Author: Marek Pielach

Journalist at Obserwator Finansowy

PKO BP sees potential in small and medium-sized exporters

SMEs account for only 30 per cent of Polish exports, which is why we see potential for growth here, says Robert Zmiejko, Head of the Foreign Development Division at Bank PKO BP.
PKO BP sees potential in small and medium-sized exporters

Bank PKO BP’s branch in London (Monika, CC BY-SA)

CE Financial Observer: The value of Polish exports amounted to over EUR168bn in the period from January to October. Will it be possible to reach EUR200bn for the first time during the whole year?

Robert Zmiejko: Yes, this record is most likely to be broken. The forecasts prepared by PKO BP indicate, that throughout 2017, total exports may reach up to EUR202bn. We also expect further dynamic growth in exports until 2020, when the total value of exports will reach up to EUR240bn. Until recently, we’ve been estimating that it would be EUR238bn, but the good economic situation of our most important partners, especially Germany, made it possible to make an upward revision of the forecast.

Do these assumptions account for Brexit? The United Kingdom is our second largest export market.

The impact of Brexit will be less important than the increasingly good reception of Polish products by consumers throughout the European Union. The knowledge that Polish products are characterized by good quality and competitive prices is becoming widespread, and therefore the demand for them should grow.

Is this also true for the United Kingdom, once it is outside the European Union?

Yes. Exports to the United Kingdom will remain at a high level, because Polish products are already well known on that market, they have appropriate distribution channels, and the demand from Poles living there is also important.

We believe that in the coming years the demand for Polish products in the United Kingdom will continue to grow, however, the rate of growth will be slower than in other European Union countries.

As for our three major export markets, nothing will change at least until 2020. These will still be Germany, the United Kingdom and the Czech Republic. On the other hand, France and Italy, i.e. the fourth and fifth largest export markets for our products, will significantly reduce their distance to the United Kingdom in this perspective.

At present almost 80 per cent of our exports go to the European Union, including over 27  per cent to Germany. Do you see a need for greater diversification of our export destinations?

Indeed, almost 80 per cent of our exports go to the European Union, but it is important that we are starting to export more and more to other regions. In 2016, some 6 per cent of our exports went to Asia, and 3 per cent to the North America. This shows that Polish companies will also increasingly export their products outside the European Union.

Is this because even the EU is now too small for them, or to the contrary – because their products that cannot effectively compete on the European market?

We often compare the development of Polish exports to the development of a child. In the first stage of development, the child only reaches the lowest tree branches, and similarly Polish exporters first focus on the markets that are geographically closest to us, i.e. countries of the European Union. This is natural, because the language, legal and cultural barriers are the smallest there. With time, however, a child grows up and begins to reach for fruits from higher branches, and at times climbs to the very top of the tree to pick the tastiest fruits. The same holds true for companies which most often learn how to conduct exports in the countries of the European Union, and over time they start to look around the world more boldly, exploring even the most exotic markets.

Why have we had systematically increasing exports since 2010? Is the domestic market with 38 million consumers becoming too small for our businesses?

The exporters have various motivations. Firstly, it is indeed about higher sales volumes. Secondly, the exposure to other markets is a great way to diversify risks. Thirdly, thanks to exports companies can extend the life cycle of a product, which, for example, is not selling so well in the local market anymore. Fourthly, by entering other markets Polish companies obtain feedback from consumers other than Polish consumers. This helps them to improve their products, and drives innovation. Selling products in other markets allows them to get to know the best international practices, while at the same time increasing their ability to compete on the domestic and foreign market.

Why has PKO BP become involved in facilitating the exports of enterprises? Did you follow the clients’ needs, or did you create this need yourself?

We want to support our clients at every stage of their growth and we follow them even if this development extends beyond the Polish market. Polish companies export the most to Germany, and sometimes they even take over local companies there. That is why in 2015 we launched a corporate branch in Frankfurt. In April 2017, another branch was opened in Prague in the Czech Republic, that is, in the third largest market in terms of the volume of Polish exports. And if we were to reach even further back, we took over the Ukrainian Kredobank in 2004, among other things, due to the growing export rates in the Polish economy.

