작성일자: 2013.9.30

작성자: 바르샤바 무역관 강세나 (sena@kotra.pl), 신일숙 (isdebora@kotra.pl)

 

 

1. Market Trends

 

□ The construction market in Poland - current state and future perspectives

 

 ○ The total value of the construction market in Poland has decreased in the first months of 2013 in relation to 2012, in line with experts’ forecasts. “Next year is expected to bring stabilization, while in 2015 the market will likely start recovering.”

 

 ○ Polish construction market in 2012.

  - The total value of the construction market in 2012 decreased by 0.6% in relation to 2011. The number of buildings built decreased by 1.3% y/y and the number of specialized construction by 0.7%, whereas civil and water engineering construction increased by 0.5% last year, according to the Central Statistical Office(GUS) data released in late June. In 2012 ca. 152,000 new apartments were built, ca. 141,000 were under construction and ca. 162,000 were given a construction permit. In 2011 the figures were respectively: 131,000, 162,000 and 184,000.

  - The bankruptcy rate of the construction companies increased last year with around 270 companies on the construction market declaring bankruptcy, mirroring their deteriorating financial situation.

 

 ○ 2013 tough for the sector -Yet chances for improvement are in perspective.

  - If the decrease of construction market reaches 8~10% in 2013 we can speak of success, professor at Chodakowska University in Wroclaw, Zofia Bolkowska commented. In Q1 construction output decreased by 15.1% y/y, according to Central Statistical Office(GUS) data.- In the subsequent months of 2013 declines were even deeper – construction output dropped by 23.1% y/y in April and by 27.5% in May, GUS data show.

  - Despite the decrease, the experts hope for improvement in the upcoming months. The business leading index for construction market increased by 45pts in Q2 2013. In relation to Q1 it is currently +0.2 pt. “Index’s increase in Q2 in relation to Q1 results from the seasonal character of the construction market, it is, however, exceptionally high at the moment. Similar growth could be observed in 2002 and 2003, when the construction industry was recovering from the an economic collapse. The high index value results in the reversal of the trend function. The current results are surely satisfying, yet they should be treated as positive one off, not a permanent change- the report of the Research Institute of Economic Development(IRG) reads.

 

Business confidence indicator
for Poland’s construction sector, 1997~2013(H1)

Note: Business indicator – Q2 2013

Source: Warsaw School of Economic

 

  - The industry slowdown is affecting other branches of the economy, including the steelwork industry. “The steelwork industry is interconnected with the construction industry, therefore it is experiencing the slowdown as well. The profits of some firms are decreasing by up to 30% y/y. The demand for steel construction in Europe is low,” said Marcin Siwa risk analysis director at market researcher Coface in June 2013.

  - Polish construction market is negatively affected by the economic situation in Europe, EU’s financial problems and the collapse of the construction market in Spain, Robert Dziwiński, head of construction sector watchdog GUNB said in May. “It turned out our companies are not mentally and legally prepared to realize contracts for highway construction,”. said the inspector.

  - The situation is similar when it comes to housing development. “Developers, on the other hand, speak of the collapse of the housing market and complain of no movement on the demand-side. They tend to forget about the over-investments of 2009, when they were buying large areas of land for housing construction. Back then, according to the experts, the supply exceeded the demand”- he added.

  - Additionally, Dziwiński points out, factors hindering the investments in the sector include prolonged decision procedures regarding the terms of projects’ development as well as excessive regulations in a variety of institutions, according to the inspector.

 

 ○ 2014 stabilization predicted - Recovery shouldn’t be expected until 2015.

  - “2014 is to bring the market stabilization, yet sector recovery can be expected in 2015 only if there is no crisis in global finance,” said Dziwiński. The inspector also emphasized the role of the EU funds for 2014~2020, which will give a boost to the sector.

  - Coface experts concurs. “2013 will be a year of calming but also a year of change. We’re expecting a recovery of the construction market in 2014, with the emergence of projects funded by the new EU budget. The companies, richer in experience, stopped reducing their profit margins. Thanks to that, we’re experiencing an improvement in profitability of the contracts and solvency of the market companies” Siwa said.

 

Source: Central Statistical Office(GUS), prepared by PAP

 

  - The market situation is expected to improve already in Q3 2013, especially in relation to the increasing size of the production. The situation of the construction companies’ investments is likely to remain unfavorable in the rest of 2013.

  - Polish construction sector could also benefit from governmental programs like the recently launched investment-support program “Polish Investments” (“Inwestycje Polskie”.

 

□ Construction machinery market

 

 ○ A dynamically changing situation in the Polish construction market has a direct bearing on the structure of the complementary market of construction machinery. The changes concern both the level and structure of imported machines and profitability of companies offering construction machinery and equipment. In the coming years, we expect excavators and backhoe loaders to represent a significant market share; we also anticipate low-level stabilization in the category of tower cranes and a shrinking in the market of road rollers.

 

 ○ According to a report prepared by PMR entitled “Construction machinery market in Poland 2012 – Development forecasts for 2012~2014”, only 20% of the absorptive power of the construction machinery market in Poland is satisfied through domestic production. Therefore, the construction segment generally must rely on imports of construction machinery.

