Poland Business Environment and steps taken by government to enhance it!
Abstract
I had a very short visit to Poland which didn’t last for more than 7 days at disposal.
I was traveling to the country as a part of my course work IMS Study Trip to Poland. As part of this trip I was assorted a project to work up on and submit a paper discussing Poland Business Environment and steps taken by government to enhance Business. I don’t think I am qualified enough or I don’t see myself at a level in which I can visit a country and submit my views about the steps taken by the government. Yes this visit created my interest about the Polish culture and as a student from Management School it further made me think more over the business aspects of doing the business in Poland.
The paper mentioned below is my research from the articles that I covered during my information research which are available at disposal on Internet and the College Library of the school. I have explicitly mentioned the references that I used and covered while doing my research over these topics. The first part of the paper will give a brief introduction about the Polish Culture, later I have focused the subject material to my research findings from out visit to the local administration to Niepolomice. Here, I have discussed how the local government was able to attract the multinationals in the city to set up their production centers which in return generated various growth and employment opportunities for the local residents of the town. In the later part of the paper, I have discussed various provisions that are been taken by the Polish government to maintain International Currency.
Interesting findings and facts about Business in Poland:
Poland is the land of opportunities, a growing and bubbling economy, throttling at full fledge to come out and the European nations.
I was fortunate enough to visit Poland as part of my IMS-8V60 course, study trip to Poland. During my visit I was always trying to analyze how it feels like living in Poland and doing business here. I have reached some conclusions and this paper is a brief introduction about my views on Poland from the business prospective.
I was in Poland from May 16-21. During these 5 days we visited many Industrial sectors trying to analyze the way they work in European economy. It was way to fascinating to know that though a small country, an off-the-cut answer to question “About living and doing business in Poland” is “great”. Poland is a very different pattern of work culture; maybe this gets carried from or inherited by the eastern countries.
Polish culture - Key concepts and values
Identity - A characteristic feature of Polish culture is its commitment to and involvement in the life of the country. Poland is a patriotic nation, united by the strong sense of community felt by its Citizens. Following centuries of invasion from neighboring countries, the Polish people are proud to have maintained an unbroken cultural identity and value their recently attained autonomy.
Relationships - As a family-focused society, the Polish are reliant on the building and maintaining of close personal relationships. Given Poland’s history of occupation, it is generally the case that outsiders must earn the trust of their Polish acquaintances before a close relationship forms. For this reason, when conducting business in Poland, you may find that your Polish colleagues adopt a fairly formal approach to begin with and it may take several meetings before any final decisions are made.
Roman Catholicism - At various points in this country’s history, religion has played a central role in Polish society. As a result, Roman Catholicism serves as the foundation of Polish identity. As one of the most devout nations in Europe, almost the entire population of Poland is Roman Catholic. Even in present-day society, the Roman Catholic Church has a significant bearing on many aspects of Polish life and culture. It continues to provide both the country and its people with a basic sense of solidarity and constancy for the future.
Poland is a large country with nearly 45 Million inhabitants who are able to live, work and transfer with each other without any problems. The economy is mainly private but there is still a significant proportion in the government’s hand. This gets reveled from our visit to Local Corporation to Niepolomice.
Niepolomice is a town in southern Poland, situated in the Lesser Poland Voivodeship (since 1999), previously in Krakow Voivodeship (1975-1998). It is situated on the Vistula River, 25 km east of Krakow on the verge of a large 
virgin forest. There is a 14th century gothic hunting castle in town built by Casimir III, as well as a conservation center for wisents nearby.
Niepolomice has been very successful in implementing schemes for attracting Investors. The municipality gained fame after it attracted a major investment by the Coca Cola Company.
Initially, Coca Cola intended to open a plant in Krakow. However, negotiations between the company and Krakow’s local government were substantially delayed after Coca Cola encountered a number of problems. Niepolomice took advantage of the situation and sent their representatives to persuade Coca Cola to invest in their town. They brought the company an attractive offer: a plot of land had already been allocated, and the bureaucratic procedures required for initiating the investment were simplified. After having shown such initiative, it was not surprising that Niepolomice succeeded in attracting Coca Cola to their municipality.
It’s definitely where MAN is at: last month it officially opened a 250,000m² plants at Niepolomice near Krakow in Southern Poland. It’s on a 142-hectare site, and represents an investment just shy of £70m. At present, 400 staff is employed at the site, the workforce is scheduled to rise to 650 by the end of 2010.
Trial production started in July. When it’s running at full tilt Niepolomice will have an annual capacity of 15,000 units from a single shift. Production will centre on the TGA-WW (World Wide) range, which is a toughened variant of the outgoing TGA designed to cope with the tough operating conditions in Eastern Europe, the CIS and the Middle East - markets MAN expect to grow fast.
Why locate here? After all, labor rates in Poland will inevitably rise, eventually getting close to parity with Western Europe, so the short-term saving on labor costs is bound to diminish. Similarly, while the Eastern European and CIS markets are currently rocketing upwards, over time this too will settle down, and demand patterns will shift towards those seen in Western Europe. MAN’s view is rather more bullish.
