French Keen to Invest in Poland
August 1, 2014
Eighty-seven percent of French businessmen who have invested in Poland say they are satisfied with the results of such projects. A massive 97 percent say they would recommend Poland as a business destination to foreign companies without a presence on this market, according to a report by the French Chamber of Industry and Commerce in Poland (CCIFP) and consulting firm KPMG entitled 20 Years of French Investment in Poland.
According to Poland’s central bank, France is the third-largest foreign investor in Poland. The cumulative value of French investment in this country stands at zl.89.7 billion (21.9 billion euros), up from zl.34.2 billion (8.4 billion euros) in 2004.
“We estimate that after taking into account indirect investment, the actual value of French investment in Poland has reached zl.103 billion, which means it can be up to 15 percent higher than the officially reported figure,” said Bogusław Kowal, director of the French Desk at KPMG in Poland.
Foreign investment translates into tangible benefits. At the moment, almost 1,400 companies with French capital are operating in Poland, with combined employment at about 200,000—meaning that these companies are an important foreign employer in this country.
French companies active in Poland chiefly invest in sectors such as manufacturing (32 percent of the total value of French FDI in Poland), wholesale and retail trade (17 percent), information technology and communication (13 percent), real estate market activities (9 percent), professional, scientific and technical services (8 percent), finance and insurance (8 percent), production and the supply of electricity, gas and steam (6 percent).
France is also an important trading partner for Poland. Due to an increase in exports to that country, Poland’s balance of trade in goods has improved significantly in recent years. Last year Poland’s exports to France totaled zl.35.7 billion, and imports stood at zl.24.5 billion, ranking France fourth among the biggest buyers of Polish goods and fifth among the largest suppliers of goods to Poland.
French investors are generally satisfied with their presence in Poland and plan to expand their business here, the report says. Nearly nine in 10 companies surveyed rated Poland’s investment attractiveness either very positively or positively. Not a single respondent rated it negatively. Nor has the latest economic downturn significantly affected Poland’s appeal. Almost two-thirds of the French companies polled said that, compared with other European markets, Poland has become more attractive to foreign direct investment, and only one in five respondents said the country’s attractiveness has deteriorated. Significantly, 87 percent of the surveyed companies rated the results of their investment projects in Poland so far either very positively or positively, and 97 percent said they would recommend Poland as an investment destination for those companies that do not yet have a presence here.
Maciej Witucki, head of the French Chamber of Industry and Commerce in Poland, said, “The positive assessment of existing investment projects testifies to the potential of the Polish market globally. Foreign investors who see the positive results of their actions not only drive the economy, but also contribute to building a positive image of Poland as a country with strong market prospects.”
French investors are the most satisfied with the state of the Polish economy—87 percent rate it positively or very positively in terms of attractiveness. The labor market and the business environment are two other areas that are highly rated by respondents—rated positively by 71 percent and 56 percent of respondents respectively.
French employers rate Polish employees highly, particularly those holding managerial positions (80 percent) and blue-collar workers (83 percent). The situation looks different if the availability of staff is taken into account. In this case, more companies say they are having problems finding suitable candidates, especially for white-collar positions.
In terms of the business environment, cooperation with local suppliers received the highest ratings. French companies highly rate both the availability of local suppliers (88 percent) and the quality of their work (73 percent). Things are worse when it comes to timely payments (44 percent of positive and 16 percent of negative responses).
The public sector received the poorest ratings. Only 45 percent of respondents rated the situation in the public sector as positive. Nearly half those polled said there is too much bureaucracy in the public sector (44 percent of responses) and that the tax and legal systems are too complicated and unstable.
Infrastructure attracted the second-largest number of negative responses. When planning their investment projects, businesses tend to pay the most attention to the quality of transport infrastructure (29 percent). But this kind of infrastructure requires the most far-reaching changes, according to those surveyed. Despite a tangible improvement in the state of infrastructure in Poland in recent years, nearly half the respondents still rate it negatively (44 percent).
French companies surveyed have optimistic plans for further investment in Poland. Sixty-four percent say they intend to step up their investment in Poland. One in three companies says it will maintain its investment at the current level, and only 3 percent are thinking of phasing down their involvement in Poland. Not a single respondent declared they intended to withdraw from Poland. Twenty-six percent of those surveyed said they planned to open a new branch or office in Poland, and 12 percent said they were planning to launch a new production facility.
These plans are expected to have a positive impact on the Polish labor market. French companies active in Poland have already created more than 200,000 jobs here, and the survey findings show that more than half the businesses polled are planning to increase employment in the coming months. Seventy-nine percent of respondents expect their consolidated revenues to increase this year.