 

 ○ An analysis of the structure of net imports of construction machinery shows that, for many years, Polish builders have remained focused on universal construction machines which can be used for various types of construction work. Different types of excavators and loaders remain unquestionable leaders. For many years, they have been the core of construction machinery stock and account for more than 80% of construction machines annually imported to Poland. Imports are largely represented by rotary machinery, which accounted for nearly 40% of total imports in 2011.

 

Construction Machinery Import Trends in Poland

Source: PMR Publications

 

 ○ The years 2007~2011 saw major changes regarding the key types of construction machinery used in road and railway construction projects, which reported a marked increase. However, in all probability, the fleet of equipment intended strictly for road projects should be expected to shrink in the coming years.

 

 ○ Since capital expenditure of the General Directorate for National Roads and Motorways(GDDKiA) is expected to fall as of 2013, capital spending on new construction machines will decrease and changes to the structure of the existing construction machinery fleet will follow.

 

 ○ Furthermore, many companies have announced plans to transfer part of their machinery stock outside of Poland to markets where they will intensify investment efforts, e.g. to Russia where numerous sport-related investment projects will be underway soon.

 

 ○ In the recent years, the most significant changes occurred in the market of tower cranes. While in 2007, which proved an excellent year in terms of the value of construction machinery sales, the sales of cranes accounted for approx. 8%, the following years saw considerable declines.

 

 ○ It was already in 2010 that their share decreased four-fold, while in 2011, tower crane accounted for a mere 0.5% of total imports of construction machinery. A direct cause of these developments could be attributed to the significant changes which occurred in the building construction segment. Slowdown in the segment of property developers, which started in 2008, curbed demand for more cranes on the market.

 

 ○ Despite the recent recovery in this market segment, the coming years are unlikely to see any major changes in the cranes market. In our opinion, the market is well-saturated and the current stock of cranes is sufficient to meet the demand generated by construction companies.

 

 ○ However, in the long-term, companies operating in the construction machinery market in Poland should not have any reason for concern, partly because of the expected inflow of EU funds in 2014~2020 and the periodic need to renew construction machinery fleets.

 

 ○ In addition, a review of the financial situation of the 35 top manufacturers, distributors and rentals of construction machinery shows that after margins recorded a dramatic decrease in 2008, they have steadily improved since 2009. The most recent data shows that the average margin generated in the segment was approx. 3%, while 20% of the companies post losses (compared to 26% in 2008).

 

□ The market for Parts of construction machinery and equipment

 

 ○ The market for parts for construction equipment in Poland is the 6th largest market in the EU; consumption was € 191 million in 2010. Imports totalled € 163 million, of which € 8.5 million originated in DCs. The best channels for developing country exporters for entering the aftermarket are the importers and the non-aligned distributors.

 

 ○ Consumption & production

  - Industrial output of construction equipment grew by 25% in 2010. However, on average, production volumes fell by 9% annually since 2006. The decrease since 2008 was 42%.

  - Regarding parts for construction equipment, total consumption, as derived from Prodcom data, is calculated at € 191 million. Total consumption increased by 11% annually between 2006 and 2010. As a result of the economic crisis, consumption showed an irregular growth pattern. From 2006 to 2008, consumption grew by 45%. In 2009, consumption fell by 42%, to recover somewhat by 27% in 2010.

  - Poland is the 6th largest market in the EU, after the United Kingdom and Austria, but ahead of France and Spain. Consumption equalled 4.5% of total EU consumption.

  - Poland is also increasingly important as a manufacturer of parts and components for construction equipment. Total production reached € 244 million in 2010. This was still below the peak of € 322 million in 2008, but up from € 179 million in 2006. As a result of the crisis, production showed an irregular growth pattern. From 2006 to 2008, production grew by 34%. In 2009, production fell by 48%, to recover by 47% in 2010.

  - Poland is now the 6th largest manufacturing nation in the EU, after Sweden and France, but ahead of Austria and the Czech Republic. Production equalled 3.2% of total EU production.

  - As the Polish economy continues to be strong, consumption and production in Poland will see growth, though strong growth will also be dependent on the situation in other European countries.

 

Apparent consumption & production of parts and components by category,

change 2006~2010

(Unit: in € million)

Source: CBI Market Information Database

 

 ○ Trade organisations

 

Name of Association	Homepage	Remarks
APCEMP	http://www.apcemp.pl	Association for the promotion of Polish construction machinery manufacturers

Source: Kotra own research

 

 ○ Trade fairs

 

Name of Fair	Homepage	Remarks
Maszbud Kielce	http://www.targikielce.pl/index.html?k=maszbud_en&s=index	International construction equipment and special vehicles fair.
Bumasz Poznan	http://www.bumasz.pl/en/	International fair for construction and road building machines, vehicles and equipment

Source: Kotra own research

 

 

2. Competitive Trends

 

□ Main Producers

 

 ○ There are over 200 producers of mining/construction machinery and equipment. Among them FUMAR S.A., KOPEX S.A., Fasing S.A. and Bumech S.A. are mail market players.

