Belgian firms slowly seeking inroads to Polish market
The largest investments here are in the construction, renovation and retail sectors, but the majority of the 200 Belgian firms with an investment or subsidiary in Poland have invested between $100,000 and $2-$3 million.
"Most of the investments are small but they are all very dynamic," said Jean Delbecque, chief representative of Bank Brussels Lambert, currently the only Belgian bank with a representative office in Warsaw.
Delbecque characterized the Belgian presence in Poland as "behind the scene." The country has a large number of companies in subcontracting agreements with Polish manufacturers that do not have a direct presence.
The largest manufacturer of Caterpillar equipment in Europe is located in Belgium. The back hoe and tractor producer subcontracts for an estimated $10 million in parts to Polish producers.
Much to the chagrin of the Belgian business community, the largest investment from that country is no longer considered to be Belgian by the Polish government.
Cimentaries CBR was created with an original Belgian investment of $100 million. Heidelberg Cement, the German cement giant, bought a 51% share in the company. CBR, which owns the Gorazdze SA and Cementownia Strzelce Opolskie cement plants, is now considered an "international" investment in Polish government statistics.
The Belgian embassy estimates that with the CBR investment, Belgium ranks sixth or seventh on the list of largest foreign investors by country. Without CBR Belgium ranks in 10th position.
In 1994, the total realized investment in Poland was $200 million with an additional planned investment of $130 million by the end of this year.
Belgium has made inroads into Poland's retail sector with the successful chain of Globi supermarkets. Globi is owned by GIB, Belgium's largest supermarket chain, the Belgium Investment Corporation (SBI) and several private Polish investors. Launched in 1991, Globi now has 12 stores in Warsaw. Total investments per store are about $6 million. The company has plans for a network of 20 franchises across Poland.
The trend in bilateral trade showed significant advances for Polish versus Belgian goods from 1993 to 1994, while Belgian trade to Poland increased 12% to $688 million and Polish trade jumped 38%. Exports accounting for 68% of Poland's $198 million increase in trade with Belgium include precious metals (pearls and diamonds), textiles and mineral products.
In the other direction, Belgium doubled sales to Poland in carpets and manufactured plastic/rubber products from 1992 to 1994.
Trade relations with Belgium took a turn toward the confusing last year when Belgium regionalized the promotion of exports and foreign trade. In 1994, as part of the country's federalization program, Belgium is represented abroad by three regional trade bodies: the Flemish Trade Board (VDBH) from the northern region of Flanders, the Wallonne Trade Agency (AWEX) of southern Belgium and the Belgian Office of Foreign Trade, the original trade office of the federal government. But commercial officers at the Belgian Embassy in Warsaw insist that the changes have not significantly affected trade relations with Poland.
"In Poland, I have to say I am very surprised because people know where Flanders is," remarked Pieter De Smet, commercial attache with the Flemish Foreign Trade Board. De Smet was the Belgian commercial attache until January 1994 when he was told to change his name plate. With a population of 5.7 million people, Flanders accounts for an estimated 70% of Belgian trade with Poland. Polish trade figures specific to each region have not been formally calculated.
Belgium, particularly the Flanders region, is the second largest producer of carpets behind the United States and the No.1 exporter in the world. Belgium exported over $33 million worth of carpets to Poland last year.
Both De Smet and Delbecque agree that there is a growing interest at home in investing in Poland. But De Smet warns that he has seen a number of Belgian firms scared off by the perceived risks in the market.
"We have a lot of interested construction companies but it is very difficult here because of the poor legislation," he said. The short-term trend is for the larger Belgian companies to invest in the Czech Republic. The reason: the burden of employee social security costs on employers in Poland.
"A lot of our big investors are really looking at this," he added. But the trade offices at the Belgian embassy are convinced that Belgian investors can't ignore Poland's huge domestic market. They expect the long-term trend to be a dramatic increase in Belgian interests in Poland.
The upcoming multi-sectoral trade mission on Oct. 18, led by the Flemish Foreign Trade Minister, is another in a string of visits that the Belgians hope will secure regional trade with potential Polish partners. The visit will include representatives of the Flemish transport, construction and textile sectors.
