Friday 28 October 2016

Ireland's Polish community helps make Poland a great SME target

Mike Hogan

Published 29/05/2016 | 02:30

Mike Hogan is Enterprise Ireland director for Poland and the Baltic States
Mike Hogan is Enterprise Ireland director for Poland and the Baltic States

It may be a bold claim, but Ireland's trade relationship with Poland is unique among non-English-speaking countries.

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While other EU markets may be richer and more populous, strong personal and professional ties between the two countries makes Poland easily accessible to Irish businesses.

People generate contacts and Ireland has few rivals with Poland in terms of people connectivity. Approximately 3pc of the Irish population is Polish, spread across the country.

Irish companies have seized the opportunity this offers, using their Polish staff to access this market, represent them and set up offices.

For instance, of the 42 companies participating in Enterprise Ireland's 2015 Trade Mission to Poland, over 50pc were represented by Polish staff.

The Polish economy has come a long way in the past decade. It did not suffered as badly as other countries during the recession with continuous GDP growth (3.9pc in 2015) due to large EU transfers and Poland's growing attraction for foreign direct investment (FDI) and manufacturing migration.

EU funds have built out the transport infrastructure, meaning companies such as Amazon now effectively service Germany from Poland. Conglomerates such as LG, Samsung, Merloni and Philips have been attracted here too.

The country is also a leading market player for ICT (cloud, ecommerce and enterprise solutions) and business process outsourcing.

Over 50 Irish companies have operations in Poland, with many such as CRH, Steripack, Kingspan, Smurfit Kappa and ABP having production facilities.

Many Enterprise Ireland clients export directly into Poland.

The fastest growing export sector is the sub-supply of goods and services to multinationals with operations in Poland.

This is simply business expansion where Irish companies with existing relationships with FDI in Ireland, extend their export footprint to Poland. But there is opportunity for firms of all sizes.

Other key exports include smart farm goods and services (agricultural technology, veterinary products and animal nutrition), materials handling equipment, pharmaceuticals and medical devices and construction services.

Ecommerce is a particularly easy way to access the Polish market with the sector growing 20pc year-on-year and worth nearly €10bn. And it may also be about to get a bit easier.

Allegro, Poland's equivalent to Ebay or AliBaba, is the dominant player in the online sales market. It is coming to Ireland in June to engage with small and medium enterprises who want to expand their online offering to Poland, and is ready to provide sales, logistics and payments support to Irish online businesses.

Allegro transacts over 150,000 purchases daily with clothing and babyware being the most popular exports from Ireland.

Often this is just simple re-selling by individual entrepreneurs - so if they can do it, there is no reason SMEs in sectors like dry food, giftware and clothing could not follow suit.

Conducting business in Poland is, for Irish firms, about as easy as it comes.

There are 11 direct-flight destinations, the country ranks ahead of Germany and France for English speakers and Irish and Polish business culture is broadly similar.

However, it is not all good news. Poland is a notoriously price-sensitive market with corporate buyers feeling more comfortable making a decision on the basis of lowest price.

This is an issue for Irish companies because we tend to sell on quality and value-added criteria.

As a former member of the Communist bloc, it should also come as no surprise that the country is quite bureaucratic - but this only really affects in-country operations and has little impact on exporters. Remember, Ireland is unusual in our low level of bureaucracy.

Nonetheless, compared to other markets, Poland ranks as a particularly strong export opportunity for Irish firms of all sizes. It is easier to access and do business in than you might think.

Mike Hogan is Enterprise Ireland director for Poland and the Baltic States

Sunday Indo Business

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