France: The big move to Poland in '95
France currently ranks fifth as Poland's trading partner and fourth as an investor here after an aggregate $310 million investment spree by French companies last year.
French investment in Poland is very diversified, with nearly 600 joint ventures all operating in widely differing sectors such as construction, electronic goods, clothing, food products, pharmaceuticals and the media.
Investments can range from multi-million dollar deals by French conglomerates to French nationals coming here and setting up shop.
The largest investments are in electronics, tire production, cement production, telecommunications, food processing, insurance and banking.
France's arrival in Poland was slower than Anglo-Saxon countries, but the French are now catching up and making their presence more visible, said Michel Bardet, commercial counselor at the French Embassy in Warsaw.
Total French investment at the end of 1995 stood at $574 million. To-date investments make up 8.4% of total foreign investment in Poland, and last year's investment spree moved France-based company aggregate investment up one notch, to Poland's fourth top investor.
Among the leading French investors last year were Michelin, Lafarge and Seita.
Tire giant Michelin rang out the year by taking a 52.1% stake for $112 million in tire producer Stomil Olsztyn in December, committing a further $150 million in future investments. Michelin decided to invest in Poland because the Stomil trademark has such a good reputation in Poland, said Francois Michelin, president of Michelin. The company plans to expand and diversify Stomil's tire production.
Cement producer Lafarge was another new arrival on the investment scene in Poland last year. Mid-year, Lafarge paid $46 for 75% of Kujawy, one of Poland's largest cement markers, with an additional $46 million pledged during the next three years. Later, Lafarge bought a 23% stake in cement maker Malogoszcz for $19 million.
Tobacco company Seita made a large year-end investment with the purchase of 33% of shares in the ZPT Radom tobacco plant. Seita invested $64 million in the plant and has the option to acquire a further 32% of Radom's shares.
While Michelin and Lafarge moved into the second and third position, respectively, as leading French-based investors, the Thomson Group still commands the No. 1 spot, with a total $185 million investment here, according to the State Foreign Investment Agency (PAIZ).
Thomson Group has majority stakes in three electronic companies, Polkolor, TCE Polska and Thomson-Lamina. Polkolor, the largest of the three, manufactures electronic tubes. The company has over 4,500 employees. TCE Polska produces televisions, hi-fi's and videos, and Thomson Lamina manufactures radios and televisions and electronic tubes.
Not surprisingly, the French have shown their strength in the food sector. Chocolate maker Cacao Barry is Poland's sixth-largest French investor, according to PAIZ. The company invested $14 million during the third quarter of 1995 and has a factory in lodz. Close behind is Michel Marbot, a French businessman who took over the Danuta factory in Malbork, close to Gdansk. The factory produces pasta. Marbot also bought a factory in Wroclaw, bringing his investments here to $10 million. The company currently has 30% of Poland's pasta market.
Another French food giant is yogurt producer Danone, whose investment in Poland has reached $5 million. The company started importing products in 1992 and formed a joint venture with Wola dairy near Warsaw in 1993. Danone early last year took full ownership of Wola and bought 60% of Mildes dairy, which is located in Bierun in Katowice province.
Although bilateral trade still favors French exports, the gap between the two countries is narrowing, as French investors have moved into Poland during the last few years.
From 1993 to 1994, French exports to Poland rose 14.2% to FF 5.3 billion ($1 billion) while Polish exports to France rose 20%, or FF 4.5 billion ($900 million), according to French embassy figures.
"The French market is very difficult for Poland," said Bardet of the embassy's commercial section. Polish companies haven't had an easy time selling their products in a country where consumers are looking for a specific type of product and luxury items.
The largest-growing sector for Polish exports has been in metallurgical products, soaring 212% in 1994 from 1993 and representing FF 1 billion ($200 million). Metal exports account for almost one-quarter of total Polish exports to France. Sales of copper to France were up 6 times in 1994 from the previous year, bringing in FF 690 million ($168 million) in sales.
