Export To Poland Presentation 2nd June 2009


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This presentation was made by Michael Clay on the 2nd June at the Polish Embassy in London as a member of the Board of the British Polish Chamber of Commerce

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  • The presentation is an overview of the market, Poland’s economic prospects, and opportunities for UK companies.
  • Export To Poland Presentation 2nd June 2009

    1. 1. Michael Clay, Board Member, BPCC
    2. 2. <ul><li>Poland as the biggest new member of the single European market offers the right balance between low business risk , and high growth opportunity </li></ul><ul><li>Attractive domestic market of 38m consumers – larger than the other seven 2004 EU entrants combined in terms of population and GDP </li></ul><ul><li>CEE gateway to regional sales, manufacturing and logistics hub – EU expansion opportunity </li></ul><ul><li>H uman capital – young, skilled demographic </li></ul>WHY POLAND?
    3. 3. <ul><li>20 years after the downfall of communism, 20 years of economic transformation </li></ul><ul><li>10 years in NATO, five years in the EU </li></ul><ul><li>Strong GDP growth </li></ul><ul><li>Inflation tamed </li></ul><ul><li>Unemployment has fallen rapidly (Feb ’04 to Oct ’08) </li></ul><ul><li>EU funds flooding in </li></ul><ul><li>...and then the global economic crisis hits Poland. </li></ul>The story so far...
    4. 4. <ul><li>Dramatic changes in global economy have changed prospects for Poland </li></ul><ul><li>Fall in value of zloty </li></ul><ul><li>Entire CEE region tarred with same brush </li></ul><ul><li>New opportunities opening up as others disappear </li></ul><ul><li>EU structural and cohesion funds will shore up Polish economy </li></ul><ul><li>Consumer spending falling slower, unemployment growing slower than across EU15, opportunities not only to cut costs </li></ul><ul><li>but to find new market opportunities </li></ul>Main themes
    5. 5. EU Structural & C ohesion F unds <ul><li>2004-2006: €12.8 billion </li></ul><ul><li>2007-2013: €67 billion </li></ul><ul><li>(plus matchfunding – another €23 billion) </li></ul><ul><li>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’ ) </li></ul><ul><li>Will change the face of Poland. </li></ul>
    6. 6. And yet... <ul><li>GDP 2009 forecast to contract by 0.4% </li></ul><ul><li>Debt rose by 24% between 2000-07 </li></ul><ul><li>S&P rating A- </li></ul><ul><li>GDP 2009 forecast to contract by 6% </li></ul><ul><li>Debt rose by 65% between 2000-07 </li></ul><ul><li>S&P rating BBB </li></ul>Poland Hungary
    7. 7. Poland has a competitive economy The Alllianz/Lisbon Council study , published on 9 March 2009, ranks EU countries according to six key criteria including economic growth, productivity growth, jobs, human capital, future-oriented investment and sustainable public finances. Overall, Poland comes in at No. 2 with strong performances on economic growth and productivity growth, where it finishes No. 1 and No. 2, respectively.
    8. 8. Central and Eastern Europe 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. <ul><li>New law came into force on 27 February, less proscriptive than old law from 2005 (under which no project was initiated) </li></ul><ul><li>Will PPP finally get moving? </li></ul><ul><li>EU funds – projects need local matchfunding </li></ul><ul><li>Municipal bonds and loans – 60% debt/budget limit </li></ul><ul><li>Banks showing far less appetite to lend </li></ul><ul><li>Yet projects have to be delivered. </li></ul><ul><li>Is PPP the answer? </li></ul>Public Private Partnerships
    10. 10. Source: OECD, GUS, Eurostat <ul><li>Young, skilled, motivated and flexible working population </li></ul><ul><li>Multilingual – 71% of students have passed English at ‘A’ Level equiv. </li></ul><ul><li>Record numbers of graduates and school-leavers have been enter ing the labour market </li></ul><ul><li>Poland’s student population quadrupled during ‘90s – today, 1.9m in tertiary education – more than entire population of Estonia </li></ul>Poland’s skilled workforce
    11. 11. <ul><li>Multinational investors cutting regardless of local conditions on Polish market </li></ul><ul><li>Polish employers have seized opportunity to get ‘leaner and fitter’ </li></ul><ul><li>Skills shortages have not gone away in cities </li></ul><ul><li>Temp workers likely to become more popular </li></ul>Have employers cut too far?
    12. 12. Announced job losses across EU
