Polski Sklep

Eastern Europe continues to be a region on investor’s lips, with Poland maintaining its position as the most desirable country in the area. The packaging companies in the know are nurturing close links in one way or another, thanks to the massive benefits of doing business in the region.

Poland is a favourable location for entrepreneurs, with the government offering many incentives for entering the rapidly growing economy. It's a system that is working and in 2006 foreign direct investment in Poland amounted to u13.9B.

The Polish market is a great place for Clondalkin. It offers us consistently good rates of sustainable growth through the ongoing investment in the region, particularly through the steady flow of manufacturing relocation. Poland also offers good transport links to the rest of mainland Europe, which is one of the reasons why so many companies are moving to the region.

We moved into our base in Lublin, 175 km south east of Warsaw, following the relocation of one of our major UK customers.

By establishing a manufacturing site close to our client’s own new facility, we were able to cement our relationship, whilst also providing us with the secure base that we needed to develop further in the region. As with all businesses, we want to grow and develop, and the added security provided by having a large customer requirement prior to taking the first step was a massive bonus for us.

Initially, many German companies relocated into Poland, particularly in the western region, to take advantage of tax incentives and the development of the 14 Special Economic Zones. We entered the market in 2003, quite early in comparison to some. Since then, it’s almost become the norm to have facilities in the CEE region, with it now being more of a requirement than an innovative move. And it’s not just manufacturing that has seized the opportunity, the retail sector looks very much like Western Europe these days. Tesco, for example, has 280 sites in Poland, French retailer Carrefour has 349 stores and Ikea has seven large outlets.

For us, Eastern Europe offers a very logical way for us to develop our operations in line with customer demands, as it allows us to deliver the same service levels and lead times as customers are used to, and indeed expect of a key supplier.

As a group, we’ve observed the increasing activity in both China and India but, at this time, we feel that the compromises and pressures that our customers and ourselves would be subject to, in terms of logistics and lead times, would not be conducive to effective business. Put simply, once we move out of the EU we become exposed to issues and regulations that are not within our control and which can impact directly on our overall performance, whereas Poland is located in a free economic zone in the heart of Europe, thus allowing us to efficiently supply our clients throughout the EU. Moreover, it also allows us to develop new clients located in Central and Eastern Europe, by virtue of our improved logistics and competitiveness.

The continued increased demand in Poland and the surrounding region has enabled us to recently announce a multi-million euro investment plan for our Polish facilities that will increase both our capacity and capability. During 2008, both of our Polish operations – Boxes Prestige Poland (folding cartons) and Harlands Poland (self-adhesive labels) – will see direct investment in both manufacturing equipment and facilities.

The two Clondalkin brands, which share a joint production facility, will benefit from a 2,500m² expansion of the site. Investment in equipment will effectively double Harlands’ production capacity, along with a 50 per cent capacity increase for Boxes Prestige, and both companies will add new printing presses and ancillary equipment.

There is no doubt that Poland and the CEE region as a whole remains a key growth area for the packaging industry in general, and there is no doubt that it will also continue to be a key development area for the Clondalkin Group.