"Most of the investments are small but they are all very dynamic," said Jean Delbecque, chief representative of Bank Brussels Lambert, currently the only Belgian bank with a representative office in Warsaw.
Delbecque characterized the Belgian presence in Poland as "behind the scene." The country has a large number of companies in subcontracting agreements with Polish manufacturers that do not have a direct presence.
The largest manufacturer of Caterpillar equipment in Europe is located in Belgium. The back hoe and tractor producer subcontracts for an estimated $10 million in parts to Polish producers.
Much to the chagrin of the Belgian business community, the largest investment from that country is no longer considered to be Belgian by the Polish government.
Cimentaries CBR was created with an original Belgian investment of $100 million. Heidelberg Cement, the German cement giant, bought a 51% share in the company. CBR, which owns the Gorazdze SA and Cementownia Strzelce Opolskie cement plants, is now considered an "international" investment in Polish government statistics.
The Belgian embassy estimates that with the CBR investment, Belgium ranks sixth or seventh on the list of largest foreign investors by country. Without CBR Belgium ranks in 10th position.
In 1994, the total realized investment in Poland was $200 million with an additional planned investment of $130 million by the end of this year.
Belgium has made inroads into Poland's retail sector with the successful chain of Globi supermarkets. Globi is owned by GIB, Belgium's largest supermarket chain, the Belgium Investment Corporation (SBI) and several private Polish investors. Launched in 1991, Globi now has 12 stores in Warsaw. Total investments per store are about $6 million. The company has plans for a network of 20 franchises across Poland.
The trend in bilateral trade showed significant advances for Polish versus Belgian goods from 1993 to 1994, while Belgian trade to Poland increased 12% to $688 million and Polish trade jumped 38%. Exports accounting for 68% of Poland's $198 million increase in trade with Belgium include precious metals (pearls and diamonds), textiles and mineral products.
In the other direction, Belgium doubled sales to Poland in carpets and manufactured plastic/rubber products from 1992 to 1994.
Trade relations with Belgium took a turn toward the confusing last year when Belgium regionalized the promotion of exports and foreign trade. In 1994, as part of the country's federalization program, Belgium is represented abroad by three regional trade bodies: the Flemish Trade Board (VDBH) from the northern region of Flanders, the Wallonne Trade Agency (AWEX) of southern Belgium and the Belgian Office of Foreign Trade, the original trade office of the federal government. But commercial officers at the Belgian Embassy in Warsaw insist that the changes have not significantly affected trade relations with Poland.
"In Poland, I have to say I am very surprised because people know where Flanders is," remarked Pieter De Smet, commercial attache with the Flemish Foreign Trade Board. De Smet was the Belgian commercial attache until January 1994 when he was told to change his name plate. With a population of 5.7 million people, Flanders accounts for an estimated 70% of Belgian trade with Poland. Polish trade figures specific to each region have not been formally calculated.
Belgium, particularly the Flanders region, is the second largest producer of carpets behind the United States and the No.1 exporter in the world. Belgium exported over $33 million worth of carpets to Poland last year.
Both De Smet and Delbecque agree that there is a growing interest at home in investing in Poland. But De Smet warns that he has seen a number of Belgian firms scared off by the perceived risks in the market.
"We have a lot of interested construction companies but it is very difficult here because of the poor legislation," he said. The short-term trend is for the larger Belgian companies to invest in the Czech Republic. The reason: the burden of employee social security costs on employers in Poland.
"A lot of our big investors are really looking at this," he added. But the trade offices at the Belgian embassy are convinced that Belgian investors can't ignore Poland's huge domestic market. They expect the long-term trend to be a dramatic increase in Belgian interests in Poland.
The upcoming multi-sectoral trade mission on Oct. 18, led by the Flemish Foreign Trade Minister, is another in a string of visits that the Belgians hope will secure regional trade with potential Polish partners. The visit will include representatives of the Flemish transport, construction and textile sectors.
