’s GDP. Poland’s reliance on imports to meet domestic demand means that, like many developing economies, it consistently reports a trade deficit. And although such trade deficits aren’t necessarily desirable, in Poland’s case it ought not to be seen as a negative. “It is important to know how this imbalance is financed,” said Piotr Bujak, a senior economist at Bank Zachodni WBK.

Almost all of Poland’s trade deficit is funded by long-term capital inflows, mainly from FDI and EU structural funds. And Poland has far larger capital inflows than it does outflows. “This by itself creates domestic demand for machinery, goods and services from abroad,” Mr Bujak said. Polish trade figures (in zł. billions) Exports

Imports

Balance

600 500 400 300

Source: Central Statistical Office

200 100 zł.bln -100

2005

2006

2007

2008

Impact of net exports on Poland’s GDP growth

2009

2010

200 100 zł.bln

10 -100

2005

2006

2007

2008

2009

2.0 1.5

0.5

3.0 2.5

0.0

-1.5

Q1 2009

Q2 2009

Q3 2009

Made in Poland 2011

Q4 2009

Q1 2010

Q2 2010

Q3 2010

3.0 2.5

percentage change

Exports

2.1

Imports

0.5

-0.4

0.0

-1.2

-0.5 -1.0 Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Source: Central Statistical Office

1.0

Source: Central Statistical Office

1.5

Q1 2009

Q4 2010

Germany’s share of Polish trade (in %)

2.0

-1.5

-1.2

-0.5

-1.0 exports & poland’s economy 2010

3.6

3.5

-0.4

Impact of net exports on Poland’s GDP growth 4.0

1.0

Source: Central Statistical Office

300

1990

1995

2000

2005

2010

Polish trade with the European Union (in zł. billions)

Source: Central Statistical Office

The country’s trade deficit grew year-on-year in 2010, reflect40 ing strengthening internal demand for imports after the slowExports down in the previous year. Poland’s combined 2010 exports 35 were valued at zł.469.15 billion by the Central Statistical OfImports fice, while total imports stood at zł.522.99 billion, leaving a trade deficit of zł.53.84 billion. The trade deficit for the previ30 ous year stood at zł.40.14 billion. Many experts expect to see the gap widen in 2011 as domes25 tic demand continues to pick up steam. “The trade deficit will continue to grow this year,” said Piotr 20 Kalisz, chief economist at Citi2000Handlowy.2005 1990 1995 2010

Net exports

Interestingly, despite the fact that Poland nearly always runs a trade deficit, the effect of net exports on GDP growth was Polish trade with the European Union (in zł. billions) positive in every quarter in 2009. This has generally been attributed to the fact that in that year domestic demand 400 Exports droppedImports and the złoty fell in value, meaning exports per350 formed better than they usually do relative to domestic de300 mand. 250

100

Return to form 50

Source: Central Statistical Office

The impact of net exports on Q4 2010 GDP growth was -1.2 percentage points – the second and deepest drop since 2008. This, however, merely reflected the growth of “domestic 150 uses,” which grew 5.6 percent y/y in Q4 2010. 200

Poland’s 2010 trade volumes picked up significantly from 2005 2006 2007 2010 the previous year, as its main trade2008partners2009re-stocked their depleted inventories and returned to growth. Total exports denominated in złoty leaped 10.8 percent y/y, while imports jumped 12.9 percent. The total value of exports in 2010 was the highest in Poland’s history.

zł.bln

Poland’s main export goods include machinery and transport equipment, manufactured goods, miscellaneous manufac-

400 350

Exports by commodity type in 2008 and 2009 Exports Imports (in 2009 prices, E millions) 2008

2009

Live 250 animals; animal products

3,565

3,636

200 Vegetable products

1,947

2,337

247

257

Prepared foodstuffs

4,331

5,269

50 Mineral products

4,163

3,199

300

Commodity type

150 and oils Fats 100

zł.bln Products of the chemical industry 2005

Plastics and rubber and articles thereof

2006

2007

5,346

2008

2009

5,886 2010

6,426

5,955

388

323

Wood and articles of wood

2,622

2,067

Pulp of wood, paper, paperboard and articles thereof

2,980

3,105

Textiles and textile articles

3,422

3,403

369

355

Articles of stone, ceramic products, glass

2,310

1,865

Pearls, precious stones, metals and articles thereof

525

531

Base metals and articles thereof

13,529

10,089

Machinery and mechanical appliances, electrical and electrotechnical equipment

25,391

25,360

Transport equipment

16,889

17,765

Arms and ammunition

6,473

5,832

Raw hides and skins, articles thereof

Footwear, headgear and articles thereof

Miscellaneous manufactured articles Works of art, collectors’ pieces and antiques

Source: Central Statistical Office

“Poland’s economy is not like China’s or Germany’s,” he added. “The trade deficit is structural in nature and this results from our economy’s reliance demand.” Germany’s share of Polish tradeon(indomestic %)

Source: Central Statistical Office

Exports 35

Source: Central Statistical Office

Imports

exports & poland’s economy

Made 25 in Poland 2011

1990

1995

2000

2005

2010

But that’s easier said than done when the global economy is as volatile as it has been in recent years.

Polish trade with the European Union (in zł. billions) 400

Exports

Imports

350 300

Source: Central Statistical Office

250 200 150 100 50 zł.bln

2005

2006

2007

2008

2009

2010

The Polish currency is expected to be strongly influenced by global sentiment in 2011. “Investors will remind themselves about the PIIGS [Portugal, Ireland, Italy, Greece, Spain] countries’ debt problems,” Adam Narczewski, managing director of X-Trade Brokers Hungary said. “Stock markets, after increasing for almost the whole of 2010, should decline in a corrective movement. All those global factors should cause the złoty to lose some ground in the first half of 2011 with possible levels of zł.4.15-4.20 for the EUR/PLN and zł.3.22-3.25 for the USD/PLN,” he added. But Polish exporters have had to get used to living with an unstable currency, with many learning to hedge against the risks associated with currency fluctuations.

tured articles, food and live animals and chemicals and related products. Imports are very similar to exports, although chemicals, mineral fuels, lubricants and related material also feature strongly.

“Even with a strong złoty decline or hike, I do not think the whole [export] industry will go under water. [Exporters] would be in real trouble [however] if the EUR/PLN goes much beyond the zł.3.00-4.50 range,” said Mr Narczewski.

Poland conducts the lion’s share of its trade with its partners in the European Union, who accounted for 78.6 percent of Poland’s exports last year and supplied 58.8 percent of its imports. Germany, whose economy bounced back strongly from a sharp contraction in 2009, is Poland’s primary trading partner, accounting for 26 percent of all exports last year and 21.7 percent of imports.

The future

The health of the single market, and especially of its German heart, is therefore of singular importance to Poland.

Currency movements

The behavior of the złoty is also crucial. Exporters obviously benefit from a weak złoty, seeing more demand for their products from abroad and padded profit margins from the exchange of the strong currencies they receive. But when the złoty is strong, imports become more affordable, allowing the economy to take in more. Most economists therefore agree that the best scenario for the Polish economy is to have a stable, and fairly strong, złoty.

The outlook for Polish exports appeared to be good at the start of 2011. Purchasing Managers Index reports showed a significant pick-up in export orders, which largely reflected the continued expansion of Germany’s manufacturing sector. But there are nevertheless serious potential stumbling blocks ahead for Poland’s exporters. The economies of the EU, and especially those in the euro zone, are generally seeing only sluggish returns to growth. Worries persist that they could be dragged down into the red again if the fiscal problems at the EU’s periphery spiral out of control. This could severely drag on demand and hurt Polish exports. That Poland does not rely heavily on exports, however, means it is better protected than most export-oriented economies against deep and sudden global contractions. This was a crucial factor in allowing Poland to avoid recession in 2009 and can therefore be seen as one of the country’s strengths. Gareth Price

Profit. Opportunity. Poland. The leader among English-language business publications in Poland.

For d

aily

new

s se ew

ww.

wbj .pl

To subscribe contact Krzysztof WiliĹ&#x201E;ski: kwilinski@wbj.pl To advertise contact Agnieszka Brejwo: abrejwo@wbj.pl

Made in Poland 2011

partner feature: branding

The presence of Polish brands abroad tionals that usually already had a portfolio of similar products. Their obvious priority was to develop brands with global reach. At that time Polish products were reserved for an internal market that covered a country with a population of nearly 40 million. This resulted in little attention being paid to exports. As a result of the cost of promoting a new product abroad, if Polish products were exported, it was often under a foreign brand name. Tomasz Wiśniewski, CBV, FCCA, Partner in charge of the Valuations Team, KPMG

ccording to a 2009 survey by the Foreign Ministry, Poland is mainly associated with historical figures such as Lech Wałęsa, Pope John Paul II and Fryderyk Chopin. It is also associated, but less so, with products and brands, although Wedel sweets, among others, appeared in the survey.

Poland lacks the kind of image that brings a distinctive product to mind. Switzerland is associated with banks and watches, Belgium with chocolates, Sweden with IKEA and Volvo, and France with perfume and champagne. And although Poland is often identified with vodka, it is difficult to regard this association as appropriate, firstly because it is awkward due to the nature of the product, and secondly because Russia is also famous for vodka, so the association is not exclusive. When we recently contacted the owners of the leading brand names in Poland in order to determine how much the value of their brand was dependent on export sales, the information was mostly held secret. But was the real reason for this the fact that there was nothing to brag about? Popular brands in Poland that have often been present on the market for over a hundred years – such as Wedel – are seldom recognized abroad by consumers other than Poles.

A Polish product – what is it?

In recent years, many consumer brands have been purchased, along with the companies that produced them, by multina-

It’s true that there were a few niche products that were successful in foreign markets (buses, boats), but they were not mass consumer products and typically they are not widely recognized.

How it’s done down south

Traveling in Tuscany, I asked a well-known wine producer if indeed the high price of their wines resulted from better quality in comparison to wines from other regions of Italy. I received a surprisingly honest answer – Tuscan wines are not better, but thanks to the promotion of the region, their customers loved them and were willing to pay a higher price. So why haven’t we in Poland built up regional products that attract tourists in the same way as Italian wines, French cheeses and Scotch whiskies? While producers are responsible for all promotional activities, the Ministry of Economy’s support in coordinating these efforts would be helpful. But, above all, economic profit should be enough to justify the presence of Polish brands in foreign markets.

The heart of each Pole beats stronger when, being abroad, we see a Polish brand: the Inglot store in Times Square, in Madison Square Garden an advert for Sobieski Vodka or Hortex juice in a shop in Greenpoint. However, these things still surprise us, even though we would like strong Polish brands in a global market to be something not so out of the ordinary. We’ve had the Chopin year, soon we will have the Polish presidency of the European Union, and in a year there will be the Euro 2012 soccer championship. These three events mean that many people are focusing their attention on Poland. Will we be able to make use of it? v

partner feature: aid for exporters

Made in Poland 2011

Where can Polish exporters find financial support? Daniel Mościcki Expert, KPMG

inancial support for export activities may be obtained from several sources, including European Union funds under the Innovative Economy Operational Programme, within the Regional Operational Programmes and from government programs.

Their goal is to strengthen the Polish economy through the promotion of Poland as an attractive economic partner and a place where valuable business contacts can be made, as well as to increase the volume of Polish exports and the number of businesses engaged in export activity. Among the institutions that support the development of Polish exporters, the first that deserve mention include the Polish Agency for Enterprise Development (PARP), the Ministry of Economy, as well as the Marshals’ offices.

Support from PARP

The Polish Agency for Enterprise Development is responsible, among other things, for the implementation of the Innovative Economy Operational Programme’s measure 6.1 – Passport to Export. This measure is aimed at small and medium-sized enterprises initiating export activities. The framework provides comprehensive support for entrepreneurs interested in establishing business contacts with foreign partners, including, in particular, advice and training to promote export and sales activities abroad, market research and participation in international fairs and exhibitions.

Kiejstut Żagun Tax Advisor, Senior Manager, KPMG

The amount of aid granted to support the preparation and implementation of export development for one entrepreneur may not exceed E200,000.

Ministry of Economy programs

Entrepreneurs are also able to take advantage of export support tools at the disposal of the Ministry of Economy. Funds are available under the Innovative Economy Operational Programme’s sub-measure 6.5.2 – supporting the participation of entrepreneurs in promotion programs – as well as through government programs.

Applicants may obtain financing for the cost of promoting their products on international markets from many sources of support. The amount of financial support depends on the source of support.

Marshals’ offices

Another source of support for Polish entrepreneurs’ export activities are the Regional Operational Programmes. Most of the Regional Operational Programmes provide separate measures aimed at strengthening the market position of enterprises, or consolidating their brands in the European market. In particular, these programs are dedicated to SMEs. The Marshals’ offices are responsible for the implementation of Regional Operational Programmes. v

partner feature: investment in poland

Made in Poland 2011

How foreign firms see Poland Andrzej Kaczmarek, former Deputy Minister of Economy

pinions about doing business in Poland are burdened by many stereotypes. In addition to discussions about the economy, comments usually focus on problems, crises, or even scandals. When analyzing the scope for a business project in Poland, one can see that reports from the media focus on unfavorable information or conditions. And it happens that our opinions are affected by commentators who often have no practical business experience.

Entrepreneurs, and especially those who have experience in international markets, know that there is no ideal place to invest and do business. Typically, where a favorable legal and tax regime does exist, there is usually a small local market and/or the presence of very strong competition to deal with. The potential of a large market within a region or a country is often limited by barriers to access. It requires of investors a higher level of business acumen, particularly in the context of the regulatory environment and the principles of fiscal accounts.

Polish bureaucracy: not so relevant

Poles often complain about bureaucracy and about taxes. In Poland, it is a commonly held belief that taxes are some of the highest and that the administration in the country is the least friendly to entrepreneurs. On the other hand, Poland still has high levels of foreign investment, meaning – it seems – tax regulations and administrative hurdles are not the most decisive factors. Investors have come to invest in Poland from economically liberal countries like the US. And investors have also come from countries both geographically distant and culturally dissimilar to Poland – like China. What motivates these companies to locate in the country? The answer to this question can be found in a report prepared by the American Chamber of Commerce in Poland and KPMG entitled, “20 Years of American investment in Poland.”

People: the decisive factor

The report shows that the main factor for companies when they decide whether or not to invest in a particular market is

the type of workforce available. In particular, investors look at the availability of a skilled labor force, which means assessing professional skills and education levels. The availability and quality of workers constitute the most important factors in the eyes of American companies investing in Poland. Other important factors include the locations for doing business in Poland and the size of the market. The growth potential of the Polish economy and its stability are also given strong consideration. The availability of industrial and commercial space is also important, as is the presence of local suppliers and subcontractors.

The American approach to business

Investors from the US speak less about bureaucracy, excessive fiscal policies and unclear regulations. Indeed, they speak less about everything that at first glance appear to be the main issues when we talk about the economy and business conditions in Poland. This is the American approach to business. In the face of the country’s bureaucracy and tax system, enterprises operating in Poland can experience more difficult conditions than in other countries – but the economic potential, level of entrepreneurship and the expected and obtained profits prevail as factors for US firms.

A step further: attracting Chinese investors

KPMG is preparing a study and a report for Chinese companies and investors currently present in Poland and for those planning business ventures here. The report is tentatively titled, “The position of Poland as a business partner for China.” Although there are only a few major Chinese investors and companies already active in Poland, increasing numbers are finding space to do business in the country. The new KPMG report will give us an interesting alternative to the American opinion of doing business in Poland. It may also provide us with the latest revision of stereotypes about doing business here. Changing investment trends and the evolving opinions of entrepreneurs, as confirmed by KPMG, show that Poland, as a place to do business, is expanding and improving. v

Made in Poland 2011

Poland’s macroeconomics

On solid ground

Stable growth has been the hallmark of the Polish economy, and that is expected to continue

f there is one thing that business abhors, it’s unpredictability. Especially for importers and exporters, unexpected macroeconomic changes can turn what once may have seemed like a smart long-term contract into dangerous ballast. That is a big reason why foreign investors have shown so much interest in Poland of late. In an environment of global economic insecurity, Poland has remained a remarkably stable ship on rough economic seas. Not that the global economic crisis didn’t rock Poland’s boat. In 2009 GDP growth slid to 1.8 percent, down from 4.8 percent in 2008. The first few months of 2009, in particular, saw significant volatility in the złoty exchange rate against key currencies, frustrating exporters and importers. But compared to other economies on the continent – and in the region especially – Poland fared extremely well, becoming the only EU country to see full-year growth in 2009.

The consumer is king

Consumer activity was the driver. Wages continued to rise – but not enough to spur inflation – and the złoty remained stable enough that Poles didn’t default on their largely Swiss

franc-denominated mortgages. Unemployment rose at the end of 2009, but didn’t spike. Recovery was solid in 2010, with Poland’s economy growing by 3.8 percent. Consumers continued to buy and inflation remained manageable. The recovery is expected to continue in 2011, with most experts predicting GDP growth of 4.0 percent or slightly more. Conventional wisdom has it that consumption will finally begin to slow this year (although February retail sales figures surprised on the upside at 12 percent growth, higher than even December 2010’s exceptionally strong numbers). At the same time, investment, which has disappointed over the past couple of years, is expected to finally begin to pick up, making up for the drop in consumption. Prime Minister Tusk’s top economic advisor, former PM Jan Krzysztof Bielecki, posited as much at the beginning of February. “The investment cycle in the Polish private sector is short. We usually see two to three years of investment growth and then two to three years when it hardly grows. After the drop in investments which began in 2009 … this year will be the first in which investments in the private sector will grow,”

Poland’s macroeconomics

said Mr Bielecki. Additionally, the credit market is loosening up somewhat, so Polish businesses will have more access to financing. For importers of Polish products, that means that they don’t have to worry about their Polish partners suddenly going bankrupt. For those exporting to Poland, it means that demand for products will remain stable.

External factors

But the Polish economy does not exist in a vacuum – its current positive performance has much to do with Germany’s impressive recovery. If Poland’s largest trading partner were to run into an economic rough patch, it could have dire consequences for the domestic economy. And, in considering external factors, it is impossible to ignore the destabilizing events that shook the globe in early 2011. The series of uprisings in North Africa and the Middle East pushed the price of oil skyward, while uncertainty regarding earthquake and tsunami damage in Japan, not to mention the nuclear catastrophe, sent shocks throughout the world’s stock markets. When events like that occur, investors lose their appetite for risk and the złoty, still considered an emerging-market currency, heads southward.

Made in Poland 2011

“In order to affect importers or exporters, the złoty would have to either appreciate dramatically (for example to record lows of 3.20 against the euro, affecting exporters) or depreciate dramatically (to over zł.4.5 per euro, affecting importers).”

Reasons for worry

As Made in Poland went to press, most analysts felt that the złoty would see a steady but slight appreciation by December Poland’s year-on-year GDP growth (in %) of 2011, provided the volatility caused by unexpected events 8 settled down. But it was by no means a unanimous view. 7 Danske Bank took a distinctly bearish tone on the złoty in 6 March, downgrading its “near future” forecast for the złoty to zł.4.15 to the euro and saying it was possible it could remain 5 there for 12 months. 4 Source: Central Statistical Office

The reason? Despite all of the good macro news, the Polish 3 economy is not without problems, and Danske Bank analysts 2 felt these were finally beginning to take a toll. 1

“The markets have not fully reacted” to the “worsening of % Q1 fundamentals, Q2 Q3 Q4 Q1 Q2 Q3 Q4public Q1 Q2 Q3 Q4 Polish not only weak finances and the 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 large current-account deficit, but also higher inflation,” the banks’ analysts wrote. “This should put downward pressure on the złoty over the longer horizon.”

So, how will the złoty behave this year?

