Polish construction hits a material ceiling.

The Polish construction market still sees itself in a growth phase, despite the international credit crunch, delays in large tenders, higher labour costs as well as labour shortages.

Indeed, demand for new residential buildings and lack of office space in the main urban areas (including Warsaw, Lodz, Wroclaw, Poznan, Gdansk and the Silesia region) is driving underlying demand.

Crucially, since 2007, the Polish construction industry has been hamstrung by a limited supply of building materials. Construction companies are often faced with material shortages and increased prices of both materials and equipment.

Sea Tower in Gdynia: price escalating.

Road construction is set to be the most profitable segment, but not the only one. Construction of sports-related facilities, railways and homes is also high on the government's agenda; in the latter case, because the private sector home market seems to have tanked.

Of concern to the Polish government is the building or renovation of stadia associated with the forthcoming UEFA Euro 2012 European football championship, hosted by Poland and Ukraine and due for the summer of that year.

At the junction: new road for Warsaw.

The lead up to the tournament is seen with some dread at a time of more expensive financial provisioning. Yet it's said that over 70% of Poland's large construction companies expect to execute projects related to the preparation of Euro 2012.

Hong Kong firms offer innovative materials

Hong Kong suppliers which have been instrumental in the development of the equestrian events and other projects associated with the Beijing Olympic Games 2008 could well find their accumulated expertise on materials in great demand in Poland.

Companies such as Hong Kong's Kwan Kin International Holdings Ltd could be of interest to Polish importers since it produces a wood/plastic compound material by recycling old wood, while Feng Yuen Steel Structure Engineering (HK) Co Ltd produces a fibreglass-reinforced plastic material used in construction.

Hong Kong firms with new products.

For development later in the fitting process, fire fighting equipment is said to be in particular demand in a number of Eastern EU countries. Sun Fung (E&M) Service Company specialises in fire extinguishers and equipment, while Li's Fire Engineering Co Ltd produces fire fighting equipment and Tyco Fire & Security (China) can supply fire alarms and other electronic security equipment.

Prospects for the Polish construction industry look very promising, according to local industry analysts. The main question is how long demand can be sustained with sufficient production capacity. According to some analysts, 2009 will see the growth rate weaken by about 8%, but double digit growth is forecast to resume in 2010.

New Belchatow power plant.

EU funds allocated to Poland are likely to have a beneficial effect on the construction market, whilst bolstering the confidence of private investors.

EU funds voted for the period 2007 to 2013 offer unique opportunities for Poland to carry out huge infrastructure projects involving transport and environmental protection.

from Anna Dowgiallo, Warsaw Consultant and
Martin Evan-Jones, Hong Kong Office

Images courtesy of:
PERI GmbH
Xinhua News Agency