Made in Poland 2012

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Warsaw Business Journal’s Made in Poland 2012

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MADE IN POLAND 2012

TABLE OF CONTENTS

MADE IN POLAND 2012 Table of Contents

Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Heavy Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44-48

From the Ministries

High-Tech. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49-53

Ministry of Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Outsourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54-57

Ministry of Foreign Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Pharmaceuticals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58-63

Ministry of Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Resources Poland’s 50 Largest Exporters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64-67

Interview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7

Government Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Calendar of Events for Exporters and Importers. . . . . . . . . . . . . . . . . . . . 8-9

Partners

Macroeconomics

Chambers of Commerce

Economic Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Exports and Poland’s Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

The Polish chamber of Commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

The Złoty and Polish Exports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

The Polish Chamber of Commerce for Importers, Exporters and Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Bilateral Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

The American Chamber of Commerce in Poland. . . . . . . . . . . . . . . . . . . 70

From the Chambers of Commerce

The British Polish Chamber of Commerce. . . . . . . . . . . . . . . . . . . . . . . . . 70

French Chamber of Commerce and Industry in Poland. . . . . . . . . . . . . . . 14

The French Chamber of Industry and Commerce in Poland. . . . . . . . . 70

German-Polish Chamber of Industry and Commerce. . . . . . . . . . . . . . . . .14

The German-Polish Chamber of Commerce. . . . . . . . . . . . . . . . . . . . . . . 70

American Chamber of Commerce in Poland. . . . . . . . . . . . . . . . . . . . . . . . .15

Industry Chambers

British Polish Chamber of Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

The National Council of Agriculture Chambers. . . . . . . . . . . . . . . . . . . . 71

List of Major Bilateral Chambers of Commerce in Poland. . . . . . . . . . . . . 16

The Polish Chamber of the Automotive Industry. . . . . . . . . . . . . . . . . . . 71

Sector Analyses

The Polish Chamber of National Defense Manufacturers. . . . . . . . . . . . 71

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

The Polish Pasta Chamber. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Automotive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-21

The Polish Chamber of the Shoe and Leather Industry. . . . . . . . . . . . . . 71

Chemicals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22-25

Websites

Clothing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-29

Kosmetologia.com. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Cosmetics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-33

Kulturawsi.com. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34-38

Meble.pl. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39-43

Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

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FOREWORD

MADE IN POLAND 2012

countries, and the results are delicious. Polish cosmetics, long known for their quality in Russia, are now making inroads in markets in Western Europe and the Americas, since they are priced competitively compared with well-known international and local brands.

Andrew Kureth Editor-in-Chief Warsaw Business Journal Group

Dear readers,

oland once again looks set for strong growth as Made in Poland 2012 goes to press. While the expansion of gross domestic product that is predicted for the country this year (around 3 percent) doesn’t match the 4.3 percent growth achieved in 2011, it still outstrips the growth expected in much of Europe. Despite slowing domestic consumption, foreign investment continues apace. Poland remains one of the most positive economic stories in the world.

One of the brightest spots is set to be Poland’s export market. Polish exports grew by 12.8 percent in 2011, and Poland’s Ministry of Economy expects them to grow by 7.7 percent this year, despite the euro-zone crisis. The weaker złoty continues to point to relatively good prospects for Polish exporters. Much of that success can be put down to the competitiveness of Polish exporters. Time and again we see Polish exporters offering high-quality products and services at prices that Western competitors can’t match. Polish food – from fruits and vegetables, to meat, to dairy products – can be produced at a fraction of the cost it takes to do so in neighboring

But it’s not just in industries that have been the country’s traditional strengths where Polish exporters are making their presence felt. They are also finding success in industries that you might not expect, such as clothing, defense and innovative technologies. Top-quality Polish leather goods share store shelves with chic Italian brands, Polish arms producers provide weapons to some of the world’s biggest militaries, while Polish software is helping to run businesses throughout Europe. So it is also diversity that is proving an advantage of the Polish export market, and is undoubtedly another driver of its growth. Poland has plenty of areas where it can improve, of course, and promotion of Polish exports is one of them. The government has taken important steps in this direction, especially during its six-month presidency of Council of the European Union at the end of 2011, when it showcased Polish exports, such as its agricultural products, at various events. With this publication, as part of the Polish Export Promotion Program – a joint initiative between Warsaw Business Journal Group and the Polish Chamber of Commerce – we also hope to do our part. Made in Poland 2012 is a one-ofa-kind resource that puts in-depth analysis of Poland’s most important export sectors alongside economic analysis, data, profiles of trade relationships with key international partners and crucial information for foreign firms interested in buying Polish products. The aim is to give potential importers of Polish goods all the information they need to find the right Polish product and partner to help their business. As we hope you’ll find in the following pages, Poland’s exporters have much to offer and will certainly make good business partners. With any luck, their success will be yours as well. v

MADE IN POLAND 2012

FROM THE MINISTRIES

Our goal is to make the Polish economy brand a reality accepted by a wide range of stakeholders who can identify with it. This in turn will contribute to creating a positive image of the Polish economy. The aim of our activities are formulated in these mission statements: • Increase foreign direct investment • Increase Polish exports of goods and services

Statement from the Ministry of Economy

here are now thousands of Polish products on world markets. However, very few people are actually aware that they come from Poland. For this reason our aim at the Ministry of Economy is to build a strong Polish brand abroad and increase the attractiveness of investments in our country.

In 2010 we began the implementation of the project “Promotion of the Polish economy in international markets.” As part of this initiative we selected 15 industries relevant to Polish exports. For each industry, we then created an individual program for promotion. The selected industries include: biotechnology and pharmaceutical industries; clothing, accessories, and leather goods; construction; cosmetics; defense; furniture; industrial protection and preservation of monuments; IT services and ICT; jewelery (amber); manufacture of medical equipment and instrumentation; manufacture of windows and doors; medical tourism; mining machinery and equipment; Polish food specialties; and the production of yachts and recreational boats. Our aim is that in just a few years’ time at least some of the promoted industries will have become “flagship” brands, which are positively associated with Poland. But we also believe that all of these industries have the potential to become Polish export hits in the future. All of the aforementioned trade promotion programs consist of two components. Firstly, the cooperation of entrepreneurs in promotional venture fairs or trade shows, and secondly, promotional activities that advertise the industry as a whole.

• Increase the position of Polish brands in the international arena As part of our promotional campaign we decided to investigate how foreign investors see Poland, as well as how Polish entrepreneurs perceive their position abroad. To achieve this aim we employed experts to develop a coherent approach to promoting the Polish economy. Based on the results of our research a new logo has been developed to promote the Polish economy. The new logo for the Polish economy incorporates the national colors, white and red, a network of people, who are arranged in the letter ‘P’, and the inscription “Poland,” for which a specially designed soft font was selected. The logo will allow for the creation of attractive promotional material for the Polish economy. The studies conducted by the Ministry of Economy also showed that the most important asset of the Polish economy is its people, in terms of their knowledge, skills and willingness to cooperate. Poles are viewed in a very positive light, as skilled professionals. In other words, Poland’s greatest strength is the talent of its population. Polish entrepreneurs also see the need for consolidation of promotional activities in Poland. In addition, they realize that just as the Polish economic brand can help them, they can also help support its development. The vast majority are also keen to help promote the Polish brand. If our greatest asset in the business world is us, the Polish people, then we need to proudly represent our brand as its ambassadors. Whereas in the past we were a little self-conscious, now we can do this with much greater confidence. The combination of different types of Polish talent, in different economic sectors, both at home and abroad, creates a positive and lasting image of Poland as a country where, and with whom, it is worth collaborating and carrying out business. v

FROM THE MINISTRIES

MADE IN POLAND 2012

field of environmentally friendly technologies â&#x20AC;&#x201C; namely the GreenEvo Green Technology Accelerator scheme. Polish companies in this sector make up an increasingly important group of businesses that are able to succeed in high-tech markets. Promoting the scientific and technological potential of the Polish economy and increasing the participation of Polish enterprises in the international exchange of technological ideas are key examples of economic diplomacy priorities. Statement from the Ministry of Foreign Affairs

or many years economic issues have remained within the scope of the Ministry of Foreign Affairs and its subordinate institutions. The promotion and protection of the economic interests of Polish enterprises operating in foreign markets is one of the main tasks of economic diplomacy established pursuant to the 2006 agreement between the Minister of Economy and Minister of Foreign Affairs. Direct representation of Polish exporters and investors, the presentation of their offers and meetings with potential foreign partners are gaining a permanent place in the official role of the ministry.

The sectors with the best-known brands on foreign markets include automotive, chemicals, clothing, construction, creative industries and modern design, the food industry, pharmaceuticals, telecommunications, as well as transport and logistics. For several years, the Ministry of Foreign Affairs has assisted the Ministry of Environment by supporting its initiatives to promote companies making use of advanced solutions in the

Companies from numerous sectors, operating across dozens of countries, are offered diplomatic support for specific projects that are important to the economy. Many of them are focused on eastern markets (mainly Belarus, Russia, Ukraine). This is the essence of diplomatic support, as the most worthwhile activities are conducted in markets where governments play a key role in decisions concerning trade and investments. It is essential to maintain regular contacts with companies and economic organizations. Such contacts help understand any existing impediments or barriers to international trade and, consequently, suggest means of adequate support to be provided by the ministry and its economic diplomacy arm. The appointment of the Consultative Council for Foreign Economic Policy at the Ministry of Foreign Affairs, in autumn 2008, helps support this aim. Representatives from leading economic organizations, economic research centers, business associations, and institutions offering financing were invited to promote trade and investment projects abroad. The Council provides a forum for the presentation of opinions and the exchange of information on economic issues that often represent challenges for foreign policy and economic diplomacy. At the same time, it serves as a platform to discuss activities and initiatives in the sphere of economic cooperation with foreign countries. v

MADE IN POLAND 2012

FROM THE MINISTRIES

markets has proven to be good news for Poland, with 27 percent of our agricultural production now being sent to foreign customers.

Marek Sawicki, Minister of Agriculture and Rural Development

efore Poland’s accession to the EU in 2004, no one expected that Polish agri-food products would be the only commodity group to produce a positive balance in foreign trade every year. Added to this success is the constantly increasing value of Polish food exports. According to preliminary data, we expect that for the year 2011 this figure will exceed E14 billion, a positive balance of E3 billion.

EU countries continue to be our biggest consumers, while Germany, as our closest neighbor, is our most important export market. During our recent presidency of the EU Council, we conducted intensive promotional activities in Brussels to advertise Polish products including Kashubian strawberries, Łącko apples and St. Martin sweet rolls. At every opportunity our campaign, “Know Good Food,” put food products of the highest quality in the spotlight. Today, long distances are no longer a major issue; the modern world is becoming much smaller. The opening up of new

One of the ministry’s most important tasks is to determine and agree on conditions for access to specific markets. Conditions of access for Polish food products to markets such as China, Japan, Singapore and Vietnam have already been agreed upon. Last year a significant increase in exports to Turkey was recorded, while exports to the United Arab Emirates were resumed. In March last year, the Association of Butchers and Meat Producers of the Republic of Poland signed a deal with the Agricultural Market Agency to carry out a two-year promotional campaign in five markets – China, Russia, Singapore, Thailand and Ukraine. This is a continuation of a previous promotional campaign aimed at markets in China, Japan, Russia and Ukraine entitled, “Meat and food preparations based on this ingredient – tradition and taste.” The promotional campaign concerns fresh, chilled or frozen meat and meat products, including fresh, chilled or frozen beef, veal and pork entitled, “The European table – tradition, modernity, quality.” The Union of Producers and Employers of the Meat Industry (UPEMI) also leads a promotional campaign called, “Tradition, quality and the taste of Europe,” which is carried out in three markets: South Korea, the United States and Vietnam. I am convinced that these campaigns are helping to increase understanding among Polish exporters and this improvement in knowledge about Polish products will soon contribute to a marked increase in interest in our products, not only in Asia but also in other parts of the world. v

INTERVIEW

MADE IN POLAND 2012

LOOKING FOR A STRATEGY Poland’s image and that of its companies and products is getting increasingly good reviews abroad, but much work has to be done before the country and its firms can boast a unified and effective promotion strategy, says Andrzej Arendarski, president of the Polish Chamber of Commerce (KIG) MiP: What do you see as the biggest challenges for Polish exporters?

seemingly still far from being resolved, is that position changing?

Andrzej Arendarski: The biggest challenge for Polish exporters is the dispersion of programs to support the internationalization of their activities, as well as the lack of a coherent promotional strategy for the country. Entering foreign markets necessitates creating an export strategy, conducting expensive market research and becoming familiar with a number of provisions of the destination country. All these requirements create significant financial and organizational barriers for businesses, and especially for SMEs.

The implementation of the euro requires analysis. The most important matter will surely be the negotiation of an appropriate reference exchange rate of our currency to the euro. This will determine, to a large extent, the development of the Polish economy. On the one hand, the lack of a common currency clearly helped exporters during times of crisis due to the weakening of the złoty. But on the other hand, currency fluctuations represent a high risk for all companies.

The National Chamber of Commerce takes a number of measures to support companies in their export activities and help them to overcome these barriers. But we believe it is essential to increase the interest of the Polish government in this regard. Discussion on a promotional strategy for the country, and identifying an entity that would coordinate and realize it has been pending for several years, and unfortunately still hasn’t brought the expected results. Entrepreneurs also point to the fluctuating exchange rate as one of the major challenges that they face, and this is also dependent on political decisions. The Polish Chamber of Commerce has been a supporter of Poland quickly adopting the euro. With the euro crisis

Due to the limited capacity of the state to support entrepreneurs, the latter are forced to bear the costs of that risk themselves. The last few years may indeed appear to be an argument to preserve the national currency. Yet an increasing number of speculative factors in the valuation of European currencies outside the euro zone should also influence any analysis of the validity of implementing the euro in Poland. Prime Minister Tusk’s government has announced it will embark on a raft of radical reforms to Poland’s tax and social security system. How do you think those will help Polish exporters? Research conducted by the National Chamber of Commerce shows that most businesspeople are critical of the legal environment in which they operate. Statements from the prime

MADE IN POLAND 2012

INTERVIEW

minister on planned changes to regulations which would simplify the tax system give hope for a change. The most important thing is that such information does not remain just talk but is reflected in new regulations. So far, one of the only reforms implemented raised pension contributions. Unfortunately, this decision will not have a positive impact on exporters due to an increase in labor costs. Businesses understand the need to reduce subsidies from the budget. In our view, the system should ultimately be made as much self-funded as possible. Separating pension payments from budget subsidies leads to healthy public finances, which are an essential element of proper economic development. Increasing the amount of pension contributions by two points on the part of employers may, in fact, have negative effects on the labor market, mainly by slowing down the pace of job creation. Reducing the negative aspects of increasing the tax burden should be linked to consequent actions to reduce all types of barriers of doing business, especially in terms of administrative and legal matters. Otherwise, Poland will continue to fare poorly on business rankings such as the World Bank’s annual “Doing Business” and will not be able to effectively take advantage of the entrepreneurship potential that it holds. Are exporting companies in the chamber optimistic about the next 12 months? According to a study conducted by KIG which looked at the sentiments of Polish entrepreneurs last year, many more companies experienced a decline in export sales in 2011 (17.1 percent of those surveyed) than had been expected. A return to prosperity among EU countries, where Poland directs approximately 80 percent of its exports, did not follow as quickly as Polish exporters had hoped. Thus, the rise in export sales recorded by 40.4 percent of firms and stable sales recorded by 42.6 percent of companies should be considered a successful outcome. Among those respondents who are producers, more than a half (51.5 percent) reported an increase in export sales last year. In large part, good export results were seen in industrial branches such as automotive, furniture, and appliances. The expectations of exporters for 2012 are almost the same as last year. Most firms (45.4 percent) expect to boost exports or maintain them at the same level (43.7 percent of firms) and only less than 11 percent expect that their export sales will decrease. The weakening of the złoty from the third quarter of 2011 favors exporters. It may be argued that without the fear of negative effects stemming from the global crisis and an excessive public debt in certain euro-zone coun-

tries, the forecasts for this year would be more optimistic than last year. Good prospects for domestic businesses will depend in particular on their domestic sales, their exports as well as investments, with good results for 2011 corresponding with even better forecasts for 2012. This means that for the whole economy one can expect GDP growth on a level similar to the current one. However, Polish entrepreneurs are pessimistic about the conditions for doing business which, according to them, will be worse in 2012. How would you assess Poland’s promotion of its own exports? Would you say the Polish presidency of the Council of the EU was used efficiently to this effect? As I have previously mentioned, Poland as a country, and Polish entrepreneurship, do not have a coherent promotional strategy. The number of activities aimed at promoting Polish enterprises, goods and services, is sparse and poorly funded. The period of the presidency was certainly an opportunity to promote our country in the European Union and change the perception of Poland as a country known mainly for the production of sausages and vodka. Did we take advantage of this opportunity? The next few months will answer that. In my opinion, we finally managed to show Poland as a country that is not so far behind in development, including in mentality, in comparison with the so-called “West.” We are open to new challenges, our economy is stable and the adjustment processes in companies allow them to meet even the toughest market requirements. More and more often, foreign contractors use the word “quality” next to the term “price” while describing the competitiveness of Polish goods and or services. It is worth upholding this image and speaking more about the changes that have taken place in the Polish economy and the fact that they are permanent. The turn of 2012 saw an important visit of President Bronisław Komorowski to China with a sizable business delegation. Would you say this is a sign that political support for Polish exports is rising? We hope that the president’s visit to China will mean a return to a positive relationship between the head of state and entrepreneurs as far as an active promotional policy abroad is concerned. The participation of the delegation of entrepreneurs during the president’s diplomatic visits contributes to building strong economic ties. During his visit to China, for example, several cooperation agreements and letters of intent were signed. In my view, this type of diplomatic missions should be systematic. v

CALENDAR

MADE IN POLAND 2012

2012

EVENTS FOR EXPORTERS AND IMPORTERS July

July 12 - 15 INNOPROM INNOPROM presents advanced technologies developed in Russia and provides a platform to discuss questions of innovation development in Russia. innoprom2012.ru

September

September 2 - 5 Autumn Fair International With over 500,000 products and 60,000 new launches, Autumn Fair International is the biggest home and gift event of the season. autumnfair.com

September 3 - 6 MSPO Expo “International Defence Industry Exhibition” MSPO Expo is one of Europe’s largest and most important events dedicated to the defense industry. targikielce.pl September 8 - 18 Izmir International Fair Izmir International Fair is the oldest trade show in Turkey, with various product groups. autumnfair.com

October 5 - 9 Anuga The world’s leading food fair for the retail-trade and the food-service and catering markets. anuga.com

October

October 8 - 11 Polagra-Food Producers, distributors, traders, wholesalers, retailers from the food sector, and specialists from the country and abroad will meet in Poznań for the 27th time. polagra-food.pl

October 8 - 11 Polagra-Tech International Trade Fair of Food Processing Technologies Polagra-Tech is the most important trade meeting of its type Central and Eastern Europe. polagra-tech.pl

October 10 - 13 EXPOPHARM With a tradition going back more than 50 years, EXPOPHARM has established itself as Europe's leading pharmaceutical trade fair. expopharm.org

October 14 - 18 Zagreb International Autumn Fair Zagreb International Autumn Fair is the central economic event in Croatia and brings together economists, exhibitors, businesspeople, experts, scientists, visitors and media representatives from all over the world. www.zv.hr November 16 - 18 Boatshow Boatshow is one of the biggest events presenting yachts, motorboats, sailing and water sports equipment in Poland. boatshow.pl

October 17 - 20 WorldFood Moscow Over the last 20 years, WorldFood Moscow has grown to become a major meeting place for the food and drinks industry and a vibrant source of products for the Russian market. world-food.ru November

December

December 4 - 9 International Contemporary Jewelry Fair Featuring innovative jewelry designers from around the world, the fair will take place aboard America’s most extraordinary luxury exhibition venue – Seafair. The $40 million yacht will be docked at Miami’s downtown Chopin Plaza at the Nouguchi Bayfront Park in a spectacular, highly visible, easily accessible waterfront location. ifae.com

MADE IN POLAND 2012

CALENDAR

2013

EVENTS FOR EXPORTERS AND IMPORTERS January

January 7 - 10 Hong Kong International Stationery Fair The fair takes place at the Hong Kong Convention and Exhibition Center, and offers a range of stationery and back-to-school items, including artist’s supplies, children’s stationery, office equipment, gift stationery and much more. hktdc.com

January 26 - 29 Paperworld The world’s leading fair for paper, office supplies and stationery products for private and business use. paperworld.messefrankfurt.com February

February 15 - 19 Ambiente The world’s most important event for the consumer-goods sector. If you are in the kitchen and household sector, or in the furnishing and decorating sector, you can give your business a boost at Ambiente. ambiente.messefrankfurt.com March

March 19 - 21 ICE Europe ICE Europe is the leading international exhibition for everybody involved in the conversion of flexible web materials, such as paper, film, foil and non-wovens. Professionals in the converting industry view this specialized trade event as a key platform to build new business relations and to establish global networks. ice-x.com/europe/english

March 20 - 22 EuroGastro 17th International Food Service Fair EuroGastro is the most important trade fair in Poland for the food-service industry. eurogastro.com.pl

April

April 10 - 13 Musikmesse Musikmesse is the world’s leading trade fair for the music industry. Here, you will find a complete range of products with everything required for music making, not to mention innumerable workshops, concerts, demonstrations and discussion events. musik.messefrankfurt.com

April 15 - 21 Bauma No other fair has a wider range of fascinating technologies in the sectors for construction machinery, building-material machines, mining machines, construction vehicles and construction equipment than the bauma fair. bauma.de/en

April 11 - 14 Automechanika Istanbul Automechanika is the leading international meeting place for the automobile sector. As the world’s biggest trade fair for the automotive aftermarket, Automechanika brings the spotlight to innovations and solutions in the fields of automobile parts, systems, tuning, workshop equipment, bodywork and paintwork, car wash, IT and management and the latest automobile services. automechanika.messefrankfurt.com

April 19 - 21 LATO 18th Fair of Tourism and Recreation The LATO Trade Fair is the largest consumer trade fair in Poland presenting offers of trips and lodgings mostly for the spring and summer holiday season. It is a unique marketplace of summer and weekend recreation offers in the most attractive regions of Poland and abroad. targilato.pl

ECONOMIC OVERVIEW

MADE IN POLAND 2012

GROWTH IN THE FACE OF CRISIS

Poland’s economy continues to grow, albeit slower than before

urope continues to suffer through the throes of economic uncertainty and the euro-zone crisis, but one thing remains relatively constant: the strong performance of the Polish economy.

