Fastener industry in Poland | FASTENER EURASIA MAGAZINE
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Fasteners in Poland in a big growth

Last year I had a opportunity to introduce Polish fastener market to readers of Fastener EurAsia Magazine. Before main trade event in Central Europe (Fastener Poland -8th to 9th of October in Cracov) it is a good time to show how the market in Poland is reacting.

Business in Poland

Still fastener business in Poland is on one of the most impressive growth in Europe. Thanks to good industry result demand of bolts, screws and nuts is growing year by year. In 2018 year industrial manufacturing had a growth of +6,4% and in 2017 it was +7,3%. In World Bank’s report of Doing Buisness 2019 Poland is ranked on 33rd place (on 170 countries) with 1st place in the world for Trade accros boarders (time and cost). Poland is open economy for new investments (in 2017 yr according to U.S. News Poland was 3rd best country to invest in the world, besides Philippines and  Indonesia). Poland’s GDP is growing every year since 1992 with yearly average 4,1% (and 5,1% in 2018 yr). Thanks to that GDP per capita now is at the level of 29 thousand USD and in 1992 it was only 6 thousand USD. Such a stunning success was achieved thanks to the huge entrepreneurship of millions of Poles. In a country where 16,5 million people work (out of 38 million of all inhabitants), 1,5 million active enterprises operate. It is these hard-working people that led the country, in just one generation, to a situation where young people from other countries (mainly from Belarus and Ukraine) are coming to Poland more and more willingly to work (unemployment rate in Poland is below 5%). Small and medium-sized enterprises employ 70% of employees from all companies. Thanks to that economy of Poland is flexible, independent and capable of defending against external crises (when the whole world suffered in 2009, the Polish economy grew at a rate of 2,8%.). What is very important - Poland has its own currency, the Polish zloty (PLN), which allows it to pursue an independent monetary policy to the European Union. During the financial crisis of 2008-2010, the Polish zloty weakened by up to 40%, stimulating the increase in profitability of export.

Industry in Poland

Industry in Poland is responsible for the creating 40% of the GDP and 30,5% of jobs. Southern Poland is more industrialized than the northern one with the largest concentration of factories in the Upper Silesian region (the second, behind the Ruhr District in Germany, the most industrialized region in Europe). According to the Deloitte report, Polish industry is the second most competitive in Europe, after Germany. The most important advantage of Poland over other countries is access to talented and qualified employees. It should be added that for many young and talented people, work in industry is a big ennoblement.

Furniture

 From the point of view of using fasteners, the most important industry in Poland will be: furniture, automotive, aerospace, domestic appliance and construction. Poland is 4th largest furniture exporter in the world (more than 12 bln of EUR). There are 22 000 companies producing the furniture in Poland, most of them small and medium ones. 85% of the total production is going for export. Big brands (such as IKEA) has opened their factories in Poland. Wood industry and good law for forests (You have to plant a new tree before cutting old one) causes that the entire industry based on wood raw material is dynamically growing. Not only furniture had a good growth but also window – door industry (also with plastic and aluminum windows) is at the top position in European Union with export value of 1,8 bln of EUR. What is most important – furniture, door and window is being produced all over Poland, in every region.

Automotive

 Poland do not have own brand (like Skoda in Czech Republic) for the passenger car, but there are two factories for the OEM automotive: Fiat (Fiat Chrysler Automobiles) and Opel (former General Motors, now PSA Group). Production in Poland of cars was 450 thousand of units in 2018 yr. Maybe it is not very impressive, but there are also a lot of TIER-1 and TIER-2 factories for automotive (like for example: Toyota Motor, Valeo, Faurecia, Delphi, Kirchoff). All the passenger cars industry is based in south of Poland, from Cracow on the east to Upper Silesia and Lower Silesia on the west. More OEM’s factories are in the light commercial vehicle and trucks division. There are Volkswagen and MAN. But most impressive is the bus production, with 5300 units produced Poland is 3rd biggest producer in European Union (after Germany and Sweden). Many brands, like MAN, Volvo, Neoplan and Scania has their factories in Poland. But the most impressive (with more than 1500 units produced) is Polish brand – Solaris.