    13. 13. <ul><li>UK 6 th largest investor in Poland – dominated by large corporates </li></ul><ul><li>UK r anked 4 th largest Polish export market </li></ul><ul><li>Poland ranked 17 th largest UK export market (up from 25th in 2005) </li></ul><ul><li>Very low presence of British mid-caps and SMEs on Polish market (different legal system) </li></ul><ul><li>Unrecognised export opportunity for British exporters </li></ul>The British Polish experience so far
    14. 14. Tesco BP GlaxoSmithKline Pilkington Cadbury’s Shell Largest British investors in Poland Unilever Arcelor Mittal Aviva (Commercial Union) Provident Associated British Foods HSBC
    15. 15. Fill fill GBP billions Source: Office of National Statistics, UKTI Trade between UK and Poland
    16. 16. <ul><li>Re-orientation of investment sourcing – new global economies; M iddle and F ar E ast seeking EU platform ; private equity funds looking for M&A opportunities, public sector investment </li></ul><ul><li>Cutting costs in western Europe – upping investment in Poland (this affects only investors already present here!) </li></ul><ul><li>EU funds and grants </li></ul><ul><li>Eurozone entry planned for 1 Jan 2012 ( ???! ) </li></ul><ul><li>Climate change, environment and energy </li></ul><ul><li>UEFA Euro 2012 </li></ul><ul><li>2015 deadline for ensuring all water pumped into rivers is treated – otherwise local authorities face fines </li></ul>Catalysts for future growth
    17. 17. <ul><li>Poland’s downturn likely to be far more mild than in rest of EU </li></ul><ul><li>Strategic location, several large, high-growth cities </li></ul><ul><li>Infrastructure projects offer promise </li></ul><ul><li>Greenfield FDI once again becoming attractive </li></ul><ul><li>Poland offers the right balance between low risk and higher growth opportunities </li></ul>Summary
    18. 18. GDP grow ing faster than ‘old’ EU Source: Eurostat *2008, 2009 forecasts (Economist) Growth compared
    19. 19. FDI destinations and unemployment Source: GUS
    20. 20. FDI destinations and unemployment Source: GUS
    21. 21. The weak Pound Zloty appreciation in %age terms (1 May ‘04=0 % ) £1 = 7.15 zł £1 = 4 . 85 zł Monthly average value of PLN. Source - NBP
    22. 22. <ul><li>Smaller towns and rural Poland have high unemployment ; large amount of undisclosed employment in grey economy </li></ul><ul><li>Labour mobility – both high and low (Poland and UK!) </li></ul><ul><li>Over 44% of Poles of productive age are not working </li></ul><ul><li>45% of Poles registered as unemployed live in villages </li></ul><ul><li>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) </li></ul>Labour availability in Poland
    23. 23. Wrocław Warszawa Kraków Silesian agglomeration Poznań Łódź Where to find human resources Wrocław Warsaw Kraków Silesian agglomeration Poznań Łódź Wroclaw Warsaw Krakow Silesian agglomeration Poznan Lodz Tri-City Source: GUS, July 2008 Bydgoszcz Torun Polish unemployment
    24. 24. <ul><li>Inward investment </li></ul><ul><li>Manufacturing: look to produce for local and regional markets, rather than as low-cost source </li></ul><ul><ul><ul><li>Outsourced services (though S. Poland overheating) </li></ul></ul></ul><ul><li>Consumer market </li></ul><ul><ul><ul><li>High-growth conurbations – Warsaw, Katowice, Krakow, Wrocław, Poznan, Tri-City and Lodz – several million prosperous consumers </li></ul></ul></ul><ul><li>Property & Construction </li></ul><ul><ul><ul><li>Residential, commercial, retail; EU-funded infrastructure projects; Euro 2012; PPP expertise </li></ul></ul></ul><ul><li>Business-to-business </li></ul><ul><li>Consultancy, HR (training, coaching), legal services </li></ul>Business opportunities
    25. 25. <ul><li>Economic growth expected to be reasonably strong over coming five-six years </li></ul><ul><li>Poland insulated against harshest effects of global downturn </li></ul><ul><li>EU funded projects will change the way Poland looks and works </li></ul><ul><li>Get involved before it’s too late! </li></ul>Poland: The bottom line
    26. 26. <ul><li>T he Export to Poland program can bring your Company into Poland </li></ul><ul><li>We can help you in Marketing, Distribution, Translation, P artner search, </li></ul><ul><li>Most Importantly, we can provide the SALES in a manner that keeps your costs low </li></ul><ul><li>Web: www. export-to-poland.com </li></ul><ul><li>email: [email_address] </li></ul>Next steps
    27. 27. Export to Poland www.exportpoland.co.uk Thank you Michael Clay Member of the Board www.bpcc.org.pl