Granted, Poland’s economic growth is expected to slow down from the 4.3 percent it recorded last year. But economists still forecast it to reach somewhere between 2.5 and 3.5 percent ( JP Morgan: 3.2 percent, OECD: 2.9 percent, World Bank: 2.9 percent, IMF: 2.6 percent, National Bank of Poland: 2.5 percent) – that’s better than most forecasts for the euro zone as a whole, which the IMF expects will grow by just over 2 percent. Poland’s Ministry of Economy is much more optimistic. In April it said that economic growth could reach as high as 4 percent. After Poland’s first-quarter growth came in at 3.5 percent however, few expect the ministry’s prediction to come to fruition. The toll the euro crisis is taking on European investment and consumption is expected to put a drag on the Polish economy in the second half of the year.

Maximizing exports

So growing, but slowing down – that’s the outlook for the Polish economy. For foreign firms importing Polish goods, that could be good news. Polish firms will be forced to keep their prices competitive to maximize exports as domestic consumption slows down. Indeed, as Made in Poland went to press, the latest figures showed that in April 2012, Polish exports had only grown by 0.9 percent year-on-year, versus an average of 6.3 percent for the first quarter of the year. Polish imports slowed down as well – at a much faster pace than exports. They declined by about 3.9 percent, due to the above-mentioned slowdown in domestic demand, analysts at ING said. Poland’s current account deficit stood at E0.6 billion in April, the most recent month for which data was available.

Still, the IMF forecasts that Poland will lead the region in economic growth, and will be the second-best in Europe, behind Russia.

Still, the long-term outlook for Polish exports is extremely positive. HSBC and research firm Delta Economics predict that Polish trade will outpace world trade growth at 5.69 percent annualized over the next five years, before increasing to 6.8 percent between 2017 and 2021. Poland is forecast to remain the 10th largest emerging trade nation in the world over the next five years.

That said, a slowdown is clearly occurring: both wages and employment are growing slower than they did last year, and inflation, which had been running between 3.9 percent and 5 percent since March of 2011, finally took a breather, sliding to 3.6 percent, on the back of slower growth in food prices and a drop in fuel prices. But clothing and recreation prices also dropped, indicating that businesses were beginning to worry about consumers spending less.

Poland’s economy will need this strong growth, since it won’t necessarily be able to continue counting on access to EU funds at the same level as over the last few years. The country spent some E20 billion on preparing for the Euro 2012 soccer tournament, much of which was funded by the European Union. This was a significant boost to Poland’s economy in the four years leading up to the championships, and helped it grow through the crisis. v

MADE IN POLAND 2012

EXPORTS AND POLAND’S ECONOMY

HEALTHY EXPORTS DESPITE TRADE GAP The strength of German exports still remains key for Polish companies

or years, Poland has imported more than it exports. According to preliminary figures from the Ministry of Economy, that trend continued last year, with the country’s trade deficit standing at a preliminary zł.59.65 billion for full-year 2011.

The perennial trade deficit is due in significant part to strong consumer demand for imported goods and to the country’s development needs. Machine tools, chemicals and engine parts are all required from neighboring Germany and other nearby countries to drive Poland’s economy out of the development phase and towards convergence with its wealthier neighbors to the west. Poland’s zł.59.65 billion trade deficit for 2011 compared to zł.55.16 billion in 2010 and zł.37.72 billion in 2009, reflecting the economy’s growing appetite.

Exports strong

Contrary to many developed economies currently experiencing widening deficits, Poland’s trade gap is not seen as reflecting a lack of competitiveness or weak export growth. In 2011, total Polish exports denominated in złoty grew by 15.3 percent year-on-year to zł.554.77 billion, on the back of a weak złoty and strong German exports in the first half of the year. The strength of Germany’s exports, and therefore the state of the global economy, is key for Polish companies since many components and raw materials used in German exports are sourced from Poland. Around 40 percent of Polish automotive components, for example, are sent to Germany, according to the European Automobile Manufacturers’ Association. That figure appears even more significant considering that roughly 98 percent of the Polish car industry’s output is exported. Luckily for Poland, German exports were healthy in the first half of 2011, meaning producers in that country filed large numbers of orders with Polish suppliers. A weakened złoty, which fell by roughly 15 percent against the euro in the second half of 2011, also aided Polish exporters by making Polish products more price-competitive for those buying in euro. The importance of Germany to Poland’s exporters is underlined by trade data for 2011, which show that 26.1 percent of all Polish exports headed to Germany. In second place was the UK, where just 6.4 percent of Polish exports were sent.

Important commodities

Products of the chemical industry, mineral products, and plastics and rubber are all Polish-sourced commodities that end up in German-made goods. Ready-made products including transport equipment and articles made from metal are also important. Meanwhile, machinery and mechanical appliances, electrical and electrotechnical equipment was the most important commodity for Poland in 2010 (latest data available), earning the country’s exporters some E32.75 billion. Of increasing importance for the future of Poland’s export competitiveness are value-added goods such as high-tech and pharmaceuticals, the development of which is explored in Made in Poland. These and other value-added goods are sectors that Poland will grow to rely on more to help it narrow its trade deficit in the long term, once internal demand begins to cool. v

Exports by commodity type in 2009 and 2010 (in 2010 prices, in E billions) Commodity type

2009

2010

Machinery and mechanical appliances, electrical and electrotechnical equipment

27.84

32.75

Mineral products

14.49

15.53

Base metals and articles thereof

10.98

13.93

Transport equipment

11.43

13.84

Products of the chemical industry

11.51

13.48

Plastics and rubber, and articles thereof

8.26

9.82

Textiles and textile articles

5.05

6.00

Prepared foodstuffs

3.92

4.53

Pulp of wood, paper, paperboard and articles thereof

3.29

3.76

Live animals; animal products

2.69

2.96

Vegetable products

2.66

2.91

Miscellaneous manufactured articles

2.13

2.27

Articles of stone, ceramic products, glass

1.45

1.74

Wood and articles of wood

0.95

1.10

Footwear, headgear and articles thereof

0.70

0.82

Raw hides and skins, articles thereof

0.52

0.73

Fats and oils

0.45

0.50

Pearls, precious stones, metals and articles thereof

0.26

Arms and ammunition

0.50

0.77

Source: Central Statistical Office

THE ZŁOTY AND POLISH EXPORTS

MADE IN POLAND 2012

GROWING RESISTANCE

What is the outlook for the złoty and how could it influence Polish exporters?

vents in the euro zone saw the złoty fluctuate significantly in the first half of 2012, much like financial markets in general. As Made in Poland went to press at the end of June, though, the tendency was for the currency to appreciate, with some analysts going as far as to suggest that the Polish currency was becoming increasingly resistant to spikes in risk aversion.

Nordea Bank, in a report, wrote that recent domestic macroeconomic figures indicated that fundamentals were strongly supportive of the złoty. These fundamentals include decelerating, but relatively strong, GDP growth, a narrowing current-account gap, notable progress in fiscal consolidation and the announcement by the government of structural reforms, which have been praised by ratings agencies.

country’s currency and makes it less vulnerable to spikes in global risk aversion, according to Nordea. Following an interest-rate hike in May, Polish central bankers have become much less hawkish and some of them suggest that a rate cut is needed. However, with CPI inflation forecast to rise again in the June-September period, any policy easing is highly unlikely in the near term.

Bigger profits for exporters?

Przemysław Kwiecien, chief economist at X-Trade Brokers, said he did, however, expect the złoty to depreciate in the near future – although he agrees it has been “doing very well recently.” However, he thinks that even if it does depreciate, it would have a limited effect on export volumes.

Moreover, there are still strong foreign capital inflows to the local debt market with yields of 10-year Polish bonds falling to multi-year lows, despite sharp upward moves in yields of both German Bunds and in euro-area peripherals.

“Demand is more important in this case, because prices on both sides are fixed in euros anyway. What it will have an impact on is profitability for exporters because a weaker złoty means bigger profits for them and a stronger złoty smaller profits,” he said.

Furthermore, the improving perception of Poland’s credit risk (as seen in lower certificate of deposit rates and asset swap spreads) is becoming increasingly supportive for the

“So unless they decide to lower their prices [in euros], their goods will not necessarily become more attractive for foreign buyers,” he added. v

MADE IN POLAND 2012

BILATERAL TRADE

DIVERSIFY AND EXPAND

Germany holds a crucial place in Poland’s bilateral trade relations

hen it comes to trading partners, none is more important for Poland than its neighbor Germany. In 2011, 26.1 percent of all Polish exports went to that country – significantly more than the 6.4 percent of the total that headed to the UK, the next-largest export destination for Polish goods.

Germany also accounted for 22.3 percent of all imports to Poland during the same period, compared to 12.2 percent from second-placed Russia. Imported goods are essential for allowing Polish producers to meet domestic demand, on which the country’s economy relies so heavily for growth. Many of these purchases are financed using inflows of long-term capital such as EU funds and FDI, which themselves create demand. Major imports from Germany include machinery, transport equipment and chemicals, all of which are needed to meet internal demand. From Russia, meanwhile, Poland imports significant amounts of natural gas.

Balance of trade

Despite Germany’s economy losing steam in the second half of 2011, Polish exports to that country remained strong – not changing in annualized terms, according to preliminary figures – as the weakened złoty helped Polish exporters. According to Polish statistics, the balance of trade between Poland and Germany over the year actually favored Poland, which exported zł.144.6 billion worth of goods to Germany and imported zł.136.9 billion. Unsurprisingly, given its proximity and the ease with which the Schengen Agreement allows trade to flow, many of Poland’s most important trading partners are members of the European Union, with each of its top-five export destinations being located in the bloc.

The UK is a particularly important export market for Poland and has grown in prominence in recent years. Polish exports to Britain rose 17 percent last year, while imports from the UK jumped 14 percent, with the trade gap widening (in favor of Poland) from £2.25 billion to £2.77 billion y/y. The large number of Poles who have emigrated to the UK – estimated at over 500,000 in 2010 – creates much of the demand for Polish products, many of them foodstuffs.

Eastern promise

But it’s not just the EU which is important to Poland’s trade mix. China and Russia, too, are crucial sources of imports for Poland. In recent years, those two countries have tended to alternate between being the second- and third-largest sources of imports to Poland, with Russian gas and Chinese manufactured goods featuring heavily. As a market for Polish exports, however, China does not even feature in Poland’s top 10 list, despite growing in importance in the last few years. That’s not to say, though, that Poland isn’t attempting to cash in on China’s potential. At the tailend of 2011, Polish copper producer KGHM signed a longterm $3.5 billion agreement to sell cooper cathodes to China Minmetals for the period covering 2012 and 2016. The deal was inked during a visit by President Bronisław Komorowski to China in late 2011. At that time the two countries signed a strategic partnership agreement which includes provisions for boosting trade and economic ties. Poland’s pro-active approach to diversifying and expanding its trade markets is good for the country’s economy, since the strength of major European markets – and even Germany – is no longer as certain as it once was. Moreover, Poland’s exporters won’t be able to count on such a weak złoty every year. v

FROM THE CHAMBERS OF COMMERCE

MADE IN POLAND 2012

French-Polish Trade: Sustained interest EU funds and the development of public-private partnership activities, which are supported and promoted by the French Chamber of Commerce in Poland (CCIFP).

Monika Constant, general director, French Chamber of Industry and Commerce in Poland Regardless of the unstable economic situation in European markets, French investors are still very interested in investing in the Polish market. By the end of 2010, France was the third-biggest foreign investor in Poland with the total flow of investments worth E18.7 billion, according to the National Bank of Poland. Poland is France’s biggest business partner out of all the Central and Eastern European countries. There are more than 800 firms with French capital registered in Poland. Between 1999 and 2010 the number of French investments in Poland increased five-fold. What encourages foreign investors to invest in Poland is not only the prospects for economic growth and an increase in consumption, but also special economic zones, technological parks, access to

Companies backed by French capital which made big investments in Poland recently are: Telekomunikacja Polska, Dalkia, Intermarche, Unibail-Radamco and Credit Agricole. There is an increasing number of small- and medium-sized companies investing in Poland too. What the CCIFP does for them is extremely helpful in terms of finding business partners, distributors and employees, but also in providing services in the public relations sector, which helps them reach Polish clients. There are promising prospects for the inflow of foreign investments into Poland. But in order to sustain this positive trend, one needs to eliminate the barriers which prevent investment into Poland. One of these barriers is an overly bureaucratic administration. For several years we have been proposing amendments to the way business is run in Poland, using the White Book of the CCIFP which consists of postulates from companies in fields such as public-private partnership, staff-share ownership, training, taxation, real estate, or adjusting Polish law to fit EU law. I hope that the joint efforts of all parties to the social dialogue will help the Polish economy develop and will help create favorable conditions for new investors. v

German-Polish Trade: A two-way stream goods such as accessories and auto parts, boats, cars, engines, ships and furniture.

Michael Kern, General director, member of the board, German-Polish Chamber of Industry and Commerce

Germany has been Poland’s largest trade partner for many years. The size of the Polish-German economic relationship is indeed impressive. The trade turnover with Germany amounts to approximately 10 percent of Polish GDP, and over 26 percent of Polish exports go to its western neighbor. But this is not just a one-way stream, since Poland takes 10th place among Germany’s trading partners. Trade turnover between the two countries in 2011 reached a record high of E69 billion. Importantly, in addition to high growth in turnover, we have seen a constant progress in terms of the structure of Polish exports to Germany, in favor of highly processed

Germany is also one of the most significant foreign investors in Poland. The vast majority of these investments are made in the automotive, banking and insurance, chemical and pharmaceutical, energy and wholesale, mechanical engineering, as well as retail, sectors. Most of the large German companies that have operated successfully in the Polish market for years are still reinvesting some of their profits there. Meanwhile, new investors are coming from Germany, especially smalland medium-sized companies. The 2012 edition of our annual economic survey shows that 95 percent of foreign, mostly German, investors in Poland, are still satisfied with their choice of investment location and that they would choose Poland again. For yet another year, Poland was ahead of other countries in the region with which it is competing for investments, such as the Czech Republic and Slovakia. This was reflected in the number of points awarded to Poland by investors for a total of 22 factors that drive the inflow of foreign capital (Poland received 4.64 points out of a maximum of six points). Four top-scoring factors behind Poland’s attractiveness were its EU membership, and three HR factors, including the qualifications, the motivation and the performance of Polish workers. v

MADE IN POLAND 2012

FROM THE CHAMBERS OF COMMERCE

US-Polish Trade: Exceptional potential growth

Tony Housh, member of the board of directors, American Chamber of Commerce in Poland The outlook for continued growth in the US-Polish trade relationship is excellent. Real numbers have continued to climb over the last few years and new avenues for trade are opening between the two markets as well as with their respective companies. In 2011, Poland ran a significant trade surplus with the United States, as the total direct trade figures reached nearly $7 billion. Poland is building on its reputation of having a strong, welleducated workforce by producing and exporting world-class manufactured products and world-class services to clients around the globe. Trade opportunities which were not on

the radar screen just a few years ago are now blossoming. As Polish-made aviation components and systems head west to Europe and America, specialized fire/rescue equipment for a new Polish airport is arriving from the US. Precision components and intellectual products are being exported to North America as US companies move to address the need for highly complex drilling equipment to meet the challenges of unconventional gas exploration and production. Fans of computer and online games in the US are probably not aware that a number of very popular games are Polish products, since Poland has established itself as a world leader in this sector. In the Polish market, patients continue to benefit from the acquisition of state-of-the-art diagnostic devices from the US. The broadening and deepening of trade will further grow opportunities for more companies and products to move across the Atlantic in both directions. There is every expectation that this positive trend in trade expansion will continue. In 2012, American companies continue to benefit from the robust growth of the Polish economy, which drives demand for their products in business and consumer circles. And as we see from the 2011 trade numbers, more American consumers and still more American companies are discovering that Made in Poland means made with quality. v

British-Polish Trade: Growing success British exports to Poland included speciality chemicals (including pharmaceuticals and cosmetics), automotive, food, construction equipment and textiles. British investors in Poland, such as Tesco and GlaxoSmithKline, have become significant Polish exporters over the past few years.

Michael Dembiński, head of policy, British Polish Chamber of Commerce The UK has become, over the course of 2011, Poland’s second largest export market after Germany, overtaking both Italy and France. According to Poland’s statistical office, the value of Polish exports to the UK last year rose by 15.4 percent compared to 2010, to E8.7 billion, while British exports to Poland were up by 7.4 percent compared to 2010, to E3.9 billion. Britain remains Poland’s eighth-largest import source. Automotive, food, chemicals (including pharmaceuticals and cosmetics) and household goods (including furniture and flat-screen TVs) were the main categories of Polish exports to the UK, with food growing particularly strongly.

The British Polish Chamber of Commerce can see many areas of opportunity for manufacturers in both countries to extend into the two markets. There is a gap that needs filling for the better-off Polish consumers – the missing upper-middle market. Brands like Marks & Spencer, for example, fit in here. But generally, we see that too few British exporters have taken a serious look at the market opportunities in Poland. We will be doing more to reach out to UK exporters to tell them about the Polish market opportunity. We will be visiting the UK to explain that Poland is once again poised to be one of the EU’s fastest growing markets during the course of this year. Any British exporter that’s doing good business on the continent but has yet to sell to Poland or Central and Eastern Europe needs to take a close look at these highgrowth, low-risk markets. The deficit between our two countries continues to grow, from £1.9 billion in 2009 to £2.8 billion in 2011, leaving plenty of scope for UK the to improve its trading performance. v

FROM THE CHAMBERS OF COMMERCE

MADE IN POLAND 2012

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.pl

Joseph Wancer Chairman

Belgian Business Chamber

Al. Jerozolimskie 92 00-807 Warsaw

22 456-4009 -

bbc@belgium.pl www.belgium.pl

Marc Cottyn President

British Polish Chamber of Commerce

ul. Nowogrodzka 12/3 00-511 Warsaw

22 622-2056 22 622-2056

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

Alan Jarman Chairman

Czech-Polish Chamber of Commerce

ul. Janáčkova 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 Industry and Commerce in Poland

ul. Widok 8 00-023 Warsaw

22 690-6880 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 ahk.pl

Michael Kern General Director

Irish Chamber of Commerce in Poland

ul. Mysia 5 00-496 Warsaw

22 583-1207 22 690-7590

info@enterprise-ireland.com www.icc.org.pl

Kenny Morgan President

Italian Chamber of Commerce and Industry in Poland

ul. Kredytowa 8/26 00-062 Warsaw

22 828-2008 22 826-0936

sekretariat@cciip.pl www.cciip.pl

Donato Di Gilio President

Netherlands-Polish Chamber of Commerce

Al. Jana Pawła II 29 00-867 Warsaw

22 653-7652 22 653-7874

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

Geert Embrechts Chairman

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 President

Polish-Bulgarian Chamber of Commerce

ul. Bobrowiecka 4A/54 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. Nowogrodzka 11 00-513 Warsaw

690-370-759

e.gricuk@pccc.pl www.pccc.pl

Michael Miasek President

Polish-Chinese Chamber of Industry and Commerce

ul. Świętojańska 46/8 81-393 Gdynia

58 660-8986 58 660-8989

office@pchiph.org pchiph.org

ul. Bukowska 12 60-810 Poznań

61 865-3823 61 624-2114

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

Ryszard Sznajder President

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.pl www.prihp.pl

Hanna Wielgosz President

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 President

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 President

Polish-Swiss Chamber of Industry and Commerce

ul. Niepodległości 69 02-626 Warsaw

22 322-7625 22 322-7626

swisschamber@swisschamber.pl www.swisschamber.pl

Marek Kondrat President

ul. Trębacka 4 00-074 Warsaw

22 630-9783 22 828-4199

office@ptcoc.eu www.ptcoc.eu

Marek Nowakowski President

ul. Szpitalna 1/28 00-020 Warsaw

22 827-0081 22 827-1079

puig@puizba.pl www.puizba.pl

Jacek Piechota President

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 in Poland

Polish-Indian Chamber of Commerce Polish-Portuguese Chamber of Commerce

Polish-Turkish Chamber of Commerce Polish-Ukrainian Chamber of Commerce Scandinavian-Polish Chamber of Commerce

MADE IN POLAND 2012

SECTOR ANALYSES: INTRODUCTION

AIMING HIGH

oland is still a relative lightweight on the world stage when it comes to trade, representing only 1.3 percent of total global trade in 2010, according to HSBC. That’s on an altogether different level than European powerhouse Germany which, accounting for 8.2 percent of total global trade in 2010, is close to leaders China (8.2 percent) and the US (11.4 percent).