20 0

Fe b

20 09 Ap r1 0 20 M 09 ay 11 20 09 Ju n 10 20 09 Ju l1 0 20 09 Au g 10 20 Se 09 pt 10 20 09 Oc t0 9 20 09 No v1 0 20 De 09 c 10 ,2 00 Ja 9 n 11 ,2 01 Fe 0 b 10 ,2 01 M 0 ar 10 ,2 01 0 Ap r9 ,2 01 M 0 ay 10 ,2 01 Ju 0 n 10 ,2 01 0 Ju l9 ,2 01 Au 0 g 10 ,2 01 Se 0 p 10 ,2 01 Oc 0 t1 0, 20 No 10 v1 0, 20 De 10 c 10 ,2 0 10 Ja n 10 ,2 01 Fe 1 b 10 ,2 01 1

Source: National Bank of Poland

Those “worsening fundamentals” were beginning to filter their way into the political debate at the beginning of 2011. “Recent global events, including in Japan month and (or nearest date) of the złoty against the US dollar, euro, over 2009 and 2010 to Average exchangethe rateearthquake on 10th of every Poland’s budget deficit rose sharply increased risk aversion and the the military actionSwiss in Libya, franc and British pound, February 2009-February 2011 eight percent of GDP – prompting the Moody’s rating agensensitivity of investors,” said Adam Narczewski, managing cy to issue1aCHF warning in October 2010 that investors could al1 USDHungary. “Emerging 1 currenEUR 1 GBP director of X-Trade Brokers ter their perceptions about Poland if the budget deficit wasn’t 6 cies were hurt but quickly recovered. The złoty is a volatile brought under control. Poland’s debt-to-GDP ratio was teecurrency and we should not be surprised when we see big tering perilously close to the 55 percent threshold which, if exchange-rate swings,” he said. 5 crossed, would trigger legally mandated spending cuts. “Nevertheless, the złoty has been depreciating since the beTo avoid that embarrassment in an election year, the govern4 ginning of the year, a trend that might be maintained in the ment was getting set to institute a set of reforms to Poland’s short-term but not till the end of the year. Higher inflation pension system which would essentially have moved money has caused the Monetary Policy Council [the National Bank from Poland’s private pension funds into its public system, 3 of Poland’s interest-rate-setting body] to act by increasing inallowing the government to shore up its balance sheet. terest rates,” he added. 2 The proposal had caused a great amount of controversy, leadMr Narczewski expects the złoty to appreciate by the end of ing Leszek Balcerowicz, a former finance minister, former the year to between zł.3.8 and zł.3.9 to the euro. “Those are president of the National Bank of Poland and architect of still levels that will make Polish export competitive,” he said. Poland’s post-communist economic reforms, to heavily critiConsumer price inflation for 2009 and 2010, in y/y percentage change 4.0 3.5 3.0

Source: National Bank of Poland

2.5 2.0 1.5 1.0

20 09

r2 00 Oc 9 tob er 20 No 09 ve mb er 20 De 09 ce mb er 20 09 Ja nu ar y 20 Fe 1 0 br ua ry 20 10 M ar ch 20 10 Ap ril 20 10 M ay 20 10 Ju ne 20 10 Ju ly 20 10 Au gu st Se 20 pt 10 em be r2 01 Oc 0 tob er 20 No 1 ve 0 mb er 20 De 10 ce mb er 20 10

20 09 Au

gu st

20 09

Ju ly

20 09

ne Ju

20 09

ay M

20 09

ril

ar ch

ry ua

Fe br

nu ar

20 09

0.0

20 09

0.5

Consumer price inflation for 2009 and 2010, in y/y percentage change 20

3.0

Source: National Bank of Poland

2.5 2.0 1.5 1.0

Poland’s macroeconomics

ru a Fe b

Ja n

0.0

09 M ar ch 20 09 Ap ril 20 09 M ay 20 09 Ju ne 20 09 Ju ly 20 09 Au gu st Se 20 pt 09 em be r2 0 09 Oc tob er 20 No 09 ve mb er 20 De 09 ce mb er 20 09 Ja nu ar y 20 Fe 10 br ua ry 20 10 M ar ch 20 10 Ap ril 20 10 M ay 20 10 Ju ne 20 10 Ju ly 20 10 Au gu st Se 20 pt 10 em be r2 01 Oc 0 tob er 20 No 10 ve mb er 20 De 10 ce mb er 20 10

Made in Poland 0.5 2011

Poland’s year-on-year GDP growth (in %)

Consumer price inflation for 2009 and 2010, in y/y percentage change

7 6

3 2 1 %

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Fe b

01 ,2

The difference amounted to as much as 4.0 percent of GDP – some €15 billion, which experts said probably resulted in an underestimation of imports. If Poland had indeed underestimated its imports to that degree, it would seriously affect its macroeconomic figures, resulting in significant changes to its GDP growth numbers, possibly dating as far back as 2004. More urgently for the government, it might mean that the debt-to-GDP ratio had already surpassed the 55 percent threshold. ay

01 ,2

,2 10

Fe b

01 ,2

Source: National Bank of Poland

1 CHF GBP Danske Bank menThe large current-account deficit1 that tioned was also gaining attention towards the end of March 2011, as former Finance Minister Mirosław Gronicki, an advisor to the National Bank of Poland, revealed a large and unforeseen anomaly in the “omissions and errors” section of Poland’s balance of payment statistics.

09 20

0 v1

09 20

Outlook: stable

for 2009 and 2010, in y/y percentage change

So does that mean that the end of Poland’s macroeconomic stability is on the horizon? As Made in Poland went to press, it seemed unlikely. A backwards revision of macroeconomic data, while making things tougher on the government in an Source: National Bank of Poland

Q4 2010

cize the proposed changes. And while experts disagreed as to whether the changes were actually necessary, there was little disagreement that they amounted to little more than creative of the złoty against US dollar, on 10th of every month (or nearest date)accounting, ratherthethan a realeuro, improvement in Poland’s fipound, February 2009-February 2011 nances. 1 EUR

Source: Central Statistical Office

2000

2001

2002

2003

2004

2005

2006

2007

2008

1 USD

Wages continued to rise and, while inflation was above the National Bank of Poland’s tolerance band of 1.5-3.5 percent in February, at 3.6 percent, it was still lower than expected, and was likely to be kept in check by interest-rate rises. “The current inflation levels are affected by global prices of energy (oil) and food (soft commodities) prices, but real inPoland’s year-on-year GDP growth (in %) flation in Poland is not rising as quickly as in other economies,” said X-Trade Brokers’ Adam Narczewski. 8 “I7 believe the Polish economy can be considered stable. Its GDP growth forecast for 2011 is one of the highest in the EU. 6 Debt levels are not dramatic and do not require the help of 5 the IMF. Employment and wages will keep increasing as the 4 economy is expected to grow, but I do not expect a burst of 3 core inflation,” he added. 2

So while Poland’s economy has problems like any other, it is1 still faring far better than many of its neighbors, and is ex% pected to retain its trend of stable growth for the near to midQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 That’s 2008 2008 2008 2009 2009 2009exporters 2009 2010 and 2010 importers 2010 2010 term. news in which both can take heart. Andrew Kureth

1 CHF

1 GBP

y 20 Fe 10 br ua ry 20 10 M ar ch 20 10 Ap ril 20 10 M ay 20 10 Ju ne 20 10 Ju ly 20 10 Au gu st Se 20 pt 1 0 em be r2 01 Oc 0 tob er 20 No 10 ve mb er 20 De 10 ce mb er 20 10

3 Consumer price inflation for 2009 and 2010, in y/y percentage change

10 20 09 Ju l1 0 20 09 Au g 10 20 Se 09 pt 10 20 09 Oc t0 9 20 09 No v1 0 20 De 09 c 10 ,2 0 09 Ja n 11 ,2 01 Fe 0 b 10 ,2 01 M 0 ar 10 ,2 01 0 Ap r9 ,2 01 M 0 ay 10 ,2 01 Ju 0 n 10 ,2 01 0 Ju l9 ,2 01 Au 0 g 10 ,2 01 Se 0 p 10 ,2 01 Oc 0 t1 0, 20 No 10 v1 0, 20 De 10 c 10 ,2 0 10 Ja n 10 ,2 0 Fe 11 b 10 ,2 01 1

09 20

Source: Central Statistical Office

09 20

0 r1

10 Fe b

20 09

Consumer price inflation for 2009 and 2010, in y/y percentage change

5 4.0 0

3.5 2000

2001

2002

3.0

2003

2004

2005

2006

2007

2008

2009

2010

Source: National Bank of Poland

20 09

00 9 Ja

nu ar

ce m

20 09

ve mb

Oc tob

20 09

be r

00 9

st 2

pt Se

20 09

ly Ju

1 EUR

2010

election year and making Poland’s macroeconomic situation look slightly worse, would be unlikely to snuff out consumer spending or thwart investments by firms looking to capitalize on the recovery in Poland.

Average exchange rate on 10th of every month (or nearest date) of the złoty against the US dollar, euro, Swiss franc and British pound, February 2009-February 2011 6

2009

Source: Central Statistical Office

transport infrastructure

Made in Poland 2011

Roads to the future

or many years now, foreign investors and Polish businesspeople alike have beamoaned the state of Poland’s roads. Major cities are connected by roads far too narrow and fragile to cope with the semi-trailer trucks needed to carry imports and exports. For those who can manage the drive, travel times can be long.

Thanks to heavy investment over the last few years, however, Poland’s roads have improved significantly. The change was mainly brought about by European Union structural funds – a large portion of which have been invested in Poland’s road network. The upcoming Euro 2012 soccer tournament, which Poland is co-hosting with Ukraine, has provided a further boost. To prepare for the expected large influx of soccer fans, Poland is currently racing against the clock to have its major cities connected with highways and adequate rail links.

Roads: building speed

The Polish Infrastructure Ministry in January 2011 announced a new program for Polish roads. The “National Road Construction Program for 2011-2015” should see a to-

tal of 810.4 km of roads built – including 168.3 km through public-private partnerships. As part of the previous, but still ongoing, five-year program (2008-2012), a total of 1,166.5 km of roads have been completed. Out of this, 183.5 km of highways were built (90 km through PPP) and 293.1 km of expressways. According to the Ministry of Infrastructure, the state of Polish roads has improved dramatically over the last few years, with the percentage of “bad roads” reduced from 34 percent to 18.9 percent between 2001 and 2009. Over the same period, the proportion of “good roads” increased from 28.5 percent to 59.6 percent. At the end of the aforementioned plan for 2011-2015, a total of 66 percent of roads around the country are expected to be in “good” condition. Poland’s roads will reach their potential one or two years after the end of Euro 2012, due to heavy investment by the Polish government, said Mikołaj Oniszczuk, a member of the board of the Association of Polish Exporters.

transport infrastructure

“When considering exporting from Poland, foreign firms need to think long-term, about the possibilities the future holds for the country’s infrastructure,” he said, explaining that Poland, because of its position between Western and Eastern Europe, has a lot to offer.

“This all means that the share of container transport by rail in Poland is still only at two to three percent,” Ms DrewkoBieńkowska said, “while the European average is around 1517 percent and increasing steadily.”

Air: speed and safety

The long lines at the country’s eastern borders might still hit companies’ wallets, but since Poland joined the Schengen Area in 2007, transporting goods to other countries in Western Europe has become a much easier process.

Land transport is not the only way to transport goods out of Poland, however, and a much quicker way to export perishables, for example, is to fly them to their destination. Both forms have their advantages and disadvantages, said Grzegorz Urban, head of marketing at UPS Polska.

Rail: stuck in its tracks

Despite large investments, Poland’s rail system still leaves much to be desired. According to Iwetta DrewkoBieńkowska, director of rail freight at ROHLIG SUUS Logistics, it is still well short of Western European standards.

“Choosing the right service depends on the customer’s needs. Air transport is certainly the fastest and safest option, but its limitation is the higher cost.” The solution to the logistics conundrum, Mr Urban said, is to find a trusted partner who will assist in finding the most efficient way to transport goods out of the country.

She added that the infrastructure itself is just one of the rail system’s problems. The poor state of rolling stock, a large number of speed limitations and high fees all conspire to drag down Polish rail as a method of transport, she said.

Roberto Galea

National Poland Construction Program for 2011-2015

Słupsk

KOSZALIN Międzyzdroje

GDAŃSK

State of completion of investments as of March 21, 2011

S22

S7 ELBLĄG

SUWAŁKI S61

Starogard Gdański

S10

OLSZTYN Ostróda Olsztynek S7

Świecie Piła

S19 S61

Brodnica BYDGOSZCZ

CIECHANÓW

S10 Inowrocław Gniezno

Międzyrzecz

Płock

Konin

Ostrów Wlkp.

Zgierz S14

KALISZ

Bełchatów

PIOTRKÓW TRYB. S12

RADOM S12

LUBLIN

KIELCE Świdnica

Motorways and express roads – state of completion

S11 OPOLE

section at tender stage section tender planned soon section under preparation

S74

S12 CHEŁM

Starachowice Kraśnik Ostrowiec Świętokrzyski

CZĘSTOCHOWA

S17 ZAMOŚĆ

S74

TARNOBRZEG

Bytom

Prudnik Kędzierzyn Koźle

KATOWICE

S19 KRAKÓW

section in use section under construction

S19

Puławy

S74 Skarżysko-Kamienna

WROCŁAW

Nysa

BIAŁA PODLASKA

S17

S3 Wałbrzych

Pabianice

ŁÓDŹ

SIEDLCE

S79 S2

S11

Nowa Sól

WARSAW

Pruszków

ZIELONA GÓRA

A18

S19

WŁOCŁAWEK

POZNAŃ

BIAŁYSTOK Zambrów

S11

S8 Łomża

OSTROŁĘKA

TORUŃ GORZÓW WLKP.

Augustów

Ełk

SZCZECIN S10 Stargard Szcz.

TARNÓW

A1 BIELSKOBIAŁA

RZESZÓW PRZEMYŚL

S7 KROSNO Nowy Sącz

Source: General Directorate for National Roads and Motorways

Made in Poland 2011

sector analyses: introduction

Made in Poland 2011

(Quietly) Rising Stars P

oland’s exports are the silent heroes of its economy. Though the Polish economy is nowhere near as dependent on exports as some of its neighbors, exports played a crucial role in keeping economic growth in positive territory throughout the global financial crisis. It’s true that domestic demand held up in 2009, but growth still slowed significantly and Polish manufacturers, boosted by a weak złoty, were able to gain market share in important export markets and generate much-needed new revenue. Their competitive prices, combined with a high level of quality, have solidified their places in overseas markets.

But what exactly does Poland export? The answers might surprise you. If you live outside Poland, especially elsewhere in Europe, chances are you own more products that have been exported from Poland than you realize. That Swedish furniture? Quite possibly produced in Poland. That wallet whose manufacturer sounds vaguely German? Also a Polish product. And the name-brand prescription medicine sitting in your cabinet? That’s right, there’s a good chance it was made in Poland. On the surface of things, Poland doesn’t have a well-known national export. America has its films, Italy its clothes, France its wine, and China, well, just about everything. But Polish exports

nonetheless play a significant, if unsung role in the global economy. And while many Polish exports are delivered to end customers under generic or foreign brand names, home-grown brands are also making a splash in some very competitive foreign markets. These include Polpharma (pharmaceuticals), Dr Irena Eris (cosmetics), Bumar (defense), Solaris (automotive) and Sunreef Yachts (watercraft), to name but a handful. In the pages which follow you will find these success stories and more, contained within analyses of eight sectors in which Polish exporters have been particularly successful: food & agriculture, defense, clothing, furniture, automotive, cosmetics, yachts, and pharmaceuticals. Watch these products – if Poland is to find its “trademark” export, it may well come from one of these sectors in the future. And that future looks bright, by the way. Polish firms are just getting started. It’s been slightly over 20 years since Poland began its transition to a market economy, and its brands are already competing head-to-head in some of the world’s most developed markets. As Polish firms gain more experience and know-how, they are sure produce even more competitive products and enter even more foreign markets. For these stars of export, the sky’s the limit. v

Made in Poland 2011

sector analysis: food & agriculture

Tradition and modernity As local and traditional food products become increasingly popular, Poland might just have found the right jingle

he year 2011 will be an important one for Polish agri-food exports. Poland’s turn at the presidency of the EU Council will start in July and, in January, Poland was the partner country at the Green Week in Berlin (IGW). Both represent huge PR opportunities, considering the dominance of EU countries in general and Germany in particular as markets for Polish agri-food (food produced agriculturally)exports.

“Poland’s membership in the European Union produced a dynamic increase in exports of agri-food products and accelerated the development of the Polish food economy,” said Mirosława Tereszczuk from the Institute of Agricultural and Food Economics (IERiGŻ) at the National Research Institute in Warsaw. Today agri-food exports represent over 10 percent of total national exports.

Despite fears that EU accession would flood the Polish market with foreign products, exports have surged and Poland has been a net exporter for several years, with over 80 percent of agri-food exports directed to EU markets. Since 2003, the value of these exports has increased more than threefold, from E4.0 billion to a projected E14 billion in 2010. And in 2010, Poland’s Ministry of Agriculture estimates there was a trade surplus of E3.5 billion.

A bite out of the crisis

Agri-food exports have also proven resilient in the face of recent crises. While wavering demand form EU consumers during the global slowdown did affect Polish exporters, the decline was moderate. Sales of Polish agri-food products abroad droped in 2009 for the first time since Poland entered the EU, but

sector analysis: food & agriculture

only by around three percent, which compares to a 15 percent drop for exports in general. This was in large part due to the depreciating złoty, which helped make all Polish exports more competitive. But agriculture in 2009 was nonetheless the only sector of the economy that had a positive balance of trade, recording a E2.2 billion surplus according to the Ministry of Agriculture. Floods in May and June 2010, for their part, took a toll on over 105,000 farms. Despite this, in the period between January and September 2010, the value of foreign trade in agrifood products amounted to E9.593 billion, a 12.7 percent increase from the corresponding period in 2009.

Let them eat Polish

Although Poland is a leading global producer of rye, rapeseed and potatoes, as well as a leading European producer of apples and berries, it is difficult to pinpoint one dominant

Dairy exports Poland’s top dairy exports are cheese and cream cheese, 153,000 metric tons of which were sold abroad in 2008. Polish rennet and ripening cheese are popular in Germany and the Czech Republic. About 80 percent of Polish dairy exports go to European Union member states. Russia lifted its ban on Polish dairy imports in 2008, and has since become an important export market as well. Like its meat products, the popularity of Poland’s dairy products is owed to their “natural” image and advantageous prices. However, despite seasonal upward trends, in Q1 2010 exports of dairy products dropped by five percent compared to the previous year. Poland’s top dairy exporters include Spółdzielnia Mleczarska “Mlekovita,” Okręgowa Spółdzielnia Mleczarska w Łowiczu, and Spółdzielnia Mleczarska w Łapach. v

Made in Poland 2011

sector in agri-food exports. In terms of value, Poland’s biggest agricultural export is meat, including pork, beef and various types of poultry meat. Milk products, baked goods, fish products and tobacco also account for a large share of the value of Poland’s exports. Between January and September 2010, Germans, who buy one-quarter of Polish food exports to the EU, bought smoked fish (for E186.9 million), poultry meat (E136.9 million) as well as baked goods (for E101.7 million). Britons, the second-largest EU importers of Polish food, bought chocolate, poultry meat and pork meat. Czechs imported Polish poultry, pork and cheese, while French, Italians and the Dutch purchased Polish cigarettes and beef.

When weakness becomes a strength

According to experts, Polish food producers were well-prepared to enter the EU, and have been taking advantage – al-

Meat exports Meat is the most popular Polish food export. Poland’s antipathy to genetically modified organisms contributes to the image of country’s meat as “natural.” Pork, veal and beef are the country’s best-selling meat products abroad. Poland’s government plans to invest more in meat production and increase its sale abroad in the coming years. It is estimated that in H1 of 2011, production of beef may rise by four percent as compared with H1 of 2009. Poland is also successful in the export of poultry meat. Polish goose-meat products dominate the German market. Meat from Poland is also making its mark in Asian markets. This year Chinese authorities approved some Polish meats for import. The top Polish meat exporters include Zakłady Mięsne ŁmeatŁuków, Food Service and PKM Duda. v

Source: Institute of Agricultural and Food Economics (IERiGŻ), Ministry of Agricultur

Poland’s agricultural exports and imports, as well as the resulting trade balance, in € million Exports Imports 12

Balance Made in Poland 2011 * estimate

sector analysis: food & agriculture

€ mln

2004

2005

2006

2007

2008

2009

2010*

Structure of agri-food exports in terms of value, 2009

Animals, meat and meat products

Sugar and sugar products

Milk and dairy products

Oil and oil products

Vegetables, fruits and mushrooms

Tobacco and alcohol

Fish and fish products

Cereals and cereal products

Potatoes and potato products

Other Source: Institute of Agricultural and Food Economics (IERiGŻ)

beit not entirely efficiently – of EU subsidies for agriculture. Over 90 percent of food processing-facilities have been modernized and are now in line with EU standards. But agriculture remains largely inefficient. Only around 30 percent of Poland’s over 1.5 million farms are considered by the EU to be competitive, modern farms. A mere 225,000 farmers with plots of over 15 hectares produce about 90 percent of Poland’s agri-food products. The overwhelming majority of Polish farms are smaller than five hectares (70 percent of Polish farms account for less than 20 percent of all arable land) and remain loss-making, highly inefficient and oriented towards self-supply. The resulting situation is that agriculture employs 15 percent of Poland’s workers and generates only four percent of GDP. However, small-scale, “traditional” farming, which uses few chemicals, results in agricultural products that are perceived as healthy, authentic and which have a smaller impact on the environment. In other words Polish farms, compared to their highly industrialized and large-scale Western European

counterparts, are well-positioned to cater to seekers of natural, traditional products.

A wise bet

And their ranks among European consumers are growing. “We are witnessing a trend of moving away from fast food,” Minister of Agriculture Marek Sawicki told Made in Poland. “Consumers are looking for traditional, natural products that are safe and without artificial additives and preservatives.” And these customers are prepared to pay. “There is a growing market for high-quality ecological and regional products, and European consumers prefer to accept a high-quality product even if it is a bit more expensive, but produced in line with nature, using traditional methods,” commented Władysław Łukasik, president of the Agricultural Market Agency (ARR). This, it seems, is the bet Poland has made to promote Polish food in a year of high-visibility within the EU. For the Green Week in Berlin, Poland prepared “an invitation to a

sector analysis: food & agriculture

Biggest export markets for Polish agri-food products, January-September 2010 Country

Value (E billion)

Germany

2.111

United Kingdom

0.671

France

0.598.8

Italy

0.656

Netherlands

0.555

Russian Federation

0.548

EU27

7.620

Total

9.693 Source: Ministry of Agriculture

culinary journey of discovery around Poland’s most attractive regions, where people still live in harmony with nature and where they still prefer traditional foods,” in Minister Sawicki’s words. According to him, the “wisdom” of keeping traditional forms of farm management allows Poles to offer products which modern consumers are now looking for. “One could say we are modern traditionalists,” he said. The confirmation that this strategy has been somewhat successful is the fact that Poland has registered 23 products in the EU system of protected designation of origin, protected geographical indication and traditional specialty guaranteed. Thirteen other products are awaiting registration. Albeit modest when compared to Italy’s 231 registered products or France’s 187, Poland fares well compared to fellow CEE countries. In the region, only the Czech Republic (25), Hungary (7), Slovakia (6) and Lithuania (1) have registered products so far.

