Another debate organized by Executive Club took place on May 18 in Warsaw. Representatives of the most important companies and social institutions in Poland discussed the current situation of the Polish export and prognosis for the future. “The Polish conquest of global markets” was the motto of the debate, which took place under the honorary patronage of the Polish Investment and Trade Agency.
Polish Development Fund – reform of Polish economic diplomacy
For many of you the expansion of Polish companies to foreign markets is a very important matter – you represent the leading Polish companies, the Polish market is becoming saturated, so it seems only natural to look for new markets – said Beata Radomska, CEO of Executive Club – The aim of our debate is to discuss the future of Polish export, the expansion of Polish companies so that “Made in Poland” becomes a globally recognized brand.
The meeting was opened by a speech given by Paweł Borys – president of the management board of the Polish Development Fund, who referred to the plans of supporting Polish companies in their expansion to foreign markets. The Morawiecki Plan concerning the expansion is the first key issue. “Without success on global markets there will be no economic success” – said the president of the Polish Development Fund, referring to the plans of creating trade offices around the world, so that companies without any means for foreign development could use them as their representation offices. We need to provide support in a reasonably friendly way. Apart from funding, there is also the issue of promotion and consulting. Paweł Borys assured that the Polish Development Fund is trying to use a series of instruments, from regulation to funding, in several industries to create a comprehensive development plan. There are six branches in the spotlight, including electric vehicle transportation and Polish furniture. The president talked about the long tradition of the Polish furniture industry. He also stated that we do not have many recognizable brands, which the Fund is planning to change. Within sector programs we want to coordinate the tools in such a way as to create the best possible conditions for improving the competitiveness, technological level, and potential of the industry.
Stimuli and impulses for foreign expansion
During the first panel entitled “Polish entrepreneurs as the European tigers? Global expansion of domestic companies”, the moderator, prof. Jerzy Cieślik (Kozminski University), asked about the impulses and motivation necessary to initiate foreign expansion. For the Oknoplast Group such an impulse was Poland’s accession to the UE as well as succession. Magdalena Cedro-Czubaj, marketing director of Oknoplast, talked about the beginnings of the company’s development, when Mikołaj Placek opened it to foreign markets. According to Leszek Hołda, PKP Energetyka S.A. also started a global conquest, although on a smaller scale than the companies of the previous speakers, after it was taken over by CVC Capital Partners. “We audited our inventory and we see construction infrastructure as the area with the most potential. We managed to open a branch in Kazakhstan and we are now talking to our friends there” – he said. Grzegorz Zieliński (European Bank for Reconstruction and Development) emphasized the involvement of his organization in supporting investments. We can see a trend in which national champions involved in production exhaust all possibilities offered by their domestic market. Our mission is to support our clients through co-investments. These goals of the Bank are shared by the Ministry of Development, which was emphasized by Tomasz Samolon (Department of International Cooperation at the Ministry of Development). “Our offer is the same for the best and largest companies and for smaller ones” – he said. Our goal is the growth of domestic companies operating on foreign markets. The majority of instruments are aimed at experts, but also investors.
How to break through an a foreign market?
Another topic discussed was the process of entering a foreign market. The panelists agreed: it is necessary to know the market and adapt to its requirements. Effective marketing is also at the basis of success abroad. Changes are required in order to break through. This is why it is not always possible to maintain the name and corporate identity functioning in the country of origin. Leszek Hołda said that his company used the support of companies specialized in market analysis to make a better choice. It is key – he said – to have a business partner who will help us prepare and another one who will help us take the first steps on the new market.
Tomasz Salomon admitted that large companies have the highest chance of breaking through, but the Morawiecki program does not exclude any companies. He expressed his hope that Poland will soon benefit from the success of these companies, who will be proud of their Polish origin. Grzegorz Zieliński, on the other hand, provided examples of companies who have been very successful on foreign markets – Cersanit, Barlinek, or znanylekarz.pl, which is doing great on Iberian markets. Magdalena Cedro-Czubaj talked about the experience of Oknoplast, which is conducting a spectacular promotional campaign abroad, including Germany.
