» Invest in WroclawCity of Perspectives

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Invest in WroclawCity of Perspectives

CONTENTS

Mechanical engineering in Poland

Lower Silesia and the Wroclaw Agglomeration as a Location for Investment

Development Prospects

Investment Incentives

The Regional Labour Market

Case study - Bombardier Transportation

Case study - Alstom

The publication prepared in cooperation:

supporting decision makers QQQ2

Introduction

Wrocław is a unique and dynamic city, making an excellent place for investment and business development. The Wroclaw Agglomeration's assets have not only been long appreciated by foreign investors, but they also have become a foundation for growth and global expansion of many well known Polish companies. However, the contemporary dynamics of change results in emergence of new needs, making information an increasingly valuable business resource. Both foreign conglomerates and domestic businesses seek useful information, indispensable in successful investment related decision-making. New economic conditions require undertaking non-standard action, which led to originating the Invest in Wroclaw project (www.invest-in-wroclaw.pl). Many risk factors can be avoided, if one has a better understanding of sector-specific determinants and the development prospects of their own line of business as well as related industries. This was the rationale behind studies of the Wroclaw Agglomeration's priority, strongly developing sectors, including the following ones:

Automotive industry. Electronics, Chemical and Pharmaceutical industry. Mechanical engineering, IT, BPO, Food industry.

We hope that the free of charge sector analyses will facilitate decision-making not only for potential investors, but also the companies already operating in the area of the Wroclaw Agglomeration. Integration of information from different sources is supposed to contribute to establishing co-operation between suppliers, subcontractors and recipients from diverse lines of business related to sectors which are priority for Wroclaw's development. Due to improving market transparency and increased ease of contact with businesses, the resulting benefits may be also enjoyed by local administration units, and most notably local communities. By combining all of the elements mentioned, it becomes possible for the whole Wroclaw Agglomeration region to increase its growth dynamics and attain a competitive advantage. We hope that in this way we are redefining the standards of support for business development.

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Chapter 1 I Wrocław Agglomeration Sector Analyses - Mechanical Engineering

Mechanical engineering in Poland

The degree of growth of the machine engineering sector is a yardstick of the whole country's level of development as, apart from the fact that devices manufactured are exported, its products are widely applied in other industries. Consequently, the condition of the mechanical engineering sector and its technological advancement impact the development of other industries, and therefore - the entire country's growth. Since 2003, Poland has seen rapid development of the mechanical engineering sector, with annual growth levels of 10%. The situation significantly deteriorated with the advent of the global economic downturn, which brought about a drop in the industry's turnover in Poland. After the period of recession, the value of production sold fell to 22.3 billion PLN in 2009. Forecasts for the coming years, however, assumed a gradual recovery and further development of the sector. The expectations were reflected by the statistical data for the subsequent years, according to which the value of the industry's production sold amounted already to 23.9 billion in 2010 , to reach as much as 29.4 billion the following year. The positive, rising trend was maintained also in 2012, whose result was the increase of production sold by about 11% up to the level of 32.7 billion. Thus, the actual growth of the mechanical engineering sector in the years 2009-2013 exceeded the previous forecast. Detailed information with regard to the Polish mechanical engineering sector's sold production throughout 2011-2013 is provided in table 1.

01. Sold production in the Polish mechanical enigeering industry 2011 -2013 (M PLN)

Value o f p roduction so ld o f the m ost

im portant m anufactu re in m illions o f PLN2011 Share % 2012 Share % 2013 Share %

M ach ines fo r agricu lture and forestry 4 066 13,8 4 741 14,5 4 713 14,2

M ach ines fo r m in ing and construction

industry3 773 12,8 4 526 13,9 3 689 11,1

Engines an d turbines, exc lud ing aircraft, car

and m otorcycle engines3 452 11,7 3 602 11,0 3 951 11,9

Industrial coo lin g and ventilation devices 3128 10,6 3 225 9,90 3 502 10,6

Bearings, gears, rack -an d -p in io n

transm issions, p o w e r transm ission 3 040 10,3 3159 9,70 2 938 8,9

com ponents

M echan ical en g in eering industry - total 29 400 - 32 700 - 33 148 -

Source: Own work based on: Central Statistical Office (GUS) Industrial goods manufacture in 2013

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Lower Silesia and the Vi roclaLW