Fruit and vegetable exports Poland is an important producer of fresh fruits and vegetables as well as their preserves, such as juice concentrates and pickled cucumbers. Whereas in the period of JanuaryNovember 2010 the biggest market for fresh Polish fruits was the Commonwealth of Independent States, both fresh vegetables and preserves were exported predominantly to EU countries. Importantly, unfavorable weather conditions severely affected Poland’s fruit and vegetable sector in 2010. Fruit crops decreased by 25 percent, whereas the production of field vegetables fell by 13 percent, amounting to 2.7 and 4.2 million metric tons respectively. Experts predict that the period of 2010/2011 will see a decrease in exports of almost all fruits, vegetables and their preserves. v

Made in Poland 2011

Poland’s agricultural exports and imports, as well as the resulting trade balance, in € million 15

Source: Institute of Agricultural and Food Economics (IERiGŻ), Ministry of Agriculture

Exports Imports

Balance * estimate

€ mln

2004

2005

2006

2007

2008

2009

2010*

Get them organized

Polish agri-food exports have the advantages of high quality, competitive prices, a large workforce and no shortage of investment. But are farmers and entrepreneurs taking advantage of the situation?

On the positive side, organic farming is developing dynamically. Between 2004 and 2009, the number of organic farms grew almost five-fold, passing from 3,760 to 17,000 farms, and this trend is expected to continue. This year, the Minitry of Agriculture is also launching a program to revive Polish local markets, where farmers will be able to sell their products directly to consumers. Efforts are also made to develop agritourism, and the Ministry of Agriculture has devised a common promotion strategy together with the Polish Information and Foreign Investment Agency (PAIiIZ) and the Polish Tourist Organization at the Green Structure of agri-food exports(POT), in terms which of value,launched 2009 Week in Berlin in January. But according to all of the experts Made in Poland consulted, the level of disorganization in the market remains aAnimals, sizablemeat and meat products obstacle. Farmers need to form groups and build closer relations Milkwith and dairy products food-processing businesses. Producers also lack organizations, as well as distribution channels and retail facilities, and should aim to bring together production, processingVegetables, and re- fruits and mushrooms tail. Exporters also tend to be loosely connected and do not benefit from strong exporter’s clubs. Fish and fish products “Many producers are too small to act independently and conclude great contracts on distant markets,” said the ARR’s Potatoes and potato products Władysław Łukasik. “The weakness of Polish exporters is that they cooperate weakly with each other in external markets.” Polish agri-food products also lack a long-term promotional strategy. Indeed, although the Polish diaspora, which accounts for an important part of EU demand, buys products that they know from home, there are very few strong, recognizable Polish brands. It also does not help that Polish products are not always sold under their Polish food producers’ brand name in Europe. According to Mr Łukasik, Polish food producers and exporters also lack support from financial institutions. “Polish ex-

Source: Ins

Made in Poland 2011

sector analysis: food & agriculture

porters do not have as broad insurance available to them as their Western European counterparts, and are therefore more at risk when it comes to delays in deliveries and the like.”

Looking east

For the time being, Polish exports remain competitive on the EU market because of their price. But this could change, warned IERiGŻ’s Mirosława Tereszczuk. “In fact it has already changed since Poland’s EU accession. Prices are going up, we see it this year, with everything going up by two, three percent, and this will continue.” On the one hand, Poland must deal with an ongoing liberalization process on the EU food market. Cheaper products from Asia or MERCOSUR countries (Argentina, Brazil, Paraguay, and Uruguay) are being made available to European consumers. But these markets, which have led the global recovery, also have consumers with increasing purchasing power, and this could also be an opportunity for Poland. For example, a new EU-South Korea free-trade agreement, which should come into force in July 2011, could bring significant results, according to Tai-Sik Lee, general director of the Korea Trade-Investment Promotion Agency (KOTRA) in Warsaw. Prospects for Polish pork meat in particular are looking up. The Agriculture Ministry is making efforts to facilitate trade

with Asia. In May 2010 Minister Sawicki went on an official visit in China and signed a protocol which was described as a “milestone” on the way to exporting pork meat to the Chinese market. And in February, Polish poultry exports received the green light from Chinese authorities. But according to Mr Lee, Polish businesspeople are generally not very used to doing business with Asian countries, instead focusing on European markets. The lack of a developed and established network for economic cooperation is another factor slowing down trade. Closer to the east, trade with the Commonwealth of Independent States (CIS) is being revived. These former Soviet republics used to be Poland’s main trade partners, but trade plummeted after the fall of the Soviet Union and Poland’s entry to the EU. Relations with Russia also suffered under the leadership of the Law and Justice (PiS) party, and between 2005 and 2007 some Polish exports were subject to an embargo. In the first three quarters of 2010, exports to the CIS constituted only around 10 percent of total agri-food export value, amounting to E992 million. But this represented an increase of as much as 31.5 percent from the first three quarters of 2009 according to the Ministry of Agriculture. Rebuilding exports with Russia and CIS countries is difficult and things are progressing slowly. “In some cases Polish

sector analysis: food & agriculture

Alcohol exports As an important producer of alcohol, Poland actively engages in conquering new foreign markets. Starting from April 2011, Sobieski, one of Poland’s bestknown brands, will target the promising Indian market. Following in its footsteps, Żubrówka intends to enter another distant market, namely China. According to the estimates of the Polish Spirits Industry Employers Union (ZP PPS), export of spirits in 2010 reached 52 million liters, as compared to 42 million liters a year earlier. Two of the biggest importers of Polish vodka in 2010 were France and the US, with exports worth E41 and E12 million respectively. v companies were replaced by others from the EU, Argentina, New-Zealand, who have secured long-term agreements,” said Mr Łukasik. But, according to Ms Tereszczuk, that is where Polish food exporters should concentrate their efforts. “Eastern markets, in my opinion, are the futures,” she said.

Made in Poland 2011

Green rush?

With relative geographic proximity, competitive prices and EU membership, Poland is well-positioned to tap into eastern markets. But although their importance is bound to increase, the EU, and Germany in particular, are expected to remain the principal destination for Polish agri-food exports for the near future. An increased budget for promotion, as well as concerted strategies, should enable Polish producers and exporters to benefit form a good visibility at the European level this year. High-quality products, which answer a growing demand for natural and traditional food, sport good chances of being well-received. Lack of cohesion among and between Polish farmers, producers and exporters will likely continue to impair their ability to make the most of this situation. But on the other hand, this leaves vast investment opportunities for entrepreneurs interested in importing Polish food and agricultural products and, according to Minister Sawicki, those investors should hurry, because those opportunities won’t last forever. Alice Trudelle

In cooperation with: Made in Poland 2011

sector analysis: defense

Targeting foreign markets Poland’s defense industry is still a work in progress, but business is booming when it comes to certain products

nder-invested, under-innovative and plagued by underdeveloped infrastructure – those are the kinds of underwhelmed opinions you might hear about Poland’s defense industry. Others include, “half the companies in the sector are state-owned” and “the sector is over-reliant on government budget decisions.”

That might be a fairly accurate assessment of the state of the Polish defense industry, but it’s only half the story. In fact, the industry has seen a number of noteworthy successes over the past few years and it’s pushing to export more equipment.

Poland’s big guns

The core of the Polish defense industry comprises around 100 companies, of which roughly half are state-owned or state-influenced. The remainder are privately owned, a mix of formerly state-owned firms, foreign-controlled subsidiaries and greenfield investments. The largest player in the Polish market is the Treasuryowned Bumar Group, which is undergoing restructuring in order to develop synergies in the otherwise fragmented Polish defense market. Bumar now includes more than 20

sector analysis: defense

Made in Poland 2011

“Another old favorite is the Kalashnikov rifle, which has been produced in Poland ‘forever’”

companies operating in four divisions: Amunicja (ammunition), Żołnierz (soldier), Elektronika (electronics) and Ląd (Land). As a state-owned firm, Bumar has naturally been focused on the domestic market, but it is increasingly turning to exports. The company’s export sales have amounted to approximately $200 million annually over the past few years, which is roughly 20 percent of its total revenue. Group CEO Edward Nowak wants to push this figure to 30 percent by 2012. That’s a fairly ambitious goal, in comparison with the world average. According to industry publication Defense News, export sales make up about 10 percent of total revenue in the international defense sector. A big chunk of Bumar Group products are shipped to Asia – Mr Nowak cites India, Indonesia and Malaysia as the largest customers – as well as the Middle East and North Africa. The

group’s offer has also found interest in the otherwise saturated markets of Europe and North America.

Old favorites and new gear

Bumar, as the largest firm in the domestic industry, naturally has the broadest export portfolio. Mr Nowak admitted that many of the group’s products are “historical,” but he nevertheless made a case for the PT-91 tank (produced by subsidiary ZM Bumar-Łabędy), which does eerily resemble old Soviet tanks. The machine has been continually modernized and fulfills all of the modern defense industry’s stringent requirements, Mr Nowak stated. Malaysia, for example, bought almost 50 PT-91s in the 2000s, with Bumar completing the contract in 2009. Another old favorite is the Kalashnikov rifle, which has been produced in Poland “forever,” according to Mr Nowak, and

sector analysis: defense

will continue to be produced in Poland. This weapon too has undergone improvements over the years and draws interest due to its reliability, simplicity and relatively low price. There’s more to Bumar’s offer than Soviet-flavored equipment, though. Trinitrotoluene (aka TNT), a product of Bydgoszcz-based Bumar subsidiary Nitro-Chem, has become very popular internationally and has, for example, successfully penetrated the US market. Export of TNT to the US started as part of a 2003 offset agreement with Lockheed Martin accompanying the sale of F-16s to Poland. This opened the door to a large and demanding market. According to Sławomir Kołakowski, head

Made in Poland 2011

Private-sector competition

PZL Mielec is another firm known for exports. The country’s largest producer of aircraft, it was founded in 1939 and privatized in 2007; today it is a unit of United Technologies Corporation, making both civilian and military aircraft. The most recent addition to its portfolio is the S70i Black Hawk helicopter (Sikorsky Aircraft, owner of the Black Hawk brand, is a sister company). The company plans to build 20 of these machines annually from 2012, all slated for export sales. Sikorsky sees potential demand for the Black Hawk reaching 1,000. The facility in Mielec is considered one of the most technologically advanced in the group, a fact which even the compe-

Export destinations of Polish arms and military equipment (in %) by value of licenses*, 2008 and 2009

2008

Source: Polish Ministry of Foreign Affairs

Total value of licenses: €1.39 billion

Total value of licenses: €368 million

2009

Southeast Asia

North Africa

Middle East

North America

European Union

South Asia

Other *total value of exports unavailable

Then there’s the Rosomak300armored vehicle, a Bumar product based on a design from Finnish defense firm Patria. The Polish Defense Ministry has€ mlnexpressed its own satisfaction with 2006 which has been 2007 the Rosomak, a modified version of deployed2008 in Afghanistan. It has been marketed in a number of foreign countries, however, and there are hopes that it could find a home alongside the PT-91 in Malaysia.

Source: Polish Ministry of Foreign Affairs

of the Polish Chamber of National Defense Manufacturers, tition acknowledges – Bumar’s CEO described PZL Mielec as aerospace firm ATK was especially impressed by the qualone of the most promising aviation companies in Poland. ity of the product, as well as the level of service. This lead to Then there’s WB Electronics, which describes itself as the further orders, beyond the original offset agreement, and a Polish exports by number of export licensesleading granted Polish manufacturer of specialist electronic solufour-year contract worth over $55arms million. and value of licenses* (in € millions), 2006-2009tions for the military. The privately held company provides Last year, total exports of 500 1,500 the explosive generated over $30 C4I (command, control, communications, computer and million for Bumar. Number intelligence systems) solutions and it has ambitious expan440 firm recently purchased a controlling stake 1,200 sion plans. The PCO, another Bumar subsidiary known forValue its optical equipin Radmor, a previously state-owned manufacturer of mobile ment, recently brought to the market its monocular MTN-1 380 900 VHF/UHF radio communication equipment. product, which fuses night-vision and infrared capabilities. *total value of exports unavailable According to the firm, this is the first product of its kind to be is the FlyEye, a unmanned reconnaisWB’s latest product 320 600 produced in Europe. sance craft which has a range of 300 km, can fly at 6,000 meters and weighs 15 kg. The firm boasts that the FlyEye can 260 be carried in a large backpack, assembled in 15 minutes and literally launched by hand. 200 2009

Defense of the future

Plenty of modernization and consolidation awaits the domestic defense industry if it is to meet the demands of today’s clients.

Source:

North Africa

Southeast Asia

Made in Poland 2011 European Union North America

Middle East

Other

sector South analysis: defense *total value of exports unavailable Asia

Yet it’s not as though Polish firms are bringing blunderbusses and catapults to the market. Many products are tried-and-true, yes, but innovative solutions are also appearing.

Polish arms exports by number of export licenses granted and value of licenses* (in € millions), 2006-2009 500

1,500

Number

900

440

Value

380

*total value of exports unavailable

600

320

300

260

200

€ mln 2006

2007

2008

2009

Source: Polish Ministry of Foreign Affairs

1,200

The past 20 years of free-market trade in Poland has undeniably led to progress, be it through the consolidation of stateowned assets, the privatization of existing facilities or the development of new ventures. Further international partnerships are also likely. In early 2011, for example, Bumar and Italian defense giant Finmeccanica inked a memorandum of understanding regarding possible partnership in offset agreements, a “Soldier of the Future” project and optoelectronic systems. Finmeccanica, it seems, is among the growing number of foreign firms with a positive opinion of Poland’s defense sector. Mark Ordon

Bumar Group

umar Group is the leading Polish producer and exporter of military equipment and armaments. The main recipient of Bumar Group’s products are the Polish Armed Forces, especially the divisions taking part in foreign missions. In Poland there are currently more than 100 companies operating in the security and defense sector. Bumar Group is the largest player in this field, bringing together 24 companies which employ 12,000 workers. The majority of Bumar Group’s subsidiaries are 100 percent owned by the State Treasury. Warsaw-based Bumar sp. z o.o. fulfills the function of the dominant entity. The group consists of several divisions that can be defined as consortia bringing together companies of the same product profile or creating similar systems platforms. These include: Bumar-Ammunition, Bumar-Soldier, Bumar-Land and Bumar-Electronics. Bumar Group’s total revenue amounts to over $1 billion. Among Bumar’s best companies are PCO SA, Nitrochem SA, Maskpol SA, Mesko SA, Dezamet SA, Cenzin sp. z o.o. as well as the leading entity, Bumar sp. z o.o.

ricochet ammunition – gunpowder, armored tanks, technical vehicles and track bridges.

Bumar is the largest producer and supplier in the armaments sector in Central Europe. Asian countries belong to its most important export markets, accounting for almost 85 percent of Bumar’s export sales. Specifically, Bumar exports to Malaysia, India and Indonesia. Other destinations for Bumar’s products include Europe, the Middle East, Africa and the United States. Bumar Group’s subsidiaries specialize in the production of ammunition and rockets, land platforms, electronics, equipment and armor for soldiers and officers, trainings, logistics and service. The companies offer also night-vision and optoelectronic equipment, equipment for individual soldiers, radars, air-defense systems, ammunition of various calibers – including non-

advertorial feature

The defense sector is one in which modern technologies are used extensively, with elements of electronics, information-communication technologies, transport, as well as bio- and nano-technologies. Bumar Group has increased its R&D expenditures to $60 million to offer its clients modern solutions, especially in the fields of optoelectronics and equipment for soldiers. Bumar Group is developing the Future Soldier system within the TYTAN program: work on a new type of assault rifle, the Modular Systems Small Arms MSBS 5.56 mm, is advanced; the FUSION night-vision and thermo-vision monocular also emerged within the program. Bumar Group’s newest research and development product is the Multifunctional Track Platform ANDERS in the form of an armored vehicle, a so-called light tank. One of the biggest projects of the Bumar Group is the construction of the anti-aircraft and anti-missile defense system in Poland, called “THE POLISH SHIELD” (“TARCZA POLSKI”), which is being developed in cooperation with European partners. v

sector analysis: clothing

Made in Poland 2011

Dressed for success It will be a while before customers associate Poland with haute couture, but local firms are sizing up foreign markets

ven if you’ve never been to Poland, there’s a good chance you’ve unknowingly worn – and perhaps appreciated – clothes made there. The country has a proud tradition of textile trade, mainly centered around Łódź, although the city is no longer the industrial powerhouse it was during the late 19th and early 20th centuries.

Łódź retains its reputation as the country’s textile capital, but the end of communism saw international clothiers set up production facilities in various locations around Poland. Levi’s, for example, founded its factory in Płock in the early 1990s. It and other multinationals entered the market to stem the flow of counterfeit products from Asia and to take advantage of low production costs.

The products they manufactured were destined for both the domestic and Western European markets, although there was a greater focus on the latter, at least at first. However, the Polish market quickly grew in importance. Times have changed, however. Poland is no longer just a lowcost manufacturing base, and the value of the market – including exports – is large and growing. Homegrown clothiers are pushing into new markets with some success.

Western allure

Redan is one such example. One of Poland’s largest apparelmakers, it owns popular brands such as Top Secret, Troll, Textil Market and Drywash. The firm plans to open a total

sector analysis: clothing

Made in Poland 2011

of 265 new shops in 2011, including locations in Ukraine, Belarus and Russia.

simply picking English-sounding names because they were better received by the public than Polish-sounding names,” he said.

“We already have around 20 stores in Ukraine, three in Russia which operate on a franchise basis and three stores in Belarus. We opened our first foreign store in Ukraine in 2005,” said Bogusz Kruszyński, president of Redan.

This reluctance to use Polish names to sell clothing brands is a hold-over from the communist period, when people regarded products made behind the Iron Curtain to be of inferior quality to those produced in the West.

“At the beginning, our brand was totally unknown over there and it took some time and effort to convince people that our clothes are well-designed, but right now we are very pleased with our position in that market,” he said.

Another example of a Polish retailer using a “Western” brand name is successful luxury leather goods maker Wittchen, which was established in 1990. The firm now has around 50 stores in Poland. Its products are also available in Russia, where it has 10 shops, as well as in Ukraine, Lithuania and Belarus. Last autumn, Wittchen opened its first store in Prague, Czech Republic.

Asked why, like many other Polish clothiers, Redan chose English names like Top Secret for its brands, Mr Kruszyński said his firm had just followed what was common practice among Polish clothiers at the time.

The company adopted as its brand name the surname of its owner Jędrzej Wittchen, a Pole born in Międzychód, a city close to the German border. He says that his firm is associ-

Value of Poland’s retail apparel industry (in zł. billions)

Year-on-year growth of the Polish retail apparel industry (in %)

3.0

Source: Rzeczpospolita estimates

2.5 2.0 1.5 1.0 0.5

2006

2008

2010

Source: PMR

3.5

5 zł. bln

2006

2007

2008

2009

2.0 1.5

*projected

1.0

1 %

Exports of Polish clothing (in € billions) 2.5

Source: PMR

Clothes sales in Poland (in € billions)

Source: Polish Federation of Apparel and Textiles (PIOT)

“Top Secret was established in 1996 and then everybody was

€ bln

2009

2010

2011*

0.5 € bln

2006

2007

2008

2009

2010

sector analysis: clothing

Made in Poland 2011

ated with “German precision” and this has been very helpful in foreign markets as well as in Poland.

of problems at the beginning,” said Piotr Nowjalis, the firm’s vice president.

“Just like in Poland, many clients in the East don’t know they are buying a product which is Polish, because of the name, which sounds German or to some, even Italian. Russians love products from those countries. If a client asks, we of course tell him that it is a Polish product. But we don’t advertise this fact in our marketing campaigns,” said Mr Wittchen.

Mr Nowjalis said that even though the average Czech has more disposable income than the average Pole, he tends to spend less on clothes than his Polish counterpart and is very conscious of the price-to-quality ratio.

Tailored to fit new markets

Footwear-maker NG2 is another Polish company which is gaining traction in foreign markets, albeit slowly. The firm, which owns the CCC, BOTI and QUAZI brands, had sales of over zł.1 billion in 2010, making it the leader in Polish shoe sales. At the same time, the value of its exports was just zł.53 million. NG2’s brands are gaining ground in the Czech Republic. “In 2005, we opened our first store in the Czech Republic and we now have 48 stores there. But I will admit that we had a lot

“In Poland we have been trying to improve our brand image, but in the Czech Republic, we avoided that and stuck with the cheap, discount-store image. That worked over there, but we are opening a store in Russia this March and there our products will be more expensive than in Poland,” he said. Wittchen has also tailored its products to fit the Russian market. “The products we sell in Russia differ from those in Poland. Classic design is not valued there. In Russia products need to be more extravagant and luxurious, with more decorations on them. The most difficult part in breaking into a foreign market is identifying the particular needs of the potential customers in that market,” said Mr Wittchen.

Made in Poland 2011

sector analysis: clothing

Building a brand the hard way

as “well, for a Polish product, it’s not bad at all.”

It would seem, then, that the trick is to create a “need” in the fashion market for Polish products. Brands are generally perceived the same way as their country of origin is perceived. German products are associated with precision and durability, Italian clothes are seen to be stylish and flamboyant, French clothes are connected with luxury and elegance, American with trend-setting.

“In Poland we are still convinced that if something is Polish then it cannot be good,” complained Mr Wittchen.

There’s just one problem – building such a reputation usually starts at home, and Poles themselves can be just as skeptical as foreigners when it comes to Polish-born fashion.

Mr Wittchen himself noted as much. “Many Polish clothiers have successfully entered Eastern markets in the last couple of years. That in itself proves that our quality and design are not of a lower standard than that of other international brands. If they were, we wouldn’t be able to compete successfully on these markets,” said Mr Wittchen.

In an interview for fashion website Moda.com.pl, Mr Wittchen recalled how it pained him at the beginning of his firm’s activities when Poles thought Wittchen couldn’t be Polish because of the good quality of its products. He recalled how the company had conducted a market survey in the mid1990s in which women were invited to share their opinion of Wittchen’s accessories. Their initial comments and impressions of the brand were very positive. However, their attitude changed immediately they were informed Wittchen was a Polish firm. They then retreated from their previous opinions and instead offered comments such

Paradoxically, Poles – and Western Europeans – seem happy enough to buy Polish-crafted Levi’s and other internationalknown labels. Thus it would seem a matter of branding rather than quality or interesting design.

