06/12/10

By Max Clarke


Investors looking to buy a controlling interest in companies operating in Poland's booming economy should pay close attention to the country's privatisation auctions.

The window of opportunity to acquire state-owned small and medium enterprises (SMEs) that have been put up for sale by the Polish treasury closes at the end of 2011. More than 500 companies remain to be sold.

Companies on offer come from a number of different industry sectors, including energy and natural resources, transport, defence and financial institutions.


Opportunities for potential investors

The treasury auctions represent an efficient fast and potentially attractive way to acquire financially stable Polish SMEs, says Tomasz Budziak, Managing Partner of Korycka, Budziak & Audytorzy, a Warsaw-based firm that advises companies on doing business in Poland and a member of Nexia International, a leading worldwide network of independent accounting and consulting firm

Acquiring these formerly state-owned business also provides a potential platform to access Poland¹s growing and well-structured capital market.

The Polish government's programme of privatisation has been a tool of the country's rapid development and reconstruction since the beginning of political and economic transformation in 1990.

Successful privatisations in many industry sectors have given foreign investors access to the Polish consumer and manufacturing markets.

Encouraged by such successes, the Polish government has published details for the privatisation of 802 companies during 2008-2011.

Public auctions are just one method of sale. They are used mostly for SMEs when the treasury decides its primary goal is not so much facilitating foreign capital supply but ensuring a good sale price.


Booming Polish economy

With its population of 38 million inhabitants, Poland is the largest country in Central and Eastern Europe and the sixth largest country in the European Union (EU).

In 2009, over 40 per cent of GDP was generated by the new EU member countries (including Bulgaria and Romania). Poland is steadily reducing the GDP gap separating it from the 15 Oold¹ EU countries. Per capita GDP has risen more than four times, from USD 4.473 to USD 18.072, between 2000 and 2009. Consumer expenditure is increasing at an average annual rate of 5 per cent.

Over the five years following Poland¹s accession to the EU, it has consolidated its position on the European market and reinforced trade relations with its EU partners. During that period, nearly 80 per cent of Polish exports each year have gone to the EU market, which accounts for 60-70 per cent of Polish imports.

Exports to the EU countries, combined with a strong internal market, have made the Polish economy more resilient to global economic turmoil than the economies of most European countries, although exports have declined.

According to European Commission (EC) forecasts (published July 2010), Poland's GDP growth will reach 3.3 per cent in 2011, making it the fastest developing country in the EU.


How the privatisation auctions work

Whilst news and updates about privatisation auctions are available from the Polish Treasury, Tomasz Budziak urges prospective foreign investors to get local, on-the-ground guidance about the processes involved.