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47 (142) 2021
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Looking beyond Brexit - inward investment to Poland

Business is great in Łodz Special Economic Zone

By Mateusz Słonecki, press spokesman at Lodz Special Economic Zone
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Indicators showing the results of economic cooperation between the UK and Poland are constantly growing. In the years 1995-2018, trade between the countries increased five-fold. Since the transformations initiated in 1989 until the end of 2017, British companies invested nearly 48 billion PLN in Poland (around £9.6 billion). And they are not going to stop, the best example of which are the recent investments in the Lodz Special Economic Zone (Lodz SEZ), recognised as third in the world and first in Europe by fDi Magazine.

British companies play a significant role in many sectors of the Polish economy. The statistics included in the Deloitte report from 2019 examining economic ties between the UK and Poland show that the cooperation has visibly tightened over the years. There are over 400 British companies successfully operating in Poland, and more are considering entering the Polish market. It is particularly attractive in connection with the tax exemptions offered by the Lodz SEZ in return for locating the investment within its borders. This opportunity was used by the British company Johnson Matthey, which decided to locate a new investment in the Lodz Zone in central Poland, near Konin.

“It’s an important investment for the region and for the Lodz SEZ. The automotive industry is developing rapidly and is investing heavily in modern technologies related to the production of electric cars. The Johnson Matthey factory, currently under construction near Konin, will produce advanced materials for batteries. The choice by such a large investor of the location in the Lodz Zone shows that we have prepared great investment areas, the location is considered strategic, and there’s a very good communication network, facilitating logistics” says Marek Michalik, president of the Lodz SEZ.

Centrally located in Poland, near the junction between the main north-south and east-west motorways, Lodz is well-placed to serve wealthy EU markets across central and north-western Europe.

Another British investor, Hellyar Plastics, is also developing near Lodz – with over 50 years of history and experience in the production and trade of modified polypropylene-based plastics. The decision to invest was made by the company's management in 2017, and its implementation took less than two years.

“We started operating activities in September 2019 and is being carried out in accordance with our multi-year plans. Today the plant works and produces compounds for many customers, both in Poland and abroad. Further projects are being implemented to develop production capacity, employment in the company is increasing and we conduct research on new engineering plastics - says Wojciech Waryszewski, managing director of Hellyar Plastics Polska. “Thanks to the experience of our crew, we can offer our customers alternative, more modern, lighter and cheaper products. A combination of British business culture with Polish creativity brings great results,” he says.

To meet investors expectations, the Lodz Zone prepares dedicated investment plots for them. These are connected to the municipal utilities, with the possibility of adjusting the water infrastructure, appropriate power of electric or gas connection. The 40-hectare “Ksawerów” complex bordering Lodz is of particular interest. Global brands such as Nippon Seiki and Miele have located their locations there. The German manufacturer of household appliances also uses a start-up offer for investors. The Lodz Zone focuses on technology development and gives its investors the opportunity to cooperate with startups. Miele uses solutions designed for their factory in 5G technology. This is the offer for which the Lodz Zone was awarded by experts from fDi Magazine (from the Financial Times group).

“We use the technological potential of start-ups and combine it with the experience of large investors. The cooperation results in the creation of ready-made innovations dedicated to the investor that accelerate their development. Building innovation based on 5G technology allows us to develop competitive advantages that introduce a revolution on the market of new technologies and accelerate the transformation of Industry 4.0,” says Agnieszka Sygitowicz, vice president of the Lodz SEZ.

The zone also has investment areas in Lodz itself, at the railway terminal from which freight trains depart for China. In addition, it builds modern warehouse and industrial halls with ramps for trucks and office facilities, ready for rent. Investing in the Lodz SEZ means an income tax exemption depending on the amount of investment outlays and the investor who incurs them. Large companies can count on 35% of the investment value, medium-sized firms 45%, and small- and micro-firms as much as 55%.

“Exemption from corporate income tax is a very attractive incentive for everyone running a business. It is particularly important in the first years of running a business, when the costs related to starting a business are high and you need to get straight ahead as soon as possible,” explains Wojciech Waryszewski of Hellyar Plastics Polska. Poland, apart from being a large European market in its own right in terms of consumption, is a great location for reasons of technical and communication infrastructure, local governments open to new investments, creative people, hungry for success and wanting to raise their standard of living. And new investments provide such opportunities. However, people, not only young people, want to take advantage of this opportunity,” says Wojciech Waryszewski.

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