Polish business versus the pandemic. PAIH sums up the year

By the end of 2020, PAIH serviced nearly 200 investment projects, the total value of which was almost 10 percent higher on an annual basis and amounted to over EUR 8.5 billion (i.e. almost PLN 40 billion). In terms of investment value, the largest players are, among others, South Korea and the United States. The largest number of projects were to do with the business services industry (44), electromobility (18) and the automotive industry and R&D (both 15). It is worth noting that when it comes to projects that were located in the Polish Investment Zone in the first half of 2020, 75 percent were Polish companies, however, more than half of the total amounts invested and the majority of jobs created was down to foreign investors. Companies registered in Poland are also an important group in the PAIH’s portfolio. However, the most intense, full of talks with foreign investors, was the last quarter of 2020, where the effects of these talks will be visible, as soon as in the first quarter of the new year.

According to fDi Markets data, Poland is the third preferred location in Europe for foreign investments. Only in the first three quarters of 2020, over 300 greenfield projects were announced in our country. This is more than in Spain and France. Only Great Britain and Germany are ahead of Poland. We note that this is due to three significant sources of investment: the electromobility industry, the renewable energy sources sector and the broadly understood IT sector - underlines PAIH’s acting Chairman, Grażyna Ciurzyńska.

According to UNCTAD data, due to the pandemic, the global flow of foreign direct investment, decreased in 2020 by 49 percent compared to the same period in 2019. The rebound predicted by the organization is not expected to take place until 2022. The pandemic slowed down investments, especially at the end of the first quarter of 2020. The reason for this phenomenon was largely due to, investors uncertainty, as well as the restrictions on free movement. In response to the pandemic, PAIH introduced new solutions. As part of PAIH24, a 24-hour hotline was launched. Among the other solutions introduced, what turned out to be very effective were virtual site visits.

- Several companies from the BSS sector decided to locate their investments in Poland, even though the pandemic did not allow them to come to the country in person. Everything took place remotely. In the case of the service industry, it is relatively easy because the standard of A-class office space is the same all over the world. However, this does not change the fact that making a decision to invest at a distance is very difficult. We at PAIH adjust our activities to the current conditions, and we can see the effects, in the form of decisions made by subsequent investors - says Monika Grzelak from the PAIH Investment Centre.

The stable and COVID-resistant value of the PAIH portfolio

In 2020, there were 58 completed projects on PAIH’s books (compared to 56 in 2019). Their value exceeds EUR 2.7 billion (i.e. over PLN 12 billion).

- The agency is taking steps to maximize the use of competitive advantages in order to attract investments with high-potential to Poland. Based on passed data, forecasts and in-depth sectoral analyzes, we have established the priority industries for the Polish economy. These include biopharmaceuticals, medtech, electromobility, electronics, aviation and defense. But also advanced chemicals, as this is a synergistic sector for biopharmaceuticals and medtech, and the ICT industry, which is a driving force for R&D - lists Grażyna Ciurzyńska.

The largest investment in terms of value, that PAIH supported last year, was the new Microsoft regional data centre. This is the first such data center in Central and Eastern Europe. Among the technologically advanced investments, there was also GFT’s research and development centres in Łódź and Poznań. By the end of 2021, this investor plans to employ over 200 IT developers there. Some of these recruited specialists have already strengthened GFT in Poland and currently create a team of around 850 people. PAIH also handled the implementation of: Alcon’s business services centre, Hyland’s R&D centre as well as production plants for Weber-Stephen, Monosol Poland and Jøtul AS. Importantly, due to FDI investments, the percentage of high-quality jobs, especially in the R&D area, is growing.

A way to deal with a pandemic

A chance for the development of Polish business in difficult times, during a pandemic, turned out to be new and often distant directions of expansion. In the face of COVID-19, foreign markets were more willing to open up to cooperation with new partners. This is the result of the search for alternative solutions to ensure security and stability of supplies. In 2020, PAIH handled over 20,000 inquiries from entrepreneurs and supported almost 270 export contracts. At least a dozen more contracts are in the negotiation process.

- The agency focused on finding local export opportunities arising directly or indirectly from the pandemic. We see how our exporters are seizing the opportunities created by disrupted supply chains. We are glad that with PAIH’s help, Polish business has opened its doors to recipients who previously imported goods from other countries. Foreign trade partners have come to appreciate the quality of Polish products, the competitive prices and innovation - comments Łukasz Grabowski from the PAIH Export Center.

PAIH's market experts monitor the situation in the world - in terms of changes and the resulting opportunities for expansion. The Polish Investment and Trade Agency informs about the successes of domestic companies on a regular basis. This year, the most successful destinations turned out to be the United States, Kazakhstan, Germany, Israel and the United Kingdom. The potential in the US was recognized by, among others the Polish brand, Saddar, which offers innovative ecological solutions, for among others, the construction industry. The Polish brand DAKO is strengthening its position in Canada, one of the largest window manufacturers has opened a showroom in Ontario and is gaining new customers in British Columbia. In turn, Polish food, found its way to Singapore and Vietnam. Malaysia and Spain are successfully being conquered by Polish cosmetics. PAIH also supported a large IT contract in Australia and the export of sports equipment to among others, Hungary and Denmark.

Polish entrepreneurs have gained a competitive position both in the potential increase in exports and in taking advantage of such phenomena as nearshoring - as geographically close suppliers of components and semi-finished products.

- Nearshoring of business processes is a noticeable trend. Companies are giving up outsourcing the most advanced function of key importance for their business stability to Asian countries, in order to locate them in more stable regions. Poland is more and more often the target country for such investments. Foreign investors are attracted to our country by the possibility of employing highly qualified, creative and efficiency staff - says Monika Grzelak from PAIH’s Investment Centre.

New perspectives

PAIH’s experts emphasize that the gradual easing of economic restrictions may take place after the first quarter of 2021. During this time, there should be a recovery, driven by private consumption, investments and traditionally export.

There is a growing demand for ecologically produced products, products of plant origin or those with ingredients that strengthen immunity, and above all, meet the highest standards in the field of environmental protection. This means that the Polish agri-food industry can expect further growth in 2021. The producers of cosmetics and furniture, as well as window and door joinery can also expect to grow . Artificial intelligence and augmented reality technology will be of great importance. The development of areas to do with, smart city and smart home, e-learning or digital health, i.e. telemedicine, chatbots, but also diagnostic tools based on artificial intelligence are expected to be more and more important - summarizes PAIH’s acting Chairman Grażyna Ciurzyńska.

PAIH is also working on the presence of Polish entrepreneurs on the promising markets of Southeast Asia. In 2023, trade between ASEAN countries and the EU may increase to $ 22 billion. Polish companies can benefit from this.

About the Polish Investment and Trade Agency

The Polish Investment and Trade Agency (PAIH) is an advisory institution that is part of the Polish Development Fund Group (PFR). It is the first point of contact for exporters and investors. It operates both in Poland and through a network of offices around the world. It strengthens the recognition of Polish brands on international markets, promotes domestic products and services, as well as technological solutions made in Poland. The agency helps entrepreneurs choose the optimal expansion path abroad. It also supports the inflow of direct foreign investments to Poland and the implementation of Polish investments in the country. PAIH cooperates with the public sector and regional partners, offering, among other things: training, audit and the promotion of investment properties, cooperation in the organization of business missions and communication support in the implementation of joint projects.