Aerospace

 Aerospace is one of the fastest growing industry in Poland. With more than 100 production companies (with 23 000 employees) 90% of the aerospace potential is based in South-East Poland Aviation Valley. Aerospace industry export generates more than 2 bln of EUR. The most recognizable brand which operates in Poland are Sikorsky, AgustaWestland and Airbus Military. Aerospace industry in Poland is connected mainly to military expenditures.

Construction

 The construction industry is another very large consumer of fasteners. The investment boom has been taking place in Poland for over ten years. New airports and football stadiums have been built all over the country. Only for the new roads Polish Government want to invest more than 40 bln of EUR until 2023 and 10 bln of EUR for the railways until 2021. Because of the air passengers growing more than 20% year to year Government wants to build a new Central Airport with the cost of 10 bln of EUR (with the new railway station and whole road infrastructure) for 100 mln of passangers near the Warsaw.  

Electronics and Domestic Appliances

 Last but not least - Electronics and Domestic Appliances. With the production value more than 16 bln of EUR it is a big consumer of fasteners. In Poland there are huge factories of cooking and washing machines together with refrigerators, such as: Bosch, Siemens, Samsung, Whirlpool, Electrolux, LG, Zelmer (domestic brand) and biggest Polish Amica. For the electronics there are: Dell, LG, Flextronics, Sharp.

Fastener industry

According to mine calculation in Poland there are 1500 companies working in the fastener business. There are dozens of small trading companies (below 6 employees) working in their region. But there are also a big producers with export all over the Europe. Production of fasteners in Poland is shown in table 1 (1 EUR = 4,3). Since 2003 Polish production has triple, now reaching value more than 1,8 bln PLN. Main production is being made for the metal screws, bolts, special products and screws for wood and window.

Table 1: Production of fasteners in Poland in 2003-2018 [PLN million]

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

595

792

890

859

910

946

795

1076

1521

1456

1355

1421

1370

1520

1634

1813

Source: own calculation based on the data of the Central Statistical Office (Statistics Poland)

                       

 Polish production of fasteners cannot fill the domestic consumption. Therefore import is very developed. From 2003 to 2018, Polish import has increased almost four times (look at table 2). The largest import was recorded in 2018, it has already exceeded the value of PLN 3,4 billion. Import is growing and growing every year. Only in 2018 it was almost 12%. And Poland is opening for new markets, looking for a better suppliers in every country.   

Table 2: Import of fasteners to Poland in 2003-2018 [PLN million]

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

893

1167

1163

1482

1647

1693

1581

1889

2298

2163

2189

2434

2588

2836

2868

3442

Source: own calculation based on the data of the Central Statistical Office (Statistics Poland)

 Biggest source of import comes from Germany (look table 3). More than 29% of all fasteners to Poland are coming from the western neighbor. Next is China, Taiwan and Italy. Especially import from China is growing year by year. Only in 2 year time, it has grown more than 80%.  For the 2018 year Turkey was on the 15th place. It means that international trade with Poland is at a low level, and Turkish companies do not properly use the potential of the Polish market. But it is changing very fast. Only or 2018 yr the growth from Turkey fastener business was on 43%, but still there is a lot of work to be done. Potential for trade between Poland and Turkey is at least 25-30 mln of EUR per year in 4 years perspective.

