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Manufacturing in Poland is On the Rise and Attractive to Investors

global manufacturing Poland

Although Poland had difficulty transitioning from a communist state-run economy to a western privatized economy in the 1990s, Poland today is fighting hard to compete in the global manufacturing market. In 2015, manufacturing held 19.32% of the share of employment in Poland. Combined with a rapidly growing economy, as well as recent legislation to promote economic growth, Poland is becoming a manufacturing leader.

Fall of Communism

After the fall of communism, Poland found itself in an awkward position. Despite having an abundance of natural resources and an infrastructure to produce consumer goods, other more commercial items were lacking. Polish officials relied on grants from the International Monetary Fund to restart its economy in a more capitalistic fashion to become as attractive to foreign investment as possible.

Financial Incentives

In 1994, the advent of the Polish Special Economic Zones created substantial incentive to start a manufacturing business in Poland. Poland provides corporate tax exemptions and preferential conditions for corporations that operate in certain regions. Since their beginnings, Polish Special Economic Zones have attracted many investors, and have allowed high-profit margins for the companies operating within them. In addition to providing jobs for Poland’s massive skilled and unskilled labor force, they have revitalized communities that would otherwise still be struggling to regain economic stability after the fall of communism.

Polish leaders have not stopped at simply providing special conditions to new start-up companies. On July 2nd, 2011, the Act on Freedom of Economic Activity was passed. This bill simplifies the procedure for establishing a new company in Poland by reducing start-up fees and waiting periods. This act, combined with the Polish Special Economic Zones and the proximity of Poland to Europe and Russia makes Poland a very attractive country for new investors looking to start manufacturing companies.

Manufacturing Resurgence

Manufacturing saw a resurgence in Poland in February of 2016. Despite economists predicting a drop in the country’s PMI, Poland’s PMI saw an increase. Economists attribute this growth to increased employment and exports. Poland’s workforce is also attractive to new investors, especially in the manufacturing industry. Worker wages, are on average, less than half that of Germany’s in comparable jobs. Additionally, there’s a skilled workforce, which is ideal for manufacturing jobs.

Manufacturing Future

What is the future of manufacturing in Poland? Due to the imminent termination of the Special Economic Zone program, an influx of investors are expected to take action before that occurs. Due to a strong presence in the electronics market (Poland makes about 35% of televisions sold in Europe) and the increasing number of exports, Poland’s manufacturing industry is only expected to grow from here. According to the Global Economic Prospects report, economic growth in Poland will increase by 3.1%, up to half a percent higher than last year. Although economists are wary of how the US political climate will affect future growth, it is safe to remain cautiously optimistic.

This article brought to you by The Cleveland Deburring Machine Company. CDMC can provide a deburring solution for gears, sprockets, aerospace and defense, automotive deburring, power transmission, powdered metals, fluid power and custom deburring applications. Our no-charge application evaluation includes a detailed report and process description in as little as 3 to 5 business days. Contact CDMC today for a deburring machine that’s right for you.

 

 

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The Czech Republic Has Been a Manufacturing Industry Leader for Decades

Czech Republic flag

When the Austro-Hungarian empire split up, Czechoslovakia became an independent nation and immediately established itself as a manufacturing industry world leader. Today, manufacturing is still paramount to the Czech Republic. Nearly 40% of all working citizens have jobs in the industry, and manufacturing comprises 35% of the Czech economy.

With a centralized location in Europe, excellent transportation infrastructure, a wealth of natural resources, and trade agreements linking the East and West, it is no wonder Czech Manufacturing attracts a lot of direct foreign investment. It’s the perfect trading buddy for Germany, Russia, and the rest of Europe.

Mining:

Before we can talk about any other manufacturing industry sector, we must pay homage to the resources that make it all possible. The Czech lands have a wealth of natural resources, mostly including raw mineral deposits. Unfortunately, Iron ore must be imported. However, black coal and limestone mines in the Ostrava region make manufacturing in the homelands cheaper and easier. Leading mining companies include Arcelor Mittal, Evraz Vítkovice Steel, and Třinecké.

Automotive:

As with much of central Europe, the most important sector in Czech Republic manufacturing is the automotive industry. More the 50% of all Czech exports are automotive products, and the industry employs more than 120 thousand people. The largest producers of automobiles in the region are Škoda Auto (Volkswagen group) TPCA (Toyota/PSA joint venture) and Hyundai Motor Manufacturing Czech.

