Poland - the new gateway to EU market: tips the HK-based Polish Commercial Consul

On May 1st 2004, the Republic of Poland, once a core member of the Eastern communist bloc, turned an important chapter in its history - the country was formally admitted into the European Union (the EU), the premier political-economic alliance in Europe that carries millions of potential customers of the European continent. This move was an important milestone in the country's economic liberalisation process starting from the early 90s, as well as an the onset of unprecedented opportunity for foreign investors and goods suppliers to take advantage of the country's unique geo-economic position in the "New Europe".

In June 2005, Kenfair International will launch its first-ever "Asia Expo-Poland" in Warsaw, the capital city of the country, to bring forth Asian manufacturers to this new market, to the doorstep of Poland. To gain a deeper understanding of the emerging Polish market, <> is taking the honour to have an exclusive interview with Mr. Andrzej Pieczonka, the Polish Commercial Consul in Hong Kong. Mr. Pieczonka is going to share with us his distinguished market insights for his country and offer practical tips for Asian SMEs who are eyeing the Polish market.

MegAsia: With the accession of Poland as new member into the European Union (EU), what role will the country play in the overall European economy then on?

Mr. Pieczonka: We expect Poland to play a very active part in the enlarged European Union. The country's infrastructure development program should be able to bring in new investments to the country and to the region. The improved accessibility to Polish-made goods within the European Market will increase its export, while on the other hand, we expect a rise in our productivity through an extensive program of technology imports. The country in effect has become an integral part of the Single European Market, with over 450 million consumers. The prospects for the medium term growth of our GDP are very promising. The rapid development of our private sector is contributing to the country's economy by increasing its strength and competitiveness.

MagAsia: How far has Poland, being one of the biggest nations in the middle of European continent, progressed on its path into a full market economy? How does the Polish consumer market reflect such a development?

Mr. Pieczonka: The Polish economy has gone through profound transformation since the early 90s. From the very beginning, privatization was considered as one of the three most important components of our economic reform, together with the other two concerns: economic stabilization and liberalisation. One significant outcome of our economic reform is the proliferation of private enterprises, which have contributed much to the restructuring of the country's economy. Small and medium companies in Poland are currently the key driving force behind the country's development. On the financial front, the Polish stock exchange is gaining steam to become extremely dynamic. Many top international banking institutions (HSBC included) are operating in the market.

One of the major duties for Poland after gaining the EU membership has been the obligation to harmonise Polish laws with those of the EU, mainly in such areas as banking, competition protection, company taxation, accountancy, consumer protection, customs, financial services, intellectual property protection, technical norms and regulations and transportation. In my view, Poland is well advancing on the way to build a high profile market economy. The country's accession to the EU has greatly boosted consumer and business confidence, which is driving the economic development. The growing business activities and increased inflow of foreign investments will ultimately bring about an uprising of the purchasing power and a stronger demand for the consumer goods.

MegAsia: What marketing and investment opportunities are available for foreign investors and Asian manufacturers and exporters?

Mr. Pieczonka: Poland has adopted the EU's common trade policy upon its accession to the EU, by which all items manufactured in Poland or gone through customs clearance at any Polish port can move freely among EU member states. This poses a splendid opportunity for investors to set up production or distribution facilities in the country. I believe that Poland will continue to attract foreign investments because of a host of favourable factors: the size of the market; the fast pace of its economic development; a productive, highly skilled and relatively cheap labour force; and the practice of equal treatment for foreign and domestic investments in accordance with the principles of free trade and an open market economy. Then, Poland's strategic location in the heart of Europe is assuring an easy access of goods manufactured there both to the EU and other Eastern markets. Moreover, to lure investments, the country is offering a wide range of special incentives to the foreign investors. There are already some Special Economic Zones in Poland where business activities can be conducted on very favourable terms. Asian manufacturers and exporters are now presented with many opportunities for market entry into Poland.

MegAsia: Do you think that manufacturers/exporters of Far East Asian origins, like Hong Kong, Mainland China, Taiwan , etc. are active in Polish market so far?

Mr. Pieczonka: When we look at the Polish import figures, covering the general product categories, China is being one of the leading suppliers. In 2003, China was the fifth largest supplier for Poland's imports, taking an over 4% in the total imports of the country. Currently, the biggest suppliers for the Polish market are Germany, France, Italy and the UK. I believe that there are lots of chances and rooms for the Asian enterprises to tap the Polish market.

