WHY POLAND? Market Overview and Economic Situation Michael Clay – UK Chairman
<ul><li>2009 GDP rises by 1.8%. Poland escapes recession –  luck or judgment? </li></ul><ul><li>EU structural and cohesion...
Poland $534 bn (+1.8%)  18th 38.1m Czech Rep. $207 bn (-4.3%)  40th 10.5m  Hungary $146 bn (-6.7%) 52nd 10.0m Slovakia $90...
Poland – High Skills, Low Cost <ul><li>Manufacturing – pluses and minuses of China </li></ul><ul><li>Business Process Outs...
Structural & Cohesion Funds <ul><li>2004-2006: €12.8 billion </li></ul><ul><li>2007-2013: €67 billion </li></ul><ul><li>(p...
Structural & Cohesion Funds <ul><li>20 1 4-20 21 : € ??  billion </li></ul><ul><li>Mo st unlikely that Poland will see the...
Structural & Cohesion Funds How much do the net contributors to Poland’s EU structural and cohesion funds see of the money...
Structural & Cohesion Funds <ul><li>New law came into force on 27 February, less proscriptive than old law from 2005 (unde...
Structural & Cohesion Funds <ul><li>The UK is the world’s greatest storehouse of PPP experience and expertise. Once PPP ge...
Poland – High Skills, Low Cost Source: OECD, GUS, Eurostat <ul><li>Young, skilled, motivated and flexible working populati...
FDI destinations and unemployment Source: GUS
Source:  GUS ,  2009 data Age Year of birth 2010 2004 1983 1967 1957 1946 Falling demographics for next 20 years 1939 2034...
24 18 21 15 12 9 6 3 Growth and unemployment  2000 2001 2002 2003 2004 2005 2006 2008 2007 Unemployment % 2009 Source: GUS...
<ul><li>UK  7th  largest investor in Poland – dominated by corporates </li></ul><ul><li>With only a very few examples, all...
Arcelor Mittal Tesco BP  Shell GlaxoSmithKline  Unilever Aviva Largest British investors in Poland Pilkington (now NSG) Ca...
Fill fill GBP  billions Source: Office of National Statistics, UKTI Trade between UK and Poland
Fill fill Poland: an increasingly important partner
Trade direct for higher margins Poland UK 750 PLN € 200 € 160 30% 50%  30% £100 £100 1,000 PLN
<ul><li>Re-orientation of investment sourcing – new global economies;  M iddle and  F ar  E ast seeking EU platform ; priv...
<ul><li>Poland the only EU member to escape recession </li></ul><ul><li>Strategic location, several large, high-growth cit...
www.bpcc.org.pl e-mail:  [email_address] [email_address] Contact us Thank you
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Poland economy and market October 2010

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Presentation given to the Newham Chamber of Commerce on 28th September 2010 by Michael Clay - UK Chairman of BPCC

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Poland economy and market October 2010