Food was the most dynamic French export to Poland in 1994, up by more than half from the previous year at FF 549 million ($108 million) or 10% of total exports. French meat exports are booming, generating FF 164 million ($33 million) and up a whopping 208% in 1994 from the year before. Yeast and egg products are selling, too, making FF 147 million ($29 million).
Look to distribution as a future sector for French investment, with companies like Aachen and Leclerc setting up shop, said Maria Poniatowska Bylina, general secretary of the French Chamber of Commerce in Poland.
Poland is becoming the choice in Central and Eastern Europe for French companies. Many companies moved to Hungary and the Czech Republic when the markets in Central and Eastern Europe opened up. But now Poland is the market venue.
"They saw that Poland was really the market to be had with such a dynamic economy," Bardet said.
10 Top French investors
Investor Amount Sector Description
1. Thomson Group $185 million electronics majority stakes in Polkolor,
TCE Polska, Thomson Lamina
2. Michelin $112 million Auto supplies 52% stake in Stomil Olsztyn
3. Lafarge $65.2 million Construction 75% in Kujawy and
23% in Malogoszcz
4. Seita $45 million Tobacco 33% in Radom tobacco
plant
5. France Telecom $45 million Telecommunications 24.5% in Centertel
6. Cacao Barry $14 million Food greenfield chocolate plant
in lodz
7. Michel Marbot $10 million Food Pasta factories in Gdansk
and Wroclaw
8. AGF $9 million Insurance 90% in AGF Ubezpieczenia
na Zycie, 92% in AGF
Ubezpieczenia SA
9. Crédit Lyonnais $7.9 million Banking 18% in International
Bank of Poland
10. Société Générale $6.9 million Banking Subsidiary and advisory
operations
Source: PAIZ
1994 TRADE FIGURES
France ' Poland Poland ' France
Total ($ Millions) 1,050 0.887
Machinery, equipment 268 130
Consumer goods 256 222
Chemical products 191 81
Farm produce 108 116
Metal products NA 197
Oil NA 56
Other 222 86
Source: French Embassy $1=FFr 5.07
French investment in Poland is very diversified, with nearly 600 joint ventures all operating in widely differing sectors such as construction, electronic goods, clothing, food products, pharmaceuticals and the media.
Investments can range from multi-million dollar deals by French conglomerates to French nationals coming here and setting up shop.
The largest investments are in electronics, tire production, cement production, telecommunications, food processing, insurance and banking.
France's arrival in Poland was slower than Anglo-Saxon countries, but the French are now catching up and making their presence more visible, said Michel Bardet, commercial counselor at the French Embassy in Warsaw.
Total French investment at the end of 1995 stood at $574 million. To-date investments make up 8.4% of total foreign investment in Poland, and last year's investment spree moved France-based company aggregate investment up one notch, to Poland's fourth top investor.
Among the leading French investors last year were Michelin, Lafarge and Seita.
Tire giant Michelin rang out the year by taking a 52.1% stake for $112 million in tire producer Stomil Olsztyn in December, committing a further $150 million in future investments. Michelin decided to invest in Poland because the Stomil trademark has such a good reputation in Poland, said Francois Michelin, president of Michelin. The company plans to expand and diversify Stomil's tire production.
Cement producer Lafarge was another new arrival on the investment scene in Poland last year. Mid-year, Lafarge paid $46 for 75% of Kujawy, one of Poland's largest cement markers, with an additional $46 million pledged during the next three years. Later, Lafarge bought a 23% stake in cement maker Malogoszcz for $19 million.
Tobacco company Seita made a large year-end investment with the purchase of 33% of shares in the ZPT Radom tobacco plant. Seita invested $64 million in the plant and has the option to acquire a further 32% of Radom's shares.
While Michelin and Lafarge moved into the second and third position, respectively, as leading French-based investors, the Thomson Group still commands the No. 1 spot, with a total $185 million investment here, according to the State Foreign Investment Agency (PAIZ).
