The Polish Information and Foreign Investment Agency and its Ukrainian counterpart InvestUkraine, today signed a Memorandum of Understanding for binding cooperation. The agreement’s purpose is to improve the exchange of information between the agencies and widen the economic promotion and cooperation in each country. Poland is still the top European state in terms of the largest numbers of European investors. We have lower labour costs than the Czechs and more well qualified personnel than Rumania. It’s due to Poland’s human resources that the country is able to maintain its competitive advantage in the European market. These were the conclusions reached at the end of the conference “Building competitive advantage - Poland’s labour market”.

Pleasant reading!

PAIiIZ’s editorial team

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NEWS

The agreement was signed on the 20th march in Warsaw, during a meeting of the Polish-Ukrainian International Commission for matters of Economic Cooperation. In its text are articles relating to the promotion of economic cooperation by both agencies in both countries and the commitment to form a joint web of contacts with foreign investors. The understanding was signed on behalf of PAIiIZ by the President Paweł Wojciechowski, and on behalf of InvestUkraine by Mr Ihor Zaglada, the first Deputy to the Director of the Ukrainian Centre.

Both parties are committed to mutually inform each other of changes to legal regulations in Poland and in the Ukraine, related to the field of activities of both agencies, to the exchange of information, data on statistics and trade and the forwarding of periodicals, publications, technical expertise and know how. Furthermore PAIiIZ and its Ukrainian counterpart will support each other in the sphere of organising conferences and seminars and will also inform the other of all these types of activities taking place in their countries. 

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The Czech Republic’s agency Czechinvest, the counterpart of the Polish Information and Foreign Investment Agency (PAIiIZ), has announced the results of its 2007 activities. The average value of the projects it handled was app. 14 million EUR, whereas in the case of PAIiIZ, it was 33 million EUR. It’s worth mentioning that the budgets of both agencies were disproportionate to the results achieved by each one - Czechinvest’s budget was more than four times greater than PAIiIZ’s (for the values see the graph).

PAIZ, just like its Czech rival, prioritises projects from the sectors of electronics, automotives and the chemical industry. Half way through last year, the Czech’s changed their basis for providing public aid. This can only now be expected by firms that transfer technology that’s less than two years old there.

According to Mr Marcin Kaszuba, a manger at Ernst&Young, we beat our southern rivals in the realms of the availability of personnel and our labour costs. In the second area Rumania is successfully competing with us, but due to the low numbers of qualified personnel, they’re unable to attract as large numbers of investors as Poland. The last set of complete figures was for 2006, which shows that 15 million EUR was then invested here, 9 million EUR in Rumania, 6 million EUR to the Czech Rep. and 2 million EUR in Slovakia. It also needs to be added that in our favour is the fact that Poland’s the region’s largest country.

- The value of investments in Poland this year could once again reach a record. For the first time, we’ll see a noticeable increase in investors from outside the EU. We noticed an inflow of Chinese investments, particularly in electronics, domestic appliances and automotives. The Japanese and Indian investments will also continue to grow - Mr Kaszuba, believes. The first Indian firms appeared here in 2006, but it was only the entry of such firms as Infosys and HCL which can attract other firms.(Rz)

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INVESTMENTS IN POLAND

Factory of Gedia Poland in Nowa Sól

Today 890 people are employed at the Works. It will be enlarged through redevelopment and the employment target is for 1,000 workplaces.

- On a 2.3 ha site that we bought this year next to our factory, we want to develop a logistics department. In the future a hall will be built here. Later we’ll change the layout of our firm in order to organise the movement better. The investment will cost 5-8 million PLN - Mr Zbigniew Paruszewski, Managing Director of Gedia Poland said.

A year ago the company also bought a 4.5 ha plot some distance from the plant. - In the future manufacturing halls will be built here, but it’s too soon to speak of the details - said the boss of Gedia Poland. This will enable the employment of 200 new employees.

The German corporation has a total of 5 factories located in Germany, Spain and Poland. The firm’s annual turnover has reached 270 million EUR (953.1 million PLN) and it employs 2 thousand personnel.

The management has yet to make a final decision regarding their new investment’s location. After Daimler and IHI withdrew their plans of constructing a new turbocharger factory at Nowa Sól, this region has become very highly rated. A 100 ha plot belonging to the Kostrzyn-Słubice Special Economic Zone (SEZ) has been a focus of interest for several companies, according to Mr Wadim Tyszkiewicz, Nowa Sól’s President.

