The Country Commercial Guide (CCG) presents a comprehensive look at Poland's commercial environment using economic, political, and market analysis. You will find Poland Country Commercial Guide 2013 in pdf format.
Poland has emerged as an important and dynamic market since the country began its transition to democracy and a market-driven economy in 1989. With 38 million people, Poland is the largest market among the former Eastern bloc countries of Central Europe and shares borders with both “new” EU and “old” EU-15 countries. Poland became a member of the European Union (EU) in 2004 and held the presidency of the EU for the last 6 months of 2011. Poland’s adoption of EU legislation has led to wide-ranging reforms in economic regulation and reduced government intervention in the private sector. Reforms in areas such as financial markets, company and competition law, accounting, and intellectual property rights have improved the environment for private business and boosted economic growth. Poland is now the sixth-largest economy in the EU. Poland’s plans to eventually adopt the Euro currency will further accelerate the country’s integration with the EU. Poland is an active member of NATO, upgrading its armed forces and participating in joint peacekeeping activities in the region and elsewhere, including Afghanistan.
The United States and Poland enjoy a very close bilateral relationship, which has fostered strategic and commercial cooperation. U.S. companies are active in Poland and have invested heavily since the late 1980s, when the country began its transition from communism to democracy and a market-driven economy. Abundant opportunities remain for U.S. firms in Poland. In addition to its large and growing domestic market, the country also affords direct access to the EU and markets to the east. Poles continue to demonstrate a strong affinity for the United States and its products.
While the rest of Europe struggled with the global financial crisis, Poland’s accumulated GDP growth from 2008-2012 was 18 percent. Poland has been called a “green island” in a sea of red. Economists expect Poland’s GDP growth to slow in 2013 and 2014 as a result of the European debt crisis and Poland’s own fiscal consolidation efforts. However, expansion is still expected to be over 1% in 2013. Poland’s growth was in part due to the sizable resources from the EU structural and cohesion funds. Poland is the main beneficiary of these funds, receiving€68.7 billion between 2007-2013. Funding for 2014-2020 is reportedly to be used to drive continued infrastructure projects, to develop Poland’s energy industry, and to stimulate innovation.
In 2012, the U.S. sold $3.4 billion worth of merchandise in Poland, up 6.6% from 2011.
U.S. firms interested in Poland can expect moderately increasing domestic demand and a general affinity for U.S. products. U.S. firms can increase their competitiveness by establishing a local presence, committing to strong after-sales service and support, and offering pricing and financial terms consistent with customer needs. U.S. exporters are encouraged to offer creative pricing and financing packages in order to win business from Polish buyers.
The Polish public holds very positive attitudes toward foreign investment. U.S. investors represent a wide range of industry sectors including automotive, aerospace, information technologies- hardware and software, food products, transportation, pharmaceuticals, paper production, appliances and financial services. Poland has also emerged as a favorable location for business processing centers including call centers, shared services centers and research and development operations. U.S. companies have invested significantly in Poland in recent years. With its well-regarded workforce, proximity to major markets, and political stability, it is an excellent choice for American firms wishing to expand their export markets.
Although Poland’s per capita GDP increased from 50 to 59% of the EU average in the last three years, the country remains one of the EU’s less developed countries with limited individual purchasing capacity and domestic consumption. Poland has made great strides toward improving the commercial climate, but investors point to an inefficient commercial court system, a rigid labor code, bureaucratic red tape, and a burdensome tax system as challenges for foreign companies.
Poland has made some progress in reducing bureaucratic obstacles to business. Its ranking in the latest World Bank Ease of Business Index was number 55, down seven spots (lower is better) in the last year which was down eight from the previous. In the 2012 Transparency International Corruption Perception Index, Poland maintained its rank of 41st out of 174 countries (again lower is better).
Although many infrastructure projects are underway, Poland still has much work to do in order to modernize its road, railway, and air transportation network. Weak transportation infrastructure increases the cost of doing business for U.S. businesses by limiting ready access to all of the markets within Poland and diminishes the country’s potential as a regional distribution hub.
Poland’s membership in the EU offers access to billions of Euros in structural and cohesion funds to support infrastructure development, environmental protection, and environmental remediation projects. It is expected that future funds will be used for infrastructure development in the area of environmental protection, as Poland is under immense financial pressure to comply with EU environmental standards. In order to meet EU emissions targets, Poland is focusing on the use of renewable sources of energy such as wind, biomass and biogas. Clean coal, coal plant upgrades, and waste-to-energy systems are also being explored to improve the countries energy mix. Polish cities will have to develop new waste stream models, including waste to energy, as landfills across the country have to be closed and remediated by EU directive.
In this environment, the need for premium office space and the expansion of the retail sector present opportunities for engineering and green-building services, particularly those built as ‘zero emission’ buildings and to LEED standards.
While much work has been done, extensive effort and investment is still required to upgrade and modernize Poland’s transportation infrastructure. Projects such as the expansion of the Metro line in Warsaw, the upgrading of the North-South railway system between Gdansk and Warsaw, and the modernization, and expansion of regional airports will continue for the next few years.
All of this has created strong opportunities for American businesses in renewable energy technologies, green building, waste management, and power generation. These top prospects will be covered in depth later in this report.
Two other areas in the energy sector that offer particularly strong sales opportunities are nuclear power and shale gas. The Polish government plans to complete its first nuclear power plant by 2024. This massive undertaking has created opportunities for reactor technology, engineering services, legal/regulatory services, and training services. Assuming Poland’s shale gas deposits transition into a production phase, this will produce a dramatic increase in the need for gas drilling rigs, gas field equipment, and services.
Other important sectors that will be discussed are airport equipment and services, consumer goods, such as cosmetics, where an American label is still a symbol of prestige and high quality, computer and information technologies, and defense and medical industries. All of these sectors continue to perform well and show signs of growth.
While the U.S. share of Poland’s import market remains small at approximately 3%, U.S. exporters have found considerable success targeting competitive niches, using effective market entry strategies, and diligently following up with marketing and sales support.
The Polish market is characterized by wide population dispersion with 25% of Poles living in rural areas and urban dwellers spread among a number of population centers, including Warsaw and Lodz in the center of the country, Krakow in the south, Wroclaw and Poznan in the west, Gdansk and Szczecin in the north, and Lublin in the southeast.
Urban consumers generally have greater purchasing power than their rural counterparts. Personal contact with the customer is critical and final purchasing decisions typically require a face-to-face meeting. Success in this market typically requires an in-country presence, such as an agent, distributor, or representative office.
While the number of English speakers in Poland is rising, particularly in urban areas, communication in Polish is recommended in order to elicit prompt responses to offers and inquiries and to facilitate negotiations. Poland’s communication network is relatively well developed and email communications and website offerings are an increasingly effective means of reaching local buyers.
Pricing remains the most critical factor in positioning a product or service for sale in Poland. Access to capital is difficult for most Polish firms, and business transactions are typically self-financed. U.S. firms that can arrange financing will have a competitive edge. The effects of the global financial crisis have underlined the need for U.S. exporters to develop a creative strategy for financing exports. Using Ex-Im Bank programs is a recommended option. In addition, currency fluctuations may continue in 2012, challenging even the most well-planned export strategy. Careful crafting of terms of sale, including creative packaging of currency and pricing terms, will help the U.S. exporter gain a long-term advantage in the current Polish market.
The U.S. Embassy in Poland, led by the Commercial Service team in Warsaw, stands ready to assist U.S. firms in achieving success in the Polish market. We encourage you to contact us and explore the best way to partner together as you commence or expand your business activities here.