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Dramatic changes have taken place in the Central European countries that joined the European Union (EU) in 2004. A combination of EU and private-sector funding has given Poland, the Czech Republic, Hungary and neighbouring Slovakia and Slovenia a tremendous boost, with considerable growth in GDP and purchasing power.
EU investment of billions of euros has improved amenities, infrastructure and living standards, while relatively low labour costs have attracted widespread private investment, with businesses upgrading traditional manufacturing facilities to export back to Western Europe, to Russia and beyond.
“The transformation of the Central European countries over the past six years has been phenomenal,” says Mike Moon, director of trade and investment at the British Embassy in Prague, Czech Republic. “It is true that economic growth slowed during the recession, but it is increasing now and will continue to grow as these countries merge further with the EU. The growth rate may not be to the same degree as in southern Asia, but it is ahead of Western Europe. In addition, these markets are much more accessible than many other parts of the world.”
FOOTBALL AND FRIPPERIES
With a population of more than 38m, Poland is the largest nation in Central and Eastern European (CEE) and the UK’s biggest trading partner in the region. Poland is an established top 20 market for the UK in global terms and exports in the first nine months of 2010 are up by more than a quarter on last year with prospects for further growth.
“Poland has received €67bn of European funds with half of that still to be committed,” says Liz Basing, director of Trade and Investment at the British Embassy in Warsaw. “Major infrastructure projects, together with preparations for the UEFA Euro 2012 European Football Championships, have made Poland the biggest construction site in Europe.
There are huge amounts of money being spent on railway, airport and road infrastructure. While UK engineering consultancy companies already established in Poland are doing well in consortia and gaining contracts, it would be good to see more UK companies getting into those areas. There are lots of opportunities in equipment for airports and, in rail, there are requirements all the way through the supply chain from engineering to seat covers.
Poland is the only EU member state to have seen continued growth through the recent recession, Basing continues. And as the CEE communities get wealthier, shopping habits are changing too. While we see an increase of food shops catering for the Polish communities around the UK, demand here for value-added food and drink products and fast moving consumer goods from the UK is rising.
“The historical relationship between Poland and the UK is long standing and warm (Tesco, GlaxoSmithKline, Marks & Spencer and HSBC are among the British names established here). British products are perceived as being of high quality but not necessarily the cheapest. Public procurement can be difficult to navigate – price is a big factor, the paperwork is very different and although many UK companies targeting the market have Polish staff, the requirement to bid in Polish underlines the need to work with a local partner. The best route for UK companies in many sectors is to build a relationship with a Polish distributor who can go after the big contracts and pass on orders that relate to individual goods and services. UK Trade & Investment advisors are well placed to help companies identify distributors in their sectors. In common with its neighbours, automotive is a strong sector in Poland, with a growing share of the market taken by luxury models. In 2010, although the car market contracted slightly, the sale of BMWs was up by 15 per cent. A Meet the Distributor event is to be staged by the British Embassy in Warsaw in March to match UK suppliers with local Polish companies.
Education and training suppliers are also doing well. Poland has a young society, with almost 40 per cent of the population below the age of 30. There are nearly two million students in 455 higher education establishments.
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