Development of agrifood sector in Poland Patrycja Purga

Development of agri-food sector in Poland Patrycja Purgał Ministry of Agriculture and Rural Development | Poland Business Opportunities in Poland Tel Aviv | 14 June 2012

Polish agriculture share in GDP & total employment EU 27 av. 5, 6% 8% 7% 26, 0% 7, 0% 27% 22% 6% 16, 1% 5% 16, 0% 4, 5% 15, 9% 4, 1% 4% 15, 7% 3, 7% 15, 2% 3, 8% 14, 8% 15, 0% 3, 3% 3, 2% 2, 6% 3% 16, 5% 3, 1% 2% 17% 12% 7% 1% 0% 2% 1995 2003 2004 2005 2006 2007 2008 2009 2010 Share of agriculture in GDP (%) Share of agriculture in total employment (%) Source: Central Statistical Office 2

Source : European 3 Commission

Key facts about Polish agriculture Large variety of natural and environmental conditions Agriculture potential: 18, 8 million ha of agricultural land Agricultural land 60% of total country area permanent 88% of agricultural land meadows utilized by individual farmers 12% 2 nd in the EU-27 (after orchards Romania) in terms of number 1% of agricultural holdings permanent pastures 9% agricultural built-up 3% Arable land 75% 40% of population live in rural areas (14, 9 million) Source: Central Statistical Office Agricultural land use in Poland (2011) 4

Farms in Poland Total UAA (farms > 1 ha) 16 503 tys. ha 15 297 tys. ha Source: Central Statistical Office 2010 → 39, 5% 5

Agricultural production in Poland Production of selected agricultural products wheat rye potatoes sugar beets rape apples meat cow's milk Stock: cattle pigs Share Rank in the world in the EU -27 in the world in the EU - 27 1, 4 20, 8 2, 9 4, 7 4, 2 1, 6 1, 3 2, 1 6, 9 41 18, 4 11 11, 6 9, 9 7, 9 8, 2 15 3 7 6 6 13 14 10 4 1 1 3 3 4 5 4 0, 4 1, 5 6, 3 11, 2 46 10 7 3 Source: Central Statistical Office | data for 2009 6

Investment outlays (by type) in Polish agriculture Investment outlays in agriculture and hunting in Poland (current prices) Investment outlays in agriculture and hunting as % of total investment outlays PLN million 4000 Transport equipment Machinery, technical equipment and tools 2, 5% Buildings and structures 3500 2, 0% 3000 2500 1, 5% 2000 1, 0% 1500 1000 0, 5% 500 0 0, 0% 1999 2000 Source: Central Statistical Office 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 7

Support to agriculture in Poland Funds paid out annually between 2004 – 2011 (as of June 2011) 8

Support for rural development Structure of RDP 2007 -2013 5%in Poland 21% Payments from public funds under RDP 2007 -2013 (as of 12 August 2011) 43% 31% 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 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 Value of sold production of food processing industry (current prices, PLN billion) 160 Beverages 140 Other food products 120 Animal feeds 100 Milled grain products, starch and starch products Dairy products 80 60 40 Oils, animal & vegetable fats 20 Processed fruits & vegetables 0 2002 Source: Central Statistical Office 2005 2007 2008 2009 Fish & processed fish products 11

Key facts about Polish food industry 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 12

Companies operating in the food sector 0, 9% Micro-enterprises (up to 9 persons) 4, 5% Small-sized companies (10 -49 persons) 22, 1% Middle-sized companies (50 -249 persons) 72, 5% Source: Polish Information and Foreign Investmenr Agency Large-sized companies (over 250 persons) 13

Poland’s entry to the EU… 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 14

FDIs in the food sector in Poland M. . . -108, 8 1711, 3 F. . . M. . . 431, 7 223, 7 C. . . 230 M. . . W. . . 485, 3 0 EUR million Processing industry : EUR 3, 4 billion A. . . 25, 5 -500 The flow of FDIs in 2009: EUR 9, 9 billion 500 1000 1500 2000 Food industry