Poland stands out in international greenfield projects ranking

23 June, Markus Spiske_unsplash
Poland attracted more new greenfield projects in 2020 than any other country in the European Union except Germany, according to the United Nations. Marked improvement in FDI by Polish companies is needed, however.

The following news items appeared in PT Daily, Poland Today’s daily business newsletter, on Wednesday 23 June – free to register here

Poland stands out in international greenfield projects ranking

Poland came fifth globally – and 2nd in the EU – in terms of the value of greenfield investment projects announced in 2020, according to the 2021 edition of the World Investment Report by the United Nations Conference on Trade and Development (UNCTAD). Poland came behind only the United States, UK, China and Germany. Due to the economic effects of the COVID-19 pandemic, the figure marked a decrease of 7% in comparison to a year earlier – however, the figure is put into a much more positive perspective when set against the average 34% drop globally. 

“This puts Poland in 23rd place in the world in terms of the value of FDI inflow,” said Marek Wąsiński, Head of the Foreign Trade Team at the Polish Institute of Economics (Polski Instytut Ekonomiczny – PIE) as quoted by Polish press agency PAP. According to PIE, the value of announced greenfield projects was USD 24.3 million in 2020, just USD 0.6 million less than Germany.

António Guterres, Secretary General of the United Nations, writing in the preface to the report, said: “Global flows of foreign direct investment have been severely hit by the COVID-19 pandemic. In 2020, they fell by one third to USD 1 trillion, well below the low point reached after the global financial crisis a decade ago. Greenfield investments in industry and new infrastructure investment projects in developing countries were hit especially hard.” 

Isabelle Durant, acting Secretary General of UNCTAD, highlighted that the report shows five factors will determine the impact of investment packages on sustainable and inclusive recovery: “additionality, orientation, spillovers, implementation and governance.”

According to PIE, Poland’s performance is less impressive when it comes to FDI by Polish firms. “The outflow of Polish investments abroad stood at almost USD 2 billion (the most since 2017), which put Poland in the 50s globally. This is evidence of lower activity of Polish enterprises abroad and an unwillingness to expand to foreign markets.” Of note from the report is that Poland’s economy is classed as a ‘developed’ economy. Not long ago it would have been referred to as a ‘transition economy’. 

 

Orlen signs multi-billion contract for new complex to reduce CO2 emissions

State-run oil refiner PKN Orlen signed a contract for c. PLN 13.5 billion with Hyundai Engineering and Técnicas Reunidas to build its Olefin III complex at its main production plant in Płock. 

When the project was announced in May this year, the company gave the following statement: “The Olefins III Complex will be built… to ensure, among others, greater energy efficiency, including a 30% reduction of CO2 emissions per tonne of the product. In view of the rising CO2 prices, this will directly improve the competitiveness of the Production Plant. The project is scheduled for completion in the first quarter of 2024 and production launch is planned for early 2025. The Olefins Complex will cover an area of almost 100 ha, or over 140 football fields. The project will add about PLN 1bn to the company’s annual EBITDA.”

 

Lotos to cooperate with international partners on offshore wind schemes

Gdańsk-based oil group Lotos signed a letter of intent to cooperate in offshore wind farm projects with Baltic Trade and Invest, a unit of German power giant RWE. Areas of cooperation include geotechnical research of the ground, potential provision of installation vessels and an inspection vessel during the wind farm construction and operation phase. The companies also plan to exchange experiences in the field of offshore wind and offshore energy, as well as  industry knowledge about the Polish market.

Wind power is a growing source of electricity in Poland. According to Germany-based data provider Statista, energy production in Poland in 2019 amounted to 172 terawatt-hours (TWh). The largest amount of electricity produced in Poland came from hard coal, at over 77 TWh. In the same year, Poland generated 25 TWh from renewable energy, including wind, biomass and hydropower.

 

Loan market booming

From January to May this year banks and credit unions granted 1,166,500 cash loans, 10.7% more than a year ago. The number of housing loans stood at 108,000, showing a growth of 16.7% to PLN 33.7 billion, the Credit Information Bureau (BIK) reported. In May alone, the number of cash loans granted by banks and credit unions grew by 63.5%, while the number of housing loans increased by 47.8%. The main cause of the significant growth is down to the effects of the pandemic, which caused a decline in housing loans last year.

In its ‘Consumer Lending in Poland’ market report about the sector in 2020, Euromonitor International commented: “While gross lending for mortgages/housing also witnessed a dramatic decline in 2020, it was not as drastic as the decline experienced by consumer credit. However, due to the high level of loan required when purchasing a house, outstanding balance against mortgages/housing continued to rise, while dominating value within overall consumer lending in Poland.”

 

Construction & assembly production growing

The Ministry of Development, Entrepreneurship and Technology (MRPiT) expects construction and assembly production to grow by about 8.1% y-y in June. In May, construction and assembly production for companies employing more than nine people increased by 4.7% compared to last year, Statistics Poland (GUS) reported on Tuesday. The result came above MRPiT expectations, Deputy Minister Robert Tomanek said.

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Written by: Richard Stephens