German powerhouse helps drive polish economy
The chamber currently has roughly 350 member companies, and has been in existence for five years.
It officially became chartered this week, and Chancellor Helmut Kohl will attend the organization's formal opening Friday, July 7, during his official visit to Poland.
Current investment
Germany easily takes first place among Poland's foreign partners, both in terms of bilateral trade and investment. The scale of German participation in the economy is so vast that officials at the German Embassy's commercial section have difficulty tracking it.
Investments of over $1 million are monitored by the Polish Agency for Foreign Investment (PAIZ), and the German Federal Government tracks investments of DM 1 million ($720,000), but much of the German investment here is on a smaller scale, according to Hans Shafer, an attachU in the embassy's commercial section.
Shafer said there are approximately 6,500 German firms doing business in Poland - which works out to nearly 36% of the total number of registered companies.
"We don't get figures for smaller companies," he said. "And a lot of the companies doing business here are small. So we use the figures issued by PAIZ."
As of the first quarter of this year, German investments and commitments in Poland totaled $8.3 billion, Shafer said.
"Poland is one of the major partners in the region," he said. "Germany does have a significant presence in (the) Czech (Republic) and in Hungary, but Poland is one of our most favored (trading) partners. German companies came into Poland with the goal of exporting to countries further to the East."
This anticipation of openings in eastern markets is one reason German large-scale investments, as recorded by PAIZ, have been increasing. For example, Continental Can Polska, a subsidiary of the packaging company Schmalbach-Lubeca, recently announced an $18.75 million capital injection to increase production at its plant in Radom. Some 20% of the plant's anticipated output of 450 million cans is targeted for export to Russia, Ukraine, Hungary and the Czech Republic. The company was already the largest single German investor in Poland.
A new trend?
During the first two months of this year, the value of Polish goods exported to Germany exceeded the value of imports from Germany. This represents the country's first current-account surplus with its largest trading partner and could, according to Shafer, represent a new trend based on the increasing re-export of goods assembled here from German parts.
"Labor is cheaper (in Poland) than in Germany," Shafer, who said "a lot of companies" are setting up assembly facilities for labor-intensive goods. He cited textile and clothing, food processing and furniture assembly plants as prime examples of this trend.
"If you look at these industries, there are very many German companies," the attachU said. "Most of them are small- to medium-sized ones. There is a large number of them, all over the country - but the most are probably in the areas closest to the German border."
The impact of these small enterprises on reciprocal trade has been dramatic. "Polish exports of pre-fabricated products to Germany are up by 74%" in the first two months of this year, he said.
German imports, valued at $7.5 billion last year, took a whopping 27.5% share of the Polish market last year. Poland exported $6.26 billion worth of goods to its Western neighbor during the same period, making Germany the country's largest foreign customer.
Agricultural products are taking a smaller share of reciprocal trade, with German exports to Poland down by almost 20% - and Polish exports to Germany also dropping. Poland continues to be a source of raw materials for Germany, and some categories are growing, but the expansion in trade and German investment is in manufacturing and assembly.
Poland has recently started exporting sand and gravel to Germany. Some sand is used in construction, while some is also exported as raw material for glass. Gravel, mined in Poland, is used by the construction industry in Germany, especially in Berlin, Shafer said.
Still, raw materials accounted for only 1.5% of the Polish goods imported into the Federal Republic last year. Finished goods accounted for 60%, and pre-fabricated (assembled) goods made up 25.8% of German imports last year.
A diverse presence
The diversity of Germany's economic presence here makes it impossible to pinpoint any particular sectors of heavy interest, Shafer said. A look at the five largest investors in Poland bears this out: Continental Can Europe manufactures beverage packaging; BTS Baukeramik manufactures bricks and construction tiles; Siemens AG is a major player in telecommunications and electronics, while Henkel manufactures cosmetics and washing powders. Germany's fifth-largest investor is Commerzbank AG, a financial institution.
The presence of consultants, visiting experts and German participation in various programs to encourage the development of entrepreneurial ventures illustrates the country's interest in fostering the development of the free-market system in its Eastern neighbor.
