Shortening supply chains for a greener world
Marek Kubik, president of ARMS (Agencja Rozwoju Metropolii Szczecińskiej), talks to the BPCC’s Michael Dembinski about the city’s development strategy, based on attracting inward investment, especially in green technologies, by showing Szczecin and its environs to be a particularly green place in which to do business.
Location is a key factor when making investment decisions. Szczecin and its metropolitan area are perfectly situated to serve Germany and Scandinavia. Thanks to lower land and labour costs, it has already attracted many investors from both countries. But do you see investment – or interest in investing – from UK companies?
Szczecin is indeed a great location for investors from Germany and Scandinavia. But proximity, good communication and lower labour costs are on their own not enough. We’re also winning when it comes to human capital. Good education, knowledge of foreign languages and open minds make companies come here willingly. Joining the British Polish Chamber of Commerce was intended to promote our region more strongly in the UK, among British companies. We are waiting for the first effects of our joint activities.
The West’s over-reliance on the Far East as a manufacturing hub has made its supply chains vulnerable to geopolitical risks. For several years, we have seen industry and logistics move to Central and Eastern Europe to strengthen their supply chains. What are Szczecin and Zachodniopomorskie province doing to attracting this form of investment?
We’re also observing this. Companies that previously invested in the Far East are becoming interested in our region and are decide to invest here. A good example – the German company Kion Polska, which, until recently had a production plant in China. Now it’s built a factory in Kołbaskowo near Szczecin, where it manufactures forklifts. It exports its products all over Europe, and in future wants to ship them all over the world. If you look more broadly, the pandemic, as well as Russia’s invasion of Ukraine, have shaken the global economy. This upheaval has shown us all how important close range is in business. Thinking that we should automatically transfer a part of our production or services to the Far East is already an anachronism.
Another issue, equally important from our perspective, is the subject of ports, including container ports and the development of terminals in the Baltic Sea and the North Sea. I mean here the development of ports in Gdańsk, Gdynia and Świnoujście, as well as the port in Hamburg, which is relatively close to us. By narrowing the perspective only to our region, the development of the port in Świnoujście may provide Szczecin and the region with a significant reduction in the supply chain between Europe and other continents.
Another issue, equally important, is the topic of the Central European transport corridor. The TEN-T network (Trans-European Transport Network) has been very important for our region for years. The idea was also to wrap traditional transport corridors with a network of intermodal transport. The development of railway lines in our region still leaves much to be desired. We believe that there is still much to be done in this field. Together with the mayor of Szczecin and the marshal of Zachodniopomorskie province, we’re determined to improve this situation.
You mentioned the need to improve rail connections. Routes to Germany from Szczecin already exist, but shouldn’t there be more of them? Why is there no train from Szczecin to Berlin, for example? What are the plans to improve rail connections between the metropolitan area and the markets of Germany? How important is rail transport in the overall transport mix used by the logistics sector?
There’s a shuttle service between Szczecin and Angermünde with onward connections to Berlin. However, everything indicates that this will improve. The latest news is that the authorities of Berlin and Brandenburg are finally planning to electrify the railway line and extend seasonal connections to the sea. Deutsche Bahn Nordost has been awarded a contract to improve transport between the German capital and Szczecin. This will strengthen cross-border cooperation in the Euroregion Pomerania, increase attractiveness for tourists and facilitate commuting to work.
The implementation of the contract is to start in 2026. It provides for a new express service on the route from Szczecin to Berlin Hauptbahnhof railway station and Berlin airport. These changes, if actually implemented, will also contribute to the revival of our region. However, in the economic development of Szczecin, we attach importance to all types of transport. From our perspective, in providing services to German companies, especially in its eastern provinces – Mecklenburg and northern Brandenburg – it is also important to have sea port, air connections, cargo and terminal. The railway network could and should be denser, so we will appeal for its further development.
Greenfield or brownfield? Is the Szczecin metropolitan area actively looking to redevelop brownfield sites for new developments, or do you think there are enough greenfields available to meet the long-term potential demand? How do you see the advantages and disadvantages of each of them?
Many industrial plants operated in Szczecin for many years, which, as a result of political changes, were closed in the mid-1990s. Over the intervening decades, they remained undeveloped and did not serve economic development. Recently, due to the dynamic development of the logistics and warehouse sector, these former post-industrial areas have been transformed into logistics parks. A model example is the former Tele-Fonika Kable plant in Załom. It was a brownfield that was almost impossible to sell. However, the owner decided to transform the property. Now we have the largest logistics centre in this part of Europe. On a 43-hectare site, there is now 228,000m2 of warehouse space.