DAX Cosmetics, Dr. Irena Eris, and Oceanic are also expanding as far as Africa, Asia and the Middle East. Bumar has signed a landmark contract for armored recovery vehicles with the Indian Defense Ministry. Meanwhile Polish pharma company Polpharma, through a raft of recent acquisitions in Turkey, Russia, Kazakhstan and at home, is well on its way to becoming a leader in the CEE region.

But that’s about to change, with HSBC forecasting Polish exports will be the fastest-growing in the world in the next 15 years. At an annual growth rate of 5.6 percent, Poland will be at the forefront of an upcoming rebalancing of global trade that will see emerging markets continue to gain in importance.

It’s not only in new regions that Polish exports are making a splash. Polish firms are also gaining recognition in sectors that are associated with much more developed economies, and are making use of the latest trends. Medical, optical and precision instruments, as well as electronics “Made in Poland” are making their way abroad in greater numbers. Polish software developers – and video-game makers in particular – have earned international recognition, and the country’s booming outsourcing sector has made it a world leader in “exporting” its business services.

It is clear from our survey of 10 among Poland’s leading export sectors that this process is already well under way. While Europe, and especially Germany, remain the top destination for Polish exports, it is evident that Polish firms have started repositioning themselves. Trying to shield their businesses from a continuing crisis that is depressing Western Europe’s economies, Polish firms are also taking this opportunity to engage fast-growing emerging markets. As their products’ quality and competitive prices become increasingly recognized, Polish firms’ appetite is growing, and their sights are turning to new, far-away markets. Perhaps the star among them this year is China, with agreements to sell Polish copper, fertilizer and meat, to name a few, surrounding bilateral visits at the highest level in recent months. But that’s not all. Major Polish cosmetics firms including

While Poland’s image and that of its companies and products are receiving increasingly good reviews abroad, the country still lacks a well-defined national brand and a unified and effective promotion strategy, exporters warn. The country also has much work to do to shift to producing higher-valueadded goods, which would go a long way to insuring Poland’s exports remain competitive in the long-term. Judging by the efforts Polish businesses and institutions have put into making success stories out of Poland’s automotive, chemicals, clothing, cosmetics, defense, food, metals, technology, outsourcing and pharmaceutical exports, we’re confident that they will rise to these challenges as well. v

Fastest-growing exports in Poland’s top 50 trade partners (sectors with value above $100 million at the end of 2010) Export

Country

Emerging export partners for Poland, 2012-2016*

CAGR (2012-2016)

Country

Growth (%)

Vegetables dried

China

255.19

Rwanda

21.11

Women’s, girls overcoats

Netherlands

182.87

Cayman Island

19.87

Cut & dried flowers

Sweden

136.96

Myanmar

17.56

Paper, board, clay, inorganic coated

Norway

123.11

Bangladesh

15.03

Uncoated paper and paperboard

Hong Kong

Paraguay

13.75

Household, laundry-type washing machine, washer-drier

Belgium

117.71

Peru

12.39

Photographic cameras accessories

UAE

116.43

Kenya

12.32

Flat-rolled iron/steel

India

110.88

Lebanon

12.19

Polyacetals, polyethers, polycarbonates

Malaysia

12.05

UAE

99.76

Singapore

11.63

Oil seeds

United Kingdom

122.7

93.89

* Emerging growth export partners are trade partners that are growing most quickly over the period, albeit potentially from a small base.

Source: HSBC

RELYING ON EUROPE After a good year in 2011, the Polish automotive industry, heavily reliant on exports to the euro zone, is holding its breath

oland has a long, if somewhat modest tradition of manufacturing vehicles and spare parts for the automotive sector. Italian giant Fiat has been producing cars in Poland since 1920, and throughout the years of the People’s Republic of Poland, models produced by Polish firm FSO such as the Polski Fiat, the Polonez, the Warszawa and the Fiat 126, known affectionately as the “Maluch” (“the small one”), dominated the country’s roads.

But the days when the local industry catered chiefly to the Polish market are long gone. The country’s automotive industry is now firmly geared towards exports, with a staggering 98 percent of Polish automotive products destined for foreign markets, according to figures from the Polish Information and Foreign Investment Agency (PAIiIZ). The automotive sector is now Poland’s second-most valuable export market, accounting for 12.7 percent of total Polish exports

BY LIAM NOLAN in 2011, according to preliminary figures from the Ministry of Economy.

Still attractive

FSO, now a majority Ukrainian-owned firm, closed its factory in Warsaw in March 2011 after the last Chevrolet Aveo rolled off its production line. But relatively low labor and production costs still entice multinational companies to manufacture vehicles in Poland, with three major foreign-owned manufacturing plants currently in operation: Fiat Auto Poland in Tychy, Opel (owned by General Motors Manufacturing Poland) in Gliwice and Volkswagen in Poznań. According to automotive research institute Samar, 825,000 cars and delivery vehicles were produced in Poland in 2011. This is down slightly from the 887,000 produced in 2010, but still a sizable figure.

MADE IN POLAND 2012

SECTOR ANALYSIS: AUTOMOTIVE

“We have a very well-educated work force and a tradition in the automotive sector as well as a technological background. Even during communism we had a lot of companies producing cars and trucks,” said Jakub Farys, president of the Polish Automotive Industry Association (PZPM). Currently, Polish automotive exports don’t travel too far, with the vast majority (84 percent) being bought by fellow European Union member states, according to industry website AutomotiveSuppliers.pl. Almost every bus produced in Poland goes to the European market, with Germany, Norway and Sweden being the major export destinations for Polish buses.

A very good year

By any standard, 2011 was good to Polish automotive exporters. Car exports increased by 3.4 percent and the value of exported car parts and accessories jumped by 10.8 percent, according to numbers from AutomotiveSuppliers.pl. Exports of buses manufactured in Poland also fared well, enjoying an 8.5 percent increase on the previous year, according to portal infobus.pl. According to preliminary figures from the Ministry of Economy, the value of Polish automotive exports reached over E17.2 billion in 2011, marking a 9.8 percent increase on 2010. Rafał Orłowski, an analyst at AutomotiveSuppliers.pl, predicts that the total value of automotive exports in 2011

will amount to somewhere between E18.7 billion and E19.1 billion. “This would be the highest value in the history of the automotive industry in Poland,” he added. The feat would be even more impressive considering the sector’s heavy reliance on exports to the euro zone, which was blighted by economic troubles through much of 2011. But Mr Orłowski noted that exports grew less strongly during the second half of the year, which may suggest that demand for Polish exports was starting to fade slightly.

A risky bet

Some fear that 2012 might be the year when the Polish automotive industry starts to truly feel the pinch. The continuing euro-zone debt crisis and the recessions forecast in several euro-zone countries represent one obvious danger. Another important factor is that Austria, Germany and Italy have decided to halt their “scrapping” or fleet-renewal schemes. These had served to boost demand for Polish exports in recent years. PZPM’s Jakub Farys described automotive scrapping schemes, and especially those in Germany, as the most important drivers of Polish production in 2009 and 2010. The end of the programs, which encouraged motorists to trade old cars for new ones by giving them a financial incentive, is therefore expected to be a big loss for Poland.

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SECTOR ANALYSIS: AUTOMOTIVE

Mr Orłowski said he expected a fall in car production in Poland for 2012. Exporters of spare parts and components are also forecast to see demand fall since The Czech Republic, France, Germany and Italy, currently the main markets for Polish suppliers, are expected to reduce their own car production levels.

Fiat: Goodbye to the Panda

Polish automotive exports will undoubtedly be hit in 2012 by Fiat’s decision to move the production of the Fiat Panda from its Tychy plant in Silesia, southern Poland, to its Pomigliano d’Arco plant near Naples in Italy. Fiat will continue to produce the Fiat 500, Abarth 500 and Lancia Ypsilon at its Tychy plant. But in 2011, Panda models accounted for nearly half of the plant’s production: Last year Fiat produced 467,760 cars in Tychy, of which 205,765 were Pandas. Bogusław Cieslar, spokesperson for Fiat Auto Poland, declined to make any export projections for Fiat’s Tychy plant in 2012, but said that this year “spelled a precarious situation in the European market.” Samar’s Wojciech Drzewiecki estimates that 250,000 fewer cars could be produced in 2012 than in 2011 in Poland as a whole, with the loss of the production of the Fiat Panda to Italy accounting for a large portion of this figure. v

MADE IN POLAND 2012

Polish manufacturers who supply multinational producers, both in Poland and abroad, with body parts, tires, car seats and other key fixtures, are looking with apprehension at the situation in Western Europe. “The component industry depends entirely on the situation in the EU,” said Wojciech Drzewiecki, the head of Samar, adding that a 3 to 5 percent drop in the output of components is likely in 2012. “A lot depends on the flexibility of those Polish manufacturers who can produce products for more than one company.” Still, Mr Farys said that “as long as there are no other ecoDistribution of Polish automotive exports, EU and non-EU, 2011, in percentage N Non-EU

15.7

(€3 billion)

84.3

(€16.1 billion) Total €19.1 billion Source: based on full-year 2011 projections by AutomotiveSuppliers.pl

SECTOR ANALYSIS: AUTOMOTIVE

Buses made in Poland Polish-owned Solaris, which sold 649 buses abroad in 2011, is the leading homegrown bus producer and exporter. Autosan ranks as the second-most successful Polish bus company in terms of export sales, while Sorbus’ sales director Michał Śliżak told Made in Poland that his family’s firm will try to re-enter the export market in 2012, following its ongoing but temporary exit due to bankruptcy. German-headquartered truck and bus manufacturer MAN, which produces buses in Wrocław, has shipped small numbers of its Polish-produced stock outside of Europe. “Last year, 21 Polish-produced Volvo 7905H Hybrid buses were exported to Mexico,” said Aleksander Kierecki, editor-inchief of infobus.pl, a Polish public transport research group. MAN also exported a small number of Polish-produced “Lion’s City” buses to Mexico. “It’s not a large quantity but Latin America could be a new market for Polish bus exports,” said Mr Kierecki. v

Inter Groclin: a Polish automotive success Polish company Inter Groclin Auto manufactures upholstered car-seat covers, complete car seats for cars, trucks and buses as well as headrests and armrests for Volvo, Renault, Citroen, Volkswagen, Mitsubishi and Porsche. The origins of the company date back to 1946, when two Drzymała brothers founded an upholstery and leather workshop in Grodzisk, Wielkopolskie voivodship.

Five most important destinations for Polish automotive exports in 2010, in € billions 30 Percentage of total exports

Value of exports 20

Source: AutomotiveSuppliers.pl, Eurostat

MADE IN POLAND 2012

15 10 5 0 Germany

Italy

France

United Kingdom

Czech Republic

nomic problems in Europe,” 2012 should see comparable production levels to 2011. Mr Drzewiecki also pointed to Opel’s production of the new Astra GTC IV model and the production of the Caddy model by VW in Poznań, which he said are in “high demand within the EU.” According to him, those new models should ensure that European and German demand for Polish automotive imports remains high.

Tough competition

As Poland sees European demand for its automotive exports falter, it is also experiencing increasingly tough competition from its neighbors in Central and Eastern Europe. Until 2009, Poland was the second-largest manufacturer of cars in the region. In 2011, a report by Samar indicated that Poland had slipped to third place, behind the Czech Republic and Slovakia.

Zbigniew Drzymała, one of the brothers’ sons, is now president of Inter Groclin Auto, having taken over the company in 1977. It was then that he set his sights on developing upholstery for car seats. Today the company exports car seats to countries across the EU, is listed on the Warsaw Stock Exchange and is valued at zł.77.6 million.

The Czech Republic, Slovakia and Hungary are traditional hubs of automotive manufacturing, and boast comparable production and wage costs as Poland, which makes for stiff competition. On the one hand, Polish producers of accessories and spare parts, especially in the south of the country, are engaged in supplying neighboring car plants located in the Czech Republic and Slovakia. But on the other, according to Mr Drzewiecki, Poland cannot hope to become the region’s top exporter with the current lack of “friendly policies towards manufacturers” from the government.

Although the first large foreign contract was difficult to win, by 1995, 98 percent of the company’s production was earmarked for export. Today, exports represent 56.7 percent of total production.

“We are one of the largest producers of cars, spare parts and accessories, but it’s not forever. The Polish government should fight for new investment, new grants and new factories to keep the base investment in Poland,” said Mr Farys.

The UK is the largest buyer of Inter Groclin products in the EU, purchasing 33.7 percent of seats that leave the company’s factory line in Wolsztyn, Wielkopolskie. Sweden (24.1 percent), France (18.75 percent) and Germany (12.8 percent) are the other top destinations for the firm’s products. v

This year may not be as exceptional as 2011 was for Polish automotive exports. But whatever it brings, the industry will undoubtedly be forced to keep a watchful eye on economic developments in the euro zone. v

A CHALLENGING ENVIRONMENT Poland’s largest chemical companies are among the country’s flagship firms. There is healthy demand for their products, but they are operating in an increasingly competitive environment

olish exports of chemical products have been growing at a healthy pace in recent years and are expected to continue expanding in 2012. But the sector faces significant challenges, both internally and externally. Tighter EU environmental laws, especially CO2 reduction rules, are set to deal a blow to this energy-intensive industry. Polish chemical firms are also in need of investment in order to shift production from basic chemicals to higher value-added, and thus more profitable, products. One thing that could help the sector is the much-awaited privatization of Poland’s top chemical firms, which the Treasury is relaunching this year. But will it be successful?

Chemicals everywhere

To the uninitiated, names such as caprolactam, nitrogen fertilizer, polyvinyl chloride, soda ash or styrene butadiene rub-

BY ALICE TRUDELLE ber might not evoke much. But these products and others, used in the production of materials for industries as varied as construction, automotive, food packaging, agriculture and consumer goods, are a fundamental part of Poland’s exports. The sector’s top companies stand among Poland’s biggest exporters, with total exports of chemicals reaching E18.7 billion in 2011, out of a total of E135.8 billion for all Polish exports, according to figures from the Economy Ministry. Exports of chemicals grew 19.1 percent (or by E3 billion) compared a year earlier. That level of growth compares favorably to the 12.8 percent growth rate for total exports. Moreover, exports to Germany, one of the world’s largest importers of chemicals, grew by almost 32 percent in the first nine months of 2011.

MADE IN POLAND 2012

SECTOR ANALYSIS: CHEMICALS

Polish chemicals in China In January 2012, Zakłady Azotowe Puławy and Azoty Tarnów signed a preliminary agreement concerning plans to build a caprolactam production plant in China. Caprolactam is a raw material used in the production of a wide variety of products including carpets, engineering plastics and cars. Locating in China would give the companies access to commodities and energy as well as a ready local market. ZA Puławy is no stranger to the Asian market, since almost 90 percent of its caprolactam output already goes to Asian countries, including India, Indonesia and Thailand. v Financial results for the sector‘s mostly state-owned companies also paint a largely positive picture. Refiner PKN Orlen, the majority shareholder in Anwil, the largest CEE polyvinyl chloride (PVC) producer and nitrogen-fertilizer maker in the CEE, reported that the only area of its operations which grew substantially in 2011 was its petrochemical segment, which saw a 120 percent y/y increase in operating profit, up to zł.1 billion. For full-year 2011, soda ash and toluene di-isocyanate (TDI) maker Ciech posted consolidated revenues of zł.4.2 billion, up by 5.4 percent y/y, and a net profit of just under zł.2 million. Last year was a period in which the company incurred the accumulated costs of restructuring. “This was reflected in our results, which, despite the simultaneous collapse of key segments of the organic market, remained at a safe level. The impact of restructuring finalized in 2011 will be seen this year,” said Ryszard Kunicki, chairman of the board at Ciech. Fertilizer maker Zakłady Chemiczne Police saw a net profit of zł.321 million in 2011, the highest in its history, largely due to it being successfully taken over by Warsaw Stock Exchange-listed fertilizer maker Azoty Tarnów, the largest Polish chemical group by revenue. Jerzy Marciniak, chairman of the Azoty Tarnów Group, said he was very satisfied with the group’s 2011 results, which grew on the back of a “very good” period for the chemical industry as well as from new synergies after its acquisition of ZAK and ZCh Police. The firm’s revenues rose from zł.1.9 billion in 2010 to zł.5.3 billion in 2011, and its net profit climbed from zł.400 million to zł.500 million in the same period. “For several years we have been building a basis for creating a real value chain. Our income from the investments has been

Up for grabs

rising and the majority of it is assigned for new investments,” Mr Marciniak told Made in Poland. Fertilizer maker Zakłady Azotowe Puławy, whose full-year results were not available at press time, also saw its revenue hit a record level in Q2 2011, at zł.996.2 million. That was an increase of 54.5 percent on the same period a year earlier. Meanwhile Synthos, Europe’s largest manufacturer of emulsion rubbers, saw its net profit soar from zł.476 million in 2010, to zł.960 million in 2011. In March 2012, the firm joined the Warsaw Stock Exchange’s blue-chip index, the WIG20. Will Conroy, CEE correspondent for Chemical Industry News & Chemical Market Intelligence ICIS, described the firms as “perhaps the biggest Polish chemical success story of the past two years.”

The energy issue

But Polish companies are looking with apprehension at EU environmental laws, which threaten to raise their energy bills significantly. Those bills are already high, since chemical companies stand among Poland’s largest gas consumers. During the wave of cold that gripped the country in February 2012, they were the first to be cut off by Poland’s gas monopoly, PGNiG. They are also the first to be penalized by generally high prices in Poland’s monopolistic gas market. According to Henryk Zysko, manager at NUS Consulting Group, an energy management consultancy firm, the deregulation of gas prices for industrial customers planned for this year is coming at a good time, since commercial users are now “starving for options.” But the EU’s commitment to reduce CO2 emissions and accompanying Emission Trading System (ETS) adds another difficulty. Beginning in 2013 the number of emission allowances granted for free each year to the industry will be reduced. “The cost of electricity has doubled during the past five years and the EU restrictions related to carbon-emission trading show that in the near future this increase could be even greater,” said Konrad Jaskóła, chairman of the council at the Polish Chamber of Chemical Industry (PIPC). According to Wojciech Lubiewa-Wieleżyński, president of the board of the PIPC, the European Union’s climate and energy policy is the single biggest challenge to the Polish chemical industry. “Unfortunately, when – as is the case in Poland – you use coal as a fuel for power stations and as raw material in the chemical industry, you have high CO2 emissions,” said Mr Lubiewa-Wieleżyński. “Around 50 percent of the chemical industry’s total emissions are actually indirect emissions from its energy consumption.”

Company

Activity

Ciech

Europe’s No. 2 soda-ash producer

Treasury share 38.72%

Zakłady Azotowe Puławy

Poland’s largest fertilizer maker and producer of melamine and caprolactam

50.67%

Zakłady Azotowe Tarnów

Fertilizer, caprolactam and nylon 6 maker

32.05% Source: Treasury Ministry

The government could reduce the shock through, for example, compensating the industry for indirect emissions, as is the case in Germany, or by putting aside a part of the money it receives from emissions

SECTOR ANALYSIS: CHEMICALS

taxes for investment purposes. But with the Finance Ministry firmly focused on reducing holes in the budget, Mr LubiewaWieleżyński was not too optimistic about such prospects. Jerzy Marciniak, chairman of Azoty Tarnów Group, told Made in Poland that, “The proposed unfavorable EU legal regulations should be changed so that they prolong the periods of attaining the very strict limits. If there are no changes, industrial plants will be shut down and production will be shifted to outside the EU.”

Chemical firms among Poland’s top exporters Rank

Company

Revenue from exports in 2010, in zł. billions

PKN Orlen

24.6*

Ciech

2.3

Zakłady Azotowe Puławy

1.2

Anwil

1.1

Zakłady Azotowe Tarnów

ZAK

0.9

Zakłady Chemiczne Police

0.8

* The figure represents all of the firm’s exports, including oil Source: “100 Largest Exporters in 2010,” Polityka

MADE IN POLAND 2012

The Treasury also recognizes the potential instability that could be caused by high gas and electricity prices, and by EU CO2 legislation, citing both of these as being among the reasons why the Polish state should divest itself rapidly of its sizable assets in the chemical sector.

