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The Warsaw Voice » Business » February 4, 2010
ECONOMY
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Poland Still a Draw for Investors
February 4, 2010 By Andrzej Ratajczyk   
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Poland's healthy economic performance continues to draw foreign investors to this country. Last year foreign direct investment (FDI) slowed only slightly, despite the global crisis.

According to the central bank, in the first 10 months of 2009 foreign businesses invested a total of 8 billion euros in Poland, 90 percent of the figure recorded in the same period of the previous year. From July to October last year, FDI exceeded 1.2 billion euros per month on average.

Cargotec of Finland was one of the largest foreign investors in Poland last year. The company plans to invest a total of 64.4 million euros to build a plant to assemble load handling equipment such as forklift trucks, cranes and terminal tractors at the Modern Technology Park in the northwestern town of Stargard Szczeciński. Thanks to this project, at least 400 jobs are expected to be created by the end of 2013. The Cargotec Poland plant was the largest foreign investment project in Poland in 2009, according to the Polish Information and Foreign Investment Agency (PAIiIZ).

IBM Polska Sp. z o.o., in turn, topped the list in a PAIiIZ league table among investors promising to generate the largest number of jobs. The company plans to hire up to 2,000 IT specialists in the southwestern city of Wrocław by 2013. They will provide server, database, network and application administration services for IBM customers across Europe. It is the first major modern services project of its kind in this country. The service center is expected to start operating in the spring.

Woodward Governor Poland Sp. z o.o., part of Fort Collins, Colorado-based Woodward Governor Company of the United States, came in first in the modern technology category. Woodward Governor Poland Sp. z o.o.'s core business is in the design, manufacture and maintenance of control and monitoring devices for the aviation, industrial engine, turbine and electricity generation sectors. The company's investment project in Niepołomice near the southern city of Cracow is worth around zl.35 million.

Sławomir Majman, head of the PAIiIZ, says in 2010 Poland will continue to attract foreign investors and the inflow of FDI to this country will be no smaller than last year as investors benefit from Poland's economic performance. Majman says the global crisis has had a positive impact on the country's image abroad. Poland offers investors economic stability, Majman said, which helps attract new investors, even those who were not thinking of coming here before the crisis. According to Majman, Poland's main strengths are its stable economic laws and highly qualified and relatively cheap labor force.

PAIiIZ data show that foreign investors are increasingly investing in electronics, hi-tech sectors and modern service centers in Poland thanks to the availability of qualified labor.

Speaking at the 5th Outsourcing Forum in Warsaw in January, deputy economy minister Rafał Baniak said, "A welcoming investment climate, a highly qualified labor force and the rapidly growing availability of modern office space are Poland's main strengths mentioned by foreign investors in the service sector."

Baniak said the main factor attracting foreign investors to Poland is its stable economy and strong potential for further development. "Last year, Poland was recognized as the most attractive investment destination in Central and Eastern Europe," Baniak said. "Poland's high rating is confirmed by its 11th place in the World Investment Prospects Survey 2009-2011" in terms of investment appeal.

The high qualifications of Polish workers are another key factor that adds to Poland's investment appeal, Baniak said. "The availability and quality of our labor force is becoming a decisive factor in decisions where to invest," Baniak said. "There are 10 large academic centers in Poland and the total number of students nationwide exceeds 2 million. This gives foreign service companies a lot of freedom in choosing locations for their projects."

The recently published Onshore, Nearshore, Offshore, Unsure? A 2010 Polish Perspective report, which looks at Poland's potential for investment in the outsourcing sector, confirms this view. The report, drawn up by Jones Lang LaSalle, PAIiIZ, Grafton Recruitment, the Association of Business Services Sector Leaders in Poland and Ernst & Young, shows that Poland's role as a location for the Business Process Outsourcing (BPO) sector is growing globally.

A number of factors make Poland attractive to investors, experts say. These include its geographical and cultural proximity to Western Europe, highly qualified workers with a good command of foreign languages such as English, German and French, data security ensured by European data protection standards, cost efficiency on the labor and real estate markets, and national and EU programs providing financial support to investors in the BPO sector. Companies investing in the outsourcing sector in Poland are eligible for EU subsidies and funding under government programs. The maximum subsidy is from 30 to 50 percent of qualified costs or two-year labor costs, depending on where the project is located within the country.

The business process outsourcing/shared services centers (BPO/SSC) sector generates an estimated $2 billion annually for the economy, with employment at around 45,000. Most BPO/SSC firms, even those that are part of a foreign corporation, do not repatriate their profits. Instead, they invest in Poland, opening new offices and upgrading the qualifications of their staff.
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