Development of agri-food sector in Poland

Patrycja PurgałMinistry of Agriculture and Rural Development | Poland

Business Opportunities in PolandTel Aviv | 14 June 2012

1995 2003 2004 2005 2006 2007 2008 2009 20100%

1%

2%

3%

4%

5%

6%

7%

8%

-3%

2%

7%

12%

17%

22%

27%

7.0%

2.6%

4.5%4.1%

3.7% 3.8%3.3% 3.2% 3.1%

26.0%

16.1% 16.0% 15.9% 15.7% 15.2% 14.8% 15.0%16.5%

Share of agriculture in GDP (%)Share of agriculture in total employment (%)

Polish agriculture share in GDP & total employment

EU27 av. 5,6%

2Source: Central Statistical Office

Source : European

Commission3

Key facts about Polish agriculture

Arable land75%

orchards2%

per-ma-nent

mead-ows12%

perma-nent

pastures9%

agricultural built-up3%

Large variety of natural and environmental conditions

Agricultural land 60% of total country area

88% of agricultural land utilized by individual farmers

2nd in the EU-27 (after Romania) in terms of number of agricultural holdings

40% of population live in rural areas (14,9 million)

Agriculture potential:18,8 million ha of agricultural land

Agricultural land use in Poland (2011)

Source: Central Statistical Office 4

2010 → 39,5%

Total UAA (farms > 1 ha)16 503 tys. ha 15 297 tys. ha

Farms in Poland

Source: Central Statistical Office 5

Agricultural production in Poland

Source: Central Statistical Office | data for 2009

Production of selected

agricultural products

Share Rank

in the world in the EU -27 in the world in the EU - 27

wheat 1,4 6,9 15 4rye 20,8 41 3 1potatoes 2,9 18,4 7 1sugar beets 4,7 11 6 3rape 4,2 11,6 6 3apples 1,6 9,9 13 4meat 1,3 7,9 14 5cow's milk 2,1 8,2 10 4Stock:cattle 0,4 6,3 46 7pigs 1,5 11,2 10 3

6

Investment outlays (by type) in Polish agriculture

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

500

1000

1500

2000

2500

3000

3500

4000

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Investment outlays in agriculture and hunting in Poland (current prices)

Transport equipment

Machinery, technical equipment and tools

Buildings and structures

Investment outlays in agriculture and hunting as % of total investment outlays

PLN million

7Source: Central Statistical Office

Support to agriculture in Poland

Funds paid out annually between 2004 – 2011 (as of June 2011)

8

Support for rural development

43%

31%

21% 5%

Structure of RDP 2007-2013 in Poland

Axis 1. Improving the competitiveness of the agricultural and forestry sector

Axis 2. Improving the environment and the countryside

Axis 3. Improving the quality of life in rural areas and encouraging diversification of the rural economy

Leader

Payments from public funds under RDP 2007-2013 (as of 12 August 2011)

9

Key facts about Polish food industry

Poland has one of the most dynamic food processing industries in Europe

Share of food in total industry sales value of nearly 24% (in the 15 EU countries ca. 15%)

68% of Polish food processing companies export their products abroad

Increasing food export with non EU countries - export to USA, Canada, China, Japan and other countries is growing yy by ca. 9%

10

Sold production of food industry in Poland

2000 2002 2005 2007 2008 20090

20000

40000

60000

80000

100000

120000

140000

160000

Value of sold production of food processing industry (current prices, PLN billion)

Beverages

Other food products

Animal feeds

Milled grain products, starch and starch products

Dairy products

Oils, animal & vegetable fats

Processed fruits & vegetables

Fish & processed fish products

Meat & meat products

11Source: Central Statistical Office

Average employment 380 000 persons (2011)

15% of the average employment in the industry

ca. 29 000 entities 73% of companies are small-sized

(up to 9 persons), but… … the largest companies (over 250

persons) generate 49% of value of the sold production

Key facts about Polish food industry

12

Companies operating in the food sector

72.5%

22.1%

4.5%

0.9%

Micro-enterprises (up to 9 persons)

Small-sized companies (10-49 persons)

Middle-sized companies (50-249 persons)

Large-sized companies (over 250 persons)

13Source: Polish Information and Foreign Investmenr Agency

revealed competitive advantages of food processing industry

opened new opportunities for the food sector (450 mln EU consumers, record growth in export by 17.5% in 2010 and by 12% in 2011)

accelerated modernization & concentration processes in the industry

Most competitive sectors of: meat, milk processing, fruits & vegetables, sugar, secondary cereal processing, tobacco production