Chemicals:

The Czech chemical sector consists of various niches including basic chemistry, crude oil processing, pharmaceuticals, rubber production and plastics. Since chemical production requires raw materials, water and energy sources, and qualified human’s resources, the chemical industry is often considered an economic indicator. With these ingredients in place, chemical manufacturing dominates the northern Bohemia region, along the Morava River. Major contributors include Chemopetrol Litvínov, Paramo Pardubice, (Petrochemical production) Spolana Neratovice, Lovochema Lovosice, (Basic Chemicals), Kaučuk Kralupy nad Vltavou, and Barum Otrokovice (Rubber industry).

Barriers:

Despite having such an excellent infrastructure and capacity for manufacturing, foreign investors and workers still have difficulty breaking into the Czech market. This is partially due to the language. Although English is widely spoken in business, the saturation of English speakers is considerably lower in the Czech Republic than other European nations. Moreover, Czech is a considerably difficult language to learn.

This article brought to you by The Cleveland Deburring Machine Company. CDMC can provide a deburring solution for gears, sprockets, aerospace and defense, automotive deburring, power transmission, powdered metals, fluid power and custom deburring applications. Our no-charge application evaluation includes a detailed report and process description in as little as 3 to 5 business days. Contact CDMC today for a deburring machine that’s right for you.

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Hungary Has Been Building a Manufacturing Empire in Europe

Hungary Manufacturing

40 years ago, Hungary was not even a spot on the map for the manufacturing community because of their lack of resources and small economy. However today, Hungary is a key trading partner for Germany, France, Italy, Austria, Romania, Slovakia, Poland and the Czech Republic. Each year more companies choose to expand to Hungary strategically. Multi-million dollars, multi-national enterprises like Knorr-Bremse, Thyssen-Krupp, Suzuki, Bosch, and Mercedes-Benz all have a strong presence. What is causing this manufacturing explosion? A centralized location, low production costs, skilled workers and most importantly, political incentives for large firms.

Government Incentives

The primary contributor to this Hungarian manufacturing boom is the government incentive for foreign investment. Refundable and non-refundable incentives are available to investors with great potential to create jobs, level wealth inequality, and drive innovation through research. The Hungarian government provides support opportunities for investments greater than EUR 10 million. These incentives include cash subsidies, tax incentives, low-interest loans, and land for free and reduced prices. Such offerings are hard to refuse for multi-national companies looking for a centralized location in Europe.

Skilled Workers

The Hungarian workforce is known for being well-educated, highly skilled, and hardworking. They tend to work long hours and take fewer vacation days than other European workers. In addition, about two-thirds of the labor force has completed a secondary, vocational, or technical degree. In particular, Hungary produces great talent in IT, engineering, mathematics, economics, and physics—the fields that fuel technology and innovation. Lastly, nearly 90 percent of graduating students speak fluent English, which makes for easier acquisition and transition.

State of the Art Electronics

Electronics manufacturing and research is another key driver of innovation and economic growth. As the largest producer of electronics in Central and Eastern Europe, Hungary is a leader in information security, mobile technology, and related research. This sector employs around 112,000 people and produces 26% of the region’s electronics. It is home to six of the top ten electronic manufacturing services including Foxconn, Sanmina, Zollner, Flextronics, Jabil, and Videoton. Their power in electronic manufacturing is a partial contributor to the growing economy.

Competitive Automotive

Automotive manufacturing is a core industry which generates nearly 21% of all Hungarian exports and employs more than 100,000 people. Stakeholders include Mercedes-Benz, Audi, Suzuki, Opel, and Daimler. Győr is even home to the second biggest engine factory in the world. The automotive sector is so fortified that a few smaller, local automotive companies have emerged and become stable among the giants. With a strong presence in auto-production, many educational institutions have partnered with the auto sector to establish research and development.

Having all the components to drive manufacturing—investment, location research, and ideal workers—Hungary’s efforts are both massive and intensive and thus far have shown great results in just a couple of decades. (Although still far behind the top global manufacturers like the United States, China, Japan, and Germany.) They’ve overcome their lop-sided economy and lack of resources, and will likely soon be competing in the big leagues as more and more corporations secure their plants in central Europe.

This article brought to you by The Cleveland Deburring Machine Company. CDMC can provide a deburring solution for gears, sprockets, aerospace and defense, automotive deburring, power transmission, powdered metals, fluid power and custom deburring applications. Our no-charge application evaluation includes a detailed report and process description in as little as 3 to 5 business days. Contact CDMC today for a deburring machine that’s right for you.

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