Eastern Europe and Poland new opportunities for Indian Business INDIA EU BUSINESS SUMMIT EUIndia Tra

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Eastern Europe and Poland new opportunities for
Indian BusinessINDIA EU BUSINESS
SUMMITEU-India Trade Relations and Beyond
Dynamics of Mergers Acquisitions and the Role
of Corporate Governance

• Dr. Malgorzata BonikowskaIndia EU Council

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EU NEW MEMBER STATES

• EU Enlargement
• 1 May 2004 accession of 10 new member states, 8
  from Eastern Europe (Poland, Check Republic,
  Slovakia, Hungary, Lithuania, Latvia, Estonia,
  Slovenia).
• 1 Jan 2007 Bulgaria and Romania
• Full participation in the Single Market and EU
  common trade policy
• Relatively cheap labour force
• High interest in attracting foreign investors
• Dynamic economic growth (bigger than in old
  member states)
• Good contacts with India in the past (60-ties,
  70-ties)
• Presence of several Indian companies already.

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EU FUNDS FOR EASTERN EUROPE

• Considerable amount of EU funds for Eastern
  European countries for the next
• 7 years 2007-13.
• EU funds for Poland (2007-13)
• 68 billion Eur - structural funds for
  infrastructure, companies investments, human
  capital, environment etc.)
• 20 billion Eur funds for agriculture and
  fisheries
• EU funds for Bulgaria (2007-13)
• 8 billion Eur

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WHY POLAND?

• GDP growth twice than of Western Europe
• 6,3 in 2007
• 5,0 in 2008 (forecast)
• The highest foreign investments inflow 16.2
  billion USD
• 2nd place Hungary, 6.2 billion USD.
• 80 companies that have invested already in
  Poland are satisfied and ready to invest again.
• Source KPMG, report 2006

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POLAND AS INVESTMENT LOCATION

• 7th position in top 10
• global investment destination
• China 48
• USA 33
• India 26
• Germany 18
• Russia 12
• United Kingdom 11
• Poland 11
• Source European Attractiveness Survey 2007,
• ErnstYoung

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POLAND AS INVESTMENTS LOCATION - sectors

• First place as most preferred location for
  investment in the communication sector.
• Second place as most preferred location for
  investment in the electricity and gas sector.
• Third place as most preferred location for
  investments in agricultural, forestry and fishing
  sectors.
• Growing potential as a location for service
  centers such as financial or call centers.
• Source AT Kearney report 2006

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EASTERN EUROPE HUMAN CAPITAL

• Percentage of population in higher education
• in the 20-29 age group
• Country Percent of the students
• Poland 30,2
• Germany 27,9
• Netherlands 25,5
• Hungary 23,7
• USA 23,4
• Ireland 22,6
• Czech Republic 18,9
• Slovakia 14,5
• Source Education at a glance, OECD 2006

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POLAND HUMAN CAPITAL

• 20 million young, highly educated, multilingual
  people.
• The youngest population in Europe
• around 47 under the age of 35 years 
• 32 under 25 years of age. 
• The young generation of Poles is one of the best
  educated in Europe
• over 55 citizens between the ages of 20-24
  attend higher education courses.
• 2 million citizens attend higher education
  courses

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EASTERN EUROPELABOUR FORCE

• Country Average number of hours actually
  worked per person annually
• South Korea  2351
• Poland 1970
• Czech Republic 1923
• Mexico 1920
• Japan 1829
• Greece 1811
• USA 1809
• Hungary 1802
• Slovakia 1791
• Source OECD Employment Outlook 2006

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POLAND - LABOUR FORCE

• The largest working population in Central Europe
• 24 million people in working age group (61 of
  the population).
• The hardest working people after Koreans.
• Poles work 600 hours more than employees in
  France and Germany.
• Source OECD Employment Outlook 2006
• In the same time - Europe is getting older. By
  2030, the number of working-age Europeans will
  decline by 7, while those over 65 will increase
  by 50.

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POLAND - EDUCATION

• Over two million young people currently study at
  the higher education institutions (half of the
  student age population).
• About 390.000 students graduate every year
• about 240.000 in social sciences, business and
  law,
• almost 44.000 in engineering, manufacturing  and
  construction,
• 20.000 in science, maths and computing
• over 3.000 in specialized language studies.
• A nationwide network of 448 centres of higher
  education.
• 130 state higher education academies including 17
  universities and 18 universities of technology,
• 318 private schools of tertiary education.
• They employ over 100 000 academics half of them
  hold
• a Ph.D. degree.

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POLAND FOREIGN LANGUAGES

• 44 of Polish society is able to communicate in a
  foreign language.
• 33 speak two foreign languages.
• 96.3 of students speak English.
• The most popular foreign language is English,
  followed by German and Russian. 

