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Manufacturing in Poland
Marcin Cendrowicz
Finpro Poland
September 2008
Poland
Quick facts:
- population 38.5 mio
- area: 322 577 sq km
- biggest cities:
Warsaw 1.6 mio,
Lodz 756 879
- GDP 308.4 bn EUR (2007)
- inflation 2.5 (2007)
- EU 2004 / euro est. 2013
- avg. (gross) salary 920 EUR
- social costs for employer
17.2-20.1%
2006
2007e
2008f
2009f
2010f
Nominal GDP (EUR, bn)
272.2
308.4
370.4
390.7
413.7
Per capita GDP (EUR)
7,140
8,090
9,740
10,270
10,870
Real GDP, yoy (%)
6.2
6.6
5.2
4.4
4.7
Inflation (CPI), yoy, avg. (%)
1.0
2.5
4.6
2.6
2.3
Unemployment rate (%)
16.2
12.7
10.4
9.0
7.9
Current account balance/GDP (%)
–3.2
–3.7
–4.5
–5.2
–4.8
5.5
4.2
3.5
3.6
4.0
FDI/GDP (%)
Key Industries:
Automotive, hight tech, steel, mining
Logistics and infrastructure: Poland is situated between the highly developed
Western European countries and Eastern Europe. Road and rail infrastructure
require improvements and are a target for EU projects for connecting to
eastern markets. All forms of communication infrastructure are being also
improved.
Materials: Energy sector is heavily dependant on Russian resources and
therefore there are many projects considered aiming at diversification of
energy sources. On the other hand Poland is one of major coal suppliers in
Europe.
Poland has own production of steel. In 2005 Polish steel mills turned out
8.3 M mt crude steel. Key players in the market are Mittal Steel, Arcelor,
Centrostal, Huta Katowice, Stalprodukt, Zlomrex.
2
About Technology Industries
Total Metal Industry output in 2006 was 10 989 MEUR, of which basic metals = 1 555 MEUR, fabricated metal
products but mach.& eq.= 490 MEUR and machinery & equipment n.e.c = 8 943 MEUR.
Export of machines & equipment amounted 25390 MEUR in 2007 being 25 % of the total exports. Major export
items are automotvie products – 2007 export exceeded 15bn eur. Major market was EU (Germany, Italy)
86% of total export figure. Increase to Ukraine was notable – 145% increas YoY mainly due to fact that
Ukrainina Avto Zaz bought Former Daewoo factory in Warsaw – FSO.
Automotive Industry
-Many global players e.g. General
Motors, Fiat and Toyota, but also a
network of smaller firms that serve
as sub-contractors. Total amount of
companies is over 700.
- a network of over 650 subcontractors, of which 320 have the
quality certificates i.e. ISO/TS
16949.
- Typical components include:
engines, rubber parts, car seats and
upholstery, auto electronics,
electrical cables and braking system
parts.
Mechanical Industry
-In 2006 the sales of machines and
appliances produced in our country
was 41,472 million PLN and formed
over 5% of the total industrial
production sold.
-At the beginning of 2007 there were
182.000 employed in the mechanical
sector.
-Sector has received many
investments during the last years.
Metal Industry
The most rapid growth is taking
place in the niche of ready made
metal articles,
-It’s the only industrial branch that
is constantly expanding its
employment – growth of 33.1%
YoY
The largest investors in the
production of metals and finished
metal articles are:
Lucchini Group, F & P Holding
Company Inc., Continental Can
Europe, ABB, INPRO, Winkelmann
and Pannhoff GmbH Co.,
Rautaruukki OY,Bekaert NV,
SAPA, Metra.
- In 2007 export exceeded 15bn eur.
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Availability of labour force
Technical education
There are 21 polytechnics in Poland in which higher technical
education is given. According to study by leading Polish daily, 51%
of Polish CEOs of major companies have technical background.
Languages are predominantly English and German. Popularity of
MBA and DI studies is rising.
The Polish government plans special subsidies for technical
universities and students who will decide to study faculties prefered
by the goverment (mainly science i.e. mathematics) however these
have not been yet implemented.
