Trade opportunities in Poland
Is it all doom and gloom in Europe? Apparently not: Poland’s resilience to the global downturn has shown why it’s the rising economic star of Central Europe. Poland and Australia both came away from the global economic downturn relatively unscathed, so why aren’t we trading more?
The beating geographical heart of Europe is currently experiencing a velvet crisis according to the Polish deputy Prime Minister, Waldemar Pawlak: “Paradoxically, Poles were helped by the global economic crisis.” With the International Monetary Fund (IMF) also describing Poland as the “bright spot in recession-hit Europe”, what opportunities can Poland offer the world’s other great economic survivor, Australia?
A democratic state with a population of more than 38 million people, in 2008 Poland was the world’s 18th richest country, generating GDP valued at US$525.7 billion. With a temperate climate and beautiful landscape stretching from the unspoilt Baltic coastline to the Tatras mountain ranges, Poland has a strong agricultural heritage and is a leading European producer of dairy, apples, potatoes and rye.
Pawlak described Poland’s stable political and economic situation, as “rare as a sunbeam in the midst of polar night” in his May 2009 interview with the Polish Information and Foreign Investment Agency; this has positioned Poland as an entry point into the European market. In the midst of a global economic slump, Poland is actually experiencing something of a renaissance.
Poland will achieve a world-leading one percent real growth this year, says the latest IMF Real Gross Domestic Product Forecast for 2009; Australia is second with 0.7 percent. Interest rates were at 3.5 percent in July 2009, and retail trade went up in May by 1.1 percent.
Its natural beauty and historical significance are drawing a flourishing tourist trade, and with 20 years of relatively stable politics and economic growth under its belt, overall, the country is looking pretty healthy, despite the global downturn. On August 13, 2009, the IMF’s Delia Velculescu confirmed: “While Poland has not emerged unscathed from the crisis, it has fared much better than its neighbours.” Successive years of growth averaging nearly 5.5 percent had increased average Polish incomes and reduced unemployment.
The Polish banking system reportedly escaped the global economic crisis with little damage, and consumer confidence as of August 2009 had risen to its highest point for the year. The country is ripe with potential, says Pawlak: “Poland is the region’s biggest politically and economically stable country, and that creates chances for successful long-term investment. Poles account for 24 percent of the region’s population, and produce nearly 40 percent of its GDP. That is an indicator of the Polish economy’s potential.”
New exporters
Given the strength of Australian business at the moment, there is much to be said for striking while the iron is hot. Based in Warsaw, Austrade senior trade commissioner for central, southern and eastern Europe Paul Sanda lists numerous areas of growth across several sectors. “Poland has a significant mining industry: coal, copper and minerals and the opportunities for investment, technologies such as mine planning, management and safety systems are strong,” he says.
In fact, Austrade is coordinating a mining mission in March 2010 that will seek out new opportunities for Australian mining and mining services firms in Russia, Ukraine and Poland. “There are many opportunities given the synergies between Poland and Australia as a coal supplier, for instance efficiencies in mine safety and security and quality control processes,” says Sanda. “Then there’s the whole issue of carbon capture and storage for power generation, and clean coal technologies.”
Another area of opportunity is information technology, with several companies already active in Poland. Interestingly, Australian online accommodation site Wotif.com recently launched there due to demand, and the take-up has been described as ‘staggering’, reported Polish Business News in August 2009.
Other areas of potential include agribusiness, specifically consulting services, food security and advanced processing technologies and large commodity or semi-processed food and agricultural commodities. Sanda comments: “There is demand in some markets also for genetic material and aquaculture technologies, particularly for exotic species such as barramundi.”
Kevin Witkowski, president of the Polish Chamber of Commerce Australia, supports a push with boutique wine and expensive seafood, and suggests using seasonal differences to our advantage as another possible export tactic: “Poles are big producers of fruit and vegetables and the Polish ‘out of season’ is our prime season.”
Existing exporters
Many Australian companies in a diverse array of fields are already active in Poland, beginning with real estate development and commercial property development. Packaging specialists Amcor have made a significant investment in Lodz, advises Sanda, while Macquarie is involved in the Gdansk Deepwater Port. Mincom is supplying mine planning and asset management software, while Bovis Lendlease is involved with the supply of project management and construction services. Redflex is another Australian company supplying traffic management and speed control/enforcement technologies.
Sanda notes that there are many other companies actively seeking commercial opportunities in “infrastructure (toll roads), investments, food processing, traffic management and ticketing solutions, security and early fire warning systems, consulting and the services sectors”. Note also, with the proximity of the Baltic Sea and a large lake region, there are opportunities in the marine sector, most notably marinas and associated services, ship and ferry building and associated services and technologies.
Another area of significant potential is franchising, says Sanda, who observes that Gloria Jeans has recently opened stores in Warsaw and Prague.
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