Emerging Europe Central & Eastern Europe 2015| 2016
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Emerging Europe Central & Eastern Europe 2015| 2016 THE TOP 50 COMMERCIAL OPPORTUNITIES in association with Copyright © Allurentis Limited 2015. All rights reserved Allurentis is delighted to have been involved in partnership with UK Trade & Investment on this, the second publication and would like to thank all sponsoring organisations for their kind contributions. We are confident that it will raise awareness with all readers and prove to be an invaluable resource, especially for those wishing to become involved in the extroardinary business opportunities and growth prospects within Central & Eastern Europe. Electronic copies of this publication may be downloaded from Allurentis Limited’s website at www.allurentis.com, provided that the use of any copy so downloaded, complies with the terms and conditions specified on the website. Except as expressly stated above, no part of this publication may be copied, reproduced, stored or transmitted in any form or by any means without prior permission in writing from Allurentis Limited. To enquire about obtaining permission for uses other than those permitted above, please contact Allurentis by sending an email to [email protected] Photos courtesy of: www.istockphoto.com | www.123rf.com 2015 PPORTUNITIES O Contents EY - K Messages UROPE Tom Salusbury: Regional Director, Central & Eastern Europe, UKTI 5 E Patrick Ney: Director, British Polish Chamber of Commerce Trade Team 6 Overview MERGING Map of the region 7 E Emerging Europe - New opportunities 8 Business CEE’s economic growth attracts sourcing investment - TMF Group 13 Transformed over two decades - crafting the path toward sustainable growth - EY 17 Central & Eastern Europe - opportunities for UK plc - CMS 21 Banking & Finance International ownership is a key feature of the region’s banking sector 25 Central & Eastern Europe setting the pace in the world of payment - Visa Europe 31 UK is a major player in Emerging Europe’s insurance markets 34 Energy Nuclear power plays significant role in CEE energy policy 38 Desire for energy security drives investment in CEE gas sector 42 Infrastructure Rapid growth in low-cost air travel driving plans to update the region’s airport facilities 46 Road investment aims to raise CEE network to Western European standards 51 Upgrading rail links is a key priority 55 Ports being expanded across Emerging Europe 60 Utilities Huge improvements needed in Emerging Europe’s water infrastructure 63 Advanced Manufacturing Opportunities in advanced engineering across the CEE region 66 Automotive industry is a key economic driver 69 Real Estate Opportunities awaiting in Central & Eastern Europe - DTZ 75 Business opportunities abound for British companies in CEE - P3 Logistics Parks 77 3 EMERGING EUROPE - KEY OPPORTUNITIES 2015 Retail Local markets catch the online retail bug - P3 Logistics Parks 79 Sofa.com’s Polish success story at P3 Pozna´n - P3 Logistics Parks 81 Online sales driving retail sector expansion 82 Healthcare & Life Sciences Increasing healthcare spending presents range of opportunities 86 Defence & Security International tension is key driver of increased spending on defence and security 90 Country Key Facts Austria 94 Bosnia & Herzegovina 96 Bulgaria 98 Croatia 100 Czech Republic 102 Hungary 104 Poland 106 Romania 108 Serbia 110 Slovakia 112 Slovenia 114 Contacts Chamber of Commerce contacts 116 Other useful contacts 118 4 ESSAGES M “ UKTI teams in Emerging Europe are focused on delivering the biggest return possible for UK business.” Tom Salusbury: Regional Director, Central & Eastern Europe, UKTI The UK has a strong track record in developing global There are other strong reasons to prioritise trade with CEE. trade and investment opportunities. Traditional and The region’s economic fundamentals are strong and developed markets continue to offer big rewards for moving firmly in the right direction, with GDP growth at exporters of goods and services. The focus for many double the rate of developed markets. The region offers a companies is shifting towards high growth Emerging market of 110 million increasingly prosperous and Tom Salusbury Markets. It undoubtedly makes sense to keep an eye on aspirational consumers. Supply chain opportunities - both the future but significant potential also exists in fast for local manufacturing and services and also the developing economies closer to home. development of energy, infrastructure and human capital - are increasing as a result of strong FDI inflows and EU UK business has a good track record in Central & Eastern Structural and Cohesion funding worth over £120 billion Europe (CEE). UK exports of goods and services are by 2020. Countries in the region are also easier to work currently worth around £16 billion and have doubled over in and lower risk than some other global markets, largely the past ten years. Large numbers of UK businesses - big thanks