PKO BP has so-called correspondent relations with more than 1,300 banks around the world. We conduct settlements in 23 currencies, including such exotic ones as the New Zealand dollar and we offer a whole range of trade finance products that are used to secure the risk associated with foreign trade on many global markets. This currently includes over 60 markets, but the list is not closed. When a customer approaches us to secure their trade on another market, we are opening up to new directions.

Let’s suppose I have a small business and I want to export furniture to New Zealand. I come to PKO BP and what happens next?

I would start with the Export Support Platform that we run. It’s a dedicated website where you can find information about 130 countries around the world, including 34 of our most important trading partners which are presented in a way that goes far beyond the general information derived from statistical yearbooks. We also have extensive industry-specific analyses: furniture, plastics, clothing, pharmaceutical products, cosmetics and sweets. We continue to draw up reports on subsequent industries that have a high export potential. We also provide customers with a global database of trade events, information about public tenders organized by the largest international institutions, etc. We have a search engine for financial instruments. Everything you need to know about exports is available in one place.

In addition, in our exporter’s guides we present the so-called exporter’s ABC – this is an educational part of the website  and allows companies, especially those just starting their adventure with exports, to understand the benefits of launching export activities and to analyze subsequent steps that need to be taken in order to increase the likelihood of a successful foreign expansion.

During one of the discussions you said that „Polish companies will look for destinations where margins are relatively high and competitiveness is still weak” and you mentioned Iran. What are the other promising directions?

It all depends on the stage of development of a given company and its product. As I’ve already said, in most cases, the exporter’s first target EU countries. Once we get experience there, we can shift to the rest of the world. I would point to places such as Kazakhstan or Vietnam. Generally speaking, countries located far away from Poland and the EU are a logistic and organizational challenge, but sometimes this goes hand in hand with higher margins, so it’s worth the trouble.

Why are you aiming to help SMEs with exports, when large companies, often with foreign capital, account for 70 per cent of  Polish exports. Wouldn’t they be attractive clients for the largest Polish bank?

It’s true that SMEs only account for 30% of all exports, but that’s precisely why we see potential for growth here. There are 1.9 million of them in Poland, and they employ 6.4 million people. Unlike large corporations, these companies do not have specialized analytical teams and cannot afford to hire external experts This why in addition to product information, the bank also provides them with analytical support. Our website is not dedicated exclusively to SMEs, we make it available for free to all entrepreneurs.

How much of PKO BP’s foreign activity is strictly business oriented and how much of it constitutes a public mission, which – it seems – should be carried out, for example, by the Polish Investment and Trade Agency?

PKO BP’s foreign activities are dictated by business objectives. Our good markets research will contribute to better revenues of our clients, which will automatically translate into even more effective cooperation. We have good relations with the Polish Investment and Trade Agency, we observe its development and we establish contacts with the new foreign trade offices. Additionally, some of the analyzes prepared by the Polish Investment and Trade Agency, the Ministry of Development and the Ministry of Foreign Affairs, as well as the Polish Agency for Enterprise Development, are posted on our website dedicated to exports. These are the institutions that have the greatest knowledge in the field of international relations and cooperation, which is why our activities complement each other.


Bank PKO BP’s branch in London (Monika, CC BY-SA)

Otwarta licencja


Related articles

The Covid-19 pandemic has strengthened Poland’s position in global exports

Category: Macroeconomics
There are two main factors that determined the robust performance of Polish exports during the pandemic: the greater product diversification of the Polish export sector compared to most EU member states and the relative importance of durable consumer goods in Polish manufacturing.
The Covid-19 pandemic has strengthened Poland’s position in global exports

Tydzień w gospodarce

Category: Raporty
Przegląd wydarzeń gospodarczych ubiegłego tygodnia (09–13.05.2022) – źródło:
Tydzień w gospodarce

Tydzień w gospodarce

Category: Raporty
Przegląd wydarzeń gospodarczych ubiegłego tygodnia (19–22.04.2022) – źródło:
Tydzień w gospodarce