2005
2004
2003
2002
3,
20
4,
00
4,
10
3,
90
4,
70
Source: OECD report on Swivel.com
2001
Source: Philips Polska HR Dept.
Unemployment *
Labor Productivity in Eur: GDP per hour worked
5,00
4,50
4,00
3,50
3,00
2,50
2,00
1,50
1,00
0,50
0,00
Recruitment
Cost: 2-3 months gross salary or
up to 30% of annual pay
Time: 2-3 months
In blue collar jobs people are not
willing to relocate, white collars
are more willing to consider
relocation
Region
%
Warszawa
2.3
Mazowieckie
7.8
Wrocław
4.0
Dolnośląskie
10.1
Tri-city
2.2
Pomorskie
8.9
Kraków
3.3
Małopolskie
7.4
Katowice
2.1
Śląskie
7.4
4
Unemployment
5
Wages, social costs and taxation
Wages
Social costs & taxation
Type
Welder
CNC programmer
Metal worker
Labourer
Project manager
Avg. salary (gross
Eur)
617 €
1 232 €
785 €
Type
%
Social cost for
employer
17,48% - 20,41%
Corporate tax
19%
depending on industry
604 €
1 412 € **
Income tax
VAT
Source: GUS, Currency conversion: NBP 08/2008*
Regional differences in salaries in private
sector (average for country = 100)
19%-40%
22%,
7% (services ie. , hotels &
restaurants, construction,
transport)
0% - education, post services,
health services, financial
services
Comments
Mazowieckie 138.8
Dolnośląskie
98.8
Śląskie
100.1
Małopolskie
92.4
Pomorskie
102.7
It is common that employer buys for employyes
private healthcare plan, also lunch coupons are
commonly used amongst office employers.
Other benefits include company car, mobile
phone.
Employee participates in social costs – 13.71%
which is deducted from gross salary by employer
6
Investments
After accession to EU Poland has started many national projects with EU
fundings of which major are:
Road infrastructure – Plan for years 2008 - 2013
Railway infrastructre – Master Plan for 2030
Environmental projects – Plan for years 2007 - 2013
Construction projects
Telecommunication/IT – Towards information society – stratregy for years
2008 - 2013
Planning and implementation of a/m projects is in the scope of Polish
Minisitry of Infrastructure (http://www.en.mi.gov.pl/)
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Investments: Special Economic Zones
A Special Economic Zone (SEZ) is a designated area in which
distribution or manufacturing activities can be conducted on
preferential terms.
The purpose of SEZs is to support regional development.
Special Economic Zones (SEZs) were created to:
accelerate the economic growth of Polish regions,
promote development and use of the most modern technological
solutions in the Polish economy,
increase the competitiveness of products and services,
find productive new uses for post-industrial property and
infrastructure,
encourage creation of new jobs.
There are 14 Special Economic Zones in Poland.
SEZ is unique setup in EU – Polish government was able to negotiate
with EU prolongation of SEZ incentives until 2013.
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Forms of tax relief and other incentives
in SEZ
Income tax exemption - CIT (19%) - level depending on local
regulations
Relief in real estate tax (depending on a decision of the local
authorities)
Non-tax incentives relating to employment of new employees (such
as reimbursement of employment training cost, social insurance
contribution, loans to create new jobs)
Full preparation of the plot of land for a given investment project
Preferential price for the plot of land (depending on a decision of the
local authorities)
The accelerated procedure for issuing a permit to purchase real
estate (average 4-8 months).
Free-of-charge assistance in handling various formalities, actions
and obligations.
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Key locations
Major locations of industries in Poland are:
Silesia – southern Poland (Katowice, Tychy). It is capital of Polish heavy
industry. Companies like Fiat, GM, Toyota have located their sites in .
Excellent location next to main road and train infrastructure makes
Silesia easily accessible both within Poland as well as from EU. Large
amount of universties secures workforce access.
Cracow has become central point in R&D especially in IT/Telcom sector –
Google, Motorola, Samsung are only few companies which have
located their R&D centres in Crocow
Wroclaw in South West Poland – in recent years Wroclaw has actively
attracted foreign investors from various sectors – most notable are
Google, HP, Toshiba, LG, Electrolux, Toyota, Volvo
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Key locations
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