Poland’s entry to the EU…

14

FDIs in the food sector in Poland

Agriculture & fishing

Wood, paper, printing

Machines and appliances

Chemical products

Mechanical vehicles

Food (groceries, beverages and tobacco) products

Metals and metal products

-500 0 500 1000 1500 2000

25.5

485.3

230

223.7

431.7

1711.3

-108.8

The flow of FDIs in 2009: EUR 9,9 billion

Processing industry :EUR 3,4 billion

Food industry received half of the investments in the processing sector

EUR million15

Enterprises operating in food sector listed on the WSEName

Capitalization (PLN million)* Production

Grupa Żywiec SA 5 649,24 beerKernel Holding SA 5 294,96 cerealsAstarta Holding NV 1 575,00 sugarKruszwica SA 1 496,45 vegetable fatsWawel SA 719,88 confectionery productsMilkiland NV 593,75 milk productsKofola SA 486,29 sparkling productsAgroton Public Limited 485,41 cerealsBelvedere SA 406,31 alcohol productionColian SA 358,4 confectionery productsElstar Oils SA 306,63 vegetable fatsPKM Duda SA 219,62 meat productsAmbra SA 155,27 wineIndykpol SA 130,92 turkey meat and productsMieszko SA 129,14 confectionery productsZPC Otmuchów SA 85,41 confectionery productsPamapol SA 70,89 ready-made dishesMispol SA 70,11 canned meatPepees SA 65,57 potato semi-finished productsSeko SA 45,89 fish productsGraal SA 44,31 fish productsMakarony Polskie SA 39,04 noodlesWilbo SA 16,39 fish productsZM Herman SA 12,31 meat products

* As for November 8,2011

In November 2011 25 companies that operates in the food sector were listed on the Warsaw Stock Exchange.

Their total capitalizatiom amounted to about 18,5 billion PLN

Source: Polish Information and Foreign Investmenr Agency, Warsaw Stock Exchange

16

17

Source : European Commission

Changes in consumption of selected foodstuffs per capita in Poland

1961-1963 1971-1973 1981-1983 1991-1993 2001-2003 2005-20070.0

50.0

100.0

150.0

200.0

250.0

Cereals Potato Vegetables Fruits Sugar

kg / per capita

Source: FAOSTAT 18

Changes in consumption of selected foodstuffs per capita in Poland

1961-1963 1971-1973 1981-1983 1991-1993 2001-2003 2005-20070.0

10.0

20.0

30.0

40.0

50.0

60.0

Bovine meat Pigmeat Poultry meat Fish, seafood

kg / per capita

Source: FAOSTAT 19

Foreign trade in agri-food products

2003 2004 2005 2006 2007 2008 2009 2010 2011*0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0

2

4

6

8

10

12

14

ExportImportBalance% share of export in the value of Polish foreign trade in total (%) % share of import in the value of Polish foreign trade in total (%)

%

EUR billion

Source: Institute of Agricultural and Food Economics-National Research Institute (IAFE-NRI), Ministry of Finance 2011* preliminary

20

Geographic structure of Poland’s agri-food export

Total UE-27 UE-15 NMS-12 CIS EFTA NAFTA MERCOSUR Other0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Export 2004

Export 2011*

Source: Ministry of Finance * preliminary data

EUR billion

21

Geographic structure of Poland’s agri-food export in 2010

* Austria, Belgium, Bulgaria, Cyprus, Denmark, Estonia, Finland, Greece, Spain, Ireland, Lithuania, Luxemburg, Latvia, Malta, Portugal, Romania, Slovenia, SwedenSource: Ministry of

Finance

(EUR 2.8 bn) (EUR 10.7 bn)

22

Geographic structure of Poland’s agri-food import

Total UE-25 UE-15 NMS-10 CIS EFTA NAFTA MERCOSUR Other0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Import 2004

Import 2011*

23Source: Ministry of Finance * preliminary data

Geographic structure of Poland’s agri-food import in 2010

Source: Ministry of Finance

** Austria, Bulgaria, Cyprus, Czech Republic, Estonia, Finland, Greece, Ireland, Lithuania, Luxemburg, Latvia, Malta, Portugal, Romania, Slovakia, Slovenia, Great Britain, Hungary

* According to a country of exportation

(EUR 2.0 bn)(EUR 9.0 bn)

24

Foreign trade in agri-food products

livestock

fish & products

oil plants & products

Source: IAFE-NRI

Balance of international trade in some agri-food products in 2011 (in EUR million)

25

Agri-food trade with Israel

2003 2004 2005 2006 2007 2008 2009 2010 2011-20

-10

0

10

20

30

40

50

60

70

80

7.512.3

19.423.5

27.6

34.7

47.5

65.7

78.2

21.0 20.319.2

26.3 30.325.4 22.7

33.0 29.5

-13.5-8.1

0.2

-2.9 -2.7

9.324.8

32.7

48.7

Export Import Balance

mln EUR

26Source: Ministry of Finance

THANK YOU!WWW.MINROL.GOV.PLe-mail:patrycja.purgal@minrol.gov.pl