Creating a strong “Polish brand” in the world of fashion will be an uphill battle, but the market is large and its pool of talented professionals is deep. It is a matter of time before they create a new, internationally recognized tradition for quality much like the one their forebearers earned in late 19th century. In the meantime, lacking this national brand, Polish firms will have to earn international respect the hard way – one sale Remi Adekoya at a time.

sector analysis: furniture

Made in Poland 2011

Turning the tables The Polish furniture industry has endured a couple of hard years, but its fortunes may be improving

oland has a long and proud tradition of furniture making, due in part to the abundance of timber in the country. The government estimates that about 30 percent of the country is forested today, down from approximately 40 percent at the end of the 1700s.

The availability of wood and centuries of experience have helped to make Poland into a giant of the furniture industry. As of 2010, the country was the 10th-largest furniture producer in the world and the fourth largest exporter by value, according to data from the Polish Chamber of Commerce of Furniture Manufacturers (OIGPM).

Polish furniture companies export about 85 percent of their production, according to OIGPM, with the majority destined for the European market. And, through investment (both foreign and domestic) as well as the hard work of local employees, the industry has earned a reputation for highquality, sturdy and affordable products.

Splintered industry

Still, the sector has had a hard time of it over the past few years. According to credit information provider Coface Poland, furniture production was one of the few sectors to see

Made in Poland 2011

sector analysis: furniture

bankruptcies rise y/y in 2010, increasing from 10 a year earlier to 15. A drop in consumer spending brought on by the financial crisis, the rising cost of raw materials, the slow revival of exports and currency fluctuations have all plagued the industry.

Top 10 importers of Polish furniture, 2005 and 2010 2005

2010

Germany

France

Many of the large international firms have launched production operations in neighboring Ukraine or Russia in order to reduce production costs and avoid stringent regulations. Meanwhile, the products which are produced in Poland can sometimes be hard to spot. Some are exported unbranded, while others are marketed under foreign brands.

United Kingdom

Czech Republic

Switzerland

United Kingdom

Czech Republic

The Netherlands

Switzerland

Belgium & Luxembourg

United States

The latter is true for Swedwood’s output, for example. The firm is a unit of IKEA and its products are marketed accordingly (although you can usually find “Made in Poland” stamped on them somewhere).

United States

Belgium & Luxembourg

Slovakia

Spain

Hungary

Italy Source: Polish Chamber of Commerce of Furniture Manufacturers

sector analysis: furniture

Major manufacturers

Manufacturers seated in Poland have had a harder time of it than their multinational peers, but are nonetheless seeking new markets and trying out new solutions. Meble Kler is one such firm. Though not a giant of industry, it has carefully crafted its image as a luxury furniture brand. A factory in Dobrodzień makes all of the firm’s products, which are then distributed via 36 showrooms and seven franchise outlets in Poland. The firm’s international network is developing as well, with Kler showrooms in Brussels, Prague, Brno, Hradec Králové and České Budějovice. This past January it opened its second German sales showroom, located in the center of Cologne, and Kler furniture reaches other European markets, as well as far-off destinations such as the US or Japan, through partner networks. The largest Polish player in the industry, meanwhile, is the Black Red White Group, a manufacturer and distributor of

Made in Poland 2011

furniture and interior design accessories. The company commands 20 percent of the market in terms of sales revenue, according to its own estimates. The group comprises Black Red White and 20 subsidiaries, including nine enterprises located in Ukraine, Belarus, Slovakia, Russia and Bosnia and Herzegovina. Production is carried out in 21 manufacturing facilities in Poland and about 30 percent of production is exported to 50 countries in Europe and North America. The group’s sales distribution network consists of 2,000 sales outlets, half of which are located outside of Poland. The Nowy Styl Group, another major player, is just as extensive, with subsidiaries spread out in 12 countries and an offering organized in four product lines: Nowy Styl, BN Office Solution, Forum Seating and Baltic Wood. Nowy Styl’s current strategy focuses on rapid expansion through mergers and acquisitions. In early 2011 the group purchased German chair manufacturer Sato Office, which specializes in the supply of furniture for offices, cinemas,

sector analysis: furniture

theaters and auditoriums. The move has allowed Nowy Styl to further develop its presence on the German market and it estimated its 2011 revenues from Germany would come in at E40 million, double the previous year’s figure. The group expects E200 million in total revenue for 2011. That’s an impressive leap for a company that started off in 1992 with seven associates and three chair models.

Rebuilding

Although it’s weathered hard times, the Polish furniture industry now appears to be recouping strength.

Export sales are on the rise, for example, albeit slowly. In 2010, Poland’s furniture exports totaled E2.83 billion, up 1.16 percent on the previous year. Economic woes in the euro zone could hinder growth, but high quality and careful pricing will help to keep Polish-made products competitive. Ambitious growth strategies will have an influence as well.

Total value of furniture exports (in € billions), 2006-2010 8 7 6 5 4 Source: Central Statistical Office

Made in Poland 2011

3 2 1 € bln

2006

2007

2008

2009

In the meantime, furniture “made in Poland” will continue to meet client demand – and expectations – in markets old and new. Mark Ordon

sector analysis: automotive

Made in Poland 2011

Driving forces Poland is quietly becoming a leader in auto and auto-parts exporting

ast of Germany and Italy, the European automotive industry has a decidedly mixed reputation. Slovakia has become a well-known export center, for example, but has no recognizable vehicle brands of its own. Romania, meanwhile, is gaining notoriety for Dacia, a unit of Renault, but the brand remains best known in Central and Eastern Europe.

On the other hand, failures of the past are hard to live down – the now defunct state of Yugoslavia is still renowned in the

United States for its Yugo (Zastava Koral) vehicle, which earned the inglorious nickname “Yugo nowhere.” Certain iconically squat communist-era brands have gained cult followings, but this has no significance for the mainstream industry. For its part, Poland’s automotive industry carries little historical baggage, but has enjoyed equally few successes. As it stands today, the industry is largely an “under-the-hood” af-

sector analysis: automotive

Made in Poland 2011

Solaris’ route to brand recognition

Solaris’ first cross-border sales were to Germany and the Czech Republic. Eleven years later it is present in 22 foreign markets with annual exports worth more than zł.800 million.

The key to gaining trust, Mr Figaszewski stated, was “flexibility, listening to customers’ wishes, delivery of expectations and quality which is on the same level as many other top European manufacturers.”

According to Mateusz Figa szewski, Solaris’ spokesperson, in making its first sales the firm had to overcome a deficit of trust.

Looking to the future, Solaris wants to offer new, “greener” products. It is working on a prototype of a purely 6 electric bus and is considering the development of ultra-light bus frames to reduce fuel consumption. 9

“In those first years it was very tough to build customers’ awareness of a Polish brand,” he said. “There was some kind of risk connected with dealing with a Polish company in this industry. But very quickly it became obvious for operators, especially from Western countries, that we are a reliable partner.”

Getting to this stage wasn’t easy, Mr Figaszewski said. “But a few years, and especially after joining the EU, I think zł.after bln Volkswagen Poznań Faurecia Toyota Motor Polska we’re onFiat equal rights as any other well-known brandTRW amongst Manufacturing Poland bus operators.” v

Poland’s top five automotive-sector exporters (export revenue in zł. billions), 2009

Value of car parts and accessories export (in € billions)

Fiat

Volkswagen Poznań

Faurecia

Toyota Motor Manufacturing Poland

TRW Polska

fair. A few home-grown brands are gaining traction, yet Polish parts and labor go into plenty of internationally branded products.

Export by the numbers

Value of car to parts and accessories According a ranking of the export top 100 exporters in Poland (in2009 € billions) in issued by Polityka (the 2010 ranking had not been 6 published as Made in Poland went to press), Fiat was the country’s second-biggest exporter and the leader in the au5

ource: Central Statistical Office

3 2 1 € bln

2004

2005

2006

2007

2008

2009

Q1-Q3 2010

tomotive market. Moreover, the auto industry accounted for over a quarter of the list. Top 10 automotive export destinations by value

Bus tram producer Solaris was the only Polish-owned (in and € millions), Q1-Q3 2010 entity among the top 10 auto exporters that year. 3,500 The value of Polish auto exports has risen fairly steadily over the years, discounting a financial crisis-induced dip in 2009. 2,500 A total of E11.61 billion “non-rolling stock vehicles, parts and accessories” were exported in the first three quarters of 2010, 2,000 3,000

1,500

4 3

4 Source: Central Statistical Office

Source: Central Statistical Office

Source: “100 Biggest Exporters in 2009,” Polityka

zł. bln

As it has established its brand, Solaris has also worked to diversify and innovate. In 2006 it became the first manufacturer in Europe to launch a hybrid bus, Poland’s top five automotive-sectorfor exporters example, and it currently (export revenue in zł. billions), 2009 claims to have the widest range of such vehicles on the market. It also added trams to its offer in 2010.

Source: “100 Biggest Exporters in 2009,” Polityka

Solaris, a maker of buses and trams, is arguably the biggest success story in the Polish auto industry. Founded as “Neoplan Polska” in 1994 by Krzysztof Olszewski, an engineer who spent most of the 1980s in West Germany, the company took on its current name in 1999 and began exporting its products in 2000.

1,000 500 € mln

Germany

Italy

France

Spain

Czech Belgium Republic

Sweden Netherlands Russia

sector analysis: automotive

Arriving at quality A remarkable transformation has taken place since the end of communism. When many international firms first invested in Poland, the industry’s main advantages were low labor and production costs. Quality remained the domain of Western-made products. No longer. In part this change has come about through the import of foreign know-how and technologies. But the strong work ethic and technical capabilities of the local labor force have also had much to do with it, as Fiat’s experience in Poland illustrates. Fiat Auto Poland produced over 522,600 units in 2010, according to industry intelligence firm Samar, accounting for more than 65 percent of car production in the country. Frustrated by labor disputes in Fiat’s home market, CEO Sergio Marchionne noted in Q4 2010 that his firm’s only facility in Poland, in Tychy, produces more vehicles than all five of Fiat’s factories in Italy – with a quarter of the manpower. v

Made in Poland 2011

for example, up from E7.47 billion for full-year 2004 (the earliest data available from the Central Statistical Office). This year is expected to maintain the overall export growth trend. “In terms of car production and export, we can expect that the situation will be at least similar to last year, or maybe even a little better,” commented Wojciech Drzewiecki, head of auto-market analysis firm Samar. Car production will be maintained, he said, because Fiat will still be making its older model Panda and its new Lancia model will start production. The end of Panda production will hurt production figures starting in 2012, however.

Vehicles for success

Polish car production and vehicle export are dominated by foreign brands, which generally have dedicated supply chains and export according to their own needs. The biggest “Polish” car maker is FSO, although since 2007 it has been owned by Ukrainian firm CJSC ZAZ. FSO has struggled for years, and as of early 2011 its future was in doubt. Its contract with GM to produce the Chevy Aveo ended at the end of February and the company’s management

Source: Central Statistical Office

4 3 2 1 sector analysis: automotive € bln

had been searching for a new production deal for months before that.

2004

2005

2006

2007

trailers, is another well-known brand.

Parts of a whole

Czech Belgium Republic

Meanwhile, local firms have seen significant success in other areas of production, such as Solaris (see box, p. 43) and Autosan have enjoyed with public transportation contracts. The latter firm produces buses, rolling stock and military transport vehicles. Wielton, a maker of trailers and semi-

The 2011 edition of book of lists is now available!

• Find key information about

the dominant players in the market

• Expand your portfolio of contacts • See who’s on top of your sector

To order: Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

Q1-Q3 2010

3,500

FSO has also engaged in talks with Japanese car-maker Nissan, but as Made in Poland went to press nothing had come of this.

Przewodnik po polskim biznesie i gospodarce

2009

Top 10 automotive export destinations by value (in € millions), Q1-Q3 2010

“We are not sure if FSO still 3,000 exists or not ... They are talk- 2,500 ing to Chinese manufacturers, who eventually could be 2,000 interested in production, but 1,500 still there’s not a final decision. And probably the Chi- 1,000 nese, if they come to Europe, 500 will choose another market,” said Mr Drzewiecki. This lat- € mln Germany Italy France UK Spain ter comment, he explained, is due to unfavorable carmarket regulations which are frequently – “17 times in the last 10 years” – tinkered with by the government.

A guide to Polish business and industry

2008

Source: Central Statistical Office

Made in Poland 2011

Sweden Netherlands Russia

Export of parts and accessories accounted for more than half of total auto exports in Q1-Q3 2010. Comparing exports during that period to figures from 2004, significant growth was noted to markets such as Peru, Thailand, China and Iraq. There was even some export of parts and accessories to Antarctica, though admittedly the volume and value were humble.

Meanwhile, the biggest export drops between 2004 and Q1Q3 2010 involved the Canadian and Malaysian markets. Germany is Poland’s top export destination for parts and accessories, and the structure of exports is expected to remain unchanged in the near term. However, according to Rafał Orłowski, an analyst from industry website AutomotiveSuppliers.pl, changes to subsidy systems in markets like Germany and Italy will affect exports. Like Samar’s Wojciech Dziwiecki, Mr Orłowski suggested

sector analysis: automotive

2011 could see a slight production and export increase compared with the previous year. As for export markets with growth potential, he isn’t counting on exotic locations like Thailand or China because of tough local competition. “Speaking theoretically, if we’re talking about markets which could see a comeback, then we’re talking about the Russian market,” said Mr Orłowski. The Russian car market is being stimulated by subsidies and, although it tends to give preference to domestically produced fare, some Polish parts and accessories are used in local vehicle manufacturing. Subsidiaries of foreign companies also dominate in the autoparts sector, albeit less completely than in vehicle manufacturing. Big names include TRW Polska, Faurecia Poland,

Made in Poland 2011

Valeo and Wix-Filtron, all of which number among Poland’s top exporters. Top among homegrown firms is Inter Cars, a Warsaw Stock Exchange-listed firm, which was Poland’s 59th biggest exporter in 2009 and describes itself as the largest CEE distributor of parts for cars, delivery vehicles and big trucks. Its sales revenues in 2010 amounted to zł.2.132 billion (roughly E538 million), a figure up 14.5 percent year-on-year. There are also scores of smaller, exceedingly vital firms spread throughout Poland. These may not enjoy the cachet of large multinationals, but their products are generally reliable and collectively responsible for Poland’s quietly growing reputation for quality manufacturing and auto exports. E Blake Berry

Made in Poland 2011

sector analysis: cosmetics

sitting pretty A focus on value for money helps Polish cosmetics exporters compete in a tough market

oland’s cosmetics industry is one of the country’s true success stories. From its beginnings until today, the story of the industry has been marked with examples of innovation and a commitment to quality. The industry has deep roots in Poland, and its history extends back to pre-war years, with familiar names such as Ewa (which evolved into Pollena Eva) and Miraculum (later Kolastyna) established in the 1920s.

nies now driving the domestic industry’s expansion, both at home and outside the country. These include companies specializing in skincare – a segment in which the Polish cosmetics industry is particularly strong – such as Dax Cosmetics, Oceanic, Ziaja, Dr Irena Eris and Soraya, as well as companies specializing in makeup and nail polish, such as Inglot and Bell.

During the communist era, Poland was the largest producer of cosmetics in the Eastern Bloc, with state-run collective Pollena producing much of the cosmetics consumed in the former Soviet Union.

Surviving the transformation

In the 1980s and 1990s, a new wave of cosmetics producers rose to prominence in Poland – including those compa-

The industry experienced a brief decline during the period of transformation in the early 1990s, with the markets of the former Soviet Union as well as Central and Eastern European countries embracing new, Western players, while old trade agreements were dismantled.

sector analysis: cosmetics

Made in Poland 2011

“There was a period of decline after the transformation period 20 years ago, when international brands which hadn’t been on the market before appeared ... but this only lasted a couple of years, and then people returned to Polish products,” said Jolanta Górska, PR and advertising manager of Oceanic, a major Polish skincare company.

Quality and innovation

Since the transformation, Polish companies have had to compete with Western companies not only in their home market, but in export markets too.

While this figure includes multinationals, Polish-owned cosmetics companies have also achieved great success in numerous markets around the world. What is it that marks Polish cosmetics products out and helps them achieve international success?

“In Poland now, you have major international companies with fantastic factories producing cosmetics in Poland to supply most of Europe – but you also still have a very strong Polish private sector,” explained Wojciech Inglot, president and owner of Inglot. There are now around 470 companies producing cosmetics in Poland today – from very small firms to large domestic players, such as Oceanic, Inglot and Dax, to major multinationals. Poland is now a cosmetics giant in the CEE region.

Exports have become an increasingly important focus for the major Polish cosmetics producers. In the first three quarters of 2010, the value of Polish cosmetics exports reached E1.15 billion, having reached E1.34 billion in 2009 as a whole, according to daily Rzeczpospolitia.

Polish producers have prospered in international markets thanks to their focus on quality, value for money and innovation. Dr Irena Eris, a leading firm in the Polish cosmetics industry, has won a host of awards, including the Prix d’Excellence of French monthly Marie Claire, and the Gold Glamour award of British monthly Glamour – a testament to the internationally recognized high quality of its products. The company has committed itself to making large invest-

2 ddni.4A_dnaloP nI edaM amalker

rekl

lker

reklama Made In Poland_A4.indd 2

21-02-11 12:48:31

sector analysis: cosmetics

Made in Poland 2011

expansion from that of most Polish cosmetics producers. “We were trying to be different from the crowd … So we tried a different concept – to have our own stores. And right now, everyone wants to have them,” explained Wojciech Inglot. His company has established a network of own stores in Poland, Australia and the United States, as well as single outlets in the United Kingdom, Ukraine and Lithuania. It has also grown a franchise network alongside these, and is now poised for major expansion in Western Europe. “We were cautious about going from Warsaw directly to Vienna and Berlin – instead, we decided to go to Vienna, Berlin, and the rest of Western Europe once we had established ourselves in New York, Dubai and Sydney – once we had done this, all of a sudden, just from Western Europe, we have about 50 serious applications for franchises – and this year is going to be the year of Western Europe – including Italy, Spain, Germany and Holland,” Mr Inglot enthused. In this way, Inglot has established itself as a global player – one with its roots firmly in Poland.

Competing on price

Polish cosmetics producers have been able to compete with major Western players in CEE markets, as well as further east, because they have shown their products to be of a good quality – which adherence to the European Union’s certification standards has helped to verify objectively. But crucially, they have also been able to compete in terms of price.

ments in research and development, establishing its own Centre for Science and Research in 2001. Oceanic, meanwhile, has made good progress in penetrating some difficult markets, including South Korea, thanks to its products’ high quality and stringent adherence to quality tests.

Innovative expansion

Makeup specialist Inglot has distinguished itself with a broad product range and a wide international network of monobrand outlets, taking a different approach to international

“Our dermo-cosmetics are sold in pharmacies, and they are much cheaper than other product lines sold in pharmacies – that is definitely our strength in export markets,” said Oceanic’s Jolanta Górska. Dax Cosmetics, which also specializes in skincare products – and in 2009 enjoyed the strongest growth of any cosmetics producer in Poland in terms of sales value and volume in the facial-care segment (32 percent and 26 percent y/y, respectively) – has succeeded both domestically and internationally. It has managed this by diversifying its portfolio in terms of high-end, prestige product lines, such as Yoskine, while at the same time pursuing more mass-appeal product lines,

sector analysis: cosmetics

Made in Poland 2011

A real alternative

Total value of cosmetics exports (in € millions), 2006-2010

It remains a considerable challenge for Polish companies to establish a strong brand awareness in Western European markets, where the major international players are so firmly established.

2000

Source: Central Statistical Office

1500

1000

500

€ mln

2006

2007

2008

2009

such as Perfecta and Celia, the latter of which was acquired by Dax in 2007. “Of all our product ranges, the one which enjoys the most popularity outside Poland is the ‘mass-market’ brand Perfecta, which offers a wide selection of body and face care products, while the ‘budget’ cosmetics brand, Celia, is becoming increasingly popular,” said Jagna Dyżakowska, PR manager at Dax Cosmetics.

“Polish cosmetics are in no way inferior in terms of quality to those of Western producers, and the main Polish players are also able to compete with the Western companies in terms of attractive packaging and labeling,” explained Ms Dyżakowska. “Polish products are better from the point of view of the relation between price and quality,” she added. “For Polish producers, the most difficult part of competing with big multinationals is the marketing and advertising, because we don’t have the large budgets that those companies have.” As consumers around the world become increasingly priceconscious, however, it may become less of a challenge to present Polish cosmetics as a real alternative. Brendan Melck

sector analysis: yachts

Made in Poland 2011

Selling sails Polandâ&#x20AC;&#x2122;s luxury yacht makers have thrived on exports despite the global slowdown

olandâ&#x20AC;&#x2122;s yachting industry, concentrated in the northern Mazurian Lake district, is experiencing phenomenal growth. Indeed, according to industry players, Poland is set to become a European yacht-building hub, whose products are marked by high quality and low prices.

The Polish yacht-production sector has grown more than fivefold over the last five years. In 2010, the combined value of sales reached almost $500 million, giving Poland about

five percent of a global market that is currently valued at around $11.5 billion. Polish boatyards are also beginning to invest in the production of much larger vessels. Maciej Chylak, president of trade fair organizer Doramm, said that Polish yards initially tended to function as subcontractors for Western shipyards, which sold Polish yachts under their own brands.

Made in Poland 2011

sector analysis: yachts

“We later consolidated and, with success, began to sell to markets in the West,” he said.

Their high quality stems from the fact that many elements are handcrafted.

The biggest hits for export sales are six- to eight-meter yachts, which are about 20 percent cheaper to build than their Western counterparts. They are mainly sold to Germany, the UK, France and Norway. Marek Słodownik of the Polish Chamber of Marine Industry and Water Sports, says that among Poland’s industrial products, yachts were the sixth-largest export in 2010, with more than 95 percent of the sailing and motor yachts made in Poland sold abroad.

