Why Poland? Reasons to trade and invest

Wojciech Szelągowski, Vice President of the Polish Trade and Investment Agency Helsinki, 15th June 2006

Polish Information and Foreign Investment Agency Content

• Key reasons to invest in Poland

• Prospective industries for potential cooperation

• Polish regions

• Few words about PAIiIZ

Polish Information and Foreign Investment Agency Key facts

Area: 312,000 km2 - 9th in Europe Population: 38.19 million - 8th in Europe Currency: Polish Zloty (EUR 1 ≈ PLN 3.93) • Investment Potential GDP per head PPP: USD 11,970 - 46% of EU level Human Capital GDP total: USD 299.2 bln • GDP per head: USD 7,834 • Strategic location GDP growth: 3.2% (2005) Membership: WTO, OECD, NATO, EU • Large and Growing Domestic Market • Regional/Global 38 million people Manufacturing and Services Platform

Warsaw

Source: EIU forecasts Polish Information and Foreign Investment Agency Five reasons to invest in Poland

Polish Information and Foreign Investment Agency Investment potential of Poland

8,0 7,0 6,0 6,8 5,2 5,3 6,0 4,8 3,8 4,1 4,0 3,8 4,0 2,0 3,2 1,0 1,4 2,0 GDP growth in Poland in % 0,0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 -2,0

-4,0

-6,0

-8,0 -7,0 • GDP growth twice that of Western Europe

• Ranked 5th in top 15 global investment destinations

• Ranked 1st in planned investments in Europe

• Expected return on investment is estimated at 2 times that of Spain and 4 times that of

Source: FDI Confidence Index Report, AT Kearney 2006 Polish Information and Foreign Investment Agency Human Capital

• Poland’s most valuable asset: 20 million talented, entrepreneurial and multilingual Gdansk young people Olsztyn Szczecin Białystok • 87% of students can Bydgoszcz communicate in a foreign language Poznan Warsaw Zielona Góra • 50% of the population is less than Lodz Radom 35 years old, 35% under 25 Lublin Wroclaw • Ranked 4th as planned R&D Opole Czestochowa Katowice Kielce investment destination after Gliwice China, India and Cracow Rzeszow Przemysl • A nationwide network of Universities and Polytechnics

Source: www.citypopulation.de, GUS Polish statistical office, CBOS (public opinion research center ) Polish Information and Foreign Investment Agency Strategic Location

• Located in the heart of Continental Europe

• Poland - part of the single market of 455 million

• Competitive cost base offers significant location benefits

• Population of 250 million within a 1000 km radius

Polish Information and Foreign Investment Agency Large and Growing Domestic Market

• 38 million consumers driving 10% annual retail market growth

• Over EUR 90 billion aimed at improving infrastructure, human resources, competitiveness and enterprise development

Consumer expenditure in Poland in mln USD

70 60 50 40 2005 30 2008 20 10 2010 0

o ls r s h s n s r c e a e lt n io t e c u e ic a o t n h a f v e ti a a t b d tw r a c r O o l o e H c u u t o o s i d a h f n e st & e & & u e s s s m & r e u g d g o n o m re & a i u s r h th o co s l & o g i te ve l & e o e g C ld rt L b in o o H , s h p d u e s o o s n o u a F H o r H T

Source: Economist Inteligence Unit Polish Information and Foreign Investment Agency Regional/Global manufacturing and Services Platform

• Excellent productivity and growth among Europe’s fastest

• 15-year track record of successful investments

• 14 Special Economic Zones & 31 Technology Parks with preferential incentive system

• USD 7.7 billion in FDI attracted in 2005 according to National Bank of Poland

Polish Information and Foreign Investment Agency Prospective industries for potential cooperation

Polish Information and Foreign Investment Agency Foreign trade in years 1990-2004 (1/2)

Structure of Poland's trade balance according to continents in %

100 85 80 60 40 9,7 20 2,6 1,4 0,9 0,2 0,2 0

e , a a i a a p a a i h l h c s t c c o t i c i i s i r a r r t ) r r r A u f t r o u t c e e e o s A r s E N h S e m m t a u t r A A O A n A (

Over 75% of Polish foreign trade is generated by private sector companies

Source: Central Statistical Office 2005 Polish Information and Foreign Investment Agency R&D Centers

There are some 40 R&D centers in Poland established by foreign investors. These centers together employ Gdańsk more than 4,500 people. Szczecin In 2005 there were 7 new R&D centers opened. The biggest are: Bydgoszcz Radzymin Warsaw: Gorzów Wielkopolski Poznań Warszawa Zielona Góra Garwolin

Krakow: Wrocław Bielawa Częstochowa Kielce Wroclaw: Gliwice Katowice Kraków Bielsko-Biała Skawina

1-2 3-4 5-6 7> NUMBER OF CENTERS Polish Information and Foreign Investment Agency Polish team won Global Management Challenge in 2004

Innovation and continual change is the hallmark of the Global Management Challenge

