Export To Poland Presentation 2nd June 2009

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Export to Poland presentation given at the Polish Embassy on 2nd June 2009 by Export Poland and Michael Clay Vice Chairman of the British Polish Chamber of Commerce.

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Export To Poland Presentation 2nd June 2009

  1. 1. Export to Poland Bi-Lateral Trading between Poland and Britain Michael Clay, Board Member, BPCC
  2. 2. Export to Poland WHY POLAND? Bi-Lateral Trading between Poland and Britain • Poland as the biggest new member of the single European market offers the right balance between low business risk, and high growth opportunity • Attractive domestic market of 38m consumers – larger than the other seven 2004 EU entrants combined in terms of population and GDP • CEE gateway to regional sales, manufacturing and logistics hub – EU expansion opportunity • Human capital – young, skilled demographic
  3. 3. Export to Poland The story so far... Bi-Lateral Trading between Poland and Britain • 20 years after the downfall of communism, 20 years of economic transformation • 10 years in NATO, five years in the EU • Strong GDP growth • Inflation tamed • Unemployment has fallen rapidly (Feb ’04 to Oct ’08) • EU funds flooding in • ...and then the global economic crisis hits Poland.
  4. 4. Export to Poland Main themes Bi-Lateral Trading between Poland and Britain • Dramatic changes in global economy have changed prospects for Poland • Fall in value of zloty • Entire CEE region tarred with same brush • New opportunities opening up as others disappear • EU structural and cohesion funds will shore up Polish economy • Consumer spending falling slower, unemployment growing slower than across EU15, opportunities not only to cut costs but to find new market opportunities
  5. 5. Export to Poland EU Structural & Cohesion Funds Bi-Lateral Trading between Poland and Britain • 2004-2006: €12.8 billion • 2007-2013: €67 billion (plus matchfunding – another €23 billion) Money earmarked for infrastructure (€28 billion), regional development, enterprise development, skills training, business competitiveness, is being spent between now and 2015/6 (‘n+2’/‘n+3’) Will change the face of Poland.
  6. 6. Export to Poland And yet... Bi-Lateral Trading between Poland and Britain Poland Hungary • GDP 2009 forecast • GDP 2009 forecast to contract by 0.4% to contract by 6% • Debt rose by 24% • Debt rose by 65% between 2000-07 between 2000-07 • S&P rating A- • S&P rating BBB
  7. 7. Export to Poland Poland has a competitive economy Bi-Lateral Trading between Poland and Britain The Alllianz/Lisbon Council study, 2009 2008 published on 9 March 2009, ranks 1 Finland 1 EU countries according to six key 2 Poland 2 criteria including economic growth, 3 Netherlands 9 4 Greece 5 productivity growth, jobs, human 5 Sweden 3 capital, future-oriented 6 Spain 12 investment and sustainable 7 UK 6 8 Belgium 10 public finances. 9 Germany 8 10 Austria 11 Overall, Poland comes in at No. 2 11 Denmark 7 with strong performances on 12 France 13 economic growth and productivity 13 Ireland 4 14 Italy 14 growth, where it finishes No. 1 and No. 2, respectively.
  8. 8. Export to Poland Central and Eastern Europe Bi-Lateral Trading between Poland and Britain Latvia, Hungary, Ukraine – these are the countries with most serious problems. Poland, Czech Republic, Slovakia, and Slovenia – these are the countries likely to be least affected by crisis
  9. 9. Export to Poland Public Private Partnerships Bi-Lateral Trading between Poland and Britain New law came into force on 27 February, less proscriptive than old law from 2005 (under which no project was initiated) Will PPP finally get moving? • EU funds – projects need local matchfunding • Municipal bonds and loans – 60% debt/budget limit • Banks showing far less appetite to lend • Yet projects have to be delivered. Is PPP the answer?
  10. 10. Export to Poland Poland’s skilled workforce Bi-Lateral Trading between Poland and Britain • Young, skilled, motivated and flexible working population • Multilingual – 71% of students have passed English at ‘A’ Level equiv. • Record numbers of graduates and school-leavers have been entering the labour market • Poland’s student population quadrupled during ‘90s – today, 1.9m in tertiary education – more than entire population of Estonia Source: OECD, GUS, Eurostat
  11. 11. Export to Poland Have employers cut too far? Bi-Lateral Trading between Poland and Britain • Multinational investors cutting regardless of local conditions on Polish market • Polish employers have seized opportunity to get ‘leaner and fitter’ • Skills shortages have not gone away in cities • Temp workers likely to become more popular
  12. 12. Export to Poland Announced job losses across EU Bi-Lateral Trading between Poland and Britain
  13. 13. Export to Poland The British Polish experience so far Bi-Lateral Trading between Poland and Britain • UK 6th largest investor in Poland – dominated by large corporates • UK ranked 4th largest Polish export market • Poland ranked 17th largest UK export market (up from 25th in 2005) • Very low presence of British mid-caps and SMEs on Polish market (different legal system) • Unrecognised export opportunity for British exporters