The Niepolomice plant is not just about reducing pressure on its Western European manufacturing capacity it’s also about meeting what it expects to be long-term and sustained demand from non-traditional markets.
While it is forecasting that the overall European market above six tons will rise by 6% during 2009, its predictions for the Polish market suggest that business here will increase by 60%. In fact MAN chairman Anton Weinmann believes more MAN trucks will be sold in Poland next year than in the UK. Further East and demand for MANs in the CIS has risen by no less than 800% since 2005.
That said, the site has considerable room for expansion. Of its 142 hectares, only 25 are currently in use. In part, this is because 80% cent of components
are shipped direct to the line - the building is surrounded by loading bays - with major assemblies such as cabs and axles unloaded from trucks and taken
almost immediately to the vehicle for which they are destined. In any case there’s plenty of room to develop a supplier park on site. MAN’s management seems keen to do this, so Niepolomice is set to become a components centre as well as an assembly plant.
Demand from Eastern Europe seems to have taken most of the European manufacturers by surprise, but they’re reacting fast: the Niepolomice plant has gone from its ground breaking ceremony to full production in little over a year. MAN must be hoping that its forecasts for Eastern Europe and the CIS come true. But in the meantime this additional capacity will ease the pressure on MAN’s other factories around Europe and, crucially for operators in search of a truck, it may allow lead times to be reduced. We’re used to seeing trucks leaving Western European factories and heading east - it looks like that flow is about to go into
reverse.
I was happy to know that Woodward Governor, Poland has launched the construction of a plant in Niepolomice, as part of the Krakow Technology Park. An engineering-production facility and an R&D centre for the entire corporation are to be built there.
The cornerstone was laid by Gerhard Lauffer - the company president and Stanisław Kracik - the Mayor of Niepolomice known for his unique ability of attracting investments. The groundbreaking ceremony was also attended by Eric Agnello - RD bud executive.
Woodward Governor Poland was granted a business permit to operate in the SEZ in September 2008. The facility in Niepolomice is to hire up to 150 people.
Woodward designs, manufactures, and services energy control systems and components for aircraft and industrial engines and turbines.
I was going through one of the articles which was been published by EUbusiness. It was titled on “World Bank expects growth in Poland in 2009″. As quoted in the article it is very much visible that Poland is likely to be the only ex-communist country in the European Union to see its economy grow this year despite the global economic crisis, a World Bank economist said Thursday in Warsaw.
Poland’s finance ministry has forecast growth of between 0.3 to 2.0 percent this year, while the European Commission believes growth in Poland will shrink by 1.4 percent.
The World Bank foresees a 3.0 percent contraction in GDP for the entire EU10 in 2009 and stagnation next year.
Steps Taken by Polish Government to maintain International Currency”
There are constant efforts that are been taken by the polish government to enhance and maintain the international currency exchange rates between the Euro and Zloty.
Poland’s government has been trading directly in currency markets to keep the zloty at around the level of 4.50 per euro, dealers said on Thursday.
The finance ministry has been converting euros from European Union funds on the currency market through a state-owned bank since February when the zloty has almost touched its all-time low of 4.93 against the single currency.
Last month a government source told Reuters the ministry was keen to keep the zloty at around 4.50 as it was good for exporters and did not hurt too many lenders who got their loans in foreign currencies.
Poland’s zloty has shed around 30 percent since last summer. But since end-February, where the first quasi intervention took place, the unit has fluctuated in a band of 4.23-4.74 per euro, having regained some 9 percent of its value from even deeper lows.
The ministry announced its presence on the market only when it had bought zlotys for the first time, but dealers said since then the ministry’s activity had taken place several more times.
‘The government maintains its view it wants a stable zloty and sometimes we see its presence on the market,’ said another Warsaw-based dealer. ‘And if it has those funds, it is using them for the zloty’s stability.’
The ministry could also use those quasi interventions to prove the currency is stable enough in a context of a possible ERM-2 entry, dealers said. The government sees the zloty’s volatility as the biggest obstacle to enter the pre-euro ERM2 mechanism, a necessary step for its goal of adopting the single currency in 2012.
References:
- Business in Poland, 16 October 2003 by Joe Smoczyński
- Forbes Magazine, [Polish govt defending zloty at 4.5 per euro-dealers
- The Development of Entrepreneurship in Rural Areas by Przemyslaw Kulawczuk
- Doing Business in Poland by British Telecom, CBI Initiative Eastern Europe - Law - 1991
- The Poland Business Forecast Report by Business Monitor International Ltd
- Doing Business and Investing in Poland by PricewaterhouseCoopers LLP., PricewaterhouseCoopers LLP
Internet Footnotes:
- Polish Market Onine: www.polishmarket.com
- Oliver Dixon: www.raodtransport.com Powered by Commercial Motor
- Online Encyclopedia: Wiki.
- Doing Business In Poland: www.communicaid.com
# This paper appears as academic research done Poland’s Business Environment. This paper is not/will never be submitted to any conference for publications. The only intent for getting this paper is to spread awareness about the polish business among students.