The biggest Polish boatyards – Delphia Yachts, Balt Yacht, Galeon, Ostróda Yacht and Ślepsk – export almost all of their production. Other well-known boatyards include Skipper Yachts, Tes Yacht, Mirage and Sasanka.

Trade winds

Overall about 95 percent of all luxury yachts made in Poland are sold abroad and about 90 percent of theese are sold to clients in the European Union and the US. Italy, the world’s largest luxury yacht-maker, exports 65 percent of its total production.

Maciej Stompór, sales director at Sunreef Yachts, Poland’s largest designer and maker of catamarans, says Poland’s cheap labor costs, location, skills and flexibility are the key reasons Poland is seeing booming production. Polish designers are also a key factor, Mr Stompór said, adding, “They are modern, functional, ergonomic.”

In Poland, the industry consists of not only large, medium and smaller yards, but also a vast network of subcontractors and suppliers. These include producers of masts, rope, fabrics, glass, resins, sails, cables, fittings and wooden finishing elements. Parts and equipment from suppliers, depending on the unit, make up around 80 percent of the total sale value.

“We are very sensitive to the global market,” he says, “with labor costs about 20 percent lower than in France.”

Choppy waters

Mr Stompór and others argue that Poland is not only an attractive place due to its lower costs, but also due to the presence of the skills that are required to produce worldclass yachts. Polish vessels are associated with high-quality laminates, precise outfitting and modern construction.

On the downside, the stronger złoty threatens sales in an export-dependent industry. Another problem is the state of Polish roads, which make it difficult to transport large yachts. Nevertheless, foreign companies see many advantages in building in Poland. In January 2011, Danish X-Yachts, for ex-

sector analysis: yachts

ample, said it will manufacture laminate yacht components in Poland at X-Yachts’ facility in Gołdap with the use of modern technical and organizational solutions from Denmark. Polish companies are also confident about making investments. Poland’s Galeon, a leading builder of luxury yachts, describes its prospects as good. “[Last year] was an excellent year for Galeon,” company spokesperson Aleksandra Brzozowska said. “We introduced five new Galeon models [the 340 Fly, 350 Htc, 385 Hts, 385 Open and 700 Skydeck] as well as 11 new Gaul motorboats.” The company also says it has expanded its dealer network. “Clients in countries like Switzerland, Turkey, China, South Korea, Australia and the US are now able to purchase a Galeon yacht.”

Regaining confidence

Others also have reasons for confidence. “We are broadening our product range to include motorboats,” says Kamil Jankowski, manager of engineering at Kama Yachts. “It seems,” Mr Jankowski said, “that the yacht market is regaining momentum after the crisis, which resulted in the de-

Made in Poland 2011

velopment of numerous new models of yachts and the broad implementation of sophisticated solutions.” In Gdańsk, Sunreef Yachts designs and builds luxury custommade catamarans of 19 to 50 meters. Its biggest superyacht, the Sunreef 114, recently received a nomination for the World Superyacht Awards 2011 in the category of best sailing yacht from 30 to 45 meters. “This is a huge success for the Polish marine business and Polish luxury industry in general,” said Mr Stompór. “Our design studio ... draws people from all over the world, and added to the local technology and know-how means we can compete on all fronts.” Mr Stompór said the company’s turnover was about E40 million, with margins falling to around 25-30 percent during the global economic crisis. The crisis created some competition from the secondary market, as buyers turned to pre-owned boats, he said. “We had to lower prices to meet tighter demand, but the 98 percent of our production that we export – 54 boats built to date – has survived the storm, with very strong demand in the Far East in particular.”

Made in Poland 2011

sector analysis: yachts

The company is also somewhat subject to the vagaries of the euro, given that it has many parts to import mainly for larger vessels’ engines, masts and rigging. “[Some] 35-40 percent of parts are imported,” Mr Stompór said, “mainly from France, the Netherlands and the US, with exports now moving more towards the Middle East, Australia and East Asia. Sunreef Yachts is already a global leader in luxury catamarans, both power and sail, as well as multihull superyachts.” Sunreef Yachts Charter now has over 1,700 yachts in its fleet. Its 2009 net sales rose to E2.3 million, 30 percent compared with 2008, with a 50 percent increase seen in provisional figures for 2010.

Increasing capacity

“Despite a challenging labor market in Poland, this accelerating production rate was achieved by optimizing production techniques,” said Stompór. Sunreef is also increasing its overall production capacity with the acquisition of 16 hectares of land in nearby Gdańsk Wiślinka for the construction of a new 24,000 sqm purposebuilt manufacturing facility. This facility will enable Sunreef

to build yachts up to 50 meters in length. “Our goal for the future is quite simply to maintain our position as the world’s largest manufacturer of large and luxury catamarans from 60 to 200 feet,” said Mr Stompór. Ostróda Yacht – a subsidiary of Beneteau Group – builds around 4,000 power boats per year. Its best-ever annual turnover totaled E50 million. “[Some] 99 percent of our production is exported to different European countries, the main markets being France, Italy, Norway, Sweden and Spain,” said Piotr Jasionowski, president of the management board.

Crunch time

Mr Jasionowski says he believes that the next three years will determine the future of the Polish boat-building industry. “If the market stabilizes, then Polish manufacturers should restart development probably even with more speed than before the crisis. If the market continues reduction of capacity, only the strongest companies will survive,” he said. Jo Harper

sector analysis: pharmaceuticals

Made in Poland 2011

prescription for growth Polish pharmaceutical exports are strong, but the industry still has some bitter pills left to swallow

oland has the largest pharmaceuticals market in Central and Eastern Europe, making it an attractive destination for FDI and giving Polish companies the resources to invest in topof-the-line medicines. This has, in turn, made Polish-made products attractive in international markets. Moreover, the countryâ&#x20AC;&#x2122;s location, between Western Europe and a number of emerging economies, gives its exporters access to some large and growing markets.

Germany is Polandâ&#x20AC;&#x2122;s main pharmaceuticals export market, while the value of Polish pharmaceutical exports to Russia and France have grown markedly. There is a strong focus on reducing pharmaceutical reimbursement costs in Germany, which has put Polish producers in a good position to sell to their Western neighbor. Indeed, the cost-cutting trend is being seen across Europe, and the

sector analysis: pharmaceuticals

predominance of generics producers in Poland means that domestic pharmaceutical producers are cost-competitive.

Polish giants

Total value of pharmaceuticals exports (in EUR m 2006r 552 2007r 740 2008r 1091 2009r 1165 Source: Central Statistical Office Lithuania, Belarus, Kazakhstan, Azerbaijan, and Uzbekistan.

The largest volume of Polpharma’s drugs is exported to the Russian market, whereas active pharmaceutical ingredients are mainly sold to North America and the European Union countries,” she said.

Total value of pharmaceuticals exports (in € millions)

In order to strengthen its position in the Polish market and to develop its exports, the company is implementing a number of research and development projects, she added.

1,200

1,000

800

600

400

200

“Polpharma conducts re- € mln 2006 2007 search work in its own research and development center in Starogard Gdański – one of the largest in Central and Eastern Europe ... Polpharma builds partnerships and collaboration with academic centers, and with service providers [which have] innovative technologies and development laboratories,” said Magdalena Rzeszotalska, a company spokesperson. Polpharma’s products are present in approximately 50 countries worldwide, Ms Rzeszotalska stated, adding that the emerging markets of Central and Eastern Europe are most important for it. “The company has its own representative offices in Ukraine,

Among other Polish pharmaceutical companies with significant exports are Polfa Warszawa, which sells around 20 percent of its production abroad, mainly to Russia and oth2008 2009 er former Soviet states as well as to Asia and South Africa, and Jelfa (owned by the Lithuanian Sanitas Group), which sells its products across CEE, including the Baltics, Ukraine, Russia and Bulgaria. Source: Central Statistical Office

Polpharma, which claims the title of largest manufacturer of drugs and active pharmaceutical ingredients in Poland, offers a good example. About 24 percent of the firm’s total turnover comes from international operations. Around 60 percent of export involves the sale of drugs, with the remainder from the sale of other pharmaceutical substances.

Made in Poland 2011

Emerging prospects

Many industry experts stress the potential of emerging markets for major pharmaceuticals exporters. “International pharmaceutical companies in the coming years should concentrate their forces on strengthening their position in emerging markets, which have the greatest potential for growth. This requires them, however, to know

Made in Poland 2011

sector analysis: pharmaceuticals

the specificity of these markets, which are homogeneous,” Maciej Kuźmierkiewicz, of pharmaceutical market research company IMS Health, said in a report. Lest one forgets, Poland is itself still an emerging market and many major international pharmaceutical players are attracted by its well-qualified but low-cost workforce. Recently, GlaxoSmithKline said that it would transfer the production of its benign prostatic hyperplasia treatment, Avodart (dutasteride), from France to Poland, in an effort to optimize manufacturing costs. The drug generated sales of $643 million in 2010 and is expected to provide a boost to Polish exports once production launches in Poland.

A strong base

Among emerging European markets, Poland has the thirdlargest pharmaceuticals market, according to IMS. Only Russia and Turkey are ahead of it. Drug expenditure represents 2.3 percent of GDP, IMS says, which is above both the global and regional averages. Poland accounts for four percent of the total value of the European pharmaceuticals market. “Given the size, growth potential, structure and current trends, especially privatization plans, the Polish pharmaceuticals market is definitely one of the most interesting to watch,” stated Dominika Grzywińska, an analyst for CEE & CIS at market research firm Frost & Sullivan. “The Polish pharmaceuticals market is the largest in Eastern

Europe, with sales generating over one quarter of the region’s turnover.” However, it is not only the size and growth perspectives that make the market so attractive, Ms Grzywińska said. “There are a number of ongoing mergers and privatization processes in consultation, which are strongly influencing the market’s shape.” Its value grew by around eight percent y/y, reaching about zł.27 billion in 2010 – this included foreign sales, she said. January 2011 also saw record revenues for drug wholesalers, with sales at pharmacies in Poland exceeding zł.2.1 billion, according to industry data and analysis company PharmaExpert.

Barriers to entry

All of these factors have enticed major international pharmaceutical players to explore – and often invest – in Poland. Once they have launched production in the country and begin selling abroad, they contribute to Poland’s pharmaceutical export revenues. Indeed, there are some notable success stories. GlaxoSmithKline Pharmaceuticals, for one, finished 10th in magazine Polityka’s list of Poland’s most successful exporters in 2009. Total export revenues from its Polish branch in 2009 reached zł.2.66 billion. But despite the healthy figures, Poland’s pharmaceuticals market is no utopia for foreign investors.

sector analysis: pharmaceuticals

Research firm Business Monitor International said it considers Poland’s pharmaceutical market overall to be an attractive setting for multinational pharmaceutical companies. In its “Business Environment Ratings for Q210” report, Poland placed seventh out of the 20 CEE markets and 31st globally. “The regulatory system remains the major drawback to companies operating in Poland,” the report reads. “While intellectual property legislation has improved since EU accession in 2004, it still attracts criticism from the international drug community.”

Made in Poland 2011

in December 2009, with the Ministry of Health claiming it will save zł.45 million. Updates to the letter include the removal of 92 drugs, considered to be either outdated or to have questionable efficacy. On a positive note, 258 drugs were added to the list, including new treatments for conditions including asthma, cystic fibrosis, phenylketonuria and attention-deficit hyperactivity disorder. Potentially this means a new batch of Polish-produced drugs will be available for export, allowing Polish companies to meet demand more widely.

Health-care reform

The picture of health

The draft legislation includes a fixed wholesale mark-up of five percent on prescription drugs which are reimbursed. The draft bill states that 17 percent of the total annual budget of the Polish National Health Fund (NFZ) is to be spent on the reimbursement of medicines.

Moreover, on the back of a recovery in the German economy – the market’s largest recipient – growth in exports over the next two years or more can be expected.

In October 2010, Poland’s Ministry of Health submitted its latest draft act on the reimbursement of medicines, which is one of the most significant components of Poland’s ongoing health-care reform.

Despite some uncertainty as to the possible impact of proposed legislative changes to the pricing of Polish products, sold mainly on the domestic over-the-counter market, and of ongoing regulatory issues in Poland, Polish pharmaceuticals exporters can look ahead with some confidence to growth in R&D, and to the development of new drugs.

Jo Harper

The latest update to Poland’s reimbursement list was released

Warsaw Business Journal presents Real Estate weekly newsletter

Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate •

Know K now abou about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions •

To subscribe: visit www.wbj.pl/ren, e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

50 largest exporters

Made in Poland 2011

Rank

50 Largest Exporters (2009) Company

Address

E-mail/website

Sector

Revenues from export in 2009 (in zł. millions)

Raw materials and fuel

18,201

Automotive

14,852

Raw materials and fuel

84,87

Automotive

7,562

PKN Orlen

ul. Chemików 7, 09-411 Płock tel: (+48) 24 365 00 00 fax: (+48) 24 365 40 40

zarzad@orlen.pl www.orlen.pl

Fiat Auto Poland

ul. M. Grażyńskiego 141, 43-300 Bielsko-Biała tel: (+48) 33 813 21 00

centrumsprzedazy.salon@dealer. fiat.pl www.fiat.com.pl

KGHM Polska Miedź

ul. M. Skłodowskiej-Curie 48, 59-301 Lubin tel: (+48) 76 747 82 00 fax: (+48) 76 747 85 00

ir@kghm.pl www.kghm.pl

Volkswagen Poznań Automotive

ul. Warszawska 349, 61-060 Poznań tel: (+48) 61 876 17 81 fax: (+48) 61 876 14 73

www.volkswagen-poznan.pl

LG Electronics Mława

ul. LG Electronics 7, 06-500 Mława tel: (+48) 23 654 74 04 fax: (+48) 23 654 3259

pl.lge.com

Electrical and electronic goods

5,184

LG Electronics Wrocław

ul. LG Electronics 1-2, 55-040 Biskupice Podgórne tel: (+48) 71 792 94 00 fax: 48 71 792 94 05

pl.lge.com

Electrical and electronic goods

4,493

Philips Lighting Poland

ul. Kossaka 150, 64-920 Piła tel: (+48) 67 35 13 000

www.lighting.philips.pl

Electrical and electronic goods

3,690

Faurecia w Polsce

ul. Spółdzielcza 4, 05-600 Grójec tel: (+48) 48 665 01 13 fax: (+48) 48 665 03 03

www.faurecia.pl

Automotive

2,871

BSH Sprzęt Gospodarstwa Domowego

Al. Jerozolimskie 183, 02-222 Warsaw tel: (+48) 22 572 76 00 fax: +48 (22) 572 66 00

www.bsh-group.pl

Electrical and electronic goods

2,871

GK GlaxoSmithKline Pharmaceuticals

ul. Rzymowskiego 53, 02-697 Warsaw tel: (+48 ) 22 576 90 00 fax: (+48) 22 576 90 01

www.gsk.com.pl

Pharmaceuticals and cosmetics

2,665

Toyota Motor Manufacturing Poland

ul. Uczniowska 26, 58-306 Wałbrzych tel: (+48) 74 888 80 00

www.toyotapl.com/walbrzych

Automotive

2,496

TRW Polska

ul. Rolnicza 33, 42-200 Częstochowa tel: (+48) 34 343 10 03 fax: (+48) 34 369 34 30

www.trw.pl

Automotive

2,367

Węglokoks

ul. Mickiewicza 29, 40-085 Katowice tel: (+48) 32 258 24 31 fax: (+48) 32 251 54 53

info@weglokoks.com.pl www.weglokoks.com.pl

Raw materials and fuel

2,319

Made in Poland 2011

50 largest exporters

Rank

50 Largest Exporters (2009) Company

Address

E-mail/website

Sector

Revenues from export in 2009 (in zł. millions)

Fiat GM Powertrain Polska

ul. Grazynskiego 141, Bielsko-Biała, 43-300, Poland tel: (+48) 33 8132 100 fax: (+48) 33 8132 451

www.fiat-gm-pwt.pl

Automotive

1,981

GK Ciech

ul. Puławska 182, 02-670 Warsaw tel: (+48) 22 639 10 00 fax (+48) 22 639 14 51

ciech@ciech.com

Chemicals

1,951

Can-Pack

ul. Jasnogórska 1, 31-358 Kraków tel: (+48)12 662 34 03 fax: (+48) 12 662-34-19

canpack@canpack.eu www.canpack.eu

Metals

1,938

Electrolux Poland

ul. Kolejowa 5/7, 01-217 Warsaw tel: (+48) 22 568 98 67 fax: (+48) 22 434 73 03

www.electrolux.pl

Electrical and electronic goods

1,833

Man Bus

Sady, ul. Poznańska 4, 62-080 Tarnowo Podgórne tel: (+48) 618 16 63 01 fax: (+48) 618 16 63 50

www.mantruckandbus.pl

Automotive

1,717

Tele-Fonika Kable

ul. Wielicka 114, 30-663 Kraków tel: (+48) 12 652 50 00 fax: (+48) 12 652 51 56

www.tfkable.pl

Electrical and electronic goods

1,679

Indesit Company Polska

ul. J. Dąbrowskiego 216, 93-231 Łódź tel: (+48) 42 645 51 00 fax: (+48) 42 645 51 91

service.pl@indesit.com www.indesit.pl

Electrical and electronic goods

1,631

Ferrero Polska

ul. Wiertnicza 126, 02-952 Warsaw tel: (+48) 22 550 50 00 fax: (+48) 22 550 50 01

ext_recepcja_pl@ferrero.com www.ferrero.pl

Food

1,618

Polski Koks

ul. Gawronów 22, 40-527 Katowice tel: (+48) 32 357 09 00 fax: (+48) 32 357 09 08

www.polskikoks.pl

Raw materials and fuel

1,544

Synthos

ul. Chemików 1, 32-600 Oświęcim tel: (+48) 33 844 18 21 fax (+48) 33 842 42 18

synthos-pl@synthosgroup.com www.synthosgroup.com

Chemicals

1,514

Gdańska Stocznia Remontowa

ul. Na Ostrowiu 1, 80-958 Gdansk tel: (+48) 58 307 22 22

remontowa@remontowa.com.pl www.remontowa.com.pl

Shipyards

1,507

Valeo

ul. Przemysłowa 3, 32-050 Skawina tel: (+48) 12 299 80 00 fax: (+48) 12 299 80 04

valeo@valeo.com www.valeo.pl

Automotive

1,494

System Gazociągów Tranzytowych EuRoPol Gaz

Al. Stanów Zjednoczonych 61, 04-028 Warsaw tel: (+48) 22 517 40 00, fax: (+48) 22 517 40 40

info@europolgaz.com.pl www.europolgaz.com.pl

Raw materials and fuel

1,325

50 largest exporters

Made in Poland 2011

Rank

50 Largest Exporters (2009) Company

Address

E-mail/website

Sector

Revenues from export in 2009 (in zł. millions)

Paper and wood

1,254

International Paper Kwidzyn

ul. Lotnicza 1, 82-500 Kwidzyn tel: (+48) 55 279 80 00 fax: (+48) 55 279 8451

www.internationalpaper.com

Anwil

ul. Toruńska 222, 87-805 Włocławek tel: (+48) 54 236 30 91 fax: (+48) 54 236 19 83

anwil@anwil.pl www.anwil.pl

Chemicals

1,050

Firma Oponiarska Dębica

ul. 1 Maja 1, 39-200 Dębica tel: (+48) 14 670 28 31 fax: (+48) 14 670 09 57

www.debica.com.pl

Automotive

1,050

Kopex

ul. Grabowa 1, 40-172 Katowice tel: (+48) 32 604 70 00 fax: (+48) 32 604 71 00

kopex@kopex.com.pl www.kopex.com.pl

Industrial machinery

1,030

Polimex-Mostostal

ul. Czackiego 15/17, 00-950 Warsaw tel: (+48) 22 829 71 00 fax: (+48) 22 826 04 93

kontakt@polimex-mostostal.pl www.polimex-mostostal.pl

Construction

1,025

Boryszew

ul. 15 Sierpnia 106, 96-500 Sochaczew tel: (+48) 46 863 02 01 fax: (+48) 46 863 00 96

www.boryszew.com.pl

Automotive

1,024

ALSTOM Power

Al. Jana Pawła II 12, 00-124 Warsaw tel: (+48) 22 850 96 09 fax: (+48) 22 654 55 90

www.alstom.pl

Industrial machinery

969

Solaris Bus & Coach

ul. Obornicka 46, Bolechowo-Osiedle, 62-005 Owińska tel: (+48) 61 667 23 33 fax: (+48) 61 667 23 10

office@solarisbus.com www.solarisbus.com

Automotive

921

Mondi

ul. Bydgoska 1, 86-100 Świecie tel: (+48) 52 332 10 00

info.swiecie@mondigroup.com www.mondigroup.pl

Paper and wood

901

ABB

ul. Żegańska 1, 04-713 Warsaw tel: (+48) 22 220 20 00 fax: (+48) 22 220 20 31

www.abb.pl

Electrical and electronic goods

888

SGL Carbon Polska

ul. Piastowska 29, 47-400 Racibórz tel: (+48) 32 415 45 01 fax: (+48) 32 459 55 20

www.sglcarbon.com

Raw materials and fuel

884

PGNiG

ul. Marcina Kasprzaka 25, 01-224 Warsaw tel: (+48) 22 589 45 55 fax: (+48) 22 691 82 73

www.pgnig.pl

Raw materials and fuel

858

Made in Poland 2011

50 largest exporters

Rank

50 Largest Exporters (2009) Company

Address

E-mail/website

Sector

Revenues from export in 2009 (in zł. millions)

Metals

831

Impexmetal

ul. Łucka 7/9, 00-842 Warsaw tel: (+48) 22 658 60 00 fax: (+48) 22 620 05 44

info@impexmetal.com.pl www.impexmetal.com.pl

Zakłady Azotowe Puławy

Al. Tysiąclecia Państwa Polskiego 13, 24-110 Puławy tel: (+48) 81 886 34 31 fax: (+48) 81 565 28 56

zapulawy@azoty.pulawy.pl www.zapulawy.pl

Chemicals

815

Toyota Motor Industries Poland

ul. Japonska 6, Leg, 55-220 Jelcz-Laskowice tel: (+48) 71 302 00 00 fax: (+48) 71 302 00 01

www.toyota-industries.com

Automotive

805

Hutchinson Poland

ul. Stolarska 23, 34-300 Żywiec tel: (+48) 33 866 64 03 fax: (+48) 33 866 64 07

info.zywiec2@hutchinson.com.pl www.hutchinson.com.pl

Automotive

791

Sitech

ul. Strefowa 2, 59-101 Polkowice tel: (+48) 76 726 70 00 fax: (+48) 76 726 70 70

sitech@pl.sitech-automotive. com www.sitech-sitztechnik.de/pl

Automotive

774

GKN Driveline Polska

ul. Południowa 18 56-400 Olesnica tel: (+48) 71 399 80 00 fax: (+48) 71 399 80 11

www.gkndriveline.com/drivelinecms/opencms/en

Automotive

772

Stalprodukt

ul. Wygoda 69, 32-700 Bochnia tel: (+48) 14 615 10 00 fax: (+48) 14 615 11 18

market@stalprodukt.com.pl www.stalprodukt.com.pl

Metals

750

Toruńskie Zakłady Materiałów Opatrunkowych

ul. Żółkiewskiego 20/26, 87-100 Toruń tel: (+48) 56 612 39 00

www.tzmo.pl

Pharmaceuticals and cosmetics

744

Volvo Polska

ul. Puławska 558/560, 02-884 Warsaw tel: (+48) 22 566 28 00 fax: (+48) 22 566 28 88

www.volvocars.com/pl

Automotive

697

Mars Polska

Kożuszki Parcel 42, 96-500 Sochaczew tel: (+48) 22 595 50 00 fax: (+48) 22 595 50 01

www.marskariera.pl

Food

656

Zakłady Azotowe w Tarnowie-MoŹcicach

ul. E. Kwiatkowskiego 8, 33-101 Tarnów tel: (+48) 14 633 07 81 fax: (+48) 14 633 07 18

azoty@azoty.tarnow.pl www.azoty.tarnow.pl

Chemicals

634

CNH Polska

ul. Otolińska 25, 09-407 Płock tel: (+48) 24 267 96 00 fax: (+48) 24 267 96 05

cnh-polska.polandtrade.pl www.cnh.com

Industrial machinery

632

Source: “100 Largest Exporters in 2009”. Reprinted with permission of Polityka

bilateral trade: introduction

Made in Poland 2011

Bilateral trade T

rade is, among other things, a relationship based on trust. It’s important for each party in that relationship to realize the importance of the partnership between importer and exporter, customer and supplier. Without exporters to provide goods and importers to buy them, the world economy would collapse.