In need of investment

Another important challenge for the industry is to shift production from base chemicals, which have low profit margins, to more sophisticated and higher-value products. This would go some way to plugging the negative trade balance that plagues the sector, and accounts for as much as 40 percent of Poland’s total trade deficit. Many Polish chemical companies, including giant petrochemical producer PKN Orlen, should concentrate on developing specialty chemical products in order to make up for business in base chemicals that they will inevitably lose to competitors from the Middle East, which enjoy much lower energy costs, explained Mr Conroy. According to Mr Marciniak, shifting to more sophisticated, higher-value products is a long-term process, which involves organizational structures being geared towards seeking new opportunities, as well as increasing the amount of applied research carried out by Polish companies. Some companies have already started this process, such as PKN Orlen’s investment in a purified terephthalic acid plant in Włocławek, and Synthos increasingly moving into manufacturing state-of-

SECTOR ANALYSIS: CHEMICALS

MADE IN POLAND 2012

Export of chemicals by groups of commodities in 2010, in E millions Type Albuminoidal substances, amylum, glues and enzymes Cut chemical fibers Dyes, tannins, pigments, paints and varnishes Endless chemical fibers Essential oils, perfumery formulas, cosmetics and toiletries

total 148 65 475 45 1,812

Explosives

Fertiliers

456

Inorganic chemicals

482

Photographical and cinamatography materials

Miscellaneous chemical products

681

Organic chemicals

967

Pharmaceutical products

1,653

Plastics and articles thereof

3,679

Plastics in primary forms

1,208

Soaps and detergents

981

Synthetic rubber and articles thereof

2,738

Chemical industry, total

9,034

Rubber and plastic goods, total

6,416

Together

15,450 Source: PIPC

the-art polybutadiene rubber, in demand from European tire manufacturers. But shifting production to more sophisticated products requires large amounts of capital. “Wise investments are needed because such a production shift does not come cheap,” said Mr Conroy. A possible answer could come in the form of a strategic investor in the upcoming round of privatizations which, the Treasury hopes, will see Poland’s largest state-owned chemical firms auctioned off (see table, p. 23). Since 2007, Poland has twice abandoned efforts to sell off substantial state-held assets in its chemical industry, citing unsatisfactory bids. The Treasury has now decided to relaunch the process, saying there has been a significant improvement in the market situation and successful restructuring processes, especially at ZCh Police and Ciech. Some are confident that this time, a foreign strategic investor will emerge. “This time we have a different situation. After the consolidation of ZAT, ZAK and Police, we have a group that is interesting from foreign investors’ point of view, especially for Eastern ones,” said Robert Gwiazdowski, head of Warsaw-based think tank the Adam Smith Centre. “Unfortunately, selling Polish assets to Eastern investors is a political issue – not an economic one,” he added. Time will tell if the privatization process proves a success, and in which hands some of the flagships of Poland’s chemical industry will end up. Either way, 2012 looks set to be a pivotal year for a sector which despite the major challenges it faces, has also proved it possesses optimistic growth prospects. v

SECTOR ANALYSIS: CLOTHING

MADE IN POLAND 2012

LOOKING OUTWARD In the last few years, Poland’s clothing firms have become increasingly confident of their products’ ability to compete abroad

oland has a long tradition of textile manufacturing, an industry that was mainly based in the city of Łódź during the late 19th and early 20th centuries. Thanks to this know-how, the collapse of communism two decades ago saw international brands like Wrangler set up production facilities in the city, which is located in central Poland.

But it was not only Łódź that attracted international brands after communism collapsed. Other Polish cities attracted big names as well, with jeans firm Levi’s opening a factory in Płock in the Mazowieckie voivodship. Poland was able to offer such firms skilled labor at costs much lower than in Western Europe. But times have changed in the past 20 years.

BY REMI ADEKOYA Labor no longer comes that cheap in Poland and last year Wrangler closed down its Łódź factory, which the firm’s director described as “too expensive” to maintain. As Poland’s economy develops and wages rise, there are likely to be more such scenarios, with the foreign clothing firms that set up factories in Poland years ago closing down and shifting production elsewhere. Today, even homegrown clothiers often have factories in China or other Asian countries. Luckily for the Polish clothing sector, however, another difference between today and two decades ago is that Polish clothiers’ appetites have grown and they are increasingly pushing into new markets with success.

MADE IN POLAND 2012

SECTOR ANALYSIS: CLOTHING

The biggest players

According to Katarzyna Twardzik, retail analyst at market research firm PMR, LPP, which owns brands such as Reserved, Mohito, Cropp and House, has the strongest presence abroad. The WSE-listed firm’s clothes are sold in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Romania, Russia and Ukraine. Overall, there are 102 Reserved stores, 71 Cropp stores and 36 House stores outside of Poland. Moreover, approximately 26 percent of LPP’s third-quarter 2011 sales revenues, which amounted to zł.622 million, were derived from exports. After the first three quarters of 2011, LPP had registered total sales revenues of zł.1.7 billion, which compared to zł.1.45 billion for the same period a year earlier. For full year 2011, LPP made a net profit of zł.268.2 million, almost double from a profit of zł.139 million in 2010. This succes has been reflected in LPP’s share price, which rose steadily for several months and soared to zł.3,000 in May. Redan, a major Polish clothier with its brands Top Secret, Top Secret & Friends and Troll, is another firm present in Eastern Europe, with stores mainly in Russia and Ukraine. The firm, which had sales revenues of zł.382 million in 2011,

has recently been concentrating much of its energies on foreign expansion. Indeed, the company opened six new outlets in Russia and Ukraine in Q4 2011 alone. This means that at the end of last year, Redan had 32 foreign stores. It plans to open as many as 82 franchise establishments under its luxury brand Top Secret in Russia alone by 2014.

If the shoe fits …

As well as being successful in exporting its clothing brands in Central and Eastern Europe, Poland also seems to have found a niche in footwear production, which it also exports to Western Europe. Polish shoes are a hit in Europe, according to Ms Twardzik, who says Polish shoemakers are even able to beat out Chinese producers. One of the reasons for this is the high duty imposed on Chinese shoe products in the European Union. Regardless, Poland produced roughly 36 million pairs of shoes in 2010 alone, according to figures form the Foreign Ministry’s Trade and Investment Promotion section. Considering that Poland’s population currently stands at around 37 million, this points to a significant number of exported

SECTOR ANALYSIS: CLOTHING

Polish shoes, with major brands including Gino Rossi, Wojas and CCC. The CCC brand belongs to NG2, Poland’s second-biggest clothing retailer, whose brands are available in the Czech Republic. NG2 also plans to develop its chain in other Eastern European countries. “We have also decided to expand to Slovakia. ... By the end of 2012, we should have eight stores in Slovakia and 61 stores in the Czech Republic,” said Piotr Nowjalis, vice president of NG2. Mr Nowjalis said his firm also plans to expand to Russia, but that those operations would be on a franchise basis. “For now, we are reluctant to open our own stores in Russia and Ukraine because the legal, fiscal and general business environment in those countries is not as friendly as in other CEE countries,” he said. NG2 plans to concentrate its foreign operations in the CEE region and also intends to start operations in Hungary and Romania. Mr Nowjalis said the Polish customer was quite similar to the Czech or Slovak customer, who have comparable levels of disposable income. Since 2007 NGZ’s sales have steadily improved, and the firm saw an especially good first quarter this year. But NG2 is not the only Polish firm to successfully sell its shoes abroad. Poland seems to particularly excel in the man-

MADE IN POLAND 2012

ufacture of children’s shoes, with companies such as Bartek and Gucio making a name for themselves both in Poland and abroad. Gucio has even had the honor of being recommended by A-list celebrity mothers such as Angelina Jolie and Gwyneth Paltrow.

Luxury success story

A classic example of Polish success in the clothing sector is Wittchen, a luxury leather goods maker established in 1990. The firm’s exports are concentrated in Eastern Europe. In Moscow alone, there are 12 Wittchen stores, and the firm’s products are also available in the Russian cities of Novosibirsk, Omsk and St. Petersburg. In Ukraine, Wittchen is available in five cities, including the capital Kiev. The firm’s products are also available in Belarus, the Czech Republic and Lithuania, where the company has four stores. Altogether, there are 36 Wittchen shops outside of Poland. Asked which of these markets has the biggest potential for his firm, Jędrzej Wittchen, the owner of the firm, singled out Russia and Ukraine. “We started expansion in Ukraine long before the global crisis and we are well-established there now. There aren’t many strong, local brands that offer luxury goods there so the market has a huge capacity for absorption,” he said.

MADE IN POLAND 2012

SECTOR ANALYSIS: CLOTHING

Mr Wittchen said his firm had invested substantially in establishing its brand in Ukraine. Its products have been advertised in magazines, on outdoor billboards and in the subway, while the company has also extended its campaign to social media, launching a Wittchen Facebook profile devoted to Ukraine. Russia, Mr Wittchen said, is a â&#x20AC;&#x153;huge market with a lot of potential for luxury goods. The upper class of the society values good quality and luxury products, which gives huge potential for developing a brand like Wittchen.â&#x20AC;? Some of the biggest barriers to entering new markets are connected with logistics and extra paperwork, which particularly affects the many Polish clothing firms expanding into countries outside of the European Union. But recent successes show that Polish clothiers are increasingly adept at finding new markets and forcing their way into them, irrespective of the obstacles they may face. v

SECTOR ANALYSIS: COSMETICS

MADE IN POLAND 2012

SEARCHING FOR GROWTH MARKETS

Polish cosmetics firms, resilient during the crisis, are looking to expand to emerging markets

BY ELLA PAŁKA

he export of Polish cosmetics is a several billion-dollar business, and it’s going rather well. Indeed, despite the European financial crisis, the growth of Polish cosmetics exports is continuing to climb steadily. But while countries in Europe remain Polish firms’ largest trading partners, many now plan to expand to other regions, including emerging markets.

search firm Global Insight prepared for the European Commission, the size of Poland’s cosmetics export market grew by an astonishing 400 percent between 1999 and 2005, making Poland one of the fastest-growing suppliers of cosmetics in the world during that period. In 2006, Global Insight put the value of Polish cosmetics exports at E2.42 billion.

Poland’s cosmetics industry experienced an impressive boom at the turn of the 2000s. According to a 2007 study that re-

And growth hasn’t stopped since, with Poland’s Central Statistical Office (GUS) estimating that in 2010 the value of

MADE IN POLAND 2012

SECTOR ANALYSIS: COSMETICS

cosmetics exports reached zł.8.1 billion. This represents an increase of around zł.1.5 billion from 2009, when exports amounted to zł.6.58 billion. According to 2010 figures from industry body Cosmetics Europe, Polish cosmetics exports were in sixth place in Europe in terms of value, after giants France, Germany Italy, the UK and Spain. Over a dozen major Polish cosmetics companies are active in foreign markets, exporting essential oils, perfumes, makeup, skincare lines and dental hygiene products, among other things.

Euro 2012 A potentially short-lived, but possibly lucrative avenue for the cosmetics industry could be the Euro 2012 soccer championships. Some firms, including Hygienika, a cosmetics and personal care company, choose to re-brand their products in the hope of appealing to new consumers who may not be familiar with their cosmetics. Along with other firms, Hygienika took advantage of Euro 2012 after signing agreements with UEFA to allow it to use the Euro 2012 logo on its products. These were available not just domestically but throughout Europe. While the influence of the sporting event may be short-lived, it could act as a catalyst to encourage consumers to at least try new products from Polish cosmetics companies.v

This success, however, cannot hide the fact that the Western European cosmetics market is already fairly saturated. Competition in the European cosmetics industry, which was estimated to be worth E67 billion in 2010, will no doubt be made more intense as the euro-zone debt crisis shrinks European consumers’ budgets. Many Polish cosmetics companies wishing to protect themselves from a downturn in Europe are looking to sell their products elsewhere. Major Polish cosmetics firms including DAX Cosmetics, Dr. Irena Eris, Inglot, Oceanic, Soraya and Ziaja have engaged, or are planning to engage, new markets.

Global expansion

Polish cosmetics products are already well known in Russia, the top destination for Polish perfumes, perfumery products, makeup, skincare and hair treatments in 2010. One reason for this popularity may be that cosmetics are cheaper to produce in Poland than, for example, in Western Europe, which results in lower retail prices. Polish producers also price their products according to the Polish domestic market, which has a lower purchasing power than those in Western Europe. Oceanic, which reported a 30 percent growth in exports between 2010 and 2011, attributes most of its success to the good price-to-quality ratio of its products. The firm, which already exports to 25 countries, including Canada, Georgia, Egypt, Estonia, Norway, Portugal, Russia, South Korea, Taiwan, Turkmenistan, Ukraine, the US and Uzbekistan, has

SECTOR ANALYSIS: COSMETICS

plans to enter more countries in Western Europe, as well as markets in North Africa, said Jolanta Górska, the company’s PR and advertising manager. DAX Cosmetics also has a strong presence in emerging markets, where it has already enjoyed success. “Results in emerging markets are impressive,” said Veronika Stempa, export manager at DAX Cosmetics. Her firm exports to Egypt, Jordan, Hong Kong, Lebanon, Saudi Arabia, South Korea, Turkey and the UAE. It also sells to clients in Canada, the EU and the US. Encouraged by good results, the firm, which saw its export sales increase by 29 percent in 2011, now plans to expand to Russia, South Africa and Spain. Meanwhile, Dr. Irena Eris, one of the best-known brands on the Polish market, will soon enter the Chinese and Malay-

Value of Polish cosmetics exports, top-five sectors, 2010, in zł billions Sector

Value

Makeup and skincare

3.3

Perfumes

1.3

Soaps

0.7

Hair treatments

0.6

Essential oils

0.4 Source: Central Statistical Office

MADE IN POLAND 2012

sian markets. The firm is already active in Hong Kong, South Korea and Taiwan. Company co-owner Henryk Orfinger recently told Polish business daily Puls Biznesu that he expects foreign markets to help drive a 30 percent increase in sales in 2012. But trying to export cosmetics to the Chinese market is not without its challenges, not least because China has traditionally been protective of its own market. According to Lidia Ziaja, export manager at skincare company Ziaja, the process of entering the Chinese market can be long and costly, as each product has to be registered, tested and approved by Chinese authorities. But she said her company is working towards this goal. “Now we export mostly to Europe but also a little bit to Asia, including South Korea, Taiwan and Vietnam. And this year we plan to expand to Hong Kong,” Ms Ziaja said. Currently, Ziaja’s largest export markets include the Czech Republic, Croatia, Finland, Georgia, Hungary, Ireland, Slovakia and Vietnam.

Going green

One trend that most Polish cosmetics companies have started adapting to is the growing demand for organic cosmetics. The heightened awareness and popularity of organic goods in general is making customers look for the same natural, sustainable and ethical elements in their cosmetics. While still representing only a small fraction of the total market, the natural cosmetics market in Europe is growing at a healthy rate,

SECTOR ANALYSIS: COSMETICS

MADE IN POLAND 2012

with revenues estimated at around E2 billion in 2010, according to Organicmonitor.com. The research and consulting firm notes that consumers increasingly want to know where their products come from, and are demanding in ever-larger numbers that their cosmetics contain natural ingredients. Many also want to avoid potentially harmful substances. Industry website Wiadomoscikosmetyczne.pl forecasts that the organics cosmetics market in 2015 will be worth $6.3 billion in Europe and $5.8 billion in the US. Although organic cosmetics are for the moment more popular in richer Western European countries, Ms Górska said she could also observe a growing demand for organic, natural and ecological cosmetics in Central and Eastern Europe. One indicator of this trend is the value of exports of essential oils, which are widely used in organic cosmetics. These saw spectacular growth between 2009 and 2010. According to figures from GUS, the value of Polish essential oils exports rose from zł.5.5 million in 2009 to zł.41.2 million in 2010. The largest buyer of Polish essential oils in 2010 was France, which purchased close to zł.32.86 million-worth from Polish producers.

Innovative skills

Perhaps in contrast to many other Polish exporters, cosmetics industry players from Poland have been recognized as be-

Top 10 destinations for Polish beauty preparations, skin-care products and other similar products, 2010, in E millions Position

Country

Value

Russian Federation

310

United Kingdom

226

Germany

167

Ukraine

134

The Netherlands

France

Spain

Italy

Turkey

Romania

59 Source: Central Statistical Office

ing innovative. According to Global Insight, Poland accounted for over three-quarters of all patents published by the 12 newest EU member states in 2007. Moreover, the majority (98 percent) of companies active in the Polish cosmetics sector are small- and medium-sized enterprises. Global Insight estimates that there are 795 SMEs in the sector, with the majority having fewer than 10 employees. One example of an innovative Polish cosmetics company is Anna Pikura, a cosmetics and collagen firm founded in Wrocław. The company currently makes some of its collagen products using a patented solution whose ingredients include extract of salmon. The firm is banking on the increasing popularity, due to their less invasive nature, of topical collagen products as alternatives to BOTOX injections. According to company representative Anna Grabowska, collagen is costly to extract and produce, even in Poland, but there may be markets of eager consumers willing to pay for it outside of the country. It’s too early to tell whether Polish cosmetics companies will defy the European downturn and continue to push their exports with the same impressive growth levels that have characterized the last decade. But with competitive prices and a healthy dose of innovation, Polish cosmetics firms seem well prepared to venture far away from their traditional markets. v

In cooperation with:

TAKING OFF

The end of the Cold War meant trying times for Polandâ&#x20AC;&#x2122;s defense industry, but it seems to be slowly getting back on its feet again

ore than 20 years after the fall of communism, the Polish defense industry is still coping with major restructuring and a complete reorientation of its production. Nevertheless, Polish defense firms are successfully landing deals to provide an increasing number of Asian countries with military equipment, as evidenced by the recent landmark contract between Bumar and the Indian Defense Ministry for armored recovery vehicles. But much work has to be done before Poland will be able to compete with many of the major players in Western Europe.

Beware the hangover

No records of actual exports from the Polish defense industry are available, and so figures pertaining to the value of export licenses issued serve as a rough estimate. In 2006, the

BY REMI ADEKOYA value of such licenses issued was E275 million. By 2008 that number had grown to E368 million and in 2009 it had more than tripled to E1.4 billion. However, the jump in 2009 was mainly due to cooperation between Polish firms, who jointly delivered components to US and Canadian defense manufacturers. By 2010, the figure had dropped back to E457 million. These numbers place Poland far behind not only major European countries like France, which boasted defense export sales of E12.6 billion in 2009, Italy (E6.6 billion) and Germany (E5 billion), but also behind the relatively tiny Austria, whose defense exports stood at E2.2 billion that same year. According to Jakub Jaworski, director of the international cooperation office at the Polish Chamber of National Defense Manufacturers, the fall in defense exports started after the

MADE IN POLAND 2012

SECTOR ANALYSIS: DEFENSE

BUMAR GROUP

AN INNOVATIVE PLAYER ON THE CENTRAL EUROPEAN DEFENSE MARKET

umar Group is the largest producer and supplier of defense systems in Central Europe. Over 40 years of activity in the defense industry has strengthened Bumar Group’s position as a solid and reliable supplier for the demanding client that is the Armed Forces of the Republic of Poland and for over 40 different countries from regions such as Asia, the Middle East, Europe, Latin America and North America. Bumar Group companies have been cooperating for many years with the best Polish universities, implementing research and development initiatives in state security and defense, including many WUT and MUT faculties. State security and defense becomes more and more crucial in terms of today’s terrorist and natural threats, and the special technologies, checked in hard conditions, used until now for military purposes only, are now being successfully adapted for the civilian market, as dual-use technologies. Science and industry efforts in research and development leading to new solutions in state security and defense need to be joined to rise to new and increasing threats. In Poland, scientists’ work is often dispersed and the industry has lacked trust in the promptness of scientists’ work. On March 5, 2012 Bumar sp z o.o. and 2 companies of the Bumar Group – Bumar Soldier S.A. and Bumar Electronics SA signed a Letter of Intent with the Warsaw University of Technology and the Military University of Technology on research and development cooperation as well as on the creation of a defense industry cluster to introduce

funds, or for cooperation with external funds. An example of a financing innovation that mainly used the company’s own means is the anti-aircraft and antimissile defense programme: the Shield of Poland. This is a technologically advanced, strategic project of Bumar Group, prepared by Bumar Electronics SA and Bumar Amunnition SA. Its detailed solutions have a crucial meaning for fast and efficient anti-aircraft and anti-missile protection in the whole national defense system. a new framework and quality to cooperation between science and industry. The document opens up more flexible forms of cooperation within the defense industry cluster, particularly with small and medium enterprises. The cluster will constitute a platform for mutual support and cooperation between science and industry, it will support and promote Polish science and industry interests in the political and social arenas, both in Poland and abroad.

Inside Bumar Group, there is one of the most innovative companies in Poland. Bumar Soldier SA has won 3rd place in the most innovative Polish companies rating organised by biggest Polish daily newspaper “Rzeczpospolita.” This leader of laser technology has not only increased its R&D budget by 300%, but has also become a leader in the number of R&D employees, licenses, patents and developed products constituting absolute inventions in the international market.

