In the Eastern Direction

One of the basic rules of business states, that the prospective profits from an investments always rise with the risk carried by it. Nowadays, Western enterprises escape risks, while Polish companies are not afraid to invest in areas that are still mostly unknown and considered as risky such as the member states of CIS (Commonwealth of Independent States) or China.

China is a promised land for many businesses – cheap labour together with a vast internal market. Cultural differences and the language barrier are however making it harder to invest in that country. Polish companies are nevertheless increasing their operations there.

Among first significant Polish investment projects in China was the opening of a roof support factory worth 10 million USD and located in the Shandong province. The investment’s shares are divided equally between a Polish corporation called Kopex and a local partner.

In the same year in Shanghai Toya, a company based in Wrocław, established an enterprise named YATO China, which is an office and distribution centre for Toya’s products on the Asian markets.

Much earlier, Selena Group had taken interest in the Asian markets, although the first investment of this particular business had been unusual, because it entered South Korea. In 2001 Selena joined a South Korean venture called Hamil Selena Co. which manufactures polyurethane foams and distributes them throughout Korea and other Asian countries. In 2008, Selena Nantong Building Materials Co. Ltd. was established in the special economic zone Nantong near Shanghai and launched construction of a new factory for the production of fitting foams, sealants and glues. The plant has reached its maximum production capacity in 2011.

Obviously, such expansion does not necessitate establishment of a factory. An excellent example of this solution is Clarena, as the company has chosen to distribute its cosmetics in Asia via a Hong Kong partner in 2010.

There are more possibilities in the East than China, like the member states of the Commonwealth of Independent States. It includes majority of the former Union of Soviet Socialist Republics, so not only Russia but mainly other markets, much less explored by Western capital. Mostostal proves the point by successfully obtaining construction contracts in the region.

Due to the geopraphical location of Poland, many of our businesses invest in Ukraine and Belarus. Apart from the already mentioned Selena and Clarena, also Impel Group offers its services in Ukraine and one of the most popular Ukrainian internet communicators (Talky3D) belongs to the same type as its most famous Polish counterpart Gadu Gadu.

Kazachstan is a very interesting market as well. Most people from Poland associate this country with exiles and Mrs Stanisława from the popular TV drama “Klan”. In fact it is much more than that – a market of 15 million consumers, with rapidly increasing wealth thanks to the profits generated by the mining industry, mainly oil and natural gas.

An investment widely commented by Polish media was the one carried out by Petrolinvest, which acquired some of the oil deposits in Kazachstan. More and more Polish businesses enter this difficult market nowadays. Since 2002 Selena Group distributes construction materials under its own brand and the pharmaceutical concern Hasco-Lek has registered several of its meds and launched the sales.

Since the Poland’s accession to EU the western direction of expansion became a priority for many Polish companies. Yet, it is those enterprises that look towards the virtually virgin territories in the East that have a real chance of extraordinary profits.