Nowa Sól is a motor industry stronghold and Mr Krzysztof Dołganow, President of the Kostrzyn-Słubice SEZ intends to establish an automotive cluster here (a spatial concentration of a group of businesses). Apart from Gedia, who produce suspension parts for e.g. Audi, Porsche, Volvo and BMW; there operate factories belonging to the Fatsa corporation (a subsidiary company to Inter Groclin), Jost (metal parts for trucks) and Voit (cooling and air-conditioning systems for cars). Two other companies Esser (producing wiring looms for cars) and Utescheny (manufacturers of plastic car components) are also planning to begin manufacturing at Nowa Sól. (PB)

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The plant will cover an area of 8 thousand m2 and will be opened for production by the end of November this year, employing over 100 people. - For a town with 30% unemployment this is of enormous significance - Mr Marek Majewski, from Pionki’s Town Hall stated.

Soudal Manufacturing is among the world’s leading manufacturers of chemicals and construction materials, their products include construction foams, sealants, glues and roofing chemicals. The Belgian firm was established in 1966 and has branches and manufacturing plants in its native Belgium, in Germany, France, Italy, Singapore, India, the USA and even in South Africa. It exports over 90% of its production to more than 100 countries across the world.

Soudal set up a Polish branch at Cz±stków Mazowiecki near Warsaw in 1996 and it’s now one of the fastest developing among all of the Company’s plants. Apart from their headquarters in Czastków the company also has sales bureaus in Gliwice, Poznań, Szczecin, Zielona Góra, Gdynia, Toruń, Olsztyn and Koszalin. It is also in cooperation with a well developed network of specialised regional distributors throughout the country. The construction of the manufacturing and warehousing plant at Pionki, testifies to the fact that the company’s expansion in Poland isn’t slackening.

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• Pay:
  
  According to the Central Statistical Office’s (GUS) figures of 17th March this year, the average gross pay in February was 3.032 PLN. This shows that on an annual scale it had grown by 12.8% and compared to January it had increased by 2.1%. The economic forecasts had suggested increases of 11.1% and 0.5% respectively.

• Employment:
  
  Employment in businesses last month was 5,371,300 people, i.e. a 5.9% increase on last year and 0.4% above the previous month’s figure GUS stated. The economists had predicted increases of 5.7% and 0.2 respectively.
  

• Exchange rates (as of 20.03.2008):

	Buy	Sell
USD	2.2307	2.2757
EUR	3.5022	3.5730

Source: www.nbp.pl

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ANALYSES AND REPORTS

On 10^th March this year, the Conference: Building competitive advantage - the Polish labour market, took place. It was organised by PAIiIZ and the British-Polish Chamber of Commerce (BPCC). This was the first in a series of strategic seminars held under the joint title of: The 2008 Policy Forum - Building Competitive Advantage. These seminars are aimed at supporting the preparation of model solutions and providing the Government with suggestions that are suitable for future policy and legislation. These debates are organised by PAIiIZ in cooperation with the bilateral chambers of commerce, representing foreign investment circles in Poland. The first meeting’s honorary guest was Ms Jolanta Fedak, Minister of Labour and Social Policy (MPS). Initiating the discussion was a presentation by Dr Paweł Wojciechowski, PAIiIZ’s President.

President Wojciechowski presented four possible scenarios for establishing a national policy for the labour market. Beginning with the actual problems and challenges, he indicated as an option for consideration: implementing an active market policy, the contracting of individuals and groups of foreign workers, together with encouraging the return of Poles who have emigrated.

According to Mr Dariusz Stanko, Director of the Department of Economic Analysis and Prognosis, at MPS, an imbalance is growing on the Polish labour market - there are shortages of people willing to work, though there’s still a high unemployment rate. Wages are increasing in large urban areas, which can be a threat to the competitiveness, when growth rates exceed increases in productivity at work in the Polish economy. Mr Stanko pointed too the existence of a poverty trap - the decision of people in the country’s poorest regions to remain in the “grey zone”, due to the low rewards from working legally. These people deliberately decide to live without accident insurance, or making pension payments towards their futures.

PAIiIZ’s president referred to the appearance of Minister Fedak, stating under labour market policy, the inclusion of active elements should be increased. These activities should include the professional activation of the unemployed, of people beginning their working lives, together with those above the age of 50, improvements relating to social security benefits and the promotion of more elastic forms of employment (elastic working times and working via the internet), enabling the combining of professional and family life. In Holland 4% of the workforce are so employed, in Poland it’s 1% at most. Personnel, particularly the young and women, have expressed an interest in these forms of work.