  14. 14. Export to Poland Largest British investors in Poland Bi-Lateral Trading between Poland and Britain Tesco Unilever BP Arcelor Mittal GlaxoSmithKline Aviva (Commercial Union) Pilkington Provident Cadbury’s Associated British Foods Shell HSBC
  15. 15. Export to Poland Trade between UK and Poland Bi-Lateral Trading between Poland and Britain 4.35 4.5 3.61 4.0 3.20 3.5 3.03 GBP billions 3.0 2.39 2.32 2.31 2.5 1.83 1.54 1.65 1.46 2.0 1.41 1.32 1.30 1.36 1.35 1.30 1.26 1.21 1.17 1.17 1.5 0.91 0.68 0.67 0.57 0.60 1.0 0.5 0.0 Fill 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 UK exports to Poland fill Source: Office of National Statistics, UKTI Polish exports to UK
  16. 16. Export to Poland Catalysts for future growth Bi-Lateral Trading between Poland and Britain • Re-orientation of investment sourcing – new global economies; Middle and Far East seeking EU platform; private equity funds looking for M&A opportunities, public sector investment • Cutting costs in western Europe – upping investment in Poland (this affects only investors already present here!) • EU funds and grants • Eurozone entry planned for 1 Jan 2012 (???!) • Climate change, environment and energy • UEFA Euro 2012 • 2015 deadline for ensuring all water pumped into rivers is treated – otherwise local authorities face fines
  17. 17. Export to Poland Summary Bi-Lateral Trading between Poland and Britain • Poland’s downturn likely to be far more mild than in rest of EU • Strategic location, several large, high-growth cities • Infrastructure projects offer promise • Greenfield FDI once again becoming attractive • Poland offers the right balance between low risk and higher growth opportunities
  18. 18. Export to Poland growing old’ GDP growing faster than ‘old’ EU Bi-Lateral Trading between Poland and Britain 7% 6% Growth compared 5% 4% 3% 2% 1% 0% Poland UK Eurozone 2004 2005 2006 2007 2008* 2009* Source: Eurostat *2008, 2009 forecasts (Economist)
  19. 19. Export to Poland FDI destinations and unemployment Bi-Lateral Trading between Poland and Britain 19.5% 20% 18% 16% 14.1% 13.2% 14% 12.2% 12% 10% 8.5% 8.7% 6.6% 7.1% 6.7% 7.4% 8% 6% 3.0% 3.8% 4% 2.2% 2.2% 1.7% 2.2% 2% 0% Warsaw Poznań Katowice Kraków Tri-City Wrocław Lublin Łódź Feb '04 Jul '08 Source: GUS
  20. 20. Export to Poland FDI destinations and unemployment Bi-Lateral Trading between Poland and Britain 70,000 67,100 66,100 60,000 50,000 39,800 38,200 40,000 31,500 24,000 30,000 21,600 22,700 21,800 16,900 20,000 11,100 11,200 11,500 10,000 4,000 5,500 6,800 0 Katowice Poznań Tri-City Lublin Wrocław Kraków Łódź Warsaw Feb '04 Jul '08 Source: GUS
  21. 21. Export to Poland The weak Pound Bi-Lateral Trading between Poland and Britain Zloty appreciation in %age terms (1 May ‘04=0%) £1 = 7.15 zł £1 = 4.85 zł 43% 40% 31% 30% 20% 10% 0% IV '04 IV '05 IV '06 IV '07 IV '08 IV '09 Monthly average value of PLN. Source - NBP
  22. 22. Export to Poland Labour availability in Poland Bi-Lateral Trading between Poland and Britain • Smaller towns and rural Poland have high unemployment; large amount of undisclosed employment in grey economy • Labour mobility – both high and low (Poland and UK!) • Over 44% of Poles of productive age are not working • 45% of Poles registered as unemployed live in villages • Age is important factor – older Poles less flexible, less mobile, less prepared to work in market economy. Only 28% of Poland’s over-55s are working (58% in UK)
  23. 23. Export to Poland Where to find human resources Bi-Lateral Trading between Poland and Britain Polish unemployment Tri-City Warszawa Poznań Warsaw Poznań Bydgoszcz Torun Łódź Wrocław Wrocław Poznan Łódź Warsaw Lodz Wroclaw Silesian agglomeration Source: GUS, July 2008 Silesian agglomeration Silesian agglomeration Kraków Kraków Krakow
  24. 24. Export to Poland Business opportunities Bi-Lateral Trading between Poland and Britain Inward investment Manufacturing: look to produce for local and regional markets, rather than as low-cost source Outsourced services (though S. Poland overheating) Consumer market High-growth conurbations – Warsaw, Katowice, Krakow, Wrocław, Poznan, Tri-City and Lodz – several million prosperous consumers Property & Construction Residential, commercial, retail; EU-funded infrastructure projects; Euro 2012; PPP expertise Business-to-business Consultancy, HR (training, coaching), legal services
  25. 25. Export to Poland Poland: The bottom line Bi-Lateral Trading between Poland and Britain • Economic growth expected to be reasonably strong over coming five-six years • Poland insulated against harshest effects of global downturn • EU funded projects will change the way Poland looks and works • Get involved before it’s too late!
  26. 26. Export to Poland Next steps Bi-Lateral Trading between Poland and Britain •The Export to Poland program can bring your Company into Poland •We can help you in Marketing, Distribution, Translation, Partner search, •Most Importantly, we can provide the SALES in a manner that keeps your costs low Web: www.export-to-poland.com email: mc@export-to-poland.com
  27. 27. Export to Poland Bi-Lateral Trading between Poland and Britain Export to Poland Thank you Michael Clay Member of the Board www.bpcc.org.pl www.exportpoland.co.uk

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