 

 ○ Their over 200 companies’ offers are including many kinds of machinery, parts and services  like transport systems, hydraulic drives, pneumatic systems for the detection, measurement and control of blood gases system, ventilation and ventilation system, air conditioning systems, mine rescue equipment, mining cables, drive chains for mining machinery, equipment and tools of mechanization, communication equipment and signaling equipment and electrical equipment.

 

 ○ Among foreign brands Caterpillar has the good position in the mining machinery markets.

 

Mining Machinery Producers Market shares in Poland

 

Source: EMIS

 

□ Main Brands

 

Brand, Producer	Homepage	Distributors/Branch/ Own sales company
Caterpillar	http://polska.cat.com/ http://www.cat.com/ http://www.b-m.pl/	Bergerat Monnoyeur Sp.z.o.o. Caterpillar Poland SP Z O O
Volvo Construction Equipment	http://www.volvoce.com/dealers/pl	Volvo Maszyny Budowlane Polska Sp. z o.o.
Sumitomo	http://www.sumitomocorpeurope.com/	Sumitomo Corporation Europe, Warsaw Branch
John Deere	http://www.deere.pl/	John Deere Polska Sp. z o.o.
Kubota	http://www.kubotapolska.pl/ www.wobis.pl	Ppuh Wobis Wojciech Wojtyczok
Kobelco	www.kobelco.com.pl (in construction)	HKL Baumaschinen Polska Sp z o.o.
Yanmar	http://yanmar.pl/ http://www.techbud.eu/	Techbud Sp. z o.o.
Hitachi	http://www.hitachi.pl/	Hitachi Europe Ltd., Warsaw Branch Tona Sp z o.o.
Neuson	http://www.wackerneuson.pl/	Wacker Neuson, Warsaw Branch
Liebherr	http://www.liebherr.pl/	Liebherr-Polska Sp. z o. o.
Komatsu	http://www.komatsupoland.pl/	Komatsu Poland Sp. z o.o.
Esco	http://www.escocorp.com/	Esco Poland SP Z O O
Hyundai	http://www.amago.pl/	Amago SP. Z O. O.
Doosan	http://www.maszynybudowlane.pl/	Grausch i Grausch Maszyny Budowlane Sp. z o.o.
JCB	http://www.interhandler.pl/	Interhandler Sp. z o.o.

Source: Kotra own research

 

 

3. Price Trends and Distribution Channel

 

□ Price Trends

 

 ○ General inflation in Poland was 2.7% in 2010, higher than the EU average of 2.1%.

 

 ○ The relative price level in Poland in 2010 was 67.6. This indicates that, in general, prices are 32.4% lower than the EU average. Between 2006 and 2010, the relative price level in Poland increased by 3.9% annually.

 

Index of producer prices

Source: CBI Market Information Database

 

 ○ Teeth

 

Photo	Product inform	Retail Price (+VAT 23%)
	Middle tooth for backhoe loaders Komatsu WB97 WB93	43.05 PLN
	The tooth is also used in the excavators Komatsu PC 150/180/200/210/220/240.	65.19 PLN
	Leftmost tooth for backhoe loaders Komatsu WB97 WB93.	68.88 PLN
	Strengthening overlay Komatsu Kmax K20RC Rock Chisel.	181.51 PLN
	Strengthening overlay Komatsu Kmax K20RP2 Rock Penetrator	270.55 PLN

 

 ○ Adaptors

 

Photo	Product inform	Retail Price(+VAT)
	Tooth adapter J200 CAT system, the blade welded into the bucket.	28.91 PLN
	Tooth adapter J250 CAT system, the blade welded into the bucket.	53.49 PLN
	Tooth adapter J300 CAT system, the blade welded into the bucket.	84.87 PLN
	Tooth adapter J350 CAT system, the blade welded into the bucket.	118.08 PLN
	Tooth adapter J400 CAT system, the blade welded into the bucket.	153.75 PLN

 

 ○ Driving Wheel

 

Photo	Product inform	Retail Price(+VAT)
	Driving wheel for JCB JS210 tracked excavator-260.	822.87 PLN

 

 ○ Others

 

Photo	Product inform	Retail Price(+VAT)
	- Name:    Quick hitch moss. ORG CX 3.4 - Number 980/88833 - Net Acquisition 2649.00 - Purchase Tax 3258.27.	2 649,00 PLN

Source : http://inter-kop.pl/, http://www.serwis-kop.pl/ (More information in their Homepages. Generally price information of the parts for mining/construction GET were not available. Just some information had been gotten in 1~2 distributors’ homepages.)

 

 

□ Distribution Channel

 

 ○ Most of the equipment servicing is done by the OEM dealers. Larger end-users have their own first-line service department, often using the OEM dealer for the supply of parts.

 

 ○ Still, the aftermarket offers most opportunities for manufacturers in developing countries, as access to it is easier than to the OEM supply chain. The best channels for developing country exporters for entering the aftermarket are the non-aligned distributors.