With that in mind, we provide you with a look at four of Poland’s most important trade relationships: with the United States, China, the European Union (and a focus on Germany) and Russia. From a purely statistical standpoint, only those last two might seem significant. The EU (and Germany specifically) is by far the largest export destination for Polish goods. Outside of the EU, Russia, which exports vital fossil fuels to Poland and in turn absorbs much Polish machinery and food, is easily the next most important trading partner.

gaining spending power, offers a fantastic opportunity for US exporters. Moreover, as Poland turns to alternative sources of energy – such as nuclear power and shale gas – US firms will be looking to share their technology and know-how. For Polish exporters, the US remains a relatively untapped market, with a great deal of potential left to exploit. Look for bilateral trade agreements between these two countries to increase over the next few years. For China, the view is longer term. The country has become an export giant, and many Western countries find it hard to compete in China’s low-price environment. Nevertheless, China’s voracious economy needs all sorts of goods from abroad, and some Polish companies are already making a go of it there.

What then of the US and China? Both represent tiny trade balances in comparison to the first two. But they are important nonetheless. Firstly, there is the simple geopolitics – they are the superpowers of today and tomorrow. Poland’s relationships with them, politically and economically, will have important consequences.

Then there’s China’s need for raw materials. Poland can’t provide all of these, but it can provide some, and firms such as copper producer KGHM have benefited from China’s rise. It’s also no secret that Chinese firms have begun flexing their muscles abroad, and indeed have also come to Poland. And while Poland doesn’t offer the huge market that the US, Japan or Germany do, its rapid development makes it a market that Chinese exporters can’t ignore.

There are other considerations as well. The US, with its economic might and technological know-how, has the potential to become a much more significant trade partner in the future. As it looks to recover from the global economic crisis, exports are critical. And Poland, with its population rapidly

In the next few pages, you’ll find analyses of Poland’s bilateral trade relationships with these partners, as well as the perspective from the partners themselves, written by the diplomats and economic experts that help maintain those very important relationships on a day-to-day basis. v

Made in Poland 2011

bilateral trade: the united states

Room to grow Poland and the United States is one of the Embassy’s top priorities.

Lee A. Feinstein United States Ambassador to the Republic of Poland

his is a dynamic period for trade and investment between the United States and Poland: the world’s largest economy, and Europe’s fastest growing. US investors are attracted to Poland’s continuing growth, Poland’s strong and growing domestic market, and its culture of entrepreneurship and trade in which American businesses feel at home. The range of projects attracting American interest here is impressive – software development in Wrocław, the aviation valley near Rzeszów, biotechnology research throughout the country, and a cutting-edge partnership between the New York and Warsaw stock exchanges. US investment in Poland has been especially strong since 2008, reflecting Poland’s unique position in the EU as a country that has grown consistently and prudently.

Energy is a good example of the huge potential for growth in trade and investment. US oil and gas companies are leading the exploration and development of Poland’s shale gas resources. The results of their efforts should start to become clear later this year, but scientists, businesspeople and strategists are optimistic that shale gas might transform Poland’s energy market and create a completely new, very valuable Polish export. On renewable energy, several US investors are helping to drive remarkable growth in Poland’s windpower generation capacity. The United States and Poland are expanding their cooperation so that Poland’s future nuclear power industry will have the best technology, a new cadre of highly qualified engineers and technicians, and a regulatory system that ensures the safety of Poland’s people and environment and a secure, zero-carbon supply of electricity. In the medical field, Poland has become the largest clinical trials market in Central and Eastern Europe and shows potential for even more growth. Clinical trials contribute zł.860 million to the Polish economy annually while providing more access to advanced therapies for Polish patients. They also help to improve the standard of medical care and create professional development opportunities for Polish medical professionals. US investment in the health sector creates a win-win outcome for US business and the health and wealth of Polish society. American firms are also doing well by doing good. The American Chamber of Commerce recognized Fluor SA with its 2010 Corporate Social Responsibility Award for Fluor’s support for universities and students, as well as its donations to children’s homes and educational institutions. I was also pleased in 2010 to nominate UPS Polska for the Secretary of State’s Award for Corporate Excellence, thanks in part to its program bringing together rural schools across the Polish and Ukrainian borders.

The United States and Europe are overwhelmingly one another’s most important commercial markets, despite the attention given to the emerging economies of the BRIC countries. And, for a large and growing number of American investors, Poland has become an attractive destination within Europe. America’s collective asset base in Poland, Hungary and the Czech Republic, for example, is roughly $85 billion – twice the size of corporate America’s assets in India. Poland’s share is the largest of these three countries, totaling $30.5 billion according to Johns Hopkins University’s 2011 survey of jobs, trade, and investment. The output of US affiliates in Poland, $8.3 billion – is larger than the output of US affiliates in Austria, Denmark, or Turkey. Some 360,000 Poles in Poland are employed directly or indirectly by American businesses, according to the American Chamber of Commerce. That number is poised to grow with new investments in renewable and clean energy, in financial and legal services, information technology, business services, real estate, and defense.

My Embassy is at work deepening business ties, especially with young people. One program I am especially proud of is the Polish American Freedom Foundation’s internships to recognize and promote young entrepreneurs. This program will bring approximately 40 Polish university students to the United States this summer for internships with US companies doing business in Poland. There they learn US business practices and corporate culture, preparing them for success after graduation from university. US companies have supported the program enthusiastically, and we expect the number of interns to grow significantly next year.

Trade between the US and Poland may be bigger than many realize. I would like it to grow further still. For the world’s largest economy and Europe’s fastest growing, there is ample room for expansion, which is why growing trade between

We are also blessed with a dynamic US business community in Warsaw, represented in a population of tens of thousands of Americans in Poland. The community’s leadership is first rate. The American Chamber of Commerce has just elected

bilateral trade: the united states

a new chairman, Joseph Wancer, whose achievements in the banking and financial sector are legendary. I was also pleased to be present for the launching of the new US-Poland Business Council in Warsaw last October. This new group brings together US businesses committed to the Polish market to advocate, in the United States and in Poland, for policies designed to link our two countries closer together. The coming years are promising. US firms have begun investing in Polish intellectual capital through massive in-house training programs. Some have established R&D centers here, while others partner with Polish universities and technical schools to build more competitive curricula. New invest-

Made in Poland 2011

ments in information technology and advanced manufacturing are creating stronger demand for more highly-educated Polish graduates. The results are increased exports of hightechnology, Polish-built aviation systems, sophisticated business services, and software solutions to markets all around the world. President Obama has made increasing global trade a top priority. The president’s visit to Poland in May will provide an opportunity to showcase opportunities for trade and investment between our countries. Boosting trade is not only good for business; trade is an increasingly strong and important pillar of the enduring ties between Poland and the United States. v

lands of opportunity The US-Poland trade relationship has a long way to go before it reaches its full potential Poland’s trade structure is heavily oriented towards fellow European Union member states, which account for 78 percent of its exports. Poland’s top export markets include Germany, France and the UK. Exports to non-EU countries, many of them emerging and developing markets, stand at approximately 20 percent, according to statistics office data for 2010. What may surprise many is that the US receives just one percent of Polish exports. The US’s share of imports to Poland is also relatively small, at just 2.6 percent. Germany, by contrast, accounted for 21.7 percent of all imports into Poland in 2010. In spite of these figures, Polish exports to the US have been growing steadily over the last decade. In 2000, Poland’s exports to the US were worth just under $1 billion, while US imports to Poland were worth approximately $2.1 billion, according to data from the US Census Bureau. US-Polish trade hit its highest point in 2008, just as the global economy was slipping into crisis. Polish exports reached $2.5 billion, while US imports to Poland peaked at $4.1 billion. Defense products comprised about a quarter of total imports.

By the end of 2010, US-Polish trade stood at just above $2.9 billion. In fact, during the first 11 months of 2010, Poland posted a $12.8 million trade surplus with the US, though a large part of the slump in US exports was due to the country’s sharp economic downturn.

Leading sectors

When it comes to the breakdown of US-Polish trade, Poland’s main exports to the US include industrial machinery – such as jet engine parts – steel and copper products, chemical products, medical control equipment, food and beverages, furniture, fuels, glassware and ceramics.

Although these products are competitive, the Polish government, along with organizations such as the US-Polish Trade Council (USPTC), as well as private sector companies, hope to diversify Poland’s economy so that it can provide higher value-added products and offer strategic knowledge in sectors including biotech, energy (shale gas and nuclear), IT/ high-tech, defense and aviation. According to Adam Normark, first secretary at the Embassy of Poland’s trade and investment section in Washington DC, his office has sponsored over 16 trade missions targeting these very sectors throughout the US. The main goal of these trade promotion events is to attract R&D partners, customers and investors as well as to cultivate Polish innovation and stronger business relationships, especially at the minister-governor level.

Made in Poland 2011

bilateral trade: the united states

According to The Economist, Poland’s economy is about the size of the state of Virginia’s. Unlike China or India, Poland is too small to become a major trading partner for the US. Nevertheless, by targeting specific states and niche sectors, Polish firms can achieve direct and tangible results. On the flip side, the main US exports to Poland include industrial machinery, pharmaceutical products, controlling and measuring equipment, road vehicles, non-ferrous and steel products and military aircraft. According to Mr Normark, most major American companies already have a presence in Poland and they now want to educate and attract more US small and medium-sized enterprises (SMEs) to expand operations and increase exports to Poland. In fact, the Polish Embassy hopes to take advantage of Poland’s upcoming EU presidency by promoting the country as an attractive business location throughout the US.

Challenges and opportunities

From the perspective of US exporters, while their share of Poland’s import market remains small, they have found considerable success in targeting competitive niches. Sectors which continue to offer strong sales opportunities include power generation, environmental technologies and defense. For Polish firms trying to enter the US market, money continues to be a major hurdle, particularly as millions of dollars are needed to build brand equity via aggressive sales and marketing campaigns. To put it simply, many Polish firms do not have that kind of money. Scale is also an issue, as many Polish firms do not have the capacity to meet demand from large-scale national buyers. That is why Dr Piotr Moncarz, chairman of the Silicon Valley-

based US-Polish Trade Council, believes Polish firms should aim to build strategic partnerships, foster integration and cooperate with US companies via shared products and services, particularly in the high-tech and pharmaceutical sectors. The success of these initiatives, however, will depend largely on decisions made by both countries’ governments to strengthen economic relations. One strategic initiative in particular, energy security, creates the potential for greater US-Polish cooperation, said Dr Grzegorz Kozłowski, of the Embassy of Poland in Washington DC. There is a tremendous amount of interest on the part of American firms and the US government to increase cooperation, exchange technical knowledge and develop economic opportunities within the oil and gas, nuclear, clean and renewable energy sectors in Poland, Mr Kozlowski said.

The future

The US-Polish trade relationship has not reached is full potential, but there are encouraging signs of improvement. Despite its solid fundamentals innovation will ultimately be the key to Poland’s long-term trading success, but an innovative economy also needs an innovative government, says Francis Skrobiszewski, director of the US-Polish Trade Council. US President Obama’s national export initiative aims to double American exports in five years. By targeting Poland as a strategic mid-sized trade partner, the US can solidify political, economic and international security relations for years to come. Polish firms, though, have to do their part to capitalize on the opportunities the US offers. Ewa Błaszczyńska

bilateral trade: china

Made in Poland 2011

Promising prospects Yet Covec is now covering its earlier losses and cooperation is developing very well. So I think that this direct involvement of a Chinese company in developing Poland’s infrastructure will be successful and could open the way to similar such ventures in future. Sun Yuxi Chinese Ambassador to the Republic of Poland

Trade imbalances

China holds a trade surplus with many trading partners around the world, including Poland. We are concerned about the situation, but nowadays lots of Chinese manufacturing plants are joint ventures with foreign firms and their exports increase these statistics.

olish-Chinese economic relations are developing very well and offer promising prospects. In 2010, the volume of mutual trade was $11 billion. Chinese imports from Poland increased by 13 percent and Chinese exports to Poland grew by 26 percent. There is a big gap, but we are trying to narrow it. Now the most important task ahead is to make mutual trade more balanced in favor of the Polish side.

Yet we see our lack of trade balance with other countries as a problem, and during the two or three years of the financial crisis we sent many trade delegations to the US and Europe to make arrangements to buy more and sell less. So the figures of the last few years show that while our exports have increased by 31.3 percent, imports to China have increased by 38.7 percent.

I consider this an urgent goal, so the Embassy has organized Polish business trips to China to show the potential of China’s huge market. China is already buying copper products from Poland, and it might buy more agricultural products. But Polish exports to China should also include more sophisticated products. For example, Poland produces very good helicopters, and these could be sold to China.

The new trend is clear. We now have a fully open market economy, so there are good conditions to invest in our country and to export more products to China.

We want to expand Chinese investment in Poland, which in 2010 reached over $200 million. The Polish government has privatization plans, and we are interested in those projects and our businesspeople do research in some of the areas. Chinese companies are also interested in direct cooperation in building Polish expressways, railways, power stations and in ventures dealing with development of renewable energy.

Case study

Covec (China Overseas Engineering Group Co) is building a section of the A2 highway in Poland. The company has completed a lot of big projects in developing countries, but this is the first time it is completing such a project in Europe. The consortium that won the contract is a highly experienced one, with some other Chinese companies included in the group, and the contract concerns the construction of a relatively small – about 50-kilometer long – section of expressway. Covec itself is overcoming some difficulties in conducting its work in Poland. It took some time to learn how to cooperate, due to certain disparities in style of management, language problems and cultural differences between Chinese and Polish workers.

Political and cultural relations

China and Poland have close political relations and in 2004 during the visit of the Chinese president to Poland, an agreement on friendly and cooperative partnership was signed. Cultural ties are also strong: many Chinese troupes perform in Poland and during the 200th anniversary of Chopin’s birth there were many Polish cultural events in China. We have opened four Confucius Institutes in Polish universities where the Chinese language and culture are taught. In China, two universities have Polish language departments. One of them is in my own home town of Harbin. However, there is a very small amount of tourism between our countries. While 60 million Chinese visit other countries around the world every year, only 20,000 come to Poland. One of my goals is to increase the level of our mutual tourism. We are encouraging Polish and Chinese travel offices to cooperate, and I believe that our mutual tourism will grow in the next few years.

China in the global economy

China’s economy is developing very quickly: in 2010 GDP growth reached 10 percent; in 2009 it was 9.7 percent. Due to the current, fast rate of its economic growth, China is making a valid contribution to the global economy. Espe-

bilateral trade: china

Made in Poland 2011

cially when there are international financial crises, our high economic performance is helping to generate some growth in various areas of the global economy. It is time for us to think about how to speed up the process of integrating the Chinese economy into the world econ-

omy, and we are ready to participate in all efforts to help the global economy perform better. China is active in such gatherings as the G20 and G8, we are talking about global finance with the World Bank, the International Monetary Fund and other global financial institutions. v

Changing attitudes Polish firms are coming around to the Chinese market

plicated legal system. They prefer to start trading with the Czech Republic or Slovakia, then later expanding to France and Germany. Most often those firms which export to China are large entities which trade raw materials rather than refined and processed goods.

The European Union is China’s largest trading partner. For EU countries combined, China is third on the list of export partners. The total value of goods traded between China and the EU in 2009 amounted to E296 billion, while E30 billion worth of services were exchanged, according to Poland’s Ministry of Economy.

Although the last 10 years have been marked by trade growth between Poland and China, Poland still has a high trade deficit with the Asian powerhouse. According to the Economy Ministry, between 2003 and 2008, Polish exports to China rose – from E224 to E866.5 million, while Chinese exports to Poland have risen from E2.56 billion to E11.46 billion.

Nevertheless, although Poland is in the EU, China ranked in a lowly 21st position on its list of export partners in 2009. The situation is getting better though, and the main dynamo for improvement is coming from a surprising source – the economic crisis.

In the same period, Poland’s trade deficit with China has risen from E2.33 billion to E10.59 billion. The deficit is also visible in the number of companies involved in Poland-China trade – 1,289 exporting from Poland and 17,175 exporting from China.

“A few years ago finding companies willing to attend business missions in China was a serious problem. Even big companies said that this direction was not among their interests. Suddenly their attitude has changed, and now we have a problem with choosing those who can go,” said Tomasz Ostaszewicz, director of the Department of Bilateral Economic Cooperation at the Ministry of Economy.

However, many experts believe the year 2009 marked a positive turning point for Poland. Paradoxically, during that year, when the crisis was at its worst, Polish exports to China increased by 21 percent. Over the same period, the average value of overall Polish exports decreased by 15 percent y/y. China’s exports to Poland also decreased and as a result, for the first time in many years, Poland’s trade deficit with China decreased. In addition, the number of companies exporting from Poland rose by 62, while Chinese importers decreased in number by 436.

Crisis, the healer

China is Poland’s most important Asian partner, but, when viewed from the perspective of Poland’s total exports, it is still only plays a bit part. Polish exports to China in 2009 amounted to only 1.1 percent of overall exports. Polish businesspeople are often intimidated by the differences between Polish and Chinese culture and are put off by China’s com-

Though that might seem surprising, the explanation is simple. Due to the crisis, European countries were not able to receive the same volume of products from Poland as they had previously, and Polish businesspeople were forced to turn their eyes to China.

bilateral trade: china

Hurdles to entry

Companies interested in exporting to China come largely from the grocery, jewelry and environmental engineering sectors, said Rajmund Żelewski, vice president of PolishChinese Chamber of Commerce. The Ministry of Economy’s Tomasz Ostaszewicz sees the future of Poland’s trade with China continuing to come from these sectors.

Made in Poland 2011

with Chinese companies, importing licenses for 338 product categories and others. Moreover, the trade deficit is still far from being minimized,” he said. “Imports from China will probably not decrease due to longterm agreements, and exports to China depend on the Polish side. A big promotional campaign might be helpful, but given the budget constrains in 2011, the Economy Ministry cannot afford it,” explained Mr Ostaszewicz.

“Recently five Polish poultry companies obtained the certificate which allows them to export poultry to China. Taking into account the high veterinary and health requirements, this can be considered a real success,” said Mr Ostaszewicz.

What next?

“Moreover, I see a chance to export special vehicles, such as fire engines and emergency cars, as Chinese provinces are in the process of developing their services in these fields,” he added.

A bilateral governmental commission is currently working on developing cooperation between the two countries, while Polish and Chinese logistics companies are continually improving connections between Poland and China.

Nevertheless, the structure of exported products is still far from ideal. Big Polish companies export mostly copper, specialist machines and chemical products while Chinese exports to Poland include mechanical and electrical devices, clothes and shoes. Poland, in short, lacks smaller companies which export highly processed products.

After the success of the Polish pavilion at Expo 2010 in Shanghai, the Polish Information and Foreign Investment Agency opened an office in Shanghai. Moreover, President Bronisław Komorowski could possibly visit China in April 2011, Mr Ostaszewicz said.