In 2004 there were 38,000 competitors Results of the 25th from 21 countries International Final in Lisbon • Poland • • Macau • China • Czech Republic • Slovakia International Finals in 2006 • Singapore will be held in Warsaw •

Polish Information and Foreign Investment Agency Medical tourism

Average cost of a 1 day visit in a Average costs of the most often used surgical health resort in various European procedures in Poland (dentistry, ophthalmology, countries (accomodation, meals, plastic surgery) in EUR 2-3 medical procedures)

Specification Poland Savings Slovakia 45 EUR Breast augmentation 2,250 5,000 2,750

Breast reduction 1,750 4,300 2,550 Czech Rep. 60 EUR

Liposuction 1,000 3,500 2,500 Switzerland 120 EUR Total face lift 2,500 3,500 1,000

Dental implant 600 1,500 900 Finland 250 EUR Hip and knee joint 4,200 10,000 5,800 replacement Poland 30 EUR Cataract extraction 860 1,600 740

Source: IQ Medica, Embassy of the Republic of Poland in Helsinki Polish Information and Foreign Investment Agency Poland – examples of manufacturing operations

Electrical Machinery & Apparatus • Average gross wage: EUR 510 Machinery & Equipment (average wage for engineers – •Average gross wage: EUR 520 EUR 820). (average wage for engineers - 820 • Employment: 73,000 persons. EUR). • Number of foreign companies: 39 • Employment: 138,600 persons. • Number of foreign companies: 36.

Automotive •Average gross wage: EUR 500 Metallurgy & Metals (average wage for engineers – EUR • Average gross wage: EUR 570 710-830). (average wage for engineers – EUR • Employment: 120,000 persons. 820). • Number of foreign companies: 300 • Employment: 176,700 persons. (Tier 1 + Tier 2). • Number of foreign companies: 50

Source: Central Statistical Office, AG “Test” 2004 Polish Information and Foreign Investment Agency Polish – Finnish cooperation Export - Import

Industrial goods, machinery & apparatus, wood manufactures - paper, pulp, paper products, non-precious metals, non-precious metal products

Mineral fuels – coal & coke, machinery & apparatus, non-precious metals, non-precious metal products

2003 2004 2005 Polish Export to Finland 315,3* 473,1 558,8 Polish Import from Finland 906,4 996,7 1065,8

*in million EUR

Source: 2003 - CIHZ, 2004 - GUS, 2005 - GUS Polish Information and Foreign Investment Agency The Largest Finnish Investments in Poland

• Sampo • Stora Enso Oyj • Huhtamaki Van Leer • Sanitec Ltd. OY • Paroc Group • Metsa Tissue OYJ • Ruukki OY • KWH Group Ltd. • Nordic Environment Finance Corporation (NEFCO)

Polish Information and Foreign Investment Agency Example of Finnish Companies in Poland

Metsa Tissue OYJ

•Location: Konstancin-Jeziorna near Warsaw and Krapkowice •Activity: Manufacture of pulp and paper, publishing and printing

KWH Group Ltd. - KWH Pipe (Poland) Ltd.

•Location: Plant near Bełchatów •Activity: Manufacture of rubber and plastics

Jacek Roman, KWH Pipe Poland

Polish Information and Foreign Investment Agency Polish regions

Polish Information and Foreign Investment Agency Polish regions

Gdańsk, Gdynia, Sopot

Gdańsk, Gdynia, Sopot Poland with investment attractiveness profile Poznań Warszawa A B C Wrocław D E Regional state aid intensity Kraków Source: Gdańsk Institute for - 50 % Market Economics (IBnGR) 2005 - 40% - 30%

Polish Information and Foreign Investment Agency Role of Poland’s Trade & Investment Agency

PROMOTION OF POLAND

•Location offers Cooperation IN database F with Polish O •Site visits R Embassies M PM’s team and incentive A abroad T with sector tours •Sector statistics IO N expertise •suppliers 100 % State owned and subcontractors Network of regional Poland’s Trade and offices (Investor Investment Agency Service Centers) •Operator of coordination Cooperation with system for large projects SEZs, central and •Coordinator of investment local authorities process (MOU and After-care investment agreement) services

COORDINATION

Polish Information and Foreign Investment Agency Summary

• Strategic location in the heart of Europe

• Competitive cost base

• Young and educated people

Polish Information and Foreign Investment Agency PL 00-585 Warsaw, 12 Bagatela Street, phone: (+48 22) 334 98 00, fax: (+48 22) 334 99 99; e-mail: [email protected]; www.paiz.gov.pl

Kiitos huomiostanne

Olemme käytettävissänne

Wojciech Szelągowski Hallituksen varapääjohtaja

12 Bagatela Street PL 00-585 Warsaw Puh.: (+48 22) 334 99 07 GSM: (+48) 600 400 801 Faksi: (+4822) 334 98 89 E-mail: [email protected] www.paiz.gov.pl Polish Information and Foreign Investment Agency