Click to watch Dr. Juergen Weber -
Click to watch Dr. Juergen Weber -
euro resources

Need an office in Europe or Eastern Europe? Office suites, meeting rooms, virtual offices, network access

free downloads
EUROPE: "Thinking beyond borders: Management of extended business travelers in Europe" report

EUROPE: "Thinking beyond borders: Management of extended business travelers in Europe, Middle East and Africa" report. 140-page report by KPMG International.

proceed to download

back to index backEUROtalk April,  2007

Polish workers go west, Polish companies head east

While Poland's 2004 entry into the European Union has proven the opportunity of a life-time for an estimated 2 million Poles who have found better paid jobs in western EU states, the resulting muscle and brain drain is forcing Polish companies to head east.So far 1,800 Polish companies have opted to invest in production facilities in Russia and neighbour Ukraine, according to a recent report in Poland's Dziennik daily.

As production costs rise and the labour squeeze in Poland grows, that number appears set to grow.

Leading Polish kitchen appliance producer Amica has announced plans to open a production facility in Velikiy Novgorod, near St Petersburg, Russia by 2009, the newspaper says.

Meanwhile Polish company Inter Grolcin Auto, car seat maker and upholsterer for global auto giants such as Audi, Mercedes, Mitsubishi, Renault, Smart, Volkswagen and Volvo opted to move production to Uzhgorod in western Ukraine, where costs are lower than in a special investment zone in Poland.

The Polish plant will create 2,000 jobs and expects no shortage of employees, Dziennik reports.

Other Polish companies also have plans to head east in search of lower costs and a stable labour force.

Leading furniture producer Forte, pharmaceutical company Bioton and sanitary products maker Bella all have plans to set up production facilities in Russia. Meanwhile, bathroom hardware makers Cersanit and Kolo are eyeing Ukraine.

Worried that the exodus of skilled labour - mostly to Ireland and Great Britain - could thwart production within a few years, Polish companies manufacturing aeroplane parts are also looking east.

Seeing ample opportunity to generate profits, last year Polish firms invested 140 million dollars in Ukraine and 148 million dollars in Russia, according to Dziennik.

While corporate income tax is higher in both Ukraine (25 per cent) and Russia (24 per cent) than in Poland (19 per cent), lower operating costs in the two countries guarantee Polish businesses greater profits.

Experts also agree Polish state coffers have lost billions of dollars in taxes, public health and social insurance payments due to the labour exodus since the country's entry into the EU.

With ever greater numbers of Polish companies looking east, this drain appears set to continue.

But with strong 6. 3 per cent gross domestic product growth projected for this year and government sources revealing dozens of fresh foreign direct investment (FDI) projects are in the pipeline, Poland may yet top the Polish central bank estimate of nearly 15 billion dollars in FDI for 2006.

Japanese companies led the FDI race in Poland last year with global giants Sharp, Toshiba, Bridgestone and Toyota deciding to set up shop.

But foreign investors must beware, the Polish TVN24 news channel reported this week.

The exodus of Polish workers, it noted, was already forcing South Korean investor LG Electronics to consider importing labourers from as far away as China to work in its new LCD television production plant in Kobierzyce in south east Poland.

Source: JurnaloGAI

previous page

go top
search our site



Other articles from the same issue (April,  2007).

The narrowing European pay gap
play read on

Study: Moving Production Abroad Can Have Positive Effect
play read on

Eastern Europe stumbling on market reforms, IMF says
play read on

Outsourcing Hotspot Cools as Wages Rise in Poland
play read on

Boost for easier EU trading
play read on

Suppliers upbeat about EU CO2 proposal
play read on

Snubbed in EU's 50th Anniversary Celebrations, Turkey Prepares Seven-Year Road Map for EU Negotiations
play read on

Talent management: UK firms try new tactics to attract rising stars
play read on

Europe to increase logistics outsourcing
play read on

Euro strength no threat
play read on

Middle East transport and logistics at crossroads
play read on

Turkey's EU commercial ground access threatened
play read on

European new car sales weak in Q1
play read on

Polish workers go west, Polish companies head east
play read on

UK: Working flat out and feeling fed up
play read on

Germany jobs market picks up
play read on

New EU working time rules
play read on

Buy Globally, Think Globally - Implications of Global Economics for Sourcing Professionals
play read on

Europe: Winning the Multi-Channel Challenge - Customers, Channels and Marketing Management
play read on

Eastern Influx: Automotive manufacturing in Central and Eastern Europe
play read on

Our Free eJournals

To visit GlobalAutoExperts Directory, click here.

©2008 | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120