It officially became chartered this week, and Chancellor Helmut Kohl will attend the organization's formal opening Friday, July 7, during his official visit to Poland.
Current investment
Germany easily takes first place among Poland's foreign partners, both in terms of bilateral trade and investment. The scale of German participation in the economy is so vast that officials at the German Embassy's commercial section have difficulty tracking it.
Investments of over $1 million are monitored by the Polish Agency for Foreign Investment (PAIZ), and the German Federal Government tracks investments of DM 1 million ($720,000), but much of the German investment here is on a smaller scale, according to Hans Shafer, an attachU in the embassy's commercial section.
Shafer said there are approximately 6,500 German firms doing business in Poland - which works out to nearly 36% of the total number of registered companies.
"We don't get figures for smaller companies," he said. "And a lot of the companies doing business here are small. So we use the figures issued by PAIZ."
As of the first quarter of this year, German investments and commitments in Poland totaled $8.3 billion, Shafer said.
"Poland is one of the major partners in the region," he said. "Germany does have a significant presence in (the) Czech (Republic) and in Hungary, but Poland is one of our most favored (trading) partners. German companies came into Poland with the goal of exporting to countries further to the East."
This anticipation of openings in eastern markets is one reason German large-scale investments, as recorded by PAIZ, have been increasing. For example, Continental Can Polska, a subsidiary of the packaging company Schmalbach-Lubeca, recently announced an $18.75 million capital injection to increase production at its plant in Radom. Some 20% of the plant's anticipated output of 450 million cans is targeted for export to Russia, Ukraine, Hungary and the Czech Republic. The company was already the largest single German investor in Poland.
A new trend?
During the first two months of this year, the value of Polish goods exported to Germany exceeded the value of imports from Germany. This represents the country's first current-account surplus with its largest trading partner and could, according to Shafer, represent a new trend based on the increasing re-export of goods assembled here from German parts.
"Labor is cheaper (in Poland) than in Germany," Shafer, who said "a lot of companies" are setting up assembly facilities for labor-intensive goods. He cited textile and clothing, food processing and furniture assembly plants as prime examples of this trend.
"If you look at these industries, there are very many German companies," the attachU said. "Most of them are small- to medium-sized ones. There is a large number of them, all over the country - but the most are probably in the areas closest to the German border."
The impact of these small enterprises on reciprocal trade has been dramatic. "Polish exports of pre-fabricated products to Germany are up by 74%" in the first two months of this year, he said.
German imports, valued at $7.5 billion last year, took a whopping 27.5% share of the Polish market last year. Poland exported $6.26 billion worth of goods to its Western neighbor during the same period, making Germany the country's largest foreign customer.
Agricultural products are taking a smaller share of reciprocal trade, with German exports to Poland down by almost 20% - and Polish exports to Germany also dropping. Poland continues to be a source of raw materials for Germany, and some categories are growing, but the expansion in trade and German investment is in manufacturing and assembly.
Poland has recently started exporting sand and gravel to Germany. Some sand is used in construction, while some is also exported as raw material for glass. Gravel, mined in Poland, is used by the construction industry in Germany, especially in Berlin, Shafer said.
Still, raw materials accounted for only 1.5% of the Polish goods imported into the Federal Republic last year. Finished goods accounted for 60%, and pre-fabricated (assembled) goods made up 25.8% of German imports last year.
A diverse presence
The diversity of Germany's economic presence here makes it impossible to pinpoint any particular sectors of heavy interest, Shafer said. A look at the five largest investors in Poland bears this out: Continental Can Europe manufactures beverage packaging; BTS Baukeramik manufactures bricks and construction tiles; Siemens AG is a major player in telecommunications and electronics, while Henkel manufactures cosmetics and washing powders. Germany's fifth-largest investor is Commerzbank AG, a financial institution.
The presence of consultants, visiting experts and German participation in various programs to encourage the development of entrepreneurial ventures illustrates the country's interest in fostering the development of the free-market system in its Eastern neighbor.