Today the Bumar Group designates around PLN700 million for research and development projects. The expected results of these projects are mostly innovative products or subassemblies used in products, which are the most likely to satisfy Polish customers, and, hopefully, help find foreign buyers. This tendency will be maintained. Bumar Group uses all available external financing sources. Bumar participate in contests organised by the National Research and Development Centre. The company also keeps searching for opportunities to create its own R&D

As the leading armament producer and supplier in Central Europe the Bumar Group is one of the key partners for defense companies from all over the world, for example: EADS, Lockheed Martin, Nammo, Rafael, MBDA, Raytheon, Kongsberg, BAE Systems. Bumar Group consists of 23 companies able to provide modern and technologically advanced equipment which can meet any demands of the contemporary battlefield in the areas of advanced electronic defense systems, ammunition and rockets production, armoured vehicles and soldiers’ personal equipment. v

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SECTOR ANALYSIS: DEFENSE

collapse of communism. “During the Cold War, the market was split between the NATO countries and the Warsaw Pact countries,” he said. “In the latter, production was split between the members, with one country producing a tank gun, another producing a chassis and so on … demand was guaranteed then. But after the Cold War ended, the ties were cut off and you found that no single country was able to produce, for example, a whole tank by itself,” he added. Mr Jaworski also said that the Polish defense industry had to contend with over-employment in most defense firms after 1989 and that some firms had survived the restructuring process, while others had not.

Success in sight

Today, the Polish defense industry is centered around 100 companies, roughly half of which have some connection to the state. The remainder are privately owned and consist of a mix of formerly state-owned firms, foreign-controlled subsidiaries and greenfield investments.

MADE IN POLAND 2012

By far the largest player in the Polish market is the Treasuryowned Bumar Group, which received a big boost in January 2012 when it signed a zł.1 billion contract to supply the Indian army with 204 WZT-3 Armored Recovery Vehicles. This is the largest contract the Polish defense industry has seen in years. It was also the fourth contract between Bumar and BEML Limited, a firm controlled by the Indian Defense Ministry, to deliver armored recovery vehicles. Up until now, Bumar has supplied 352 WZT-3 vehicles to India. The latest contract also includes a package of technical support, final assembly, receipt procedures, testing of completed vehicles, as well as technical assistance. In recent years Bumar has also sold PT-91 M tanks to Malaysia and Grom rockets to Indonesia. “We have also delivered 48 MBT PT-91Ms to Malaysia and short-range air-defense systems (KOBRA) to Indonesia,” said Tomasz Badowski, a spokesperson for Bumar. Bumar, which is currently undergoing a restructuring process, includes more than 20 companies operating in four divisions: ammunition, soldier, electronics and land. In 2010, the firm’s sales revenues amounted to zł.2.4 billion, zł.348 million of which came from exports. The company’s plan for

MADE IN POLAND 2012

SECTOR ANALYSIS: DEFENSE

2011 was to have zł.2.9 billion in revenues, of which zł.530 million was expected to come from exports.

company plans to build 20 of these machines annually from 2012, all slated for export sales.

Black Hawk up

The firm’s current product line also includes the M28 – a turbo-prop, twin-engine, STOL class (short takeoff & landing) aircraft designed for passenger and/or cargo transportation, para drop, medical evacuation, marine reconnaissance and patrol flights, as well as search and rescue missions. It also builds UH-60M Black Hawk Cabins, used in the assembly of Sikorsky UH-60M Black Hawk helicopters. The firm cooperates with global aviation players such as Spirit Aerosystem, Pratt & Whitney Canada and SAAB Aerostructures.

But Poland’s defense industry offer isn’t only restricted to Bumar. Poland also does reasonably well with assault-rifle sales, mostly due to exports to the US. In 2010, 2,000 7.62mm AKMs were exported there, 4,000 7.62 mm AK-47s and 1,400 7.62 mm DPMs. PZL Mielec is the biggest Polish aircraft manufacturer and is currently expanding its production profile to include aerostructures and helicopters. The firm was founded in 1939 and privatized in 2007, when it was purchased by United Technologies Holdings (UTH), a subsidiary of United Technologies Corporation (UTC). Today, it manufactures both civilian and military aircraft, including the s70i Black Hawk helicopter (Sikorsky Aircraft, owner of the Black Hawk brand, is a sister company). The

In December 2011, Sikorsky Aircraft signed a contract with Brunei’s Ministry of Defense to provide 12 S-70i Black Hawk helicopters with associated spare parts, training and ground support equipment. The aircraft will all be built in Mielec. The contract also contains an option for 10 additional helicopters.

SECTOR ANALYSIS: DEFENSE

“I am proud that another foreign customer has chosen helicopters built in Mielec,” Janusz Zakrecki, president of PZL Mielec, said in a statement after the news was announced, adding that “this contract shows the trust that our products have been gaining throughout the world.” The firm regards the contract as particularly important because it could it gain recognition in southeast Asia.

Further potential

According to Bumar’s Tomasz Badowski, there are several areas in which the firm could be very competitive abroad. “We have good integrated defense systems and products in areas of air defense solutions, ammunition, personal weapon and individual soldier equipment, and also armored vehicles,” Mr Badowski said. He also said that Bumar is currently developing new defense programs such as the multilayered air defense system, Shield of Poland, the multi-role armored platform ANDERS, programmable ammunition for tanks and self-propelled howitzers, as well as a future soldier system called TYTAN. The firm’s short-range air-defense missile Grom is a very competitive product, Mr Badowski added.

MADE IN POLAND 2012

Meanwhile, the Polish Chamber of National Defense Manufacturers’ Jakub Jaworski sees further potential in the general area of electronics, such as communication devices, smalland-medium-sized UAVs, and also heavy equipment. But while Polish firms are encountering more and more success abroad, especially in Asia, these markets are not easy to navigate and require a certain level of political support. In markets such as Asia and Africa, strong political support is required to do business, said Mr Jaworski. “In those countries they ask two questions: ‘Does your own army use this equipment?’ and ‘Do you have the support of your government?’” According to him, countries like the US and the UK actively support and lobby for their defense firms abroad, which is not always the case with the Polish government. Poland’s defense industry still has much work to do in order to compete with the world’s best, but if the industry’s restructuring process is carried out successfully, the government puts more effort into promoting the country’s firms abroad and the industry’s players continue to improve, then it could yet see many better days ahead. v

TRIUMPH OVER ADVERSITY Poland successfully utilized the opportunities provided by its presidency of the EU to ensure continued growth in agricultural exports in 2011

ast year proved to be a successful one for Poland’s agricultural market. This was despite testing times that saw adverse weather affecting crops, and a costly outbreak of E.coli bacteria in neighboring Germany that lead to a Russian embargo on EU fruits and vegetables.

Despite the difficulties encountered, 2011 was a record one for Poland in terms of the performance of agri-food exports, which were up E4 billion on 2010, to just over E15 billion, according to the Ministry of Economy. “Last year was a very hard year for farmers. The harvest was one of the worst for the past 40 years,” Poland’s Minister of Agriculture Marek Sawicki told Made in Poland. But despite a slightly lower harvest of basic grains and a sig-

BY DAVID INGHAM nificantly lower harvest of oilseed rape, there was a large increase in the amount of sugar beet, corn, vegetables and fruits harvested last year. Overall, crop production increased by 5.5 percent. “When it comes to the agri-food market, what proves that it was not a bad year are the sales results for foreign trade of agri-food goods,” Mr Sawicki said.

Tough times

In 2011, Poland’s agricultural sector was severely affected by the outbreak of E.coli that struck the EU over the summer. Various fresh fruits and vegetables such as lettuce, tomatoes and cucumbers were all touted as the possible cause of the deadly bacteria, which likely originated in Egypt.

SECTOR ANALYSIS: FOOD

MADE IN POLAND 2012

Sales of fresh fruit and vegetables across the EU plummeted following numerous deaths, mostly in Germany, and the hospitalization of thousands of people all over Europe, including three Poles.

drop in sales, cost Polish farmers dearly. Not all was lost however, as the European Union agreed to pay Poland’s fruit and vegetable producers E46 million in compensation as part of a E210 million pan-European package.

Despite the fact that Poland’s Ministry of Agriculture insisted Polish produce was safe, Russia, an important export market for Polish food, banned all fruit and vegetable imports from the European Union. The move, along with the EU-wide

The Polish food industry’s image took another hit in February 2012, however, as an investigation found that five men had been selling industrial salt for years to food-processing plants in Poland. Polish health authorities later ruled that the amounts of dioxins and heavy metals in the salt, which is normally used to de-ice roads, were minimal and not dangerous to human health. But the harm was done, and authorities in neighboring Czech Republic announced a temporary ban on imports of Polish salt, while Polish health authorities ordered over 230,000 kilos of food to be withdrawn from the market as a precaution.

Dairy exports In 2011, the biggest buyer of Polish milk and condensed cream was Algeria. Polish dairy products are also exported to China, Egypt, Mexico and Russia, among other countries. However, the majority of Polish dairy exports go to European countries. In 2010, the biggest exports in this sector were cheese and curd (E433.2 million), milk and cream (E379.3 million) and butter (E85.4 million). The volume of exports of dairy products in 2011 remained at a level similar to the previous year, but the value of sales grew by some 10 percent. Among major companies active in the dairy sector are Arla Foods, Danisco, Danone Polska, Hochland Polska, Lacpol, Mlekowita, Mlekpol, Olsen Trading, Polindus, Polmlek Olsztyn, Spółdzielnia Mleczarska Ryki and Target Polska. v

The country’s Agriculture Ministry took seriously the possible negative impact of the “salt affair” on perceptions of Polish food products, and the Agriculture Minister declared he would “not allow our efforts [to promote Polish food] to go to waste due to the activities of a few crooks and criminals.”

European Union impact

Poland’s accession to the EU in 2004 originally created fears that the domestic market would be flooded with foreign produce and that as a result the agriculture industry would suffer. But EU membership has actually helped open up new export possibilities, since barriers to foreign trade with other EU countries have been removed. This is evidenced in the sizable rise in the value of Polish exports since accession,

MADE IN POLAND 2012

SECTOR ANALYSIS: FOOD

Meat exports

The main food export from Poland in terms of value is meat. In 2010, the country was fourth in the EU in terms of pork and poultry production and seventh for the production of beef. Pork and poultry products are now not only exported to traditional markets such as Germany and the Czech Republic, but also to new, eastern, markets such as Japan and South Korea. Poland is currently ranked as one of the lowest in the EU in terms of beef consumption. However, the number of herds in Poland is increasing steadily, due mainly to the realization that beef obtained from certain specialized breeds of cattle is an increasingly sought-after product. In 2000-2010, beef production increased by 17.5 percent, from 331,000 tons to 389,000 tons. Turkey, in particular, has become a new market for Polish beef exporters. Meanwhile, poultry producer Konspol has recently opened new poultry factories in Argentina, China and Indonesia. Other major companies in the Polish meat sector include Agros Holding, Animex, Drosed, Indykpol, PKM Duda and Sokołow. v from E4 billion in 2003 to an estimated E14 billion in 2011. “Since entering the European Union, Poland has seen a rising turnover in agri-food products in terms of foreign trade,”

said Lucjan Zwolak, vice president of the Agricultural Market Agency. According to preliminary data from the Central Statistical Office (GUS), the value of agri-food exports in 2011 exceeded the value of export sales in 2010 by almost 12 percent. The country’s recent six-month presidency of the Council of the EU also provided Poland with a golden opportunity to promote Polish produce to officials and business leaders from other European countries. During a visit by EU ministers to Poland in September 2011, Minister Sawicki said he wanted to show how beautiful and diverse Polish agriculture products are. Under the motto “Polska … Tastes Good!” the ministry showcased Polish produce at various formal and informal meetings during the period of the presidency, which finished at the end of 2011. For example, at a meeting in Strasbourg a total of 3.5 metric tons of Kashubian strawberries were distributed to those present. In Brussels, in September, 12,000 Łąck apples were served to delegates and politicians at a meeting of the EU council of ministers, while 5,000 Saint Martin Croissants (Rogul świętomarciński) were made available at a similar meeting in November. “Polish food products were widely discussed in Strasbourg and Brussels while we were promoting Kashubian strawberries, Łąck apples or the Saint Martin croissants in the EU and in the European Parliament. This promotion has been very effective,” said Mr Sawicki.

SECTOR ANALYSIS: FOOD

Changing landscape

The years following EU accession have seen a decrease in the number of overall agricultural holdings in Poland. This can be viewed as a positive development for the country, since small, unproductive agricultural holdings have traditionally formed the largest share of the sector. In 2009, the overall number of agricultural holdings in Poland amounted to more than 2.5 million, a 12.1 percent decrease from 2003. Currently some 40.4 percent of agricultural holdings in Poland are relatively small, sized 1-1.5 hectares, and have relatively low productivity. Over the same period, larger holdings have increased, with the number of 30-50-hectare farms growing by 0.3 percent and 50-100-hectare plots increasing by 0.2 percent. According to the Ministry of Agriculture, these larger farms are important to the future of Poland’s agricultural sector. The ministry says these farms’ most important challenges are to become more competitive, continue to be innovative and to adjust to production under changing environmental conditions and higher standards of animal welfare. Since Poland’s accession to the EU, organic farming, an agricultural production system that sustains the health of soils and ecosystems by avoiding the use of synthetic fertilizers and pesticides, has developed particularly well. In 2003, organic farming was carried out on 61,200 hectares of land,

MADE IN POLAND 2012

Fruit and vegetable exports Poland is a major exporter of fresh fruit and vegetables, with the country’s exports worth some zł.2 billion in 2010. However, the fruit and vegetable market was severely affected in 2011 by Russia’s embargo of Polish fruit and veg products, as a result of an E.coli scare in Germany. The Ministry of Agriculture estimated that last summer’s embargo cost Polish farmers as much as zł.160 million. Despite this, one sector which had a particularly good year was Poland’s mushroom market, which has grown rapidly in recent years. Poland, which produces 225,000 metric tons annually, is currently the biggest producer of mushrooms in the EU. The country is also an important producers of preserves and frozen vegetables. Poland currently ranks fourth in terms of fruit production and sixth in vegetable production among EU producers. Major companies exporting fruits and vegetables include Agros Nova and Bakalland. v spread over 2,286 different agricultural holdings. Data from the Ministry of Agriculture, as of the end of 2010, showed that the area had grown to 518,500 hectares and that there were 20,956 registered organic-food holdings. Organic farming land now constitutes around 2.8 percent of the total agricultural area of Poland.

New markets

“Traditionally the primary export markets for Poland have been European Union countries, where the target is almost 80 percent of the agri-food exports. At the same time Poland has expanded its markets and is looking in new geographical directions,” said Mr Zwolak, of the Agriculture Market Agency. In the first half of 2011 Polish sales within the European Union increased by 9.8 percent, according to data from the Ministry of Agriculture. Germany continued to be Poland’s largest export market for agri-food products during this period, with sales of approximately E1.4 billion. The products which sold best in the German market in terms of value were salmon, processed and preserved fish, fruit juice (mainly apple juice), poultry, biscuits, and other baked products, as well as milk powder, cigarettes and beef. But the largest increases in export trade were with Turkey and Belarus. Trade from Poland to Turkey grew by some by 164 percent, due to an increase in the export of beef products, and to Belarus by 110 percent, due to increased sales of pork and apples. It seems that eastern markets could hold the key to further growth for Polish agri-food exporters. Significant increases in exports to South Korea and Japan were seen during the first half of 2011. In terms of value, the sale of cigarettes, beef, poultry, chocolate and chocolate products, pork, bakery and confectionery products, sugar syrup, smoked fish (especially

MADE IN POLAND 2012

SECTOR ANALYSIS: FOOD

Alcohol exports Poland’s main alcohol export is vodka, and in the past five years the country’s vodka exports have almost doubled. In the first three quarters of 2011, vodka export sales grew by some five percent year-on-year, according to the Polish Spirits Industry Employers Union (ZP PPS). The largest foreign markets for Polish vodka in Europe are France, Italy and Hungary, while outside the European Union the United States imports the greatest amount of Polish vodka, followed by Mexico and Canada. Last year was a record one for Polish vodka producer Sobieski, whose sales in the US reached a record nine million liters. And with the domestic spirit market shrinking, Asian countries have proven to be a lucrative new source of income for Polish vodka brands. Both Wyborowa and Belvedere have managed to successfully enter the Chinese market, while Chopin Vodka sells well in Japan, and Żubrówka is strong in both Cambodia and Vietnam. Leading alcohol producers in Poland include Ambra, Browar Łomża, Carlsberg Okocim, Cichan, Grupa Sobieski, Grupa Żywiec, Kompania Piwowarska and Van Pur.v

salmon), cheese and cottage cheese and apples, dominated. Looking forward to the rest of 2012, Mr Zwolak said he felt that despite difficulties in making predictions due to the unseasonably dry autumn and winter, for the majority of agricultural sectors, this year will not be worse than last year. In particular, both dairy and poultry are markets that are expected to offer increased demand for Polish exports. Even though the agricultural sector has not had an easy ride in recent years, there is definitely room for optimism since Polish products continue to be popular abroad. v

SECTOR ANALYSIS: HEAVY METALS

MADE IN POLAND 2012

GLOBAL REACH While Poland’s copper exporter KGHM is enjoying unprecedented success, the country’s steel sector is still recovering from the global crisis

oland’s soil is rich in mineral resources, and the country exports considerable volumes of metals and metal products, including aluminum, copper, lead, steel and zinc. According to figures from the Ministry of Economy, exports of metallurgical products rose by 18.8 percent in 2011, to E16 billion, putting their share of total exports at 11.8 percent. Among those, exports of articles or iron and steel amounted to E4.7 billion, cast iron and steel to E3.9 billion, and copper products to E3.5 billion. These form by no means a homogenous sector, as evidenced by the different prospects for Poland’s two major metal exports, copper and steel.

Copper boom

The star among Polish metals export is copper. The red metal, riding a wave of historic-high prices and growing demand, especially from China, had a stellar year in 2011. One of the top ten producers of copper worldwide, Poland’s feat is attributable to mostly one company. “Polish copper exports practically boil down to KGHM,” said Robert Maj, analyst at KBC Securities. Sales revenues of KGHM, Europe’s

BY ALICE TRUDELLE second-largest copper producer, roughly equal the market of Polish copper and silver production, which is estimated at around zł.20 billion annually. Silver accounts for about 20 percent of this figure, or zł.4 billion, making the firm the second-largest producer of refined silver in the world. KGHM produces refined silver bars, which are used in jewelry, electronics, as well as in the electrical and photographic industries. Its main customers for silver are the UK, Germany and Belgium. Meanwhile, around a quarter of KGHM’s massive zł.16 billion copper sales are domestic. The rest is exported, with a little over 40 percent going to Europe. Exports to Germany account for around half of this figure. But the importance of China as a market for Polish copper is rapidly growing. While sales to the Asian giant used to account for around 6 percent of KGHM’s total only a few years ago, they now make up around 15 percent. According to Mr Maj, China could grow to make up 20 percent of KGHM copper exports, on par with Germany, in upcoming years.

MADE IN POLAND 2012

SECTOR ANALYSIS: HEAVY METALS

Eastern demand, Polish profits

Today China accounts for 40 percent of global copper consumption, and its appetite is growing rapidly. Chinese demand was growing at a double-digit rate before the global financial crisis, and at around 8 percent in 2011. Similar growth levels are forecast for 2012. KGHM’s copper cathodes, copper wire rod and round billets are needed in wiring for air conditioning, appliances, construction and transportation. “China needs copper to grow its cities. Recently the proportion of Chinese living in urban areas crossed 50 percent of the total population. This means they will also keep buying appliances, cars, cellphones, etc. All this makes China hungry for copper,” said Mr Maj. A major deal landed by KGHM during Polish President Bronisław Komorowski’s visit to China in December 2011 confirms this. China Minmetals agreed to the long-term purchase of KGHM’s cooper cathodes between 2012 and 2016. The five-year agreement will involve the sale of 100,000 metric tons of copper cathode per year, valued according to today’s prices at $700 million, putting the deal at a total of $3.5 billion. Demand for copper is also expected to rise in the other emerging BRIC nations (Brazil, India and Russia). Meanwhile, high demand has led to a spike in prices. “We are in a bull cycle for commodities. Right now copper prices are

at almost historical levels,” said Mr Maj. This has proved very profitable for KGHM, which reported a yearly profit of zł.11.3 billion in 2011, a record in the firm’s history.

