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Resolute Poland

World Cement,


The road to success

With the help of EU funding of €67 billion (Poland being the highest beneficiary) for the period 2007 – 2013, the country is undergoing a facelift. Recent market reports confirm that Poland’s construction industry has outperformed the whole of Europe’s for the past five years. While Europe’s construction industries experienced deep recessions in 2009, Poland benefitted from a spike in growth, with data indicating a 9.9% growth that, nevermind Europe, was a global outperformer. The UEFA European Football Championship (Euro 2012) preparations have catalysed planned investment into the transport sector, specifically in airports, roads and railways, plus the all-important new sports stadia that have sprung up in the host cities of Warsaw, Gdansk, Wroclaw and Poznan. Particularly welcome will be the road construction programme, as Poland has lagged well behind most of Europe in terms of the size and quality of its road network, infamously known for choked and potholed single carriageways.

The substantial activity across Poland’s construction sector has positioned the country as a safe haven for construction companies over the past two years. Europe’s largest players, including Skanska, Strabag, Hochtief and Bouygues, as well as the cement producers and building materials suppliers, have experienced increased orders.

There could be more EU money on the way. In June 2011, the Warsaw Business Journal reported that Poland could receive €80 billion in cohesion policy payments if new budgetary proposals are approved by the EC. Much of this could depend on how reforms introduced in November 2011 by Poland’s new government will be successful in shielding the country’s economy from the eurozone crisis.

In July 2011, the UN Conference for Trade and Development (UNCTAD) reported, in its annual survey, that Poland had become the sixth most attractive FDI host country in the world behind China, the US, India, Brazil and Russia. According to the National Bank of Poland, data recorded for the first five months of 2011 indicated that FDI inflows into the country reached €4.2 billion, i.e. 62% of total inflows in 2010, just 2.5% lower than the corresponding period in 2010.

On the right lines

In November 2010, the Polish government adopted the Long-Term Investment Plan for the Railway Sector (WPIK), up to 2013, with an extension until 2015. The European Investment Bank has also announced that it will be lending €120 million for the rehabilitation and modernisation of a 58 km section of the railway line along the trans-European transport axis forming part of the E59 European rail corridor linking Malmo-Ystad-Szczecin-Poznan-Wroclaw-Chalupki-Ostrava. The loan will finance the upgrading of the existing twin-track line from Wroclaw to the border of the Lower Silesia Voivodship in southwest Poland.

Boom time for cement

The surge in Poland’s construction industry has, quite naturally, been great news for the country’s cement manufacturers. Andrzei Balcerek, President of the Board & General Director of Górazdze Cement S.A. said that 2011 was exceptionally successful with cement consumption expected to have reached 18 million t at year end, an increase of some 17% on 2010. “These historic records result mainly from the very high consumption within the communication infrastructure that includes construction of highways and roads, modernisation of the railway network, and the modernisation of airports,” says Balcerek. He also noted that the non-residential construction sector covering shopping centres, hotels, and apartments was another sector that saw significant revival after the regress in 2009 – 2010. In addition to the revival in the construction industry, there was also revival in the power industry where many investments have been made to increase productivity. Balcerek is optimistic about the future: “We anticipate that in spite of many dangers and risks, the Polish economy this year will still be growing, although probably the growth rate will be lower than in 2011”.

Some 80% of the industry is in the hands of the four big players: Górazdze Cement (HeidelbergCement), Lafarge Cement, Grupa Ozarów (CRH) and Cemex Polska, and each of these have been involved in modernisation projects over the past two years in response to the growing domestic demand.

Euro 2012 beckons

Euro 2012 will take place in Poland and Ukraine this summer. As a taster, on 24 July 2011, throughout the day, some 9000 people per hour poured into the new National Stadium in Warsaw, eagerly accepting the free invitation to participate in the ‘Sunday Walk’ through and around the brand new structure. The visitors gazed at the 70 m high central spire, the giant LED screens, tested the seating and generally soaked up the atmosphere of the country’s largest stadium. All of this in anticipation of the opening game on 8 June. Mikolaj Piotrowski, Head of Communications at PL 2012, which has been supervising the infrastructure projects on behalf of the Ministry of Sport, was reported in The Guardian in April to have said, when UEFA chose Poland and Ukraine for the finals: “My friends were happy because they knew that Poland would qualify automatically, but I was happy because of what it means for the whole economy. What is important is the legacy. The whole country needs this modernisation.”

This stadium is one of the biggest sport infrastructure investments in Poland. It will have a seating capacity of 63 000 and underground parking for 1700 cars.

Górazdze delivered building materials for the construction of three of the Polish stadia. It supplied 40 000 m3 of ready-mixed concrete for the foundations, stands, floors, columns and other elements for the City Stadium in Poznan. It also supplied 30 000 t of cement to the onsite concrete operations for the construction of the National Stadium in Warsaw (see also above) and the city Stadium in Wroclaw.

Conclusion

The country is undergoing rapid transformation. As The Economist recently reported: “Poland is the biggest beneficiary of EU money for modernisation, with new roads and other infrastructure projects slowly dissolving an old image of shambolic backwardness.” It remains to be seen if the new government, which recently announced a series of tax, spending and pension reforms designed to ensure financial stability in an uncertain environment, will remain resolute in carrying out its reform agenda.

Sources
Company reports and news.
Reuters.
PMR reports.
Warsaw Business Journal.
The Economist.
Financial Times.
The Guardian.

This article is an abridged version of the full article by Paul Maxwell-Cook, which appeared in the January 2012 issue of World Cement.

Read the article online at: https://www.worldcement.com/europe-cis/10012012/resolute_poland/


 

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