Thomson Group has majority stakes in three electronic companies, Polkolor, TCE Polska and Thomson-Lamina. Polkolor, the largest of the three, manufactures electronic tubes. The company has over 4,500 employees. TCE Polska produces televisions, hi-fi's and videos, and Thomson Lamina manufactures radios and televisions and electronic tubes.
Not surprisingly, the French have shown their strength in the food sector. Chocolate maker Cacao Barry is Poland's sixth-largest French investor, according to PAIZ. The company invested $14 million during the third quarter of 1995 and has a factory in lodz. Close behind is Michel Marbot, a French businessman who took over the Danuta factory in Malbork, close to Gdansk. The factory produces pasta. Marbot also bought a factory in Wroclaw, bringing his investments here to $10 million. The company currently has 30% of Poland's pasta market.
Another French food giant is yogurt producer Danone, whose investment in Poland has reached $5 million. The company started importing products in 1992 and formed a joint venture with Wola dairy near Warsaw in 1993. Danone early last year took full ownership of Wola and bought 60% of Mildes dairy, which is located in Bierun in Katowice province.
Although bilateral trade still favors French exports, the gap between the two countries is narrowing, as French investors have moved into Poland during the last few years.
From 1993 to 1994, French exports to Poland rose 14.2% to FF 5.3 billion ($1 billion) while Polish exports to France rose 20%, or FF 4.5 billion ($900 million), according to French embassy figures.
"The French market is very difficult for Poland," said Bardet of the embassy's commercial section. Polish companies haven't had an easy time selling their products in a country where consumers are looking for a specific type of product and luxury items.
The largest-growing sector for Polish exports has been in metallurgical products, soaring 212% in 1994 from 1993 and representing FF 1 billion ($200 million). Metal exports account for almost one-quarter of total Polish exports to France. Sales of copper to France were up 6 times in 1994 from the previous year, bringing in FF 690 million ($168 million) in sales.
Food was the most dynamic French export to Poland in 1994, up by more than half from the previous year at FF 549 million ($108 million) or 10% of total exports. French meat exports are booming, generating FF 164 million ($33 million) and up a whopping 208% in 1994 from the year before. Yeast and egg products are selling, too, making FF 147 million ($29 million).
Look to distribution as a future sector for French investment, with companies like Aachen and Leclerc setting up shop, said Maria Poniatowska Bylina, general secretary of the French Chamber of Commerce in Poland.
Poland is becoming the choice in Central and Eastern Europe for French companies. Many companies moved to Hungary and the Czech Republic when the markets in Central and Eastern Europe opened up. But now Poland is the market venue.
"They saw that Poland was really the market to be had with such a dynamic economy," Bardet said.
10 Top French investors
Investor Amount Sector Description
1. Thomson Group $185 million electronics majority stakes in Polkolor,
TCE Polska, Thomson Lamina
2. Michelin $112 million Auto supplies 52% stake in Stomil Olsztyn
3. Lafarge $65.2 million Construction 75% in Kujawy and
23% in Malogoszcz
4. Seita $45 million Tobacco 33% in Radom tobacco
plant
5. France Telecom $45 million Telecommunications 24.5% in Centertel
6. Cacao Barry $14 million Food greenfield chocolate plant
in lodz
7. Michel Marbot $10 million Food Pasta factories in Gdansk
and Wroclaw
8. AGF $9 million Insurance 90% in AGF Ubezpieczenia
na Zycie, 92% in AGF
Ubezpieczenia SA
9. Crédit Lyonnais $7.9 million Banking 18% in International
Bank of Poland
10. Société Générale $6.9 million Banking Subsidiary and advisory
operations
Source: PAIZ
1994 TRADE FIGURES
France ' Poland Poland ' France
Total ($ Millions) 1,050 0.887
Machinery, equipment 268 130
Consumer goods 256 222
Chemical products 191 81
Farm produce 108 116
Metal products NA 197
Oil NA 56
Other 222 86
Source: French Embassy $1=FFr 5.07