Challenges ahead

Admittedly, 2011’s historic profits were helped by the sale of KGHM’s stake in cellphone operator Polkomtel, worth around zł.2.6 billion, and the firm substantially reduced its profit outlook for 2012, to zł.3.8 billion. The other main reason for lower expected profits in 2012 is a new copper and silver mining tax, in place from the spring of 2012, which will be drawn mainly from KGHM. Indeed, success has its downsides and the state-controlled company’s booming profits have become an attractive target for the Pol-

Revenue from exports in 2010, top Polish metals companies, in zł. billions 3

KGHM

12.02

ArcelorMittal Poland

5.23

Grupa Can-Pack

2.33

GK Impexmetal

1.17

GK Stalprodukt

0.79 Source: Polityka

SECTOR ANALYSIS: HEAVY METALS

ish government, which is trying to plug holes in the budget. The new tax is expected to bring over zł.2 billion to the state budget annually from 2013. The tax has drawn criticism from the firm, as well as from several politicians. “It’s a very bad solution. The amount of copper that is economically viable to extract from Polish deposits is decreasing, as the cost of excavation and production is rising, which means the company is going to be much more exposed to macroeconomic changes. This will leave very little space to develop the firm,” said Mr Maj. Nevertheless, the company is going ahead with mergers and acquisitions. Among them is the massive takeover of Canadian rival Quadra FNX for around zł.9.5 billion, the largest takeover in Poland’s history, completed in March 2012. The acquisition of Quadra FNX will increase KGHM’s copper production levels by 25 percent in 2012 and by nearly 50 percent by 2018, while operating costs will fall by more than 20 percent come 2018. The deal will also make KGHM, currently the world’s ninth-largest producer of copper, number four globally. KGHM has also said it is on the lookout for more purchases. KGHM has been a star among Polish firms for some time, and despite challenges, that seems unlikely to change soon. “KGHM has gained a historic opportunity to make a quantum leap in its development and in its long-term value. I ensure you that we will take full advantage of this opportunity,”

MADE IN POLAND 2012

Herbert Wirth, president of the management board, said in a statement.

Steel works

Poland is also a large exporter of steel products. Iron was one of the important sectors of the Polish industry before World War II, and some factories still in operation today date back to the 19th century, such as the former Huta Królewska, active since 1802, former Huta Florian in Świętochłowice, founded in 1828, and Huta Batory’s former plate rolling mill, established in 1900. All three are now owned by ArcelorMittal. Despite Poland’s steel industry remaining a high priority under communist rule, in 1989 a number of obsolete installations had to be shut down. Massive investments were made to modernize the industry, but it wasn’t until the turn of this century that Polish steelworks, consolidated with a number of mergers and acquisitions, started to become competitive again. Over the last few years, several large investments were carried out, especially by ArcelorMittal Poland, by far the biggest steel producer in the Polish market, holding about 70 percent of production capacity of the Polish steel industry. “Since 2004, [when the company bought Polish Steelworks (PHS) from the state], ArcelorMittal has invested over zł.4.5 billion in Poland. We intend to continue this in the years to come,” said Jacek Woliński, director of ArcelorMittal Poland’s Kraków unit, in a statement.

Other important players in the Polish metals sector

Alchemia

The steel conglomerate comprises six subsidiaries, merged in September 2011: Huta Batory, an important producer of high-quality seamless steel pipes of large diameters supplying the power engineering sector, the oil and gas transit sector and the chemical industry; Rurexpol, a producer of seamless pipes for a wide range of applications, including the mining industry; Walcownia Rur Andrzej, a manufacturer of hot-rolled seamless pipes of small diameters; Huta Bankowa, producer of bulb flats, equal-leg angles, round bars, rolled tires and rings; Kuźnia Batory, producer of forged bars, used in the machine-building, shipbuilding, power engineering and automotive sectors; and Laboratoria Badań Batory, a research lab. Alchemia saw net profits boom to zł.38.9 million in H1 2011, compared to zł.7.7 million in the same period a year earlier.

Can-Pack

The group, comprised of over a dozen enterprises, produces aluminum beverage cans, steel food cans, steel chemical containers and glass packaging, and sees average annual sales of over $1 billion. In recent years, Can-Pack started beveragecan making plants in Finland, India, Morocco, Poland, Romania, Russia, Ukraine, the United Arab Emirates and the UK. According to Polityka, the firm is Poland’s 17th-biggest exporter and its revenue from export in 2010 amounted to zł.2.34 billion.

Impexmetal

The WSE-listed company concentrates on the aluminum business, but also sells products of copper, copper alloys, lead, silver, steel and zinc. The company operates globally with about 270 foreign partners, and cooperated at home with about 1,120 Polish companies. According to Polityka, the firm’s revenue from export in 2010 amounted to zł.1.17 billion. Impexmetal posted consolidated net profits of zł.106.60 million for full-year 2011, up from zł.78.80 million a year earlier. Sales amounted to zł.2.8 billion in 2011. “I would be very happy if in 2012 we could repeat the net profits of 2011, but I am afraid that it will be very difficult,” Piotr Szeliga, president of Impexmetal’s management board, told Money.pl.

GK Stalprodukt

WSE-listed GK Stalprodukt is a leading manufacturer and exporter of highly processed steel products such as transformer electrical sheets, cold-formed sections, road barriers and toroidal cores. The company also has its own distribution network of steel products. According to Polityka, the firm’s revenue from export in 2010 amounted to zł.797.32 million. GK Stalprodukt posted sales of zł.520 million in Q4 2011, up 17.2 percent on the same period in 2010. This was the group’s highest-ever quarterly results. Net profit was three times higher y/y. But for the whole year 2011, even though the total sales increased by 15.6 percent y/y, net profit was down 17.4 percent y/y, due to unfavorable price trends in the electrical sheets segment, the firm said in a statement. v

MADE IN POLAND 2012

SECTOR ANALYSIS: HEAVY METALS

Polish exports of metals, 2010, in E millions Articles of aluminum

105.5

Articles of copper and copper alloys

1,107.4

Copper and copper alloys

1,809.5

Copper waste and scrap Jewelery of gold, silver, pearls Ferro-alloy Flat-rolled products of iron or non-alloy steel Lead and articles of lead

29.1 5.7 12.8 165.1 9.5

Stainless steel and articles thereof

14.1

Tubes, pipes and hollow profiles, of iron or steel

28.6

Tube or pipe fittings, of cast iron or steel

21.2

Railway or tramway track construction material

11.0

Radiators, air heaters and hot air distributors of iron or steel

148.6

Reservoirs, tanks and similar containers, of cast iron or steel

16.9

Screws, bolts, nuts, hooks, rivets, of iron or steel

20.7

Semi-finished products of iron or non-alloy steel

185.9

Silver

58.7

Stoves, ranges, grates, barbecues, cookers, gas-rings of iron or steel

199.0

Structures and parts of structures, of cast iron or steel

106.8

Unwrought aluminum and aluminum waste and scrap Waste and scrap of iron and steel Zinc and articles of zinc

35.0 495.6 19.7 Source: GUS

Recently the firm has made investments aimed at producing more value-added grades of steel, such as the commission in 2011 of two hot metal desulphurization stations at its steel plant in Dąbrowa Górnicza. The zł.24 million investment will allow for the production of six million tons of high-quality steel suitable for products in the automotive, appliance and construction industries.

It’s the economy

Poland’s steel exports include a wide range of products including bolts, cookers, gas rings, grates, hooks, nuts, pipes, radiators, reservoirs, rivets, screws, stoves, structures and structure parts, tanks and tubes, which are manufactured and exported by an array of smaller companies. All of these steel products are needed in the building of infrastructure, factories and houses, among other things. This means that steel consumption tends to increase when economies are growing. Thus, starting in 2008, the global financial crisis hit the sector considerably harder than other branches of the industry. By 2009, the sudden slump in demand led to a serious decrease in steel prices, production size and level of employ,ment.

Coupled with high energy prices in Poland, this led to a number of Polish steelworks deciding to reduce operations. Steel exports, largely dependent on Europe’s economic health (The EU accounts for 75 percent of Polish steel exports), are now experiencing a fragile recovery. “In recent years we have witnessed a great number of volatilities. Booming in 2007 and 2008, deep recession following the global financial crisis of 2009 and recovery in 2010. Current market dynamics augur well for future steel production and sales, [but] the raw materials market (iron ore, coke, gas and other fuels and utilities) of late is characterized by extreme price fluctuations. This, again, warrants care when considering growth aspirations,” Romuald Talarek, chairman of the Polish Steel Association (HIPH), said in a statement. By mid-2011 ArcelorMittal was operating its Polish facilities at around 80 percent operational capacity. The company now says it will take several years to return to pre-crisis production levels. “In our opinion, the most significant risk for companies based in Europe is a loss of market shares due to cheap im-

SECTOR ANALYSIS: HEAVY METALS

ports from countries with lower production costs. With regards to Poland specifically, we should focus on two major challenges: energy prices combined with the excise rate, both of which are higher in Poland than in the neighboring countries, as well as stringent EU regulations with regards to CO2 emissions. In the east there are no such restrictive limits of CO2 emissions and Ukraine itself also has the advantage of raw materials, because rich deposits of iron ore are located there. All these factors constitute a challenge for steelmaking in Poland,” said Sylwia Winiarek, head of external communications at ArcelorMittal Poland. “[This year] is going to be a difficult year for ArcelorMittal, particularly for the plants located in Europe, as there is still significant overcapacity and we see no immediate return to demand levels from 2008.” Research firm Business Monitor International also foresees Polish steel output to remain well below pre-recession levels for several years, although in terms of growth, the firm puts the Polish steel industry as one of the best performing in Europe. “The growth rate seen in 2010 was not repeated in 2011 as domestic consumption and fixed investment failed to make up for the expected shortfall in exports. Exports are still 18 percent below the 2008 level and insufficient to prompt a fast return to pre-recession output levels,” the firm wrote in a recent report.

MADE IN POLAND 2012

Looking forward, the Polish steel industry can count on relatively robust demand at home, with continued high production of cars, consumer goods, home appliances and machines, as well as continued activity in road and railway construction. But the picture for exports is decidedly less rosy. China, for one, while it acts as a push for copper exports, is becoming an important competitor for European steel producers. The Asian giant is the biggest steel producer in the world (Poland comes in distant 19th), and its cheaper steel exports have become enough of a worry that in January 2012, the European Steel Association EUROFER filed an anti-subsidy complaint against the country at the European Commission. “Clearly the miracle of the Chinese steel industry, which now accounts for almost 50 percent of global steel production, is not the result of free market forces. The Chinese government owns, directs and subsidises virtually every aspect of its steel industry and has financed huge excess capacities. By promoting a sector intrinsically lacking a genuine cost advantage, China continues to be the major cause of unfair competition in the global steel market, injuring in particular the European steel industry on the domestic and third markets,” Gordon Moffat, EUROFER’s director general, said in a statement. v

MADE IN POLAND 2012

SECTOR ANALYSIS: HIGH TECH

NEXT-GEN, TODAY Poland boasts a patchwork of small but successful high-tech firms

BY E BLAKE BERRY

“M

ade in Poland” is not something you see written on a cutting-edge product. Not often, anyway.

The country is not associated with high technology in the same way as, say, South Korea, Japan, the US or Germany. Tellingly, the German term “Polnische Wirtschaft” (Polish economy) has for decades been a byword for backwardness (this is changing, albeit slowly). It’s not just a matter of reputation. Innovation and the production of new technologies within a given economy are, in most cases, closely linked with expenditure on research and development. Now consider this: According to the “OECD Science, Technology and Industry Scoreboard 2011,” Poland had the fifth-lowest expenditure on R&D in the organization as of 2009 (latest data available). In terms of private-sector R&D expenditure as a percentage of total expenditure, it was at the bottom of the 34-member bloc. Meanwhile, data from the European Union’s statistics office, Eurostat, show that the value of high-technology exports from Poland amounted to E4.9 billion in 2008 (again, latest

data available), roughly 4.3 percent of the value of all Polish exports that year. In the EU27, only Bulgaria and Estonia had lower percentages of high-tech in total exports.

Scattered pockets of innovation

There are plenty of other statistics on innovation and high technology, few of which flatter the Polnische Wirtschaft. Yet – as Mark Twain famously noted – statistics are often beguiling. In practice, the Polish economy is home to a respectable and growing volume of high-tech manufacturing. There are few areas in which Poland really stands out, though; no national technological specialty. Instead, there are scattered pockets of innovation spread across a spectrum of sectors. The production of medical, optical and precision instruments – taking place in three discrete but similar sectors – illustrates this point well. There are literally dozens of small and medium-sized enterprises (SMEs) manufacturing precision instruments in Poland, few of which have high-tech products, truth be

SECTOR ANALYSIS: HIGH TECH

MADE IN POLAND 2012

told. Calmet, a producer of calibrators and meter testers in Zielona Góra, and Sonel, a Świdnica-based maker of thermographic cameras, pyrometers and other metering equipment, are among the few standouts.

What is high technology?

For its part, Warsaw’s Wamed, a manufacturer of medical lasers and laboratory equipment, is one of the better-known Polish firms in its sector. And when it comes to optical instruments, Poland appears to have no firms engaged in high-tech production.

Settling on a definition of “high technology” is tricky. Does one focus on products or sectors? Where do services fit in? How much emphasis does one put on R&D intensity? After all, plenty of firms – and a few sectors – have stood at the bleeding edge of technical innovation, pouring money into R&D, only to discover themselves stuck in the scientific equivalent of a blind alley, with no viable product.

However, Sebastian Christow, director of the Electronic Economy Department at the Polish Economy Ministry, pointed out that there may be more firms involved at different stages of the supply chain in these sectors. “There are lots of small and medium-sized enterprises that produce small components,” he commented. “They’ve all got their own know-how.”

For simplicity’s sake, this article cleaves largely to the OECD’s “Technology Intensity Definition,” a product-based classification which groups industries according to R&D intensity. Accordingly, the following industries are considered “hightechnology”: aircraft and spacecraft; pharmaceuticals; office, accounting and computing machinery; radio, TV and telecoms equipment; and medical, precision and optical instruments.

Gross domestic expenditure on R&D (as % of total R&D expenditure in OECD), 2009

Pharmaceuticals are covered elsewhere in Made in Poland. The Polish aerospace industry, meanwhile, is robust and deserving of greater attention than can be afforded it here. Suffice it to say that Poland exports some aircraft and many aircraft parts; it exports neither spacecraft nor spacecraft components.

What remains of the OECD’s “Technology Intensity Definition” is touched upon here, and software development is also considered “high-tech” for present purposes. It isn’t as R&D-heavy an industry as certain others, but it’s knowledge-intensive and innovative. v

*2008 **2007

Israel

Finland

Sweden

US*

Germany

Poland

Greece**

Mexico**

High-technology exports (as % of total global high-tech exports), selected EU27 member states in 2008 10

Source: OECD Main Science and Technology Indicators Database (last updated June 2011)

++B Grossl Gross 2009 Israel Finlan Swede US* Germa UK ++IN Greec Mexic *2008 **2007 Source June 2

++B Room Highmembe Germa

SECTOR ANALYSIS: HIGH TECH

MADE IN POLAND 2012

Poland’s first computer processor

Nor is it supposed to be. The Warszawa is designed to be inexpensive (under zł.100) and users can program it directly using Java, facilitating open-source projects. As proof of concept, Gryf Technologia used the Warszawa processor in a specially built telemetry system collecting data from utility meters (water, electricity, gas), allowing the remote monitoring of facilities such as office buildings or factories. The processor could potentially be used in a variety of more sophisticated applications, including computers,

mobile devices and medical equipment, but Gryf Technologia president Marcin Kwiatkowski acknowledges that this is still 1.0 hardware. “The first Polish processor is a considered and practical design which is perhaps not revolutionary, but is easy to expand upon and opens the road for the development of [further] Polish processors,” Mr Kwiatkowski commented. He expects to enter production this year and intends to approach potential customers – both industrial and consumer – at the turn of 2012/13. Gross is domestic on R&D Export still a expenditure ways off, but Mr Kwiatkowski has his eye of total R&D expenditure OECD), like 2009Poland, needs on(as the% Brazilian market. “This incountry, its5 own advanced technological solutions and our processor can help them with this,” he said, opining that the popularity 4 of Java technologies in Brazil could help build interest. v *2008 **2007

When it comes to electronics, the volume of production is many times greater. Most of the firms involved are multinationals, however.

Source: OECD Main Science and Technology Indicators Database (last updated June 2011)

LCD panel production is a major sector. South Korean manufacturer LG Display, for one, has a major manufacturing center in Kobierzyce, near Wrocław, which produces liquidcrystal andonTVs. It’s not alone – Toshiba and Gross display domesticscreens expenditure R&D TPV similar infacilities the area. All three (as %Electronics of total R&Dhave expenditure OECD), in 2009 firms export much of their factories’ output for use in own5 branded products sold throughout the region. 4 One of the few homegrown players in the electronics *2008 market is Manta Multimedia. The Warsaw-headquartered **2007 firm 3 makes everything from e-readers and MP3 players to electric kettles and hair dryers, mainly through licensed designs. Its first 3D television, a 42-inch LED model, has sold well in Po2 land and, via Amazon.co.uk, in the United Kingdom as well, business daily Puls Biznesu reported in mid-February. 1

Encouraged by such successes, the firm is developing prod0 ucts basedFinland on its own US* designs. Production of Greece** Manta’s first Israel Sweden Germany UK Poland Mexico**

Polish-designed products could begin as early as Q1 2013, president Bogdan Wiciński told the newspaper.

International software players

Some of Poland’s most important high-tech exporters don’t manufacture anything at all. They design, code and service Israel Finland Sweden US* Germany UK Poland Greece** Mexico** their products.

Polish software developers – and video-game makers in par-

High-technology % of total global high-tech exports), ticular – haveexports earned(asinternational recognition. Indeed, the selected EU27 member states in 2008 10

Economy Ministry’s Sebastian Christow described games as some of the fastest-exporting products made in Poland, cit++BAR GRAPH, PLZ++ ing CD Projekt in particular. Grossly inadequate

Gross domestic expenditure on R&D (as % of total R&D expenditure in OECD),

With good reason. 2009 CD Projekt has built a strong reputation Israel 4.28 in the industry for its Witcher role-playing games (based on 3.96 the books of Finland Andrzej Sapkowski, a popular fantasy author) Sweden 3.62 as well as forUS* its stance2.79against digital-rights management (anti-copying) software.2.78The second game in its series, “The Germany UK well – between 1.85 Witcher 2,” sold mid-May and late November ++IN RED++Poland++IN RED++ 0.68 2011, over one million units were sold for the PC. An Xbox Greece** 0.59 360 version of the game Mexico** 0.37came out in April 2012, with anSource: Eurostat

Strength in electronics

*2008 Czech Poland Norway **2007 UK Switzerland Hungary Republic Source: OECD Main Science and Technology Indicators Database (last updated June 2011)

Germany Netherlands France

Gross domestic expenditure on R&D in Poland (as % share of GDP), ++BAR2002-2010 GRAPH, PLZ++

Room for export growth High-technology exports (as % of total global high-tech exports), selected EU27 member states in 2008 Germany 8.2 Netherlands 4.7 France 4.5 UK 3.2 Switzerland 1.9 Hungary 1 Czech Republic 1 +IN RED++Poland++IN RED++ 0.3 Norway 0.3 Source: Eurostat

0.8

0.7 8

0.6 0.5

0.4 4

Germany Netherlands France

Switzerland Hungary

Czech Republic

Gross domestic expenditure on R&D in Poland (as % share of GDP), 2002-2010 0.8

Poland

Norway

0.2 0.1 0.0

200

0.7 0.6

Source: Eurostat

0.3

150

Positive developments 2004 2005 2006 2007 2008 2009 2010 Gross domestic expenditure on R&D in Poland (as % share of GDP), 2002-2010 2002r 0.56 2003r 0.54 (PCT) Number of international patent 0.56 2002-2011* applications filed2004r from Poland, 2005r 0.57 2006r 0.56 2007r 0.57 2008r 0.60 2009r 0.68 2002

2003

rganization

High-technology exports (as % of total global high-tech exports), selected EU27 member states in 2008

Source: OECD Main Science and Technology Indicators Database (last updated June 2011)

At the end of 2011, Gryf Technologia, a start-up developing IT and electronics solutions, announced that it had produced Poland’s “first processor.” The computer processor, dubbed Warszawa, has a 32-bit architecture, a 4 KB cache and a 700 Mhz clock rate. In other words, Gryf Technologia’s hardware is no threat to the likes of Intel or AMD.

