Businesses are booming
Companies in the plastics sector are profiting from the good times as well. Plast-Box, a manufacturer of plastic packaging based in Słupsk, Pomerania, in the north of Poland, generated consolidated revenues of zł171.5m (€40m) in 2018, an increase of more than 7% over 2017 revenues. The group closed 2018 with a net profit of zł1.9m (€0.44m) and earnings before interest, tax, depreciation and amortisation of zł12.9m (€3m). A significant part of the sales revenues of Plast-Box was generated on foreign markets. In 2018, export sales accounted for 61.2% of consolidated revenues and amounted to zł105m (€24.48m), up 6.8% compared to the preceding financial year.
Domestic sales were also robust in the past year. Group revenue was zł66.5m (€15.51m), an improvement of 7.7% compared to the domestic sales recorded in the previous year.
“We have the conditions to further increase sales dynamically. We build commercial, operational, and financial potential for further growth,” said Grzegorz Pawlak, president of the board at Plast-Box. He noted that in late 2018, the company expanded its smaller packaging production capacity by acquiring Urzulin, Grodzisk Mazowiecki, central Poland-based Stark Partner. “This extends our competences on the increasingly competitive packaging market and in a measurable manner allows us to build additional value of the group,” said Pawlak, adding that this widening of the product portfolio should open new markets.
Poland’s biggest plastic producer, Basell Orlen Polyolefins, based in Płock, central Poland, is also looking ahead at new opportunities. The company appointed a new CEO and president, Laurent Hautier, in February 2019, who noted: “BOP is one of the largest and most modern polyolefin sites in Europe. We will be strengthening the company’s position,” she said. The company currently runs a high-density polyethylene (HDPE) and a polypropylene (PP) installation, with respective capacities of 480,000 tonnes/year based on the Spheripol process and 320,000 tonnes/year using Hostalen equipment. It also has the capacity to produce 100,000 tones/year of low-density polyethylene (LDPE.
Room for growth
Of the over 300 largest plastics processing and manufacturing companies in Poland, more than 65% are controlled by Polish capital according to PlasticsEurope Polska, the Polish branch of trade association PlasticsEurope. And there is plenty of room for growth, on the domestic market alone. In Poland, at 75 kg per capita, plastics use is still lower than the western Europe average of 90kg. Experts see the plastics market in Poland growing faster than the European average in the coming years. According to the Central Statistical Office of Poland, employment rose at companies producing plastic and rubber products by 6.2% in 2018 year-on-year, while production in the Polish plastics and rubber sectors combined was up by 9.8%.
Plastics consumption has been rising in Poland, with an increase of 9% in 2017 over 2016, compared to an average of 3.5% in Europe, says the office (Główny Urzad Statystyczny, in Polish). This growth has been boosted by the continuing strength of the Polish economy in general, which has witnessed 27 years of uninterrupted growth. According to World Bank data, Poland’s projected GDP growth for 2019 is 4%.
The packaging sector is the most popular client for the Polish plastics industry – responsible for 32.5% of domestic demand. The construction sector accounts for 25%, a proportion that is growing, and the automotive industry – also growing – consumed about 10% of plastics production in the country in 2018.
Moreover, according to the statistical office, the production of plastic products in Poland is among the country’s most rapidly growing sectors in recent years, outperforming both pharmaceuticals and chemicals.
And it is not just employment and production seeing growth. Główny Urzad Statystyczny data shows that producers of plastic and rubber products are willing to invest in production. In 2017, investment was up 7.5% – in fact every tenth złoty invested in industrial processing in Poland came from plastics producers – an impressive record.
Indeed, one of the largest plastics sector investments will prove extremely important for not just Poland’s plastics industry, but for the entire national economy over the next five years, namely Polish polymer producer Grupa Azoty’s E1bn ‘Police Polymer’ project.
The company, headquartered in Tarnów, in the south-east of Poland, is building a 437-kilotonne-per-annum propylene and polypropylene (PP) complex at the port city of Police in northern Poland. Work is due to begin on the project in 2019 and commercial production is due to start towards the end of 2022, with trial operations due to start during the second quarter of that year.
Grupa Azoty president Wojciech Wardacki, said the investment will significantly shape the future of not just the Polish plastics industry but the country’s whole economy.
He said: “The project is of strategic importance for the Polish economy. At present, our country is a polypropylene importer, and after the completion of our project we will be an exporter.”
Wardacki added: “We would like Police Polymer to be the starting point for the further development of Grupa Azoty, as well as the Polish chemical sector,” he noted. As Grupa Azoty will be using the Baltic Sea as its main transport route, this will reduce supply chain distances for European customers.
The Polish plastics sector also benefits from playing host to one of the most important events for Europe’s plastics processing sector – Plastpol, staged annually in Kielce, in south-central Poland. The exhibition, which in 2018 was held across seven halls and 34,000 square metres – saw nearly 800 exhibitors and representatives from around 39 countries attend the event, which is organised by Targi Kielce SA.