  1. 1. WHY POLAND? Market Overview and Economic Situation Michael Clay – UK Chairman
  2. 2. <ul><li>2009 GDP rises by 1.8%. Poland escapes recession – luck or judgment? </li></ul><ul><li>EU structural and cohesion funds shoring up Polish economy; British taxpayer paying to build Poland’s infrastructure – but missing out on chance of benefiting from the rewards </li></ul><ul><li>Consumer spending growing, unemployment falling, opportunities not only to cut costs but to find new markets </li></ul><ul><li>British business largely missing out on Polish opportunities, despite the country offering high potential and low risk </li></ul><ul><li>Sterling-denominated goods and services 20% more competitive compared to those from the eurozone </li></ul>Main themes
  3. 3. Poland $534 bn (+1.8%) 18th 38.1m Czech Rep. $207 bn (-4.3%) 40th 10.5m Hungary $146 bn (-6.7%) 52nd 10.0m Slovakia $90 bn (-5.0%) 57th 5.4m Slovenia $51 bn (-7.5%) 69th 2.0m Lithuania $40 bn (-14.4%) 75th 3.3m Latvia $28 bn (-17.5%) 80th 2.2m Estonia $20 bn (-14.5%) 93rd 1.3m GDP (nominal) Source World Bank/EIU, 2009 growth GDP rank pop.
  4. 4. Poland – High Skills, Low Cost <ul><li>Manufacturing – pluses and minuses of China </li></ul><ul><li>Business Process Outsourcing </li></ul><ul><li>Infrastructure, public projects </li></ul><ul><li>Supply chain (automotive, aviation) </li></ul><ul><li>Chemicals and pharmaceuticals </li></ul><ul><li>Food, agricultural products and processing </li></ul>Foreign direct investment
  5. 5. Structural & Cohesion Funds <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>Is chang ing the face of Poland ! </li></ul>EU structural and cohesion funds
  6. 6. Structural & Cohesion Funds <ul><li>20 1 4-20 21 : € ?? billion </li></ul><ul><li>Mo st unlikely that Poland will see the money earmarked for it in the current EU Financial Perspective. Main net donors to EU budget have their own profound financial problems to deal with (plus Greece). </li></ul><ul><li>The current round of EU funding will not be repeated – make the most of it while you still can! </li></ul>EU structural and cohesion funds
  7. 7. Structural & Cohesion Funds How much do the net contributors to Poland’s EU structural and cohesion funds see of the money? For every €1 that Austria contributes to Poland via Brussels, it sees €0.93 back in terms of contracts won by Austrian companies competing for EU-funded tenders. Germany sees back €0.64. Denmark €0.43, Sweden €0.41. The UK? A mere €0.13! The UK taxpayer is paying to build Poland’s new infrastructure, but UK businesses are not benefiting from the opportunities! EU structural and cohesion funds Source: Ministry of Regional Development
  8. 8. Structural & Cohesion Funds <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
  9. 9. Structural & Cohesion Funds <ul><li>The UK is the world’s greatest storehouse of PPP experience and expertise. Once PPP gets moving in Poland, there will be plenty of opportunities for UK know-how in this sector: </li></ul><ul><li>Road, rail and telecoms infrastructure </li></ul><ul><li>Public buildings </li></ul><ul><li>Healthcare </li></ul><ul><li>Environmental protection </li></ul><ul><li>Renewable energy </li></ul>Public Private Partnerships
  10. 10. Poland – High Skills, Low Cost 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. FDI destinations and unemployment Source: GUS
  12. 12. Source: GUS , 2009 data Age Year of birth 2010 2004 1983 1967 1957 1946 Falling demographics for next 20 years 1939 2034 2027 2007 1991 1981 1970 1963 starting work 340 000 2017 1993
  13. 13. 24 18 21 15 12 9 6 3 Growth and unemployment 2000 2001 2002 2003 2004 2005 2006 2008 2007 Unemployment % 2009 Source: GUS (Polish stats office) 0 GDP growth, year-on-year % 2010
  14. 14. <ul><li>UK 7th largest investor in Poland – dominated by corporates </li></ul><ul><li>With only a very few examples, all these investments have been highly profitable </li></ul><ul><li>UK: Poland’s 3 rd largest export market (after Germany and France) </li></ul><ul><li>Poland: UK’s 20th largest export market ( up from 26th in 2005 ) </li></ul><ul><li>UK: Poland’s 8th largest import source </li></ul><ul><li>Poland: UK’s 15th largest import source ( 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
  15. 15. Arcelor Mittal Tesco BP Shell GlaxoSmithKline Unilever Aviva Largest British investors in Poland Pilkington (now NSG) Cadbury’s (now Kraft) Provident Associated British Foods HSBC RSA (Royal Sun Alliance) First Property Group London & Cambridge Property
  16. 16. Fill fill GBP billions Source: Office of National Statistics, UKTI Trade between UK and Poland
  17. 17. Fill fill Poland: an increasingly important partner
  18. 18. Trade direct for higher margins Poland UK 750 PLN € 200 € 160 30% 50% 30% £100 £100 1,000 PLN
  19. 19. <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 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 , infrastructure requirements, PPP </li></ul><ul><li>On target for e urozone entry in 201 5(?) [budget deficit is the issue] </li></ul><ul><li>Climate change, environment and renewable energy </li></ul><ul><li>UEFA Euro 2012 </li></ul><ul><li>EU deadlines for environmental protection, renewable energy targets </li></ul><ul><li>Convergence with Western Europe – a nation in a hurry! </li></ul>Catalysts for future growth
  20. 20. <ul><li>Poland the only EU member to escape recession </li></ul><ul><li>Strategic location, several large, high-growth cities </li></ul><ul><li>Infrastructure projects and EU funds offer promise </li></ul><ul><li>Greenfield FDI once again becoming attractive </li></ul><ul><li>Skilled, well-educated and motivated workforce </li></ul><ul><li>Poland offers the right balance between low risk and higher growth opportunities </li></ul>Summary
  21. 21. www.bpcc.org.pl e-mail: [email_address] [email_address] Contact us Thank you

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