Krakow has attracted foreign direct investment worth
billions of dollars
Forty-million
Poland
is situated in the very center of Europe, it has a long
border with Germany, and the Polish economy is integrated
with the Western European markets as the country has joined
the European Union in 2004. At the same time Poland’s labor
costs stay at a third of Germany’s. Small wonder foreign
investors, from multinationals to fairly small enterprises,
have flocked in the recent decades either to buy a
privatized company here or to set up a brand-new one. The
more so that Poland boasts a sizeable and fast-expanding
internal market of its own, enjoys a healthy GDP growth year
after year, and remains a model of political and economic
stability in the region. And the country does encourage
foreign investments.
If you want to jump the bandwagon and invest in Poland,
Krakow appears a particularly good place.
Advantages of investing in Krakow
Krakow has just a million inhabitants or so in its immediate
metropolitan area but some 8.5 million live within a radius
of 100 km. And the city is situated at Europe’s crucial
crossroads between Germany and Ukraine and between
Scandinavia and the south of the continent, with the
country’s best road and rail links, and
Krakow
international airport
second busiest in Poland after the Warsaw one.
In Krakow practically everything costs much less than in the
bursting capital,
Warsaw.
It applies to living costs as well as, say,
office space
and notably labor. The right staff is also far more readily
available here than in skills-hungry Warsaw, while Krakow’s
25
institutions of higher education
produce 30,000-plus graduates a year. At the same time the
city’s various charms, the quality of life, cultural
robustness,
fine restaurants,
etc, are incomparable. And crime in Krakow is the lowest
among Poland’s major cities (the country as a whole being
much safer than the USA, to say nothing of Russia).
The downside, notably for major
corporations,
is greater distance to the Warsaw corridors of power and the
lack of the critical-mass concentration of big businesses.
Krakow's FDI
In the years 1989 to 2005 foreign direct investments in
Krakow amounted to US dollars 4.67 billion. The figure
translates into 6,177 dollars per capita.
Americans invested more money in Krakow than any other nation
but German FDI projects proved more numerous.
To name names the following are foreign companies that invested
the biggest money in Krakow to date:
Hypo-Vereinsbank (Germany) paid
$1,011 million for the BPH bank.
Philip Morris (USA) paid $521 million for the
Krakow Tobacco Plant.
Pliva
(Croatia) paid $209.8 million for the Polfa Pharmaceutical
Plant.
Mittal Steel Company (UK) paid $202.1 million for the
Huta im. Tadeusza Sendzimira (HTS) Steelworks and its
affiliates.
RR Donnelley&Sons Co.
(USA) invested $123.7 million to build printing plants.
Dutsche Bank (Germany) paid $119.5 million for the
BWR Bank, GTC Korona office block, and GTC Galeria Kazimierz
shopping mall.
Carrefour
(France) built three
shopping centers
for $98.5 million.
Fortis Bank (Belgium) paid $97 million for the
Pierwszy Polsko-Amerykanski Bank SA.
HGA Capital / HSH Nordbank (Germany)
invested $93.7 million to build Galeria Krakowska shopping
mall.
ECE Projektmanagement (Germany) invested $93.7
million to build Galeria Krakowska shopping mall.
Tesco
(UK) invested $92.7 million in its Polish subsidiary, the
Tesco Polska S.A.
Mid Europa Partners (USA) paid $88.6 million
for the Aster City Sp. z o.o. cable television.
Rumeli Group (Turkey) paid $79.1 million for
the Nowa Huta Cement Works.
Metro
(Germany) invested $77.7 million to build the M1 shopping
center and the Makro Cash & Carry hypermarket.
Accor
(France) invested $65.9 million in hotel chains.
Klepierre
(France) invested $63.8 million to build the Krakow Plaza
shopping mall.
Kardan Group (Israel) invested $60.5 million
in the Galileo office block, and GTC Galeria Kazimierz
shopping mall.
Plaza Centers
(Israel) invested $50 million to build the Krakow Plaza
shopping mall.
BP
(UK) invested $48.5 million in its Polish subsidiary, PB
Poland Sp. z o.o.
Sheraton / Starwood Hotels and Resords (USA)
invested $43.2 million in the Sheraton Krakow Hotel.
Ikea
(Sweden) invested $40 million in the Ikea shopping center
and the Cracovia Business Center office block.
Tips for foreign investors.
1. You need a lot of patience in dealings with bureaucracy – in
Krakow as everywhere.
2. A knowledgeable native helper with connections can prove
pretty instrumental in cutting through the red tape.
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