The easing of the employment of foreigners should help in finding workers. Today the barriers are the long and complicated procedures for them to gain work permits and the short periods the permits are then valid for. Dr Wojciechowski, discussed the European Commission’s proposals from October 2007 - the issuing of a “Blue Card” - i.e. visas valid throughout all of the EU, granting permission to work for people from outside the EU that have the required qualifications.  Also, lowering the costs for the employment of foreigners and the granting of an amnesty to those that work illegally in Poland, would enable them to leave the labour market’s “grey zone”. President Wojciechowski, underlined that it was important that the Polish government consider this proposal.

Mr Jimmy Zeng, President of the firm: Athletic Group, pointed to these barriers when organising group contracts for foreigners. Apart from the long and complicated procedures, businessmen were discouraged with the uncertainties of lengthening work permits for further periods and the related high costs of travel, accommodation, followed by changes of large groups of personnel - in cases where they are not granted extensions to work permits. This complicates the execution of large investment projects lasting over several years.

Removal of tax barriers and an active labour market policy, should also prepare the market for Poles returning from economic migration. Particularly those that are the most valuable, well qualified and industrious workers. They should be considered by circulating information of the conditions for employment and the running of businesses and by enabling them to keep in touch with their country, e.g. by providing education in the Polish language. If we want to create the conditions for keeping graduates and for their return from abroad, we most consider what the émigrés lack in the domestic market and what attracts them to foreign employers. The level of pay isn’t the sole factor. From BPCC research conducted by Mr Michał Dembiński, it appears that Poles are not only focused on good financial conditions in employment, but also equal (fair) treatment, security and stability, together with the possibility of using their skills and acquiring new ones. The race to acquire employees is won by those that have a “flat” management structure and place an emphasis on equitable and direct relations with each employee, providing them with the opportunity of planning their own career paths. Mr Henryk Michałowicz, representing the Employers Federation, summed up this question by stating that what was essential for Poland’s economic policy was the decisive question of how and by what means are we to support workers within the country and should we seek foreign workers.

Mr Dembiński, also spoke of the mobility of Polish workers, which is only relatively high among young people. Mr Marek Wróbel, from the company Randstad, when speaking of his firm’s activities, said that in some regions of Poland it was difficult to get the unemployed to travel to other parts of the country, even when good pay and accommodation was offered. Many of those present at the discussion said that too much was being invested in ensuring diplomas for almost all young people. It was worth reviving the important place of trade schools in education and training, which were until recently being closed and given a low priority. Minister Jolanta Fedak, that the government had deliberately introduced a policy of extending education, when it anticipated unemployment several years ago.

The participants of the conference with the journalists, stressed that the conference was an opportunity to discuss the current situation on the labour market, within a circle of people who were forming national policy - professionals and experts. A series of observations from market analysts were here shown in another perspective - that of the foreign investors. Ms Czesława Ostrowska, Undersecretary of State at the MPS, when summing up the conference, presented the state of the Government’s work and immediate plans that are to deal with the matters discussed.

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DID YOU KNOW?

The Kot brothers built their factory 10 years ago in an economic activity zone, which was exempted by the local authorities from property tax. Over the subsequent decade they have invested app. 40 million PLN and this has paid off - as each year the firm has noted an increase in production of around 20%. Currently at the boatyard they produce around 2,000 motor launches and 200 sailing boats each year, with Delphia Yachts being able to offer a selection of 30 different boats. The income from the sale of these yachts is 50 million PLN annually.

- We sell around 7% of our production domestically, the rest goes for export. Through a network of dealers we cover almost the whole world; we have over 50 dealers. The most are in Scandinavia (13%), Australia and Germany (9% each) and the USA (6%). First we sought them out ourselves, now they approach us themselves. Recently we received an offer from Turkey - said Wojciech Kot, who in the team of brothers is in charge of the company’s image, trade and public relations.

- The works have created many jobs, as a result of which young people aren’t leaving Olecko. In addition they probably offer the highest wages in town, which raises living standards, supporting the sport and culture. This is why we considered extending Delphia’s tax exemption. The gains exceed the several hundred thousand PLN a year that we’d gain from taxes - Olecko’s Mayor, Mr Wacław Olszewski said. - A firm such as Delphia Yachts is a great promotion for our town of 20 thousand people. Whoever enters Delphi’s website reads about Olecko - he added.  

Many Polish firms produce boats for the French, German or English boatyards that have become dominant on the world’s markets for yachts and motor launches. According to the figures from the Central Statistical Office, in 2006 the value of the Polish yachts, rowing boats and canoes exported, reached 566.2 million PLN. Most were bought by the Norwegians (112 million PLN), French (105 million PLN) and Germany (82.3 million PLN), but also included were French Polynesia, the Shetland Isles, San Marino and Angola. (Rz)

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