to EU membership. and small - have invested in this region. We currently take a fraction of a potential export market to the UK worth over UKTI teams in Emerging Europe are focused on delivering £600 billion. the biggest return possible for UK business, through majoring on sectors that offer the best opportunities: This is surprising, given that the countries of CEE are infrastructure; energy; defence & security; healthcare & so close to the UK and so easily accessible for business life sciences; advanced manufacturing; retail; and travel via low-cost airlines. We are regarded very positively financial & professional services. We are also promoting and English is widely spoken. UKTI support for business UK innovation, science and technology more generally to has also been extended, through the creation of new open supply chain potential. trade teams in British Chambers of Commerce - able to support sales through tapping into networks of This publication showcases what we consider to be the local contacts, knowledge and expertise - thus Top 50 commercial opportunities in CEE. We hope it supplementing existing support available through over inspires: leading to proactive engagement with both 60 experienced UKTI staff, located in British Embassies UKTI and Chamber of Commerce teams and, to ultimately around the region. win new business. 005 MESSAGES “ Overseas Business Network is unlocking CEE Potential for British SMEs.” Patrick Ney: Director, British Polish Chamber of Commerce Trade Team The scale of the opportunity in the CEE region for British With over 40 new export advisors, complementing UKTI’s companies is vast, as is the effort of our competitors to regional team of 68 Trade & Investment specialists, the take advantage of it. This means the challenge to harness new networks have provided over 2,500 services for the best local business networks and talent to help British British companies since their inception. Businesses are companies to succeed in the region, is significant. Patrick Ney starting to benefit from the new arrangements. Whether Fortunately, there has never been a better time for British it be paintbrush manufacturer, LG Harris, breaking into SMEs, in particular, to target CEE markets through the region via the British Polish Chamber of Commerce working with UKTI and the new Overseas Business Trade team; the British Slovak Chamber’s innovative use Networks (OBNs). of social media and online promotion to help sell to In six of the CEE markets, UKTI has invested in new British companies; the British Business Centre in Hungary relationships with business groups such as chambers of helping a UK based firm to relocate its manufacturing commerce and OBNs. These groups, staffed by local business from China to Hungary, enabling the client to be business people, provide export consultancy services on closer to its distribution/customer network; or the British- behalf of UKTI, from answering routine enquiries to Czech Chamber delivering a product launch for a vinyl conducting complex market entry projects. Together, they flooring supplier aiming to crack the Czech market. work with the UK network of business advisors to help Businesses now have more choices to target commission, British companies reach new markets. agent and supply chains than ever before. These OBNs are able to tap into their local market Is there a market opportunity for your goods or services? members, there are over 2,000 across the region, What are the spending habits of your target market? providing additional advice and support, from trusted Who’s the right distributor, agent or partner to take your translators to the best logistics deals. Their Business business forward? How can you increase sales through Centres provide an ideal platform for new-to-market B2B/B2C markets? The OBNs, each of which has been visits and fly the flag for Brand Britain. Poland, Czech accredited to the highest standards by the British Republic, Slovakia, Hungary, Romania and Slovenia are Chambers of Commerce, are here to help. To find out more currently covered. But roll-out to other CEE markets is see the Useful Contacts section at the back of this projected soon. publication or contact your local UKTI advisor. 6 P o la n d C z e c h R e p u b l i c A u s t r i a S l o v a k i a H u n g a r y R o m a n i a S l o v e n i a C r o a t i a B u l g a r i a OVERVIEW - MAP OF THE REGION OVERVIEW Emerging Europe - New opportunities High rates of economic growth and huge potential for UK business across UK business has not been slow to take these opportunities, but does lag many industry sectors, are the key characteristics of a region, comprising behind France and Germany. UK exports have nevertheless doubled over nine countries and a combined population of some 110 million people. the past decade. A total of over £16 billion in 2014, still accounts for less This is the geographic region of Central and Eastern Europe (CEE), than 3% of a market currently worth £600 billion annually.