Mr Żelewski said that political activity is crucial for the development of Polish-Chinese trade. The Polish government needs to maintain good political relations with this huge partner.

The disadvantages and problems Polish businesspeople have to face do not end there, according to Mr Żelewski.

But the last word belongs to businesspeople – they are the ones who need to shake off old inhibitions and embrace the potential of the world’s second-largest economy.

“China is characterized by complicated legal rules, problems

Joanna Sopyło

Made in Poland 2011

bilateral trade: europe/germany

A European success story Business ties

A few companies have been present in Poland for many years – a good example is BASF, which has Polish roots dating back to the end of the 19th century. Nearly all major German players have discovered the Polish market. Some of them see Poland as a good basis for their activities in other CEE countries. Increasing numbers of SMEs are expanding their range of coverage – for instance Polish IT companies with comparative advantages are branching out into the German market.

Helmut Lüders Head of the economic department at the German Embassy in Warsaw

he growth and development of the Polish economy is a wonderful European success story. So too is the development of German-Polish relations in recent years. Our countries enjoy smooth cooperation in politics and business, including in our approach to trade and investments. We also hold common positions on most European issues. The shared understanding both countries have now was inconceivable just one or two decades ago.

Never in the past have German-Polish relations been so good – and the economic relations between our countries reflect the excellent understanding both of our economies have.

Bilateral trade

Despite the burdens caused by the global financial crisis, Poland’s importance for German foreign trade is still growing steadily. Among all other German trade partners in Central and Eastern Europe, Poland continues to hold first place – ahead of the Czech Republic and Russia. We expect the flow of trade to keep developing dynamically this year and in 2012 as well. In the opposite direction, Germany has been the most important trading partner by far for Poland for many years. Approximately 26 percent of all Polish exports are shipped to Germany. The country’s robust, strong economic growth supports this sound development. In 2011, Poland and Germany will be among the countries with the highest growth rates within the EU. The Polish market is important for countless German exporters. Two-thirds of German exports to Poland are from those industries that are traditionally strong in Germany – machinery and equipment, electronics, cars, various commodities and chemical products. Surprisingly, the structure of Polish exports to Germany does not differ considerably and points to a healthy, although not quite balanced, trade exchange with an overall volume of E66 billion in 2010.

The framework conditions for German-Polish economic relations are excellent. This has been confirmed during numerous official visits and during the latest consultations between the German and Polish governments. Many businesses in Germany appreciate the policy of steady economic renewal in Poland and, though still slow at times, the improvement of Poland’s infrastructure. The presence of a high number of German companies in Poland reflects the growing importance of Central Europe. There are a growing number of German contacts to countries located around the Baltic Sea, while the Eastern Partnership and contacts within the framework of the so-called Weimar Triangle (France, Germany and Poland) continue to be important for Germany. There is an increasing potential for investments in CEE, with Poland serving as a hub between East and West. Poland’s integration into the EU and its sustainable and responsible economic and financial policies are considered important factors by German companies when they make investment decisions.

Investment

Without counting smaller investments of less than E1 million, over the past 20 years, cumulative German investments in Poland have amounted to more than E20 billion. German capital has therefore created numerous jobs and strengthened local communities in Poland. Metro Group, Volkswagen, MAN, Robert Bosch, RWE, Siemens, BASF and Bayer are among the most significant investors. However, I hesitate to name them as there is a risk of omitting other important companies.

Poland’s membership of the EU, its large and growing internal market, proximity to Germany, competitive tax rates, highly qualified labor force and expected positive growth rates for years to come are among the factors that make Poland an excellent country to trade with and invest in. Viceversa, Polish export-oriented companies see the German market as a place of strong innovation, high labor productivity and excellent infrastructure. Many also see it as the home of world-leading research institutions in both basic and applied research. v

bilateral trade: europe/germany

Made in Poland 2011

Relying on Germany Germany’s economic health is crucial to Poland’s exporters Poland has reaped huge economic benefit from its 2004 accession to the European Union. Structural funds have poured in, allowing the country to develop its infrastructure and, according to many economists, stave off recession in 2009. In terms of trade, the volume of Polish exports to the European single market has grown in each year since the country’s accession, although imports dipped slightly in the crisis year of 2009. Last year, total exports to the EU stood at zł.368.55 billion, compared to zł.222.89 billion in 2005.

Trade patterns

There has been no discernible pattern in terms of the structure of Poland’s exports to the EU since its accession. The proportion which goes to the bloc has hovered between 7780 percent every year since 2005. The EU accounted for 78.6 percent of Poland’s exports in 2010, a drop of one percentage point from the year before. Imports coming from the EU, however, have displayed a slight downward trend since 2005. Last year, 58.8 percent of all imports came from the EU while in 2005 the volume stood at 65.6 percent. One reason for this is the rise of China’s economic star, and in particular the success of its exporters. In 2009, China had risen to become the second-largest importer to Poland, before Russia moved back into second place in 2010 – re-establishing its position as the major non-EU importer to Poland. “In the case of China, the story is the same as everywhere else. Many countries import a lot of goods from China, generating a high trade deficit with them,” said Monika Kurtek, senior economist at Bank BPH. “Russia is in second place mainly due to high prices of imported commodities like oil and gas,” she added.

The Germany effect

In terms of the absolute value of trade with the EU, 2007 saw the most significant y/y leap, as Poland cashed in on implementation of the Schengen Agrement. This abolished border

controls between signatory countries and allowed trade to flow more freely across Poland’s frontiers. In 2009, the main imports into Poland were machinery and transport equipment – products badly needed by the country’s developing economy. Domestic demand is the main engine of GDP growth in Poland and high export volumes are required to meet it. Much of the supply comes from Germany, whose economy produces advanced technical products and raw materials vital to Poland. Germany, which neighbors Poland and whose economy is the largest in the EU, has been Poland’s main trading partner since 1990. Poland’s exports to its western neighbor accounted for 26 percent of the total last year, while Germany accounted for 21.7 percent of all imports, according to Polish statistics. To put the size of Germany’s share in perspective, the next most significant destination for Polish exports, France, accounted for just 6.8 percent of the total. Poland imports goods from Germany that the latter is traditionally strong at making, such as machinery, electronic products and cars. It also imports a number of commodities including chemicals.

Accounting for differences

The products Poland exports to Germany, meanwhile, are surprisingly similar and were in great demand last year. Companies such as aluminum-products maker Grupa Kęty, oil refiner Orlen and many from the chemicals sector ramped up production to meet demand from Germany where industrial output leaped in 2010. Indeed, on the back of this, Polish production was 11.5 percent higher in December 2010 than a year earlier. Surprisingly, Poland does not run a trade deficit with Germany, at least according to Polish statistics. Last year, Poland exported zł.121.88 billion to its western neighbor, and imported zł.113.54 billion. But this may have more to do with who does the counting than anything else.

There is a considerable difference between German and Polish statistics. According to official German statistics, there was a trade deficit of roughly E10 billion in 2010. In euro terms, according to Poland’s statistics office, Poland had around E2 billion in surplus.

Dependency

Germany’s share of Poland’s trade pie has been diminishing, albeit extremely gradually, ever since Poland began its eco-

Made in Poland 2011

bilateral trade: europe/germany

nomic transition. German imports to Poland dropped by 0.7 percentage points y/y in 2010. Nevertheless, for Polish manufacturers, much will still depend on the strength of German demand. “As long as the economic situation in Germany does not deteriorate, Polish producers should not have any reason to be worried,” said Ms Kurtek.

Should the fiscal problems of the euro zone’s periphery countries spread to the zone’s major economies, however, Poland could suffer from a huge drop in international demand for its products. Poland’s exporters would be wise, therefore, to explore markets further afield and to slowly wean themselves off their dependency on the single market. Gareth Price

bilateral trade: russia

Made in Poland 2011

To improve trade, improve trust petroleum gas (propane, butane) and an increasing supply of coal make for a three-percent share of Russian exports to Poland. Synthetic rubber, petroleum jelly and paraffin, as well as potassium fertilizers, take further positions.

Ekaterina Belyakova Trade representative at the Russian Embassy in Warsaw

he Russian Federation is Polandâ&#x20AC;&#x2122;s second-largest partner in terms of turnover, just behind Germany when it comes to imports and sixth when it comes to exports. Poland, in turn, firmly belongs to Russiaâ&#x20AC;&#x2122;s top 10 trade partners, taking fourth position among EU countries. After a short period during the crisis with a dramatic 40 percent fall in mutual turnover, Polish-Russian trade is again seeing growth. According to Russian statistics, turnover between Poland and Russia amounted to $20.8 billion in 2010. That includes exports from Russia to Poland at about $14.9 billion and Russian imports from Poland at about $5.8 billion. According to Polish statistics, Polandâ&#x20AC;&#x2122;s imports from Russia amounted to $18.2 billion, while exports from Poland to Russia equaled $6.6 billion. Despite the differences, both sets of statistics reflect the dynamism and significance of trade between the two countries.

Key products

Russian exports to Poland are characterized by a low level of diversification and an exceptionally high share of unprocessed or little-processed products. Minerals and, especially, energy, form over 90 percent of Russian exports to Poland. For Russia, that is a significantly larger proportion than with any other country in the world. Obviously, this makes PolishRussian trade too dependent on the global economic situation and too sensitive to crisis. The main products that Russia supplies to Poland are crude oil and unprocessed petroleum products, amounting to over 70 percent of exports. Contrary to widespread misconceptions in Poland, the share of natural gas imported from Russia is relatively small and equals around 15 percent (including gas supplied through the territory of Ukraine). Liquified

Polish exports to Russia are far more diversified: they comprise two large groups of products. The first group includes products that Poland has been exporting to the Russia for many years, even decades. These include agricultural products and foodstuffs, cosmetics, paper products, building and finishing materials and plastic articles. In 2010, Poland exported fresh apples worth $200 million to Russia. Exports of make-up and skin-care products were valued at $150 million. Exports of putty and sealing compounds, as well as paint fillers, amounted to $90 million. The other major group of Polish exports to Russia includes products coming from Poland-based daughter companies of global corporations, mainly in various branches of the electronics industry such as home appliances and consumer electronics. The group also includes car production and medicines. In 2010, the top Polish export to Russia was parts and units of transmitting devices, mainly TV receivers. Exports from this branch were worth $340 million. Exports of complex medicines amounted to almost $270 million, while exports of car parts and accessories equaled $160 million. Exports of electric ovens and other home appliances reached $83 million. Notably, however, the same type of production is gradually developing in Russia and constitutes growing competition to imports. This process has strengthened due to the global crisis.

Potential for development

The prospects of further growth of our exchange are predominantly linked to cooperation in the sphere of investment and innovation. The possibility exists for establishing common Russian-Polish enterprises in one of our countries that would produce products intended for both the Russian and European markets. Scientific and technical cooperation might also play an important role. Sectors which have the best conditions for the expansion of such cooperation include IT, energy production, chemicals, metalury, machine construction and transport. Other fields, such as agriculture and environmental protection technologies, also have good prospects. There is mutual interest in cooperation in the field of energyefficiency and the use of renewable energy sources.

Made in Poland 2011

bilateral trade: russia

Strengths and weaknesses

The strengths of Russian-Polish economic cooperation include traditions of cooperation, the understanding of each others’ mentality and, partly, the conditions for operating on each others’ markets. We have a treaty that forms a good basis for cooperation. However, it lacks provisions on support and mutual protection of investments. On both sides there are administrative and technical barriers, such as the insufficient development of transport infrastructure or difficulties in starting up. However, the biggest barriers have emerged in people’s minds. I think that until significant changes in the political climate of our relations appear, real progress in business relations is not possible. But signs of such changes are already visible. There is significant investment activity on the part of Polish firms in Russia.

Consolidated direct Polish investment in Russia at the end of Q3 2010 amounted to $428.5 million. Russian investments in Poland, however, are scant. Positive examples are important, but we won’t find fully successful cases of Russian investment in Poland. The few projects that exist are an exception to the rule. There is reason to say that there is a bias against Russian capital, both in public opinion in Poland and among the country’s elite. We need to meet and learn about each other. That is why we are seriously considering creating various platforms for contacts, the exchange of entrepreneur delegations and regions’ representatives. We simply need to improve trust. No matter how long we talk about the possibility of doing good business and no matter how much we could possibly earn from it, we will not improve business ties if one side doesn’t trust the other. v

Business with the bear Polish-Russian trade is growing, but is influenced by factors other than just what makes business sense Say the words “Russian trade” to a Pole and he or she might first think of Russian goods arriving from Kaliningrad. In recent times, the long queues of cars smuggling alcohol and cigarettes from the Russian enclave into Poland have been one of the few sure things in exchange between the two countries. That wasn’t always the case. In the years from 1950 to 1990, Soviet Russia was Poland’s main trading partner in terms of both imports and exports. But since its Comecon trading system collapsed in 1990, Russia’s importance as an export market for Polish goods has fallen significantly. From Q1 to Q3 2010, Russia ranked as Poland’s seventhlargest trading partner, receiving only 3.8 percent of its exports, according to Poland’s Central Statistical Office (GUS).

Germany, on the other hand, led the list with a 25.8 percent share of Polish exports, followed by France and the United Kingdom with 7.2 and 6.8 percent shares, respectively.

Holding grudges

Any improvement in these figures will not only be dependent on what makes business sense. Polish-Russian trade is unique in that it is also strongly influenced by the countries’ current political relations. “We observed it right after the Smolensk plane crash, when we saw a great warming of relations. However, right after our criticism of the Russian report into the crash, suddenly the Russians did not want to allow Polish transportation companies to enter the country,” said Wojciech BorodziczSmoliński, an analyst from the Center for International Relations in Warsaw. This latest dispute over transit permits was finally settled – but only after Polish trucks were turned away from the Russian border for eight straight days. With over 90 percent of Polish goods being delivered by semi truck, it is estimated to have cost the Polish freight industry over zł.30 million.

bilateral trade: russia

Made in Poland 2011

Union, on the other hand, only managed to secure half this figure. But although Russia may sometimes seem an unpredictable trading partner, the potential gains are too great for many to ignore. Polish companies have therefore learned to live with, and adapt to, the uncertainty of the Russian market. “Polish companies recognize Russia as a market of the future and Poles have a kind of special knowledge of how to work in an unfriendly investment environment,” Mr Borodzicz-Smoliński added.

Tipping the balance

Traveling in the opposite direction of Poland’s pharmaceutical exports are huge quantities of Russian gas and oil. Indeed, say the words “Russian trade” to a Pole and the second thing he or she might think of are the millions of cubic meters of oil and gas flowing into the country, providing the Kremlin with an uncomfortable amount of leverage over Poland’s economy. In 2009, Poland spent zł.27.7 billion on the purchase of Russian mineral products, including oil and gas, lubricants and other related materials – more than from any other country. It’s not surprising, therefore, that politically motivated disputes such as this have tarnished the image of Russia as a reliable trading partner. Polish companies are now somewhat nervous about sending their products eastwards to Russia. In 2009, the involvement of Polish companies in the Russian economy remained small in comparison to those of other countries, according to a survey conducted by the Polish Information and Foreign Investment Agency (PAIiIZ). In that year, 75 percent of all Polish companies surveyed were active in Germany, while 48 percent traded in the Czech Republic and 48 percent in Ukraine. However, only 33 percent of those questioned said they were active in Russia. “Political factors will affect Polish-Russian [trade] relations till the moment that Russia becomes a truly democratic state,” added Mr Borodzicz-Smoliński.

A worrying diagnosis

It’s something which causes anxiety in certain sectors of the Polish economy. In 2009, Russia was the fourth largest recipient of Polish pharmaceuticals, receiving products worth some zł.401.6 million, 8.4 percent of Poland’s total pharmaceutical exports, according to Poland’s Central Statistical Office. For some companies such as Polfa Warszawa, much of their business models rest on income from exports to Russia, and with it the ups and downs of Russian-Polish political relations. In 2008, Polfa Warszawa received 50 percent of its total export sales from Russia, Ukraine and Belarus. The European

In total, 92 percent of Poland’s gas comes from Russia – a dependence which tips the trading balance significantly in Russia’s favor. Year-on-year, Poland continues to add to its significant trade deficit with Russia, which has grown steadily from $530 million in 1997 to $7.82 billion in 2009, according to GUS figures. “This situation may change if Poland manages to develop substantial amounts of shale gas. In that case, Poland’s dependence on Russian gas imports could decline in the longrun,” said energy analyst Adnan Vatanser from the Carnegie Endowment, a foreign-policy think tank. Indeed, if the highest predictions for the amount of shale gas lying under Poland’s soil turn out to be accurate, the country could itself become a net exporter of gas.

Winds of change

Despite the sometimes negative aspects of trade with Russia, Polish exchange with its eastern neighbor is changing and improving year-on-year. In 2010, it rocketed by 40 percent, and it looks set to continue this trend in the coming years. Symbolic of this change is the opening of a new crossing point on the Polish-Kaliningrad border. With capacity for 4,000 vehicles, it is hoped that the crossing will at last put an end to the practice of smuggling Russian goods into Poland. Say the words “Russian trade” to a Pole in some years’ time then, and the images that come to mind may be altogether more positive. Andrew Shale

Made in Poland 2011

mister & junior of export competition

Warsaw Business Journal Group and the Polish Chamber of Commerce, under the patronage of the Economy Ministry, have undertaken a new initiative called the Polish Export Promotion Program, aimed at promoting Polish exporters and their products abroad. Through this project we will shine a spotlight on Poland’s export market, as well as the companies and products that it comprises, and draw attention to their achievements. The project includes two core events: publication of Made in Poland and the Mister & Junior of Exports Competition.

“Mister & Junior of Export 2011” competition under the patronage of the Ministry of Economy The competition for the title of the “Mister & Junior of Export 2011” is organized by the Polish Chamber of Commerce and Warsaw Business Journal.

RULES AND CONDITIONS §1 The objective of the competition is to distinguish products (goods or services) characterized by specific quality and economic value which serve as good examples of achievements in export. The competition is to serve as a means of promotion for these products and is to emphasize the role of export in the development of Poland’s economy. §2 Products submitted in the Mister of Export category must have been a subject of export for at least three years. Each exporter has the right to submit up to five products. §3 Products submitted in the Junior of Export category must have been a subject of export for at least one year. Each exporter has the right to submit up to five products. §4 All exporters of domestic products are eligible to participate in the competition. Participation in the competition is free of charge. §5 The main criteria for evaluating products submitted for the competition:

• value of exports of the product – 40% • level and innovativeness of the technical and technological solutions, and the originality of the solutions – 30% • growth (in relation to previous years)*, export prospects and sales markets – 20% • competitiveness of the product on the external market (price, functionality and aesthetics of the product) – 10% §6

The competition is divided into two stages: 1. During the first stage the commission will examine the submitted forms for formal approval and will designate a group of products to be evaluated by the jury of the competition 2. During the second stage the jury will select the winners of the competition among all those that qualify for the final.

mister & junior of export competition

Made in Poland 2011

§7 Members of the jury of the competition are appointed by the Chairman of the Polish Chamber of Commerce. The jury of the competition can ask for opinions from experts to evaluate the selected products. §8 The jury of the competition grants the winners of the competition the following titles:

• Mister of Export • Vice-Mister of Export • Junior of Export §9

1. The winner of the Mister of Export category will receive:

• The title “Mister of Export 2011”, • The statuette “Mister of Export 2011”, • A cash prize of zł.20,000 and a letter of congratulations from the Economy Minister,

2. The winner of the Vice-Mister of Export category will receive:

• The title “Vice-Mister of Export 2011”, • A cash prize of zł.10,000 and a letter of congratulations from the Economy Minister.

3. The winner of the Junior of Export category will receive:

• The title “Junior of Export 2011”, • A cash prize of zł.10,000 and a letter of congratulations from the Economy Minister.

The jury of the competition, depending on the results of the final evaluation of the products, will decide during a plenary session on the number and type of granted titles, awards and distinctions. §10 All products taking part in the final phase of the competition which received an award or a distinction have the right to use the title: “Winner of the Mister and Junior of Export 2011 Competition”. §11 The announcement of the results of the competition and the handing out of the awards will take place in June 2011, during a gala in Warsaw. §12 Entering the competition: All detailed information concerning the competition, including the registration form, can be found on the following websites: www.kig.pl, www.wbj.pl The registration form (one registration form for each individual product), together with the required documents must be delivered before April 30, 2011 to the following address: Polish Chamber of Commerce 00-074 Warsaw, ul. Trębacka 4, room 303 with the annotation: “Mister & Junior of Export 2011 Competition” The jury of the competition can request the presentation of a model of a product submitted to the competition. In such a case, the date and place of delivery of the model of the products submitted to the competition should be settled with the appropriate responsible persons. Responsible persons: Bogdan Galewski tel.: (22) 63 09 666 bgalewski@kig.pl

Żanna Szulc-Stronczyńska tel.: (22) 63 09 668 zstronczynska@kig.pl

*does not apply to applications in the Junior of Export category

Made in Poland 2011

mister & junior of export competition

Registration Form mister & junior of export page 1

Product name, product group

Producer’s name

Producer’s address

Exporter’s name

Exporter’s address

7 8

Annual production volume of product (according to 2010 annual report)

In units (unit name) 10

Value of export of the given product in 2010

Countries to which the product is exported

Percentage share of the product export in relation to company’s total exports

Value in złoty mln

Export growth compared to previous years* Unit price of export in złoty

Product age

Since when has the current version been produced? When was export started? Product data

Was the product created with participation of industrial designers, experts on ergonomics?

Is the product the original solution of the producer?

What kind of certificates, attestations or awards has the product received?

Does the product have a quality certificate?

Does the product have an opinion from a KIG division or a sector chamber of commerce?

Does the product have an opinion from experts, and if yes, what kind of experts?

