Doing business in Poland

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Swietokrzyski bridge Warsaw Poland

As the European Union’s sixth-largest economy, Poland swerved the global recession and now offers opportunities in energy, transport, defence and for sellers of paintbrushes and Yorkshire puddings alike 

As the glass lift winds its way up Warsaw’s Rondo 1 skyscraper, passengers are afforded a panorama of the Polish capital, which could – if you squint hard enough – pass for Shanghai or São Paulo. Cranes, construction sites and cloud-piercing steel-and-glass structures scatter the view as far as the eye can see.

Sure, there are remnants of Poland’s communist past – rows of brutalist grey apartment blocks and yellow trams scuttling down seemingly infinite boulevards – but the roads also host zooming Porsches and Lamborghinis, while apartment dwellers wake every morning to life in this energetic 21st-century boomtown.

Even the most ardent news junkies might not be au fait with Poland’s recent economic successes. Today it’s the European Union’s sixth-largest economy. It was one of the few nations to escape the global downturn in 2008, while GDP increased 3.3 per cent in 2014 (the rest of the EU limps along at 1.3 per cent).

Roads, train lines and energy are constantly improving, boosted by infrastructure investment for football’s Euro 2012 tournament. It’s a far cry from communist Poland, which was mired in deep debt and high inflation. “In only 25 years, it’s nothing short of an economic miracle,” says Paddy Ney, director at the British-Polish Chamber of Commerce (BPCC) trade team.

Inside Warsaw’s British embassy – a place full of highly polished marble floors, echoing footsteps and a David Bailey portrait of a smiling Queen Elizabeth II – ambassador Robin Barnett enthuses about the €85.2bn (£62bn) of EU structural and cohesion funds which will be spent on Polish projects until 2020. “Transport, water, sewage culture – there are many opportunities for British companies,” he says.

Engineering firm Amec Foster Wheeler is one company taking advantage of Poland’s infrastructural growth, having signed a $430m (£279m) contract with energy group PGE to provide advice and support in developing the country’s first nuclear power plant.

With the £7bn-to-£11bn plant opening in 2024, Amec FW opened Warsaw offices with a 30-strong staff, mostly expats. Strategic business development director Bob Churchill reckons that there are “significant opportunities for UK companies in the supply chain”.

Castle Square Warsaw Poland

With more than 38 million consumers – and a burgeoning middle class – British exporters also look set to benefit. “EU infrastructure funding produces wealth right down to the painting market where people have more money to improve their surroundings and buy more paintbrushes,” says Nigel Gardiner-Harvey, divisional manager of Worcestershire-based Harris Brushes, which entered the Polish market in 2013.

Having drafted a list of “anybody in Poland who would be interested in selling or distributing paintbrushes”, the firm enlisted BPCC help, subsequently striking deals with retailers such as Tesco (huge in Poland with 440 stores and a £2.2bn turnover).

Poland’s increasingly worldly consumers are also targeted by BPCC, which launched a Food is GREAT market entry campaign for British food and drink producers that could see home-grown cheddars and even Aunt Bessie’s Yorkshire puddings on Polish supermarket shelves.

Borscht and goulash ready meals are already in UK shops, a by-product of the population being boosted by half-a-million thanks to Polish emigration (there are 579,000 Poles in Britain, up from 58,000 in 2001). This diaspora – Polish is now Britain’s main non-English language – might help Harris Brushes’ Gardiner-Harvey, who hopes “Polish tradesmen might start talking”.

However, it’s caused an apparent ‘brain drain’ in Poland. In 2007, such was the labour shortage, Poland’s ex-president Lech Kaczynski (who died in a 2010 plane crash) joked he couldn’t find a decorator, while authorities reportedly considered using 20,000 convicts on construction projects.

However, the UK economic downturn led to many well-educated émigrés returning. Iwona Chojnowska, director at foreign investment agency PAIZ mentions the initial wave of immigrants after Poland’s 2004 EU entry, delineating between the “20 per cent skilled workers who are now returning with acquired skills, often working as managers for foreign businesses” with the “80 per cent unskilled workers staying because UK salaries are higher”.

Strong work ethic

Regardless of whether it’s a Polish plumber in London or an IT consultant in Warsaw, one thing is agreed: the seemingly ingrained Polish hard-work ethic. “Polish people are diligent, hardworking and focused about getting the job done,” says Adrian Leung, HSBC Poland’s head of corporate banking, who has lived in Warsaw for two years. “Polish people know they can achieve more if they work and get things done for themselves…”

Indeed, last year high-street retailer Next admitted recruiting Polish workers for warehouse jobs before advertising the roles in the UK, arranging buses to drive candidates from Warsaw to West Yorkshire.

The prodigious work ethic is particularly noticeable in Polish millennials. Says Chojnowska: “When we asked investors ‘What’s the main reason for coming to Poland?’, people used to say economic standing and political stability. Now they say, ‘It’s because of young people willing to learn’… They truly are the gold of Poland.”

Despite the Ukraine crisis, Poland is seen as the ideal gateway to the emerging markets of the Central Eastern European (CEE) region and its 100 million consumers, by dint of its strategic location bridging eastern and western Europe.

Warsaw Poland

Opportunities could come from further afield thanks to the Chengdu-Lodz freight railway, meaning British firms with manufacturing outlets in China, such as Harris Brushes, can ferry goods to eastern Europe – eliminating the need for expensive and lengthy shipping. “Otherwise, you’ve got to reach Shanghai before shipping to Amsterdam, which takes 45-60 days, then get inland,” says Leung. “The train takes two weeks.”