20 20 20 So

0.6 0.5 0.4 SECTOR ANALYSIS: HIGH TECH

MADE IN POLAND 2012

0.3 Source: Eurostat

0.2 0.1 0.0

2002

2003

2004

2005

2006

2007

2008

2009

2010

Number of international patent (PCT) applications filed from Poland, 2002-2011* 200 Source: the World Intellectual Property Organization

150

100

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

other four game titles in the pipeline between now and 2015. Nor is CD Projekt the only Polish game developer making waves. Techland’s “Dead Island,” a multi-platform zombie shoot ‘em up, sold a remarkable three million copies between its early September 2011 debut and the end of the year. That despite technical flaws and mixed reviews. People Can Fly, another developer, released the first-person shooter “Bulletstorm” in early 2011. The game was well reviewed, but sales disappointed; now the company is reportedly working on the next game in Epic Games’ mega-franchise “Gears of War.” There’s also City Interactive, whose “Sniper” game moved over two million units between mid2010 and the end of 2012. Sniper 2 is due out in August 2012. And that’s just (the top tier of) game developers. There are many other software producers headquartered in Poland, such as ERP and business-intelligence-solutions producer Asseco Poland, a holding with subsidiaries throughout Eu-

At the frontier of progress Some of the most R&D-intensive work being done in Poland today takes place at the Institute of Electronic Materials Technology (ITME), a multi-discipline research institute run under the aegis of the Economy Ministry. The institute made headlines in 2011 with the news that one of its teams had discovered a method to produce graphene – often described as a next-gen replacement for silicon in electronics – on an industrial scale. However, Andrzej Jeleński, deputy director and scientific manager of ITME, said that the market needs to develop before the institute can truly capitalize on its research. Graphene isn’t on the market yet in consumer products, although Samsung is researching – and investing heavily in – the possibilities. The firm’s first commercial application incorporating graphene is expected to be a touchscreen, with flexible (and possibly foldable) displays on the horizon. ITME’s expectations are more modest. “We hope to start export when there are products for particular applica-

tions,” Mr Jeleński stated. Graphene-enhanced pastes or glues might be among the first to hit the market. “We’re doing some experiments on those and they are promising. But it’s hard to predict [success] because of the costs of introducing new technologies,” he added. Mr Jeleński also pointed out that ITME is a largely research-oriented body, involved only in small-scale production. Should the market for graphene explode, the institute would probably form a commercial agreement with a commercial company or possibly set one up itself. In the meantime, ITME produces and exports a number of other products. According to Mr Jeleński, silicon wafers sell well, as do compound materials, and the quality of ITME’s photonic crystal fiber is “at the international level.” The institute’s UV detectors, he added, are “as good as anything reported in scientific literature”; their applications, while somewhat limited, include: sky radiation analysis, “ozone-hole” detection and missile-launch or gun-fire detection. v

Inn Nu 20 20 20 20 20 20 20 20 20 20 *pr So

MADE IN POLAND 2012

SECTOR ANALYSIS: HIGH TECH

The last of Europe’s memory makers Poland is home to Europe’s only producer of computer memory, Wilk Elektronik. Founded in 1991 as a distributor of RAM products, it brought its own brand, GOODRAM, to the market in 2003. Today Wilk Elektronik manufactures a variety of memory products, from SD cards and flash drives to solid state drives and proprietary memory. Just a few years ago there were several other computer memory producers active in Europe, such as Qimonda, a German firm which filed for insolvency protection in 2009. So how has Wilk Elektronik avoided its competitors’ fate? CEO Wiesław Wilk attributes his firm’s success to a combination of factors, including a business acumen built on years of experience, continual investment in modern equipment and production technologies, a young, dedicated workforce, and familiarity with other European cultures.

rope and consolidated sales revenues of over E871 million for the first nine months of 2011. Or Comarch, a rival of Asseco with a similar business profile, which earned sales revenues of E124 million for Q1-Q3 2011.

Reason for optimism

By no means do the aforementioned companies represent the full breadth of high-tech production in Poland. There are plenty of other firms and niches. Military and security robots are being created by the Industrial Research Institute for Automation and Measurements. Gallium nitride-based blue lasers and substrates are being produced by TopGaN and Ammono, respectively. New players are appearing regularly. “Our firms are innovative,” said Mr Christow of the Economy Ministry. “Poles have problem-solving abilities in their genes.” But, he admitted, many entrepreneurs are satisfied with their lot in Poland. “Our internal market is big enough that producers don’t always look outward.” How can Poland improve its reputation as a producer of innovative products? One way is to improve links between research institutions and business.

“The matter of production costs can’t be forgotten either,” he adds. “The level of remuneration in Poland is comparable to the level in Taiwan, which is currently the center of world memory production.” Whatever the reason, Wilk is clearly making the most of its status as Europe’s sole computer-memory producer. In 2011, it exported over 60 percent of its total production; the goal for 2012 is 70 percent, with both domestic and international sales growth. The company has a branch in Dubai, from which it distributes to markets in the Near East and Africa, but it remains best known closer to home. According to Mr Wilk, its products are particularly popular in Ukraine, where GOODRAM USB and flash cards hold a 20 percent share of the market. The company is looking for growth opportunities in Russia, as the largest market in the region. v

“There is traditionally a gap between the two worlds, industrial and research, in Poland,” said Andrzej Jeleński, deputy director and scientific manager of the Institute of Electronic Materials Technology. The fact that there are few local hightech manufacturers doesn’t help either, he said, since these are the companies that would ordinarily find ways to commercialize the research done by ITME and other institutions. “The foreign companies are interested in using their own research,” Mr Jeleński added. There’s reason to be optimistic, though. Even if Polish expenditure on R&D remains woefully inadequate, there’s been an upward trend in spending (as a percentage of total GDP) since 2006. The number of international patent applications filed from Poland has been rising since 2005. And foreign perceptions of Poland are slowly changing, for the better. “Before the year 2000, Poland and Polish brands met with dislike and great criticism in the reception of consumers from Western Europe,” commented Wiesław Wilk, CEO of computer-memory producer Wilk Elektronik. “In the last 10 years we’ve proved that Polish-educated specialists create products and brands valued in the European market.” v

BUSINESS SERVICES AS AN EXPORT Poland has become a world leader in providing outsourcing services to businesses located around the globe. Today, the sector is developing in several successful directions, including human resources outsourcing

utsourcing, a mysterious term not so long ago, has revolutionized the way businesses are run the world over. Thanks to online technology, firms can now choose to contract noncore activities to sometimes remote locations, freeing up cash, personnel, time and facilities for activities in which a company holds a competitive advantage. Nowadays companies often contract out data processing, legal, manufacturing, marketing, payroll accounting, or other aspects of their businesses to concentrate on what they do best and thus reduce average unit costs.

The idea of service delivery businesses being run from virtually anywhere in the world has more often than not been associated with emerging Asian economies, most notably India. Few people know, however, that over the last few years, Poland has become a world leader in the sector.

BY MARK ORDON

Emerging leader

According to global management consulting firm Everest Group, Poland is now the most mature offshoring location in Europe and the fifth in the world, following Brazil, China, the Philippines and India. Outsourcing plays a major role in the Polish economy, to the point where it rivals with more traditional, tangible, and less sophisticated exports. According to data from Polandâ&#x20AC;&#x2122;s Association of Business Service Leaders (ABSL), the total value of the outsourcing sector in 2011 was more than zĹ&#x201A;.13 billion, including both domestic and international contracts. The sector provides employment to some 80,000 people in around 300 business service centers.

MADE IN POLAND 2012

SECTOR ANALYSIS: OUTSOURCING

Part of this success is due to Poland’s attractive geographical location in Europe and its well-educated, multilingual labor force. This has encouraged many firms to set up service centers in the country to cater to the needs of clients, or their own corporate structures, worldwide. “Poland is the ideal control center for Europe,” said Krystian Bestry, vice president of ABSL and managing director of global business service provider Infosys BPO Europe, which has a business process outsourcing center in Łódź. “Being a member of the European Union guarantees stability and simplifies cooperation with clients in Western Europe. Meanwhile, Poland offers a wide group of well-educated specialists who speak foreign languages and are eager to develop their skills,” added Mr Bestry. The fact that business service centers in Poland are beginning to play the role of process centralization centers spanning many countries and even continents has not gone unnoticed by the world’s biggest firms. As a result, many new investments in the outsourcing sector are currently underway around the country, with the Polish Information and Foreign Investment Agency currently working on 156 such projects worth a total of E5.7 billion.

HR as part of the business process chain

According to ABSL, Polish outsourcing centers now specialize in accounting and finance, IT and research & development activities. Today, another sector in the outsourcing landscape is emerging, with high potential for growth: human resources. All over the world, companies have started entrusting functions such as payroll calculation and employee administration to external specialists. But human resources outsourcing is a relative newcomer to the CEE region, said Michał Sokołowski, head of the International Resourcing Centre at Hays Specialist Recruitment in Kraków. Mr Sokołowski recalled that when he was building teams to service HR processes for clients four to five years ago, the idea of human resources outsourcing was a new one for many companies. At the beginning, clients were very careful with outsourcing their HR processes to centers operating in the region. The first projects were small, spanning recruiting services for only one location or branch. With time, however, customers grew to appreciate the service being offered, said Mr Sokołowski.

SECTOR ANALYSIS: OUTSOURCING

The scope of operations grew with time and today, Hays Poland enjoys the patronage of large multinational corporations. Due to the relative novelty of the sector, numbers are scarce and it is difficult to determine the exact share of the outsourcing market held by the human resources sector. Human resources services are generally considered as one of the many business processes an outsourcing company can take over, so pinning down a specific number is a difficult task at least for now, explained Jadwiga Naduk, head of market research & consultancy and Hays Poland. But the sector is undeniably growing, and getting more sophisticated in the process.

Refining the process

The range of outsourcing services offered in the field of HR has already widened significantly, since firms active in Poland have tailored their offers to the growing needs of customers. Hays, for example, has traditionally been involved in managing recruiting and employee selection processes for its clients. With time, clients have pushed out more specialized processes to the service center, with the Polish team now

MADE IN POLAND 2012

handling employer branding, onboarding of new employees, communications management and personnel management. Other players in the market are also diversifying their service structures to meet changing demand. Warsaw-based Contract Administration, one of the leaders and pioneers of HR outsourcing in the country, is among them. The company started off in 1991 offering payroll services. Now operating seven offices in Poland, the Czech Republic and Slovakia, the firm processes around 100,000 payslips a month. Though the administrative and payroll HR services still remain the core business for Contract Administration, new custom-designed solutions assist customers in molding their HR processes or offer ready-made employee portals to enhance internal communication. In addition to the more administrative aspects of human resources, otherwise referred to as “hard” HR, a niche is also developing in “softer” areas of the sector. “For many years, human resources management meant personnel administration, payroll calculation, statistics, employment contracts and the like. Modern HR management has a much wider out-

MADE IN POLAND 2012

SECTOR ANALYSIS: OUTSOURCING

Organizing a growing sector: ABSL and IO The Shared Service Center/ Business Process Outsourcing (SSC/BPO) sector in Poland has experienced rapid growth over the last five years. Today, the sector comprises between 200 and 300 companies and employs over 40,000 people. The Association of Business Service Leaders (ABSL) forecasts this number to increase to as high as 70,000 in the next two to three years. The sector is organized around two main associations: ABSL, established in 2009, and the Outsourcing Institute (Instytut Outsourcingu – IO), founded in 2007. ABSL members include corporations such as Hay Poland, Jones Lang LaSalle, HP, Capgemini, Thomson Reuters, UBS, Franklin Templeton, Geoban and Infosys. reach which includes any activity geared toward taking advantage of a company’s human potential to reach its targets,” explained Tomasz Kopczyński, president of Poznań-based Synergia PM, an HR and IT consulting firm. Companies are becoming increasingly conscious of the need to effectively and jointly manage processes such as recruitment, evaluation, motivation and development, but lack the competencies and resources to do so, he added.

Expanding beyond Poland

The basic activity of many firms that offer HR outsourcing remains dealing with payroll services. Magdalena Marcinowska, payroll partner at Grant Thornton, noted that 99 percent of the company’s HR-related activity is focused on services in payroll and general HR administration. But she also said that she sees plenty of potential for “hard” HR services. Indeed, large corporate customers, impressed with the support provided by HR service-providers in Poland are now using services offered by these same firms outside of the country. Contract Administration has expanded and now provides services from offices in the Czech Republic and Slovakia. Meanwhile, Polish company Synergia PM has taken yet an-

IO was initially affiliated with Harvard Business Review Polska, but transformed into an independent foundation in 2009. Among the institute’s members are ADP, Outsourcing Experts, Baker & McKenzie, J Krzyżanowski i Wspólnicy, Target BPO, it WORKS, Infosys BPO, InONE, Holicon and CWS-boco. v

other route to open up new channels for its services. The company has recently signed a partnership agreement with Human Resources Systems Group (HRSG), whose headquarters are in Ottawa, Canada, to distribute i-SkillSuite®, an IT application geared towards supporting the strategic management of talent. Armed with this new tool and the longtime experience of his new overseas partner, Synergia PM’s Mr Kopczyński aims to not only provide existing customers with a new ready-to-use solution, but also expand into markets beyond Poland. Although outsourcing may not feature any time soon alongside apples and auto parts in rankings of Polish trade exports, outsourcing projects in Poland prove that the country has reached a level of development and competence that means many of its business functions and processes are now worth exporting. v

SECTOR ANALYSIS: PHARMACEUTICALS

MADE IN POLAND 2012

A CURE IN NEW MARKETS As the government looks to cut down on pharmaceutical expenditure, Polish firms are eying expansion into new markets

olish pharmaceutical producers, heavily involved in making inexpensive versions of products developed by research-based companies (so-called generics), have ridden the crest of a wave in the last decade or so, as Polish authorities strove to bring affordable medicines to as many people in the country as possible. With this goal more or less achieved and the government anxious to balance its budget, Polish drugmakers are increasingly on the lookout for markets where similar expansion is taking place – or alternatively, where cost-containment is forcing payers to find ever-cheaper treatment options.

Domestic-fueled growth

Poland’s pharmaceutical market is, after Russia, the largest in Central and Eastern Europe. The industry’s strong position results from years of consistent and dynamic growth. In fact, the sector’s growth has been nothing short of exceptional, with production of pharmaceuticals and active pharmaceutical ingredients in Poland increasing by as much as 60 percent between 2005 and 2010, according to industry publication Chemia i Biznes. Over this period growth in the Polish pharma industry averaged 10 percent per year, compared to the Western European annual average of 3.5 percent, and

BY BRIAN DAVIES 4 percent in fellow-CEE countries Hungary and the Czech Republic. During that period, pharma companies operating in Poland also invested huge amounts – an estimated zł.1 billion – in registering their products and ensuring they were in line with European Union requirements. Such rapid growth was possible in part because of the size of the domestic market, but also because of the government’s relatively generous levels of expenditure on public-funded drugs. Polish pharmaceutical companies grew financially and developed technically as demand soared, with patients and the National Health Fund (NFZ) paying more and more for medicines. But that’s changing, and the industry saw a distinct slowdown in 2010.

Changing times

The Polish government, observing the continued rise in its expenditure on drugs reimbursement with concern, mooted the first versions of the Reimbursement Act in 2010. While virtually every European nation is also engaged in cutbacks, the controversial law came into effect at the beginning of 2012 and is poised to make a lasting change to the industry in Poland (see box p. 60).

MADE IN POLAND 2012

SECTOR ANALYSIS: PHARMACEUTICALS

Indeed, public expenditure on drug reimbursement, which has been such an important factor in the growth of the pharmaceutical market, will be reduced in 2012 for the first time in decades. This year the NFZ’s planned expenditure on outpatient drug reimbursement is zł.8.28 billion, down from zł.8.68 billion in 2011.

Another model While Polpharma has notably opted for an acquisitionbased expansion model, another important company in the Polish pharma industry, Bioton, Poland’s largest producer of insulin, is choosing another path. The firm’s main strategy consists of forming cooperation agreements with multinationals, which take care of the marketing and distribution of Bioton’s products on export markets. The company has started sales of insulin in China in association with Germany’s Bayer, and in Russia with GSK. Bioton also recently announced a major new cooperation agreement with Icelandic generics giant Actavis, through which it will tackle markets in the EU, Japan and the US, among others. v

“One could argue that with its relatively large market and years of good growth levels, Polish firms have had quite an ‘easy life’ up to now, while producers from smaller markets have had to go abroad to seek growth,” said Maciej Kuźmierkiewicz, director of consulting at the Polish branch of IMS Health, a leading global pharmaceutical consulting and intelligence provider. But pharma firms operating in Poland have more than one trick up their collective sleeve, and are now increasingly looking to expand their presence in countries in which the health insurance market is still developing, and government expenditure is growing. As domestic growth levels have tailed off, Polish pharma firms have stepped up their export activities. Exports have already grown strongly in recent years, but that trend became especially evident in 2010, and it’s expected to continue. While larger Polish drug producers and some smaller players have started projects aimed at developing innovative medicines, Polish pharmaceutical companies are primarily focused on producing generic versions of originator medicines. During the communist era and afterward, generics made it possible for cash-strapped governments and citizens to afford the cost of treatment. Today, this specialization makes

A guide to Polish business and industry

Przewodnik po polskim biznesie i gospodarce

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FOR MORE INFORMATION CALL AGNIESZKA BREJWO +48 504 201 007 OR E-MAIL ABREJWO@WBJ.PL TO ORDER CONTACT KRZYSZTOF WILIŃSKI: +48 22 639 85 67 EXT. 208 OR E-MAIL KWILINSKI@VALKEA.COM

MADE IN POLAND 2012

SECTOR ANALYSIS: PHARMACEUTICALS

Regulatory challenges The introduction of the Reimbursement Act, which deals with drug pricing and reimbursement, at the beginning of 2012 generated its fair share of controversy. Doctors protested, pharmacists rebelled and there was even behind-thescene talk of multinationals scaling down their operations. But according to experts and market players, while tougher regulatory conditions may be a catalyst for a stronger focus on exports, they are not likely to discourage investment in Poland. “I think it is very probable that Polish manufacturers will focus on export sales in the coming years, as a way to cope with the growing problems associated with very restrictive reimbursement policies,” Ms Stefańczyk predicted.” However, the Polish market will always be attractive, because of its size,” she added. Mr Kuźmierkiewicz also said he did not believe the hotlydebated legislation would result in multinational producers, which are also engaged in exporting their products from Poland, reducing their presence here. “Clearly the new law hasn’t been introduced in the most effective and transparent way, but the fact of the reimbursement law changes is not at all unusual. Poland, one of the 20 largest pharma markets in the world, with a growing economy and still significant unmet demand for health care, remains a market for pharma firms to increase, and not reduce their presence in,” he said. v

Polish drugs very competitive for exports, both to the West, where developed markets are undergoing the effects of the economic crisis, and in emerging markets to the east.

The players

The Polish pharmaceutical industry is divided into Polishowned producers, with the two largest players being Polpharma and Adamed, foreign-owned generics producers such as Israeli Teva, owner of the former state-owned Polfa Kutno and Polfa Kraków, and multinational, innovative pharma companies with production bases in the country, including British GlaxoSmithKline, French Sanofi, and Swiss Novartis. Poland’s largest pharma companies have been involved in the consolidation of the domestic market, while at the same time turning their attention increasingly to external markets. Adamed acquired one of the last state-owned pharmaceutical producers, Polfa Pabianice, in early 2010. This strengthened its position in the over-the-counter sector, and in the antibiotic and diabetes therapeutic areas. Adamed is also one of Poland’s export champions. The company, which set up a subsidiary in Ukraine in 2006, also launched a representative office in Spain in 2009.

Looking east

Meanwhile, Polpharma has focused on exporting its generic medicines to Russia and the Commonwealth of Independent States, as well as to countries in Central and Eastern Europe. In 2011, the firm made several acquisitions, with the aim of becoming a leading generics producer in the CEE region. It

SECTOR ANALYSIS: PHARMACEUTICALS

first purchased Turkish Cenovapharma in June and went on to acquire a majority stake in Russian drug maker Akrikhin in August.

Sales of medicines in pharmacies, 2007-2010, end-user prices (in zł. billions)

The firm’s biggest takeover came in September, when it bought Kazakhstan’s number-one drug maker, Chimpharm. Finally, in October, Polpharma won a tender to purchase Polfa Warszawa, the largest of the state-owned firms that had previously made up the pharmaceutical holding company Polski Holding Farmaceutyczny. Like Polpharma, Polfa is focused on the Russian market, where it has a strong, established presence, and on emerging CIS countries, where it has succeeded in boosting its sales in the last couple of years. This series of acquisitions could provide an important boost for Poland’s pharma exports in the future, and could also help Polpharma become a regional leader in the generics market, alongside Slovenia’s Krka and Hungary’s Gedeon Richter and Egis. In Russia and the CIS, acquiring local players that have their own production facilities is crucial for successful expansion, due to the “import substitution” policy in place in several countries, most notably in Russia. For strategic reasons, governments actively encourage pharma companies involved in exporting medicines to establish their production within the country in question. “Russia is an attractive market for Polish pharma companies expanding abroad, but only for those producers which have factories there,” said Monika Stefańczyk, chief pharmaceutical analyst at research firm PMR. Others, she explained, may face difficulties, for example with getting their medicines on the local reimbursement list. No such potential regulatory obstacles exist, however, in the single market of the EU.

Going west

Markets to the east of Poland offer the promise of dynamic growth and are familiar territory for many Polish firms, which have old ties and connections with many of them. But EU countries also offer increasingly attractive export opportunities for Polish producers, with the euro-zone debt crisis beginning to turn to their advantage. “Western Europe, with payers’ cost-containment efforts promoting generics usage, is also an option for Polish pharmaceutical producers. Eastern European players, among them Polish firms, are already attempting to take advantage of this opportunity,” said Mr Kuźmierkiewicz.