When it comes to the difference between a greenfield and a brownfield, we can certainly see it in the fact that the investor usually prefers to have a clean, developed area, which they will develop at their discretion. Occasionally there are companies that want to develop old buildings, brick tenements, into modern residential, office or apartment buildings. When it comes to greenfield in Szczecin, we have potential. We are considering opening new areas for entrepreneurs.
Szczecin is a city characterized by a low population density – almost three times lower than Warsaw’s – with a wealth of parks and tree-lined avenues, ideal for recreation and relaxation, offering its residents an attractive quality of life. How important is this factor for foreign investors when choosing a location?
Scandinavian capital has been crucial to the revitalisation of our region and its economy. The Scandinavians pay attention to this aspect. The part of Europe where we are lucky to live is characterised by openness of space, focus on work-life balance, here there is a lot of greenery and water. All this also determines that we have many opportunities to spend time, recreation and relaxation.
A typical Scandinavian investor has a list of questions about the proximity of cultural institutions, forests, lakes, sea and aqua-parks as well as the standard ones about the distance to Berlin. Szczecin perfectly responds to this type of demand. Hence the presence of investors in our region.
Offshore wind energy is part of the Polish plan to reduce dependence on fossil fuels. A cluster of large companies from this sector already operates in the metropolitan area – how important is the further development of offshore wind energy for the future of Szczecin? Are there also onshore wind and solar projects developing in the area?
This is a very important point of our activity. We are responsible for attracting investors to Szczecin, creating a good climate for companies and the economic promotion of the city. From the very beginning, we held talks with potential investors, and this dialogue brought concrete results. Vestas, one of the world’s largest wind turbine companies, has decided to invest in Szczecin. This is a landmark decision and has the potential to fill the gap left by the demise of the shipbuilding industry. We hope that the industry related to wind energy will strengthen the economy of Szczecin. This is a completely new opening for the economic development of our city, advanced development, because it is based on modern technologies. The creation of such a plant will generate additional jobs and will significantly affect the business environment and attract suppliers of this company to our region. Gondolas and turbine hubs for windmills will be assembled in the new factory. The plant is to be launched in the second half of 2024 and employ up to several hundred people.
The key element of the investor’s decision to make Szczecin an offshore centre is its location and close access to water. The factory in Szczecin and the installation port in Świnoujście are to be the key elements of the implementation of the first Baltic Power offshore wind farm in Poland. Wind energy is a great opportunity for Szczecin. As experience and scientific studies show, our region has great opportunities and a good location for the development of wind energy.
The Baltic Sea is considered one of the best reservoirs for the development of wind energy. Today, of course, the leaders are the Danes and Germany, but other countries, including Poland, also want to develop in this direction. And in this, as Szczecin, we see our chance.
The onshore and offshore industry has been developing in Poland for a long time and we, as Szczecin, decided to the post-shipbuilding industry, hence the idea to create a strategy: Zachodniopomorskie Offshore 2027 and Szczecin Offshore 2025. We want to act together and show that there are two locations in Poland for the construction of plants producing wind installations other than the Tri-City – and these are Szczecin and Zachodniopomorskie.
The city of Szczecin pursues a consistent policy of promoting the best location for the offshore industry. That is why in 2022 we carried out a number of events in this area, e.g. offshore debates with the participation of experts, participation in the fair in Hamburg, preparation of the Szczecin Offshore 25 Report, defining the potential of this industry in Szczecin, and a conference in Kołobrzeg.
The energy crisis also sent a clear signal to the government and business: we need the right energy mix for our economic security. This will be a leading topic in the public debate for years to come.
The pandemic has made remote work a reality for many. The development of new office projects is on hold as the market assesses long-term demand for retail space. Will this trend help Szczecin overcome the relative shortage of office buildings? How well is Szczecin served with flex-space offices, which are currently popular among investors?
We recognise this trend. At the moment, we are receiving many such enquiries from investors. We have noticed that the office space market in Szczecin has recovered a lot, especially after the pandemic. We know that new office space construction projects are planned in our city. Several new companies have recently entered Szczecin. The activities of ARMS are focused on encouraging and attracting new investors to Szczecin, including the construction of office buildings. We’re doing much in this area to promote Szczecin’s economic potential.