Entry through capital support can be both external and internal in nature – said the moderator, Jerzy Cieślik, in his summary – Entry though one’s own network of trade offices is necessary to prevent, among others, spending most of your margin on intermediaries. It is good to know that public institutions are willing to provide their support. Even thought different problems appear on this path, companies need to keep gaining knowledge and new qualifications. Hence the need for increasing the numbers of specialist staff, which is still insufficient.
The discussion in the second panel was devoted to the new challenges for Polish export, economic relations with the Middle East, and the search for new opportunities and competitive advantages that will help us succeed on foreign markets. It was moderated by dr hab. Roman Sobiecki – professor at the Warsaw School of Economics, dean of the Collegium of Business Administration, and director of Institute of Markets and Competition.
Geographic reorientation and increasing the share of export to countries outside the EU as a path to economic success?
The second panel was opened by Elżbieta Bugalska (Bank Gospodarstwa Krajowego), who talked about the high chances of small companies using new technologies to conquer the global market. When referring to the risk faced by companies who decide to conquer foreign markets, she stated that banks are capable of securing the Polish entrepreneurs taking their first steps abroad. President of the management board of the Polish Investment and Trade Agency, Tomasz Pisula, stated that within the Polish Development Fund group entrepreneurs can expect active support for the expansion of their companies. Foreign trade offices, waiting for entrepreneurs in such cities as Teheran, Nairobi, or Shanghai, can offer assistance in, among others, the organization of business forums or meetings with foreign investors. Despite the Agency’s limited funding, he hoped that companies will be more willing to utilize the opportunities provided by the offices in terms of trade and investment promotion outside Europe. Maciej Pyrka (Emirates) mentioned the attractiveness of the Persian Gulf as a place for establishing trade cooperation. He mentioned the examples of the Polish cosmetic industry, which is now thriving in Dubai. The cultural environment in the Middle Eastern countries ensures security and reduced risk of export to these countries.
“The greatest advantage of Polish entrepreneurs is their agility, business flexibility, and fast operation” – said Andrzej Kozłowski (ROHLIG SUUS Logistics). Additionally, companies invest in good product quality and innovativeness, which helps them provide added value and makes them more competitive on the market. He also stipulated that Made in Poland is gaining renown and importance outside Europe, especially in Africa, where high quality products are beginning to with the battle against international brands. It is a great place to look for opportunities because, despite high risk, profitability and rate of return are significantly higher and can be achieved quicker than on our continent.
Attorney Stefan Feliniak from Wolf Theiss claimed that the basic risk associated with export to countries outside the European Union is credit risk and political risk, with the latter gradually gaining importance. The differences in legislation and legal culture pose a serious problem for Polish exporters, but contracts with countries of increased risk are associated with significantly higher margins.
All speakers agreed that geographic reorientation and increasing the share of export to countries outside the EU are necessary. Prof. Roman Sobiecki concluded the panel with a statement that the topic of new challenges will always be relevant. The saturated European market is an economic motivator for the development of companies outside our continent, while opportunities can be found on emerging markets, which still have significant reserves. In order for the conquest of foreign markets to succeed, an effective system of support needs to be created. The participants of the debates shared their concerns as well as optimistic prognoses concerning the Made in Poland brand and the expansion of Polish companies to foreign markets. Many new opportunities to invest abroad have appeared in business. These opportunities are accompanied by a certain degree of uncertainty and an increasing number of questions, which the speakers answered during an inspiring discussion, providing some additional guidelines and advice to the listeners.
Organizer: Executive Club Sp. z o.o.
Honorary Patronage: Polish Investment and Trade Agency
Partners: Bank Gospodarstwa Krajowego, Cigno Consulting, Emirates Polska, Euler Hermes, Oknoplast, Rohlig Suus Logistics, Wolf Theiss, Vivenge
Media Patrons: Newseria, Poland-Export, Poland Today, Polish Market, Rynki24, Biznes Polska