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The Warsaw Voice » Business » April 28, 2011
Business & Economy
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FDI Harder to Attract
April 28, 2011   
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In 2010, Poland attracted less foreign direct investment (FDI) than in 2009, but a marked improvement is expected this year.

Foreign investment in Poland totaled 7.54 billion euros last year and was 2.4 billion euros lower than a year earlier, according to balance-of-payments data released by the National Bank of Poland in December 2010. In contrast, Polish investment abroad increased in 2010 to 3.78 billion euros from 3.72 billion euros a year earlier.

Last year’s FDI in Poland was smaller than expected. The Polish Information and Foreign Investment Agency (PAIiIZ) had projected that FDI would reach almost 10 billion euros.

PAIiIZ President Sławomir Majman points out that “the National Bank of Poland data is usually revised significantly in the course of the year so one should be cautious about it.”

“I think that looking at the outcome of projects handled by PAIiIZ, which usually account for around 15 percent of all [foreign direct] investment in Poland, FDI inflows last year were in the order of 9-10 billion euros, closer to 9 billion euros,” Majman added.

One consolation is that the global economy has improved and global foreign investment flows are expected to increase this year. UNCTAD, the United Nations agency for trade and development, estimates that global investment flows may rise to $1.5 trillion this year, followed by $2 trillion next year.

But Poland has to make an effort to benefit from the improved economic conditions and attract more investors. “The competitive edge stemming from the good condition of our economy during the crisis, when we were the only European country to offer that scarce commodity called economic stability, is slowly fading away. Now, stability is returning to Europe and we have to find other arguments,” says Majman. “We need to highlight the fact that Poland offers high-quality labor; we have to improve our infrastructure and raise the country’s profile internationally.”

PAIiIZ data shows that foreign investors in Poland have recently focused on the automotive industry. A lot of money is also being invested in the service centers of global corporations, which have qualified staff available in Poland.

Russia’s Intrall Rus company, which in February signed a letter of intent with PAIiIZ and the authorities in Poland’s West Pomerania province, plans to launch a research center and an automotive plant in the province. The company’s managers hope to recruit highly skilled workers in Poland. The project is linked with the construction of a factory to manufacture delivery vans in the Russian city of Stavropol.

Anatoly Leyrikh, chairman of the board of directors at Intrall Rus, says the company’s Polish project will be carried out in stages, with 22 million euros to be invested in the first stage. In this phase, a research and development center will be established. “There were many arguments for choosing West Pomerania,” Leyrikh said. “A major strength of the province is its location and welcoming investment climate. Equally important for us was the readiness of the local authorities to offer their assistance and support for the project.”

Leyrikh added that West Pomerania has a “strong university base and many qualified workers, which creates good conditions for setting up the research and development center where we will be designing most our new vehicles.”

In the letter of intent, the province authorities committed themselves to supporting the Russian project in many respects. Local officials promised to work with employment agencies in recruiting and training workers for Intrall Rus. The authorities also want to support the development of ties between Intrall Rus and schools and universities in the region in terms of creating degree and training programs for the research center’s future staff.

Senior province official Jan Krawczuk said, “We especially welcome the type of the planned project. This is no longer simple production, but research and development, which will provide jobs to engineers educated at Szczecin’s universities.”

Intrall Rus plans to manufacture commercial vehicles, light delivery vans and all-terrain vehicles in West Pomerania. The value of the project is estimated at 270 million euros. Construction work should begin at the end of 2011 and the first vehicles are to roll off the production lines in 2014. Intrall Rus will be producing most of its vehicles in Stavropol in southern Russia. But the Polish project will be important to the company. The research and development center will be designing new prototype vehicles, while the manufacturing plant will be assembling a limited number of mass-produced models—around 2,500-5,000 vehicles a year.

At first, 50 engineers are expected to be employed at the company’s Polish facility. Employment may increase to 500 or 600 once vehicle production is launched. Intrall Rus also plans to establish long-term ties with Polish suppliers of components.
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