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POLAND AND ICT

• Polish Information and Communication Technologies
  (ICT) education centers and specialists are
  highly recognized worldwide. 
• Poles are winning in the prestigious Top Coder
  ranking and also achieving high positions in the
  worldwide Google Code Jam Competition and the IBM
  Linux Scholars Challenge.
• Polish IT specialists are employed by the largest
  IT companies in the world
• They constitute an important share of managers
  responsible for research and development (RD)
  activities in multinational corporations such as
  Microsoft and Nokia.
• In Sillicon Valley there are 300 Polish computer
  scientists.
• There are 20 information and telecommunications
  (ICT)  academic centers with more than 2500
  students each and 150 000 IT, computer science
  and
• telecommunication students overall.

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EASTERN EUROPE BEST CITIES RE QUALIFIED STAFF

• Place City Score
• 1 London 1,44
• 17 Warsaw 0,21
• 23 Prague 0,15
• 25 Budapest 0,13
• Source European Cities Monitor 2006, Cushman
  Wakefield

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EASTERN EUROPE LABOUR COSTS

• Labour costs per hour in EUR
• Country Private sector Production sector
• Poland 5,9 5,2
• Hungary 6,7 6,1
• Czech Republic 7,4 6,7
• Slovenia 11,9 10,8
• UK 26,5 26,6
• Germany 28,7 32,0
• Denmark 33,8 32,3
• source Eurostat, 2007

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EASTERN EUROPE - MARKET
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POLAND - MARKET

• Population of 38,16 mln
• the largest market in Central Europe
• the eighth largest on the Continent,
• 30th in the world.
• Polands  market is larger than the combined
  markets of all the other nine accession countries
  that entered the EU together with Poland in May
  2004.

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POLAND SPECIAL ECONOMIC ZONES

• 14 Special Economic Zones created until 2015-17.
• designated areas in which investment activities
  can be conducted on preferential terms.
• Investors permitted to operate in the SEZ can
  benefit from the following
• income tax exemption a form of regional aid
• land at competitive prices
• free assistance in dealing with formalities
  relating to the investment project
• exemption from real estate tax
• grants for employee training programmes
• grants for the creation of new jobs

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INDIA AND EASTERN EUROPE

• Economic growth transforms India into one of
  Asia's star economies.
• The new member states are slowly waking up to the
  vast business and cultural potential of India.
• However, India is still seen by most people in
  Eeastern Europe as an underdeveloped country
  source of cheap and non educated labour force.

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INDIAN INVESTMENTS

• Over 90 of the funds of Indian companies are
  invested in other parts of Asia and the
  developing world.
• The rest is invested in Europe the United States.
• Eeastern Europe has started to be popular after
  2004 (the EU enlargement).

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EASTERN EUROPE - PROBLEMS FOR INDIAN COMPANIES

• Not stable political system
• Unclear law environment
• Restricted domestic policy towards Asians
• Visa problems
• Crossing borders
• Public opinion against cheaper labour force from
  Asia.
• Stereotyped perception of Indians in business.

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INDIA EU COUNCIL

• The India EU Council was established to
  facilitate contacts between India and Eastern
  Europe, also in the field of business
  cooperation.
• It is registered under the European law, as an
  NGO in Poland.
• It operates from Warsaw but has representatives
  in Sofia, Vilnius as well as in New Delhi.
• It acts through its partner companies.

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OFFER FOR INDIAN BUSINESS

• business and investment assistance (legal, taxes,
  social dialog etc.).
• Representation offices management.
• Public affairs (central and local government)
• Training and coaching programs re cross-cultural
  relations and human resources management in a
  different cultural background.
• business trips and workshops.
• Feasibility studies and business plans.
• Financial consultancy (EU funds included).
• Research, analysis and sector dossiers on request
  (environment, energy, tourism etc.)
• Business news and features e-services delivered
  by email
• Business press and internet monitoring.

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LODZ CHAMBER OF COMMERCE

• Reactivated in 1990.
• Its the biggest organisation of economic
  government, associating more than 400 enterprises
  in Lodz region.
• Its associates companies of all trades
• Mainly textiles, construction and farmaceutical
  companies
• 85 SME
• It is a member of Polish Chamber of Commerce.

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OFFER FOR INDIAN BUSINESS

• Representation of business interests in front of
  the governmental and local administration,
• Participation in governmental and EU programs
  supporting business development,
• Contribution to the member companies development
  and support to their activities,
• Assistance in court cases,
• Organisation of trade missions for companies.
• Information services.

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IMPORTANT EVENTS FOR INDIAN BUSINESS IN POLAND
2008

• INDIA EU business workshops in Lodz, spring 2008
  (Lodz Chamber)
• India EU business workshops in Gdansk, May 2008
  (India EU Council)
• India Days (Indian Embassy to Poland).

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INDIA EU COUNCILoffices inWarsaw (Central
Eastern Europe) Sofia (South-Eastern
Europe)Vilnius (Nord-Eastern Europe)www.indiae
u.euemail info_at_indiaeu.eu
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LODZ CHAMBER OF INDUSTRY AND COMMERCE30
Tuwima str.90002 Lódzphone 48 42 250
5450fax [phone]email
liph_at_liph.com.plwww.izba.lodz.pl