Meanwhile, Poland is emerging to be a regional hub for distributing products in Europe. We can see the increased competition in the market and many Polish regional distributors are extending their networks right now. And it is found that Asia is high on their sourcing list.

MegAsia: How can Asian suppliers take advantage of the emerging Polish consumer market? What are the most sought-after consumer items in Poland right now?

Mr. Pieczonka: With the emerging middle class in the country, Polish can now afford goods of higher quality and better designs at higher prices. The average age of the Polish population is relatively young, leading to a high demand for children-related items, clothing and entertainment goods for teenagers. The most sought-after consumer goods at the moment are mainly clothing, toys and electronic items.

Therefore, suppliers and merchants should look at those favourable factors brought about by the improvement in income and living standard. More people are looking for attractive goods that offer a combination of high quality and competitive price. Major European hypermarket operators like Tesco(UK), Auchan(France) and Metro(Germany) are already moving in to tap the mass consumer market. There are also some other multinational companies operating in the Polish market and they buy from Asia many promotional items as well.

Therefore, suppliers and merchants should look at those favourable factors brought about by the improvement in income and living standard. More people are looking for attractive goods that offer a combination of high quality and competitive price. Major European hypermarket operators like Tesco(UK), Auchan(France) and Metro(Germany) are already moving in to tap the mass consumer market. There are also some other multinational companies operating in the Polish market and they buy from Asia many promotional items as well.

MegAsia: What has the Polish government done so far to help facilitate the entry of foreign imports into the country as a result of its new EU status? How can Hong Kong and other Asian SMEs benefit from the new practices?

Mr. Pieczonka: The example of Hong Kong proves that the best assistance from the government is to set clear principles for the business entities to act. This is also exactly what our economic reforms are aiming at. As mentioned before, accession to the EU means that Poland has to comply with the EU's customs principles and regulations. Being a part of the Single European Market, Poland has worked to align its import tariffs with the EU tariff rates, which have been generally lower than the previous Polish rates. Then, it is also important for Hong Kong and other Asian exporters to note that Poland is now obliged to adopt the EU's health and safety standards for consumer goods. In this respect, Hong Kong exporters should be with not much problems as they have already been making their goods for European countries in compliance with EU standards and safety directives.

Mr. Pieczonka: The example of Hong Kong proves that the best assistance from the government is to set clear principles for the business entities to act. This is also exactly what our economic reforms are aiming at. As mentioned before, accession to the EU means that Poland has to comply with the EU's customs principles and regulations. Being a part of the Single European Market, Poland has worked to align its import tariffs with the EU tariff rates, which have been generally lower than the previous Polish rates. Then, it is also important for Hong Kong and other Asian exporters to note that Poland is now obliged to adopt the EU's health and safety standards for consumer goods. In this respect, Hong Kong exporters should be with not much problems as they have already been making their goods for European countries in compliance with EU standards and safety directives.

Next, they should act quickly to tap the rapidly developing SMEs sector in Poland, which can become Asian merchants' strategic partner in this part of the west world. Many Polish importers are actually evolving into regional distributors in Eastern Europe, and they are growing rapidly. I can say Poland has successfully created a thriving and upbeat environment for doing business during the 14-year economic reforms.

MegAsia: Kenfair is going to host its first-ever "Asia Expo" in Poland in early June 2005. What good suggestions would you like to give to Kenfair and all would-be exhibitors?

Mr. Pieczonka: My congratulations to Kenfair for choosing Poland to stage this new show. First of all, I must say that the choice of place and timing are good. The capital city Warsaw is a vibrant place and the leading business and convention centre in Central & Eastern Europe. June is also the perfect month with beautiful weather for the event. In fact, Poland's booming economy has attracted many companies from all over the world. The show is going to be an excellent opportunity for all participants to gain direct access into the Polish market environment, demand patterns and business practices.

I am sure Kenfair will put up an active and well-scheduled promotion to attract buyers in Poland and nearby countries. I would also like to suggest the organiser to seek for additional support from the regional chambers of commerce in Poland. Surely, they will help to line up with more local SMEs and boost visitor attendance. Then, on preparing marketing materials for use at the exhibition, we should bear in mind that while the majority of Polish businessmen speak English, a translated version in Polish will serve good purposes. So a short presentation of your offer in Polish in the printed matter is hightly recommended. Lastly, the exhibitors must spare some time out to visit around the city, because Warsaw is the very dear place to all Polish mationals. The touring around will let you much about the people you intend to do the business with.

I wish you all a good and successful show, and an enjoyable stay in the capital city of Poland.