But Poland’s ongoing prosperity isn’t without challenges, namely bureaucracy. In the World Bank’s ‘Ease of Doing Business’ index, it finishes 32nd overall but 137th in the world in dealing with construction permits. Meanwhile, Poland’s 85th placing in ‘Starting a Business’ means it’s easier to start a company in Iran, Liberia or the Marshall Islands.

“There’s no doubt more work needs to be done,” admits Barnett. “The biggest complaints are around construction permits and tax issues… it’s taking a long time to move Poland from a paper-based society to an e-based one.”

Then there’s the ostensibly impenetrable Polski language (try pronouncing the city name Szczebrzeszyn). “I speak a few languages, my wife is Polish so you’d expect I’d pick it up,” says Leung. “But I struggle.” However, Ney says: “Generally, in negotiation phase, language isn’t an issue.

Nine out of 10 distributors will speak enough English. Or they might get their son, daughter or cousin to do the translation.” Chojnowska points out 42 per cent of Poles can speak a foreign language – Director even met a Polski Bus (see right) employee who speaks fluent Welsh, despite having never visited the country.

Savvy consumers

Marketing your product towards Polish consumers also requires some work. “Many British companies think they won’t need to change their labelling, but you have to sell products in Polish,” says Ney. “If you sell pork pies in Poland, the word ‘pies’ means ‘dog’ in Polish so you have to be careful about what label you use!”

The second most visited page on polskibus.com’s website is ‘Terms and Conditions of Carriage’. “You wouldn’t find that in any western European country!” laughs chief executive Barry Pybis, in his Warsaw office. “When I told the office, they said, ‘Eh? Isn’t that normal?’ Polish consumers really do hunt for value and quality – they are discerning customers.”

Leung says: “Fifteen years ago, Poland may have been the land of opportunity where you could turn up with any business model and make money because it was emerging from socialism. But these days, Polish consumers are as demanding as elsewhere in Europe.

British firms looking at Poland really need to understand this competitive edge.” Adds Pybis: “Any British company who thinks they can come here and do something cheap and cheerful will fail.”

For businesses unsure whether their product will work in the land of polka and pierogies (dumplings), Barnett recommends road-testing the idea among UK-based Polish staff: “I think sometimes people forget the best adviser is somebody who may be sitting in their company… I’ve met some companies with Polish staff who haven’t exploited that local knowledge to the extent they could.”

As experts point out, the best thing to do is discard any outdated Cold War clichés and book a trip to Poland. “People are surprised it’s a modern European country,” says Ney. “When I first came here in 2007, I expected to find a grey, miserable country but it’s not like that at all.”

Polski Bus Poland

Case Study

Polski Bus
Launched in June 2011, Polski Bus is an inter-city express coach service that has revolutionised bus travel within Poland. Owned by Stagecoach founder Sir Brian Souter’s Souter Investments, the entrepreneur entered the market after discovering Poland lacked a National Express-like inter-city coach network at a time when infrastructure was improving in the run-up to Euro 2012.

Starting with 18 buses, the coaches offered free WiFi, reclining leather seats and steward service while offering fares starting at one zloty (17p) (“a combination of Singapore Airlines quality with Ryanair’s pricing model,” says current CEO Barry Pybis).

Such was the interest, the website crashed on the first day when 500,000 people visited it. Polski Bus’s wholesale embrace of digital culture was revolutionary too, particularly selling tickets online. (Pybis: “Previously, you handed over your money, bought your ticket but if the bus was full, you were disappointed.”), while buses offer chargers alongside free WiFi. “We’re not a budget company,” stresses Pybis. “We’re a high-quality operator operating a yield management business model.”

With “turnover increasing faster than our pace of growth”, today Polski Bus has a fleet of 144 buses including double-deckered Astra Megas, and employs 802 people. With its iconic red buses and Ziggy the Stork logo linking 22 Polish cities – plus further afield in Germany, the Czech Republic, Austria, Slovakia and Lithuania – the brand has become a household name.

It’s even helped the environment too: “Twenty-six per cent of Polish people have stopped using their car to use us for journeys,” he says, with Souter Investments launching a similar coach service in Finland last year. Adds Pybis: “We’ve created 800 jobs in eastern Europe from scratch, raised the quality of services, forced competition to raise their quality of service and put technology at the forefront. I hope Polski Bus is around many decades after I’ve gone.”

polskibus.com
@PolskiBuscom

Poland Links 

bpcc.org.pl
@BPCC_Trade
@paddyney
facebook.com/ukinpoland
@UKTI_Poland
amecfw.com
@amec_fw
harrisbrushes.com
@HarrisBrushes
paiz.gov.pl
@Invest_inPoland
hsbc.pl

Read more on Poland

Flight review Norwegian: LGW to WAW
Warsaw City Guide 

About author

Christian Koch

Christian Koch

Alongside his work for Director, Christian has written features for the Evening Standard, The Guardian, Sunday Times Style, The Independent, Q, Cosmopolitan, Stylist, ShortList and Glamour in an eclectic career which has seen him interview everybody from Mariah Carey to Michael Douglas through to Richard Branson with newspaper assignments including reporting on the Japanese tsunami and living with an Italian cult.

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