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Within 18 months from the initial briefing the company was established and operational in Poland
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Foreign Direct Investment into Poland by a British International Company
The client was a manufacturer and distributor of innovative high temperature heating, insulating, and electronic control systems solutions for the major appliance industry and whose customers included GE, Electrolux, Whirlpool and LG.
Our Challenge
The client’s strategy included expansion into Central Eastern Europe (CEE) and they were aware that if they did this in an EU country there would be the possibility of lower costs, grants and subsidies. The client required a clearer idea of the various alternatives and consequent advantages.
What we did
The first task was to work with the client on the selection criteria on the potential location for the new manufacturing facility in CEE, which included:
- Growth in the country
- Foreign direct investment criteria
- Interest rates
- Exchange rates and their relative stability
- Wage rates and inflation
- RPI
- Political risks /exposures
- FDI government agencies to understand availability of grants or subsidies available from European Union and country.
Following presentation of our report the next steps were:
- Visit countries with the MD
- Check the laws on FDI in each country
- Hold meetings with local Chambers of Commerce
- Hold meetings with other similar UK companies and their MD / CEO in each country
- Report on the suitability of each location.
After review the final recommendation on the country was Poland. The next step was to review locations in Poland and set up meetings with local government agencies to understand local issues and grants.
The selection criteria were:
- Unemployment rates
- Ability to recruit bi lingual senior and mid management
- Attractiveness of area to ex-pats
- Total cost of employment- operatives/supervisors/managers
- Local building/employment/training grants
- Proximity to key customers
- Proximity to airport with direct flights UK
- Road communications
- Universities with relevant research capabilities
- Trucking routes
- Local packaging
- Environmental risks relating to site
- Provision of utilities
- Expansion of potential (including site and utilities)
- Local area and site security.
Next we concentrated on the legal, financial and operational aspects of setting up the company in Poland including:
- Company registration
- Opening of an account at a Polish bank
- Getting the required permissions and licences
- Registration in the tax office for VAT
- Consultations with other authorities and institutions
- Public announcements on the planned decision
- Application to government / local authority for financial support for creation of new jobs.
The construction of the factory followed and included:
- Negotiation of terms with the constructors for the building with MD
- Technical conditions of infrastructure connection
- Various reports on the impact on the environment
- Construction design with client
- Consultations with other authorities and institutions
- Public announcements on the planned decision
- Decision regarding site development given
- Application for construction permit
- Monitoring the construction.
Staffing the company in Poland involved:
- Seek Plant Manager
- Interview for plant manager with MD and key staff in UK
- Arrange contract for country manager with lawyers in Poland
- Recruit Agency to help with key positions
- Meetings with local human resource and government agencies for white and blue collar staff with MD.
The Outcome
Within 18 months from the initial briefing the company was established and operational in Poland with a lower cost base and customers who saw this move as a demonstration of their commitment to the business relationship.
Mr Kevin Roberts, the MD commented. “.........provided valuable support during the pre-operative phase of establishing our facility in Poland. Andrew Blatiak is a fluent Polish speaker........his knowledge and experience of working in Poland was excellent. He was able to introduce a wide network of contacts including local authorities, government agencies, banking and universities. I am happy to recommend his company to anyone considering similar plans.”
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