Year

Value

2007

21.59

2008

24.97

2009

26.07

2010

26.79 Source: Polish National Health Care System (OSOZ)

Value of Polish pharmaceutical exports, 2005-2010 (in zł. millions) 2000

1,651*

* preliminary data 1500

1,200 870

1000

Source: Central Statistical Office

MADE IN POLAND 2012

630 500

380

2005

460

2006

2007

2008

2009

2010

Indeed, cash-strapped Western nations have implemented a wave of major health care cost-containment legislation, and governments and regulators across the EU are seeking to boost the use of generics. Polish generics producers, with their lower production costs, are well positioned to take advantage of the situation. Since growth in sales of generics are predicted to outstrip those of innovative products in the coming years, the Polish pharma industry has every opportunity to continue to prosper, with exports at the heart of this. Competition is fierce, with Indian producers competing particularly strongly on price, but the established brand awareness and trust of Polish brands on many markets will help ensure their continued popularity. v

50 LARGEST EXPORTERS

MADE IN POLAND 2011

Rank

50 LARGEST EXPORTERS (2010) Company

Sector

Revenues from export in 2010 (in zł. millions)

Address

E-mail/website

PKN Orlen

Raw materials and fuel

24,635,025

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

Automotive

12,552,021

Al. Wyścigowa 6, 02-681 Warsaw tel: (+48) 22 607 4732

www.fiat.pl www.fiatgroup.pl

KGHM Polska Miedź

Raw materials and fuel

12,023,922

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

www.volkswagen-poznan.pl

Volkswagen Poznań

Automotive

7,367,324

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

LG Electronics Mława

Electrical and electronic goods

5,746,303

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

pl.lge.com

5,234,913

Al. Józefa Piłsudskiego 92, 41-308 Dąbrowa Górnicza tel: (+48) 32 776 66 66; fax: (+48) 32 776 82 00

www.arcelormittal.com/poland/

pl.lge.com

ArcelorMittal Poland

Metals

LG Electronics Wrocław

Electrical and electronic goods

5,128,044

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

Philips Lighting Poland

Electrical and electronic goods

3,734,970

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

www.lighting.philips.pl

GK Grupy Lotos

Raw materials and fuel

3,675,842

ul. Elbląska 135, 80-718 Gdańsk tel: (+48) 58 326 43 00; fax: (+48) 58 301 88 38

lotos@grupalotos.pl www.lotos.pl

GK GlaxoSmithKline Pharmaceuticals

Pharmaceuticals and costmetics

3,376,259

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

www.gsk.com.pl

Volkswagen Motor Polska

Automotive

3,064,015

ul. Strefowa 1, 59-101 Polkowice tel: (+48) 76 848 3000; fax: (+48) 76 848 34 00

vwmp@vwmp.pl www.vwmp.com.pl

Węglokoks

Raw materials and fuel

2,721,125

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

BSH Sprzęt Gospodarstwa Domowego

Electrical and electronic goods

2,719,579

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

www.bsh-group.pl

MADE IN POLAND 2011

50 LARGEST EXPORTERS

Rank

50 LARGEST EXPORTERS (2010) Company

Sector

Revenues from export in 2010 (in zł. millions)

Address

E-mail/website

PLL LOT

Transport and logistics

2,648,545

ul. 17 Stycznia 39, 03-906 Warsaw tel: (+48) 22 577 61 11

lot_info@lot.pl www.lot.com/pl/pl/web/newlot/ home

Faurecia w Polsce

Automotive

2,641,403

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

www.faurecia.pl

TRW Polska

Automotive

2,465,679

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

www.trw.pl

Grupa Can-Pack

Metals

2,336,729

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

canpack@canpack.eu www.canpack.eu

GK Ciech

Chemicals

2,276,135

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

ciech@ciech.com www.ciech.com

Fiat Powertrain Polska

Automotive

2,186,487

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

www.fiat-gm-pwt.pl

Toyota Motor Manufacturing Poland

Automotive

2,177,351

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

www.toyotapl.com/walbrzych

Grupa Tele-Fonika Kable S.K.A.

Electrical and electronic goods

2,119,940

ul. Wielicka 114, 30-663 Kraków tel: (+48) 12 652 5000; fax: (+48) 12 652 5156

www.tfkable.com/pl

Polska Żegluga Morska PP

Transport and logistics

2,106,921

Pl. Rodła 8, 70-419 Szczecin tel: (+48) 91 359 4333; fax: (+48) 91 359 4288

polsteam.com.pl

Indesit Company Polska

Electrical and electronic goods

2,088,313

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

Electrolux Poland Sp. z o.o.

Electrical and electronic goods

1,928,725

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

www.electrolux.pl

Grupa Valeo Automotive

Automotive

1,800,762

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

valeo@valeo.com www.valeo.pl

GK Boryszew

Automotive

1,591,223

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

www.boryszew.com.pl

50 LARGEST EXPORTERS

MADE IN POLAND 2011

Rank

50 LARGEST EXPORTERS (2010) Company

Sector

Revenues from export in 2010 (in zł. millions)

Address

E-mail/website

Ferrero Polska Sp. z o.o.

Food

1,564,226

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

TPV Displays

Electrical and electronic goods

1,549,788

ul. Złotego Smoka 9, 66-400 Gorzów Wielkopolski tel: (+48) 95 739 1005

Mondi Świecie

Paper and wood

1,447,609

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

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

Firma Oponiarska Dębica

Automotive

1,357,050

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

www.debica.com.pl

GK Gdańska Stocznia Remontowa

Shipyards

1,257,700

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

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

GK Polimex-Mostostal

Construction

1,241,152

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

MAN Bus

Automotive

1,226,842

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

www.mantruckandbus.pl

Grupa TZMO

Pharmaceuticals and cosmetics

1,207,672

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

www.tzmo.pl

International Paper Kwidzyn Sp. z o.o.

Paper and wood

1,188,656

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

www.internationalpaper.com

GK Impexmetal

Metals

1,178,860

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 Chemicals

1,151,021

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

TRW Steering Systems Poland

1,123,753

ul. Słowackiego 33, 43-502 Czechowice-Dziedzice tel: (+48) 32 324 1200; fax: (+48) 32 324 1290

www.trw.pl

Automotive

ext_recepcja_pl@ferrero.com www.ferrero.pl

–

MADE IN POLAND 2011

50 LARGEST EXPORTERS

Rank

50 LARGEST EXPORTERS (2010) Company

Sector

Revenues from export in 2010 (in zł. millions)

Address

E-mail/website

Grupa Anwil

Chemicals

1,112,290

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

anwil@anwil.pl www.anwil.pl

ALSTOM Power

Industrial machinery

1,054,702

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

www.alstom.pl

ABB

Electrical and electronic goods

1,036,047

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

www.abb.pl

Zakłady Azotowe w Tarnowie-Mościcach

Chemicals

1,012,982

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

GK PGNiG

Raw materials and fuel

989,574

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

www.pgnig.pl

Kombinat Koksochemiczny Zabrze

Chemicals

973,484

ul. Pawliczka 1, 41-800 Zabrze tel: (+48) 32 271 1231; fax: (+48) 32 271 82 07

kombinat@kkzabrze.com.pl www.kkzabrze.com.pl/

Hutchinson Poland

Automotive

955,985

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

GK Kopex

Industrial machinery

920,060

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

ZAK

Chemicals

860,736

ul. Mostowa 31 A, 47-220 KędzierzynKoźle tel. (+48) 77 481 2000

zak@zak.com.pl www.zak.eu

Volvo Polska

Automotive

857,489

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

www.volvocars.com/pl

GK Cersanit

Construction

833,948

Al. Solidarności 36, 25-323 Kielce tel: (+48) 41 315 8003; fax: (+48) 41 315 8006

www.rovese.com

802,041

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

Solaris Bus & Coach

Automotive

Source: “100 Largest Exporters in 2010”. Reprinted with permission of Polityka

GOVERNMENT AGENCIES

MADE IN POLAND 2011

SELECTED 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.pl www.anr.gov.pl

Leszek Świętochowski

Al. Niepodległości 208 00-925 Warsaw

22 608-3000 22 608-3860

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

Janusz Witkowski

Al. Ujazdowskie 1/3 00-583 Warsaw

22 694-6000 22 625-2637

sprm@kprm.gov.pl www.kprm.gov.pl

Tomasz Arabski

ul. Puławska 148/150 02-624 Warsaw

22 621-0251 22 601-2921

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

Marek Działoszyński

ul. Targowa 65 03-729 Warsaw

22 536-1300 22 635-6194

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

Przemysław Biliński

ul. Świętokrzyska 12 00-916 Warsaw

33 857-6251 -

info.sluzbacelna@kat.mofnet.gov.pl www.mf.gov.pl

Jacek Kapica

General Directorate for National Roads and Motorways

ul. Żelazna 59 00-848 Warsaw

22 357-8888 22 357-8763

kancelaria@gddkia.gov.pl www.gddkia.gov.pl

Lech Witecki

Ministry of Agriculture and Rural Development

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 Foreign Affairs

Al. J. Ch. Szucha 23 00-580 Warsaw

22 523-9000

zo.sekretariat@msz.gov.pl www.msz.gov.pl

Radosław Sikorski

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

22 661-1000 22 661-1336

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

Władysław Kosiniak-Kamysz

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

minister@msp.gov.pl www.msp.gov.pl

Mikołaj Budzanowski

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 Labor Inspectorate

ul. Krucza 38/42 00-926 Warsaw

22 420-3731 22 420-3455

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

Anna Tomczyk

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

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

uzp@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 57 00-950 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 Krasnodębska-Tomkiel

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 Police Station

Chief Sanitary Inspectorate

Customs Service

Ministry of Labor and Social Policy Ministry of Regional Development

Polish Tourism Organisation

The Patent Office of the Republic of Poland

Zbigniew Derdziuk

MADE IN POLAND 2012

PARTNERS

Partners The Polish Chamber of Commerce (Krajowa Izba Gospodarcza, KIG) www.kig.pl 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. 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. Services related to entering business in foreign markets occupy a special place in KIG’s activities. We help businesses prepare to do business in foreign countries and we also organize several international trade missions and trade-fair presentations, which are an excellent opportunity to establish business contacts.

The Polish Chamber of Commerce for Importers, Exporters and Cooperation (Polska Izba Gospodarcza Importerów, Eksporterów i Kooperacji) www.pcc.org.pl The Polish Chamber of Commerce for Importers, Exporters and Cooperation is an independent organization that was initiated by the most active companies in the region of Wielkopolska. The chamber brings together Polish and foreign companies from different industries and supports the development of small and medium-sized enterprises through the provision of comprehensive information, training and advisory services. Those include assisting members in developing business contacts at home and abroad, introducing our members’ products and services to different foreign markets, organizing group tours to international fairs and exhibitions, organizing business missions and meetings, and providing information about funds and grants for business dev.elopment.

BILATERAL CHAMBERS

MADE IN POLAND 2012

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American Chamber of Commerce in Poland Established in 1990 the American Chamber of Commerce in Poland (AmCham) seeks to be the leading voice for international investors in Poland, representing its member companies, the investor community at large and demonstrating the positive role that business and commerce play in the development of the country and its society. Currently, AmCham boasts as many as 360 members who were the largest foreign investors in Poland in 2010. ul. Emilii Plater 53 00-113 Warsaw Phone: (+48) 22 520 59 99 www.amcham.pl French Chamber of Industry and Commerce in Poland (CCIFP) The French Chamber of Industry and Commerce in Poland is an employers’ association uniting over 350 French and Polish firms. For 18 years CCIFP has been working for the interests of Polish and French investors by acting as a platform for networking and for the exchange of business experiences and best practices between companies. CCIFP works to influence the transformation of the Polish economy and create favorable conditions for business development in Poland. ul. Widok 8 00-023 Warsaw Phone: (+48) 22 696 75 80 www.ccifp.pl

British-Polish Chamber of Commerce We’ve been networking business relationships in Poland since the early days of the market economy. Today we reach out across Poland and the UK promoting the best of each country. Our executive team works with you to support your business growth. Partnership and networking is at the very heart of what we do. Whether you are a large global corporate or a small company employing a few people – if you’re doing business between Poland and the UK – we want to speak with you. In recent years we have been recognized as the best British chamber in continental Europe no fewer than four times by COBCOE, a network of over 10,000 businesses in over 30 European countries. Joining us enables you to network and grow your business in Poland, one of Europe’s highest growth potential economies. ul. Nowogrodzka 12/3 53 00-511 Warsaw Phone: (+48) 22 622 2056 www.bpcc.org.pl German-Polish Chamber of Industry and Commerce (AHK Poland) The German-Polish Chamber of Industry and Commerce is the largest bilateral organization of economic self-governance in Poland and one of the most influential German chambers of industry and commerce (AHKs) in the world. It represents around 1,000 member companies and has been working to develop German-Polish relations for 15 years. The organization’s offer includes professional consulting for German and Polish companies, facilitation of contacts between them and finding trustworthy business partners, as well as market analysis and help in setting up new companies abroad. ul. Miodowa 14 00-246 Warsaw Phone: (+48) 22 531 05 00 www.ahk.pl

MADE IN POLAND 2012

INDUSTRY 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 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 bureaucracy. The tasks of the organization include active involvement and cooperation with government administrative officials 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 Automotive Industry

The Polish Chamber of the Shoe and Leather Industry

(Polska Izba Motoryzacji)

(Izba Przemysłu Skórzanego)

www.pim.pl

www.pips.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 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 Polish Chamber of National Defence Manufacturers is a voluntary, self-governing organization of the Polish defense and security industry companies. It was established in 1995. PCNDM currently has approx. 135 member companies, among them are big state-owned companies, military production and repair plans, R&D institutes and many private companies as well as Polish branches of foreign companies. The Chamber represents its members in contacts with government, organizes training sessions for its members, works to help its members with increasing technical level of their products, facilitates cooperation between members as well as between members and foreign companies. PCNDM leads consortiums consisting of Polish defense companies to provide comprehensive offers to foreign partners. PCNDM represents the Polish defense industry in the European Defence Agency (as a National Point of Contact) and in the NATO Industrial Advisory Group. The Chamber has license for arms and military equipment trade issued by the Polish Ministry of Internal Affairs, ISO 9001:2009 certificate, certified Internal Control System, NATO N-Cage code.

Agricultural sector partner: http://kulturawsi.pl

Furniture sector partner: http://meble.pl

INDEX

MADE IN POLAND 2012

Index A

ABB ��67 Actavis ��59 Adamed ��60 Adam Smith Centre ��25 ADP ��57 Agros Holding ��41 Agros Nova ��42 Akrikhin ��63 Alchemia ��46 ALSTOM Power ��67 Ambra ��43 AMD ��51 American Chamber of Commerce in Poland �� 15, 16, 70 Ammono ��53 Animex ��41 Anna Pikura ��33 Anwil �� 24, 67 ArcelorMittal �� 46, 48, 64 Arla Foods ��40 Asseco Poland ��52 AutomotiveSuppliers.pl ��19

Bakalland ��42 Baker & McKenzie ��57 Bartek ��28 Bayer ��59 Belgian Business Chamber ��16 Belvedere ��43 BEML Limited ��36 Bioton ��59 Boryszew ��65 British Polish Chamber of Commerce �� 15, 16, 70 Browar Łomża ��43 BSH Sprzęt Gospodarstwa Domowego 64 Bumar ��38, Bumar Group ��36

Calmet ��50 Can-Pack �� 46, 65 Capgemini ��57 Carlsberg Okocim ��43 CD Projekt ��51 Cenovapharma ��63 Cersanit Construction ��67 Chimpharm ��63 China Minmetals �� 13, 45 Cichan ��43 Ciech ��23, 24, 25, 65 Citroen ��21 City Interactive ��52 Comarch ��53 Contract Administration ��56 Credit Agricole ��14 CWS-boco ��57 Czech-Polish Chamber of Commerce ��16

Dalkia ��14 Danisco ��40 Danone Polska ��40 DAX Cosmetics �� 31, 32 Dr. Irena Eris �� 31, 32 Drosed ��41

Egis ��63 Electrolux Poland ��65 Everest Group ��54

Faurecia w Polsce ��65 Ferrero Polska ��66 Fiat ��18, 20, 64, 65 Firma Oponiarska Dębica ��66 Franklin Templeton ��57 French Chamber of Industry and Commerce in Poland �� 14, 16, 70 FSO ��18

Gdańska Stocznia Remontowa ��66 Gedeon Richter ��63 General Motors Manufacturing Poland 18 Geoban ��57 German-Polish Chamber of Industry and Commerce �� 14, 16, 70 Gino Rossi ��28 GlaxoSmithKline �� 15, 60, 64 Global Insight ��33, Grant Thornton ��57 Grupa Lotos ��64 Grupa Sobieski ��43 Grupa Tele-Fonika Kable ��65 Grupa TZMO ��66 Grupa Valeo Automotive ��65 Grupa Żywiec ��43 GryfTechnologia ��51 GSK ��59 Gucio ��28

Hays �� 55, 56 HP ��57 Hochland Polska ��40 Holicon ��57 Human Resources Systems Group ��57 Hutchinson Poland ��67 Hygienika ��31

ICIS ��23 Impexmetal �� 46, 66 IMS Health ��59 Indesit Company Polska ��65 Indykpol ��41 Infosys �� 55, 57 Inglot ��31 InONE ��57 Intel ��51 Inter Groclin ��21 Intermarche ��14 International Paper Kwidzyn ��66 Irish Chamber of Commerce in Poland 16 Italian Chamber of Commerce and Industry in Poland ��16 it WORKS ��57

J Krzyżanowski i Wspólnicy ��57 Jones Lang LaSalle ��57

KBC Securities ��44 KGHM ��13, 44, 45, 64 Kombinat Koksochemiczny Zabrze ��67 Kompania Piwowarska ��43 Konspol ��41 Kopex ��67 Krka ��63

Lacpol ��40 Levi’s ��26 LG �� 51, 64 LPP ��27

MAN �� 21, 66 Manta Multimedia ��51 Marks & Spencer ��15 Mitsubishi ��21 Mlekowita ��40 Mlekpol ��40 Mondi Świecie ��66

Netherlands-Polish Chamber of Commerce ��16 NG2 ��28 Novartis ��60 NUS Consulting Group ��23

Oceanic ��31 Olsen Trading ��40 Opel ��21 Outsourcing Experts ��57

People Can Fly ��52 PGNiG �� 23, 67 Philips Lighting Poland ��64 PKM Duda ��41 PKN Orlen ��23, 24, 64 PLL LOT ��65 PMR �� 27, 63 Polfa Pabianice ��60 Polfa Warszawa ��63 Polimex-Mostostal ��66 Polindus ��40 Polish-Belarusian Chamber of Commerce and Industry ��16 Polish-Bulgarian Chamber of Commerce ��16 Polish-Canadian Chamber of Commerce ��16 Polish-Chinese Chamber of Industry and Commerce ��16 Polish-Indian Chamber of Commerce ��16 Polish-Portuguese Chamber of Commerce ��16 Polish-Russian Chamber of Commerce and Industry ��16 Polish-Spanish Chamber of Commerce 16 Polish-Swedish Chamber of Industry and Commerce ��16 Polish-Swiss Chamber of Industry and Commerce ��16 Polish-Turkish Chamber of Commerce ��16 Polish-Ukrainian Chamber of Commerce ��16 Polkomtel ��45 Polmlek Olsztyn ��40 Polpharma ��59, 60, 63 Polska Żegluga Morska PP ��65 Porsche ��21 Pratt & Whitney Canada ��37 PZL Mielec �� 37, 38

Qimonda ��53 Quadra FNX ��46

Redan ��27 Renault ��21

SAAB Aerostructures ��37 Samar �� 18, 20 Sanofi ��60 Scandinavian-Polish Chamber of Commerce ��16 Sikorsky Aircraft ��37 Sokołow ��41 Solaris �� 21, 67 Sonel ��50 Soraya ��31 Sorbus ��21 Spirit Aerosystem ��37 Spółdzielnia Mleczarska Ryki ��40 Stalprodukt ��46 Synergia PM ��57 Synthos �� 23, 24

Target BPO ��57 Target Polska ��40 Techland ��52 Telekomunikacja Polska ��14 Tesco ��15 Teva ��60 Thomson Reuters ��57 TopGaN ��53 Toshiba ��51 Toyota Motor Manufacturing Poland ��65 TPV �� 51, 66 TRW �� 65, 66

UBS ��57 Unibail-Radamco ��14 United Technologies ��37

Van Pur ��43 Volkswagen �� 18, 21, 64 Volvo �� 21, 67

Wamed ��50 Warsaw Stock Exchange �� 21, 23 Węglokoks ��64 Wilk Elektronik ��53 Wittchen �� 28, 29 Wojas ��28 Wrangler ��26 Wyborowa ��43

ZAK ��24, 25, 67 Zakłady Azotowe Puławy ��23, 24, 66 Zakłady Azotowe Tarnów �� 23, 24, 67 Zakłady Chemiczne Police �� 23, 24 ZAT ��25 ZCh Police ��25 Ziaja �� 31, 32

For over nearly two centuries, the experience and tradition of Polfa Warszawa S.A., supported by state-of-the-art technology, have caused its logo with the Warsaw mermaid placed on pharmaceuticals, such as Acard速, Allertec速 WZF, Laremid速 and Xylogel, to become a synonym for quality, safety and trust. Offering to you products from the factory at 22/24 Karolkowa Street in Warsaw, we are always certain that these are top quality products.