* does not apply to registration in the Junior of Export category

Producer (director’s signature and company stamp)

mister & junior of export competition

Made in Poland 2011

Registration Form mister & junior of export page 2

Product name: Producer name: Exporter name:

Picture of the registered product or a description of the service in the form of a print-out or recorded on electronic media (CD, DVD)

Producer (directorâ&#x20AC;&#x2122;s signature and company stamp)

Made in Poland 2011

useful contacts

Chambers of Commerce Address

Tel. Fax

E-mail Website

Top executive Title

ul. E. Plater 53 00-113 Warsaw

22 520-5999 22 520-5998

office@amcham.com.pl www.amcham.com.pl

Józef Wancer Chairman

British-Polish Chamber of Commerce

ul. Fabryczna 16/22 00-446 Warsaw

22 320-0100 22 621-1937

info@bpcc.org.pl www.bpcc.org.pl

Martin Oxley CEO

Czech-Polish Chamber of Commerce

ul. Janackova 10 702 00 Ostrava, Czech Republic

(+420) 596-612-230 (+420) 596-612-231

cpok@opolsku.cz www.opolsku.cz

Magdalena Holeksová Director

French Chamber of Commerce and Industry in Poland

ul. Widok 8 00-023 Warsaw

22 696-7580 22 696-7590

ccifp@ccifp.pl www.ccifp.pl

Monika Constant General Director

German-Polish Chamber of Industry and Commerce

ul. Miodowa 14 00-246 Warsaw

22 531-0500 22 531-0600

info@ahk.pl www.ahk.pl

Lars Bosse CEO

Irish Chamber of Commerce in Poland

ul. Mysia 5 00-496 Warsaw

22 690-6880 22 690-7590

office@icc.nazwa.pl www.icc.org.pl

Kenny Morgan President

Netherlands-Polish Chamber of Commerce

ul. Jana Pawła II 29 00-867 Warsaw

22 653-7885 22 653-7874

office@nlchamber.com.pl www.nlchamber.com.pl

Eric Drok Chairman

Polish-Azeri Chamber of Commerce and Industry

ul. Św. Jana 55 42-200 Częstochowa

34 361-4651 34 361-3126/18

paig@bigduo.pl www.paig.bigduo.pl

Witold Piecuch CEO

Polish-Belarusian Chamber of Commerce and Industry

ul. Kopernika 30 00-336 Warsaw

22 828-5102 22 828-5101

info@pbihp.pl www.pbihp.pl

Józef Łochowski CEO

Polish - Bulgarian Chamber of Commerce

ul. Bobrowiecka 4A 00-728 Warsaw

22 642-6960 22 642-6960

biuro@pbih.com.pl www.pbih.com.pl

Vladislav Angelov President

Polish-Canadian Chamber of Commerce

ul. Pulawska 300A 02-819 Warsaw

22 697-6888 22 697-6886

pccc@pccc.pl www.pccc.pl

Michael Miasek President

Polish-Indian Chamber of Commerce

ul. Bukowska 12 60-810 Poznań

61 610-1316 61 610-1318

biuro@piig-poland.org www.piig-poland.org

Ryszard Sznajder President

Polish-Italian Chamber of Commerce

ul. Kredytowa 8/26 00-062 Warsaw

22 828-2008 22 826-0936

sekretariat@cciip.pl; www.cciip.pl

Donato Di Gilio CEO

Al. Niepodległości 69 02-626 Warsaw

22 322-7667 22 322-7667

info@ppcc.pl www.ppcc.pl

Pedro Pereira da Silva Chairman

Polish-Russian Chamber of Commerce and Industry

ul. Zimna 2/2 00-138 Warsaw

22 654-7373 22 654-7388

prihp@prihp.com.pl www.prihp.com.pl

Hanna Wielgosz CEO

Polish-Spanish Chamber of Commerce

ul. Arabska 9 03-977 Warsaw

22 511-1570 22 511-1571

phig@phig.pl www.phig.pl

Stefan Bekir Assanowicz CEO

Polish-Swedish Chamber of Industry and Commerce

ul. Chmielna 101/102 80-748 Gdańsk

58 763-1469 58 768-1480

psig@psig.com.pl www.psig.com.pl

Tadeusz Iwanowski CEO

Polish-Swiss Chamber of Industry and Commerce

Al. Jana Pawła II 15 00-828 Warsaw

22 697-7979 22 697-7980

swisschamber@swisschamber.pl www.swisschamber.pl

Marek Kondrat President

ul. Smocza 27 01-048 Warsaw

22 652-1619 22 652-1622

office@ptcoc.eu www.ptcoc.eu

Marek Nowakowski CEO

Polish-Ukrainian Chamber of Commerce

ul. Mazowiecka 2/4 00-048 Warsaw

22 828-0081 22 827-0079

puig@puizba.pl www.puizba.pl

Jacek Piechota President

Scandinavian-Polish Chamber of Commerce

ul. Wiśniowa 40B/9 02-520 Warsaw

22 849-7414 22 646-4930

spcc@spcc.pl www.spcc.pl

Carsten Nilsen Chairman

Name

American Chamber of Commerce

Polish-Portuguese Chamber of Commerce

Polish-Turkish Chamber of Commerce

useful contacts

Made in Poland 2011

government agencies Address

Tel. Fax

E-mail Website

Top Executive

Agency for Restructuring and Modernisation of Agriculture

ul. Poleczki 33 02-822 Warsaw

0-800-380-084 22 318-5330

info@arimr.gov.pl www.arimr.gov.pl

Tomasz Kołodziej

Agricultural Property Agency

ul. Dolańskiego 2 00-215 Warsaw

22 635-8009 22 635-0060

anr@anr.gov.p www.anr.gov.pl

Tomasz Nawrocki

Al. Niepodległości 208 00-925 Warsaw

22 608-3000 22 608-3860

dane@stat.gov.pl www.stat.gov.pl

Józef Oleński

Al. Ujazdowskie 1/3 00-583 Warsaw

22 694-6000 22 625-2637

kontakt@kprm.gov.pl www.kprm.gov.pl

Tomasz Arabski

ul. Długa 38/40 00-238 Warsaw

22 536-1300 22 635-6194

inspektorat@gis.gov.pl www.gis.gov.pl

Andrzej Wojtyła

ul. Świętokrzyska 12 00-916 Warsaw

22 694-5555 22 694-4303

kancelaria@mofnet.gov.pl www.mf.gov.pl

Jacek Kapica

ul. Wspólna 30 00-930 Warsaw

22 623-1000 22 623-2750

kancelaria@minrol.gov.pl www.minrol.gov.pl

Marek Sawicki

Ministry of Economy

Pl. Trzech Krzyży 3/5 00-507 Warsaw

22 693-5000 22 693-4046

mg@mg.gov.pl www.mg.gov.pl

Waldemar Pawlak

Ministry of Labour and Social Policy

u. Nowogrodzka 1/3/5 00-513 Warsaw

22 661-1000 22 661-1336

info@mpipis.gov.pl www.mpips.gov.pl

Jolanta Fedak

ul. Wspólna 2/4 00-926 Warsaw

22 461-3000 22 461-3275

uwagi.do.mrr@mrr.gov.pl www.mrr.gov.pl

Elżbieta Bieńkowska

Ministry of Treasury

ul. Krucza 36/Wspólna 6 00-522 Warsaw

22 695-8000 22 628-0872

investor@msp.gov.pl www.msp.gov.pl

Aleksander Grad

National Bank of Poland

ul. Świętokrzyska 11/21 00-919 Warsaw

22 653-1000 22 620-8518

listy@nbp.pl www.nbp.pl

Marek Belka

National Labour Inspectorate

ul. Krucza 38/42, Warsaw 00-926 Warsaw

22 420-3731 22 625-4770

kancelaria@gip.pl www.pip.gov.pl

Tadeusz Jan Zając

Polish Agency for Enterprise Development

ul. Pańska 81/83 00-834 Warsaw

22 432-8080 22 432-8620

biuro@parp.gov.pl www.parp.gov.pl

Bożena Lublińska-Kasprzak

Polish Information and Foreign Investment Agency

ul. Bagatela 12 00-585 Warsaw

22 334-9800 22 334-9889

post@paiz.gov.pl www.paiz.gov.pl

Sławomir Majman

Polish National Police

ul. Puławska 148/150 02-624 Warsaw

22 621-0251 22 601-2921

sip@policja.gov.pl www.policja.pl

Andrzej Matejuk

Polish Tourist Organisation

ul. Chałubińskiego 8 00-613 Warsaw

22 536-7070 22 536-7004

pot@pot.gov.pl www.pot.gov.pl

Rafał Szmytke

Public Procurement Office

ul. Postępu 17a 02-676 Warsaw

22 458-7702 22 458-7700

sekretariat@uzp.gov.pl www.uzp.gov.pl

Jacek Sadowy

Social Insurance Institution

ul. Szamocka 3, 5 01-748 Warsaw

22 667-1000 22 667-1418

www.zus.pl

Supreme Chamber of Control

ul. Filtrowa 5/7 02-056 Warsaw

22 444-5000 22 444-5793

nik@nik.gov.pl www.nik.gov.pl

Jacek Jezierski

The Office of Competition and Consumer Protection

Pl. Powstańców Warszawy 1 00-950 Warsaw

22 556-0800 22 826-6125

uokik@uokik.gov.pl www.uokik.gov.pl

Małgorzata KrasnodębskaTomkiel

The Patent Office of the Republic of Poland

Al. Niepodległości 188 / 192 00-950 Warsaw

22 579-0000 22 579-0001

informacja@uprp.pl www.uprp.pl

Alicja Adamczak

Name

Central Statistical Office

Chancellery of the Prime Minister

Chief Sanitary Inspectorate

Customs Service Ministry of Agriculture and Rural Development

Ministry of Regional Development

Zbigniew Derdziuk

importer/exporter events

Made in Poland 2011

EVENTS FOR IMPORTERS and EXPORTERs Date

Event

Description

Website

May 12-15, 2011

Targi Techniki Motoryzacyjnej

TTM is the largest automotive technology fair in Poland and is targeted at professionals from the automotive industry.

http://ttm.mtp.pl/pl

May 25-27, 2011

Home Decor i Luminexpo

Home Decor is the largest fair dedicated to the interior design and fittings industry in the region.

http://www.homedecor.pl/pl

June 1-2, 2011

7th edition of AutoEvent

AutoEvent is the biggest and the most substantive annual conference of the automotive industry in Poland and in Central and http://www.autoevent.pl Eastern Europe.

June 14, 2011

Mister and Junior of Export Competition Gala

The Mister and Junior of Export awards will be handed out at a festive gala, organized by the Polish Chamber of Commerce (KIG) in cooperation with Warsaw Business Journal.

http://www.wbj.pl

June 14-17, 2011

ITM Poland

ITM Poland – the largest fair of modern technologies for industry in Poland.

http://technologie.mtp.pl/en

July 14-16, 2011

INNOPROM

INNOPROM presents advanced technologies developed in Russia which are ready to be used in industry, to facilitate the spreading of the best innovation practices and developing business connections between industrial enterprises and technology developers.

http://www.innoprom.org

August 30 – September 1, 2011

The BTS Exhibition of Shoes, Leather and Leather Goods

The BTS Exhibition of Shoes, Leather and Leather Goods features trends for autumn and winter 2011/2012.

http://bts.mtp.pl/pl

August 30 – September 1, 2011

The NEXT SEASON Exhibition of Clothing, Lingerie and Accessories

The NEXT SEASON Exhibition of Clothing, Lingerie and Accessories features trends for fall-winter 2011/2012.

http://nextseason.mtp.pl/pl

September 4-7, 2011

Autumn Fair International

Autumn Fair International is the biggest show of its kind during the third quarter, and is the most important buying opportunity for retailers seeking fast-moving items for the festive season and beyond.

http://www.autumnfair.com

September 5-8, 2011

MSPO Expo “International Defence Industry Exhibition”

MSPO Expo is one of Europe’s largest and most important events dedicated to the defense industry.

http://www.targikielce.pl

September 8-18, 2011

İzmir International Fair

İzmir International Fair is the oldest trade show in Turkey with various product groups.

http://ief.izfas.com.tr

September 12-15, 2011

Polagra-Food

Food sector specialists from the country and abroad will meet in Poznań for the 26th time.

http://www.polagra-food.pl/pl

September 12-15, 2011

Polagra-Tech

International Trade Fair of Food Processing Technologies Polagra-Tech is the most important trade meeting of its type Central and Eastern Europe.

http://www.polagra-tech.pl/pl

September 13-16, 2011

World Food Moscow 2011

The leading international exhibition for food products in Russia takes place in the centre of Moscow city.

http://www.world-food.ru/eng

September 14-18, 2011

Zagreb International Autumn Fair, Zagreb, Croatia

Zagreb International Autumn Fair is a group of specialized fairs on topics including energy, ecology, innovation, construction and transport.

http://www.zv.hr

October 5-7, 2011

WorldHotel 2011

WorldHotel aims to present a full and diverse offering of products, services and solutions for lodging houses of different standards.

http://www.targiwarszawa.com

October 6-9, 2011

EXPOPHARM

Visitors from Germany and abroad can explore topics beyond drugs and medicines designed especially for self-administration to include pharmaceutical services, cosmetics, homeopathy, pediatrics and food supplements.

http://www.expopharm.de

October 8-12, 2011

Anuga Food Fair

The world’s leading food fair for the retail-trade and the foodservice and catering markets.

http://www.anuga.com

November 18-20, 2011

BOATSHOW

BOATSHOW is one of the biggest events presenting yachts, motorboats, sailing and water sports equipment in Poland.

http://www.boatshow.pl

partners

Made in Poland 2011

Partners KPMG KPMG is one of the largest networks of professional firms worldwide. In 146 countries KPMG member firms provide Audit, Tax and Advisory services. Our greatest asset is the expertise of 140,000 of KPMG employees worldwide. KPMG was among the first professional firms to establish itself in Poland, opening its office in Warsaw in May 1990. In response to the high demand for professional services in audit and advisory, we have opened five regional branches within Poland in Kraków, Poznań, Wrocław, Gdańsk and Katowice. KPMG in Poland employs almost 1,200 staff. We advise Polish and multinational corporations and organisations in all sectors of the economy, particularly in finance, insurance, pharmaceuticals, the trade and manufacturing of consumer goods and industrial goods, information, communications and entertainment, public administration and SMEs. Why KPMG? Our member firms around the world have high corporate standards of service. We have a team of outstanding advisers, comprising hundreds of experienced professionals. Our professionals have extensive experience and know-how in their respective industries. We build close relationships with our clients based on regular communication, deep knowledge of our client’s business and understanding of their expectations. We have a strong set of values and transparent communication between KPMG personnel and our clients. We aim to share information, assist in practical implementation of strategies and in interpreting the law and tax regulations. Our advisers are recognised for their thought leadership in trade organisations and in the media. KPMG in Poland ul. Chłodna 51, 00-867 Warszawa Tel. +48 (22) 528-1100 Fax +48 (22) 528-1009 http://www.kpmg.pl kpmg@kpmg.pl

The Polish Chamber of Commerce (Krajowa Izba Gospodarcza, KIG) Since 1990 the Polish Chamber of Commerce has been working primarily for small and medium-sized enterprises, representing their interests at home and abroad. It brings together over 150 local chambers of commerce. The mission of the Polish Chamber of Commerce can be summarized in the slogan: “We care about entrepreneurship.” This care is demonstrated on many levels. First of all, we represent Polish entrepreneurs in their relations with the President of the Republic of Poland, the government, Parliament and local authorities. We review all draft legislation affecting the economy and business activities. In this area, KIG depends on the opinions of its members, especially chambers of industry and experts cooperating with us. Another area of KIG’s activity is to provide services to entrepreneurs in such areas as law, training and consultancy. We confirm and issue business documents and certificates. We also contribute to the competitiveness of the Polish economy through the use of EU structural funds for entrepreneurs. Services related to entering business in foreign markets occupy a special place in KIG’s activities. We provide training to help businesses prepare to do business in foreign countries. We also organize several international trade missions and trade-fair presentations, which are an excellent opportunity to establish business contacts. The headquarters of the Polish Chamber of Commerce welcomes many delegations of foreign politicians and businesspeople who are looking for partners. Krajowa Izba Gospodarcza ul. Trębacka 4, 00-074 Warszawa Tel.: +48 (22) 630-9600 Fax: +48 (22) 827-4673 www.kig.pl kig@kig.pl

Made in Poland 2011

partners

The National Council of Agriculture Chambers (Krajowa Rada Izb Rolniczych) www.krir.pl The National Council of Agriculture Chambers is the national representation of all agricultural chambers in Poland. It consists of presidents of the agricultural chambers and one delegate from each chamber. The council makes important decisions for the local agricultural chambers. The main and basic task of these chambers is to act to solve the problems of and represent the interests of their members. The agricultural chambers influence the shape of agricultural policy and participate in its execution. The Polish Chamber of the Automotive Industry (Polska Izba Motoryzacji) www.pim.pl The Polish Chamber of Automotive Industry was established in 1994 and consists of representatives of the wider automotive industry lobby. We represent companies of the automotive sector, including leading car dealers, authorized service, parts and components manufacturers, distributors of garage equipment, professional organizations, certification companies, auto-industry media, and the automotive sector associations. We bring together both small and large businesses and associations in Poland. The Polish Chamber of National Defense Manufacturers (Izba Prodcentów na Rzecz Obronności Kraju)

The Polish Pasta Chamber (Polska Izba Makaronu) www.makarony.org The Polish Pasta Chamber was established in 1997 as a representative of pasta manufacturers to cooperate with government administration. The tasks of the organization include active involvement and cooperation with government administration in the field of legislation concerning the production and marketing of pasta, as well as undertaking joint marketing and promotional activities, publishing activities and information and participation in food fairs. The chamber brings together 21 producers of pasta in Poland. The Polish Chamber of the Shoe and Leather Industry (Izba Przemysłu Skórzanego) www.pips.pl The Polish Chamber of the Shoe and Leather Industry is a non-profit trade association representing the Polish footwear and leather industry. We bring together footwear manufacturers, leather goods and clothing producers, tanneries, suppliers of chemicals, accessories, and machines, among others. We cooperate closely with Polish trade press and research institutes. The main aim of our organization is the support for the Polish footwear and leather industry and its effective promotion in Poland and on the international markets. Internet portals cooperating with Made in Poland: Cosmetics sector partner: http://kosmetologia.com.pl

www.przemysl-obronny.pl The Polish Chamber of National Defence Manufacturers brings together 147 state-owned and private enterprises. They include giants such as Bumar, Polish Operator, SA Mesko and Radwar, as well as small businesses. The chamber represents the sector to the govenrment, organizes training sessions for its members, works to help its members increase the technical level of their products, facilitates cooperation between members, encourages increased production, and encourages the restructuring and modernization of the industry.

Agricultural sector partner: http://kulturawsi.pl

Furniture sector partner: http://meble.pl

index

A ATK AutomotiveSuppliers.pl Autosan

J 32 45 45

B Balt Yacht 53 74 Bank BPH 8 Bank Zachodni WBK 73 BASF 73 Bayer 47 Bell 55 Beneteau Group 40 Black Red White Group 22, 29, 30, 32, 33, 87 Bumar 60 Business Monitor International

C Citi Handlowy CJSC ZAZ Covec

10 44 70

Dacia Danske Bank Dax Cosmetics Delphia Yachts Doramm Dr Irena Eris

42 18, 19 47, 48, 50, 51 53 52 22, 47, 48

F Faurecia Poland Fiat Finmeccanica Fluor SA Food Service Frost & Sullivan FSO

46 43, 44 33 67 24 59 44, 45

G Galeon GlaxoSmithKline GM Grupa Kęty

53, 54 59 44 74

I IKEA IMS Health Inglot Inter Cars

Index

Jelfa Johns Hopkins University

58 67

K Kama Yachts Kolastyna KPMG

54 47 13, 14, 16

L Levi’s Lockheed Martin

34, 37 32

M MAN Meble Kler Metro Group Mirage Moda.com.pl Moody’s

39 59 47, 48, 50 46

NG2 Nissan Nitro-Chem Nowy Styl Group

73 40 73 53 37 18

Samar 44, 45 87 SA Mesko 58 Sanitas Group 53 Sasanka 40 Sato Office 73 Siemens 32 Sikorsky Aircraft 53 Skipper Yachts 53 Ślepsk 28 Sobieski 22, 43, 45 Solaris 47 Soraya 24 Spółdzielnia Mleczarska “Mlekovita” 24 Spółdzielnia Mleczarska w Łapach 22, 53, 54, 55 Sunreef Yachts 39 Swedwood

T 36 45 32 40, 41

Tes Yacht TRW Polska

United Technologies Corporation UPS Polska

Valeo Volkswagen

W 32 59 24 58, 78 87 47 22, 58 32

R Radmor Radwar Redan Renault Robert Bosch

32 87 34, 35 42 73

53 46

Oceanic 47, 48, 50 Okręgowa Spółdzielnia Mleczarska w Łowiczu 24 Orlen 74 Ostróda Yacht 53, 55

PCO PharmaExpert PKM Duda Polfa Warszawa Polish Operator Pollena Eva Polpharma PZL Mielec

21 73

ROHLIG SUUS Logistics RWE

Made in Poland 2011

32 21, 67

WB Electronics Wielton Wittchen Wix-Filtron

46 73

32 45 35, 36, 37 46

X X-Trade Brokers X-Yachts

11, 18, 19 53, 54

Z Zakłady Mięsne Łmeat-Łuków Ziaja ZM Bumar-Łabędy Żubrówka

24 47 30 28

presents

Investing in Poland 2011 Part of Warsaw Business Journalâ&#x20AC;&#x2122;s series of business guides

presents

Forr in Fo inve investment vest ve s meent st nt new news ws an and nd anal analysis, a ys y iss, visit: v www.investinginpoland.wbj.pl To order a print copy or CD-ROM version of the publication, e-mail kwilinski@valkea.com or call +48 (22) 639 85 67 ext. 208