Table 3: Import of fasteners by country to Poland in 2016-2018 [EUR million]

 

2016

2017

2018

Together

% of Polands import

Germany

175,7

192,7

238,1

606,5

29,1%

China

60,1

76,7

112,0

248,9

11,9%

Taiwan

67,6

70,8

81,3

219,7

10,5%

Itay

48,5

55,1

57,4

161,0

7,7%

USA

35,3

37,8

37,2

110,3

5,3%

France

19,9

25,1

29,0

73,9

3,5%

Japan

20,9

20,7

20,6

62,2

3,0%

Czech Republic

16,6

21,3

21,8

59,6

2,9%

Vietnam

17,1

18,4

23,1

58,6

2,8%

Korea

15,4

16,9

18,8

51,2

2,5%

Slovakia

13,3

14,1

19,9

47,3

2,3%

Spain

12,6

15,5

18,6

46,6

2,2%

United Kingdom

11,5

15,4

16,7

43,6

2,1%

Sweden

11,5

10,8

15,1

37,4

1,8%

Turkey

7,5

9,1

13,1

29,8

1,4%

Source: own calculation based on the data of the Central Statistical Office (Statistics Poland)

 Poland is a very important distribution center on the Central and Eastern European fastener market. Since 2003, export has increased four times, reaching a record 1,8 billion PLN in 2016 (table 4). What is worth it noted, Poland is still gaining more markets. Biggest growth was just after the introduction of anti-dumping duties by the European Commission for Chinese fasteners. From 2009 to 2011, Polish exports increased as much as 73%, which in a way can confirm the thesis that many companies in Europe have shifted purchases to Poland. In 2018 yr still a big growth of export (19%). Main markets are Germany, United Kingdom, Czech, Slovakia, Russia, France and Sweden.

Table 4: Export of fasteners from Poland in 2003-2018 [PLN million]

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

359

513

546

594

700

725

617

829

1073

1057

986

1159

1336

1409

1530

1823

Source: own calculation based on the data of the Central Statistical Office (Statistics Poland)

 What is more important that Polish Fastener Business is growing every year and gaining a bigger role in European Union Countries. Now domestic demand is on 5th place in European Union (before Spain and just outside France and United Kingdom). You can see in table 5 that there is a still a huge potential of entering Polish market. Growing every year more than 10% with huge potential to enter all other smaller countries in Central Europe (Poland is a good supplier to such a countries like Lithuania, Latvia, Ukraine, Belarus).

Table 5: Value of: production, trade and domestic market for fasteners in chosen European Union countries in yr 2018 r. [mln EUR]          

Place

Country

Import

Eksport

Production

Together

Domestic market

1

Germany

3 746,8

5 785,5

4 090,1

13 622,4

2 051,4

2

Italy

869,8

1 760,8

2 013,6

4 644,2

1 122,6

3

United Kingdom

1 189,5

776,5

435,5

2 401,5

848,5

4

France

1 551,9

1 382,5

652,9

3 587,3

822,3

5

Poland

807,7

427,9

425,4

1 661,0

805,2

6

Spain

657,7

522,8

465,0

1 645,5

599,9

7

Czech

872,4

501,5

110,8

1 484,7

481,7

8

Romania

523,2

74,7

12,1

610,0

460,6

9

Hungary

475,0

109,3

23,4

607,7

389,1

10

Slovakia

542,5

175,7

22,0

740,2

388,8

11

Austria

747,7

415,4

42,1

1 205,2

374,4

12

Sweden

461,6

325,1

59,5

846,2

196,0

13

Belgium

572,2

444,2

37,3

1 053,7

165,3

14

The Netherlands

858,5

712,9

5,2

1 576,6

150,8

Source: own calculation based on the data of the Central Statistical Office (Statistics Poland), Eurostat and UN Comtrade Database

What the companies in Poland particularly pay attention to is, of course, quality. On the construction market, it is important to have the CE mark or the Polish construction sign B. Without this, it is impossible to handle large investments. The certificate required by the automotive ISO / TS 16949 in Poland has about 500 companies TIER-1 and TIER-2. In addition to quality, the price-availability - lead time relationship is also important.

The culture of doing business in Poland makes face-to-face contact the most important. We have a saying in Poland - no matter what You know but important who You know. This is why – if You want to have a business in Poland – You have to meet right people at the right place.

Dr Marek Langalis
Owner of professional riveting Company – Olfor;
Editor in Chief of Polish Fastener Magazine