LLLAj. iT* vZiMlnr!• ation ft

The Wrocław Agglomeration and Lower Silesia have a well established reputation as a region attractive to investment in the mechanical engineering sector. The region's rich tradition stems from facts including the operation of industrial facilities such as Wrozamet and Pafawag, which satisfied part of the domestic demand and played a key role in the Polish industry. Currently, the sector is enjoying a period of dynamic growth through expansion of the existing entities and new investments. Lower Silesia's attractiveness, investment- wise, is a result of factors including the region's good transport links, availability of well qualified engineers and the activity of numerous scientific-research units, with the Mechanical Faculty of Wrocław University of technology at the forefront. The trend is expressed by the fact that new facilities are being located and existing enterprises are being acquired by companies including ABB, Alstom, KGHM Zanam, Sauer-Danfoss, Haco, or Bombardier. An important part of the sector in the region of Lower Silesia are companies producing machines and devices for mining industries such as KGHM Zanam, Mine Masters, Boyart Longyear, and Ruda Trading. Apart from the features indicated above, the reagion's attractiveness also stems from the fact that mining and copper processing (Legnica-Głogów Copper District) is well developed in Lower Silesia, while in the area of Wałbrzych there are remnants of the industry in the historic rock and brown coal basin.

02. Revenue of chosen enterprises from mechanical engineering sector active in Lower Silesia

4$ K°*# J ^

■V

*

VY

vP

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Source: Dunn and Bradstreet 2013. (* includes revenue from sales of products manufactured across the whole country)

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Chapter 2 I Wrocław Agglomeration Sector Analyses - Mechanical

Lower Silesia and the WrocławActctI.operation as a Location fo.................................................................................... t

To the most important subsegments of the mechanical engineering industry machines, engines and turbines industrial machinery - refrigerating appliances and ventilation systems Bearings, gears, drive elements.

03. Breakdown of selected enterprises involved in the machine engineering sector

Company Production sector Location Country of origin Staff employed

ABB Switchgear devices and electrical power engineering systems

Wrocław Switzerland 3000

KGHM ZAN AM Mining machines Polkowice Poland 2400

ALSTOM POWER Generators and stators for turbinesets

Wrocław France 2200

GE Power ControlsPolska Controllers, sensors and switches Kłodzko USA 650

Legrand Polska. Control, safety and measurement Ząbkowice Ślaskift::: France 550

BOMBARDIERTRANSPORTATION

Polska

Traction systems, railway engines, carriages, trams and metro trains

Wrocław Canada 550

HS WROCŁAW. Hydraulic systems for aviation Wrocław USA 550

PAFAL Measurement devices for gas and electrical current

Świdnica Poland 370

SAUER-DANFOSS Steering systems and hydraulic engines

Wrocław, Bielany Wrocławskie USA, Denmark, Germany 350

PRZEDSIĘBIORSTWOHAK Cranes and related devices Wrocław Poland 300

CHOFUM Casts for industrial machines Chocianów Poland 260

Dolnośląska Fabryka Maszyn Elektrycznych Machines and generators Wrocław Poland 190

MINĘ MASTER Mining machines Złotoryja Poland 180

RUDA TRADING Mining machines Polkowice Poland 150

DOLFAMEX Cutting tools Jelenia Góra Poland 150

INSS POL Steel structures and installations Wrocław Poland 120

ECKERT AUTOMATYKA SPAWALNICZA Cut-off machines for contour cutting Legnica Poland 100

MAGROTEX Helical conveyors Chojnów Poland 100

ENITRA Chains and conveyor belts Wałbrzych Poland 80

HURAS Konstrukcja iBudowa Maszyn Pallet coilers and decoders Legnica Poland 30

Specjalnych.

Source: Statistic Office, EMIS Intelligence, Bisnode

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Lower Silesia and the wroclaLWŁH m i* iT* T L s J nr!

• ation ft

Territorial distribution of mechanical engineering companies in Lower Silesia is shown in figure 4. The sector's companies are concentrated mainly in the area of Wroclaw - the region's biggest economic centre, as well as in other big cities, which stems from the need to ensure an adequate quality of human resources, most notably engineers and production workers, indispensable in large scale manufacturing operation. A significant part of the sector's companies are based also in the area of Legnica and Głogów, and other cities belonging to the Legnica-Głogów Copper District, which is related to the region's copper and other metal deposits, as well as the well-developed mining, smelting and power engineering industries. Due to global economic links, employees' command of foreign languages is an important factor for mechanical engineering companies. Additionally, as far as more advanced manufacture is concerned, other factors of investment attractiveness become important, including the region's level of economic development or a well-developed social infrastructure. This is why Wroclaw is continually enriching its cultural offering, testimony to which is, for example, the city's title of the European Capital of Culture for 2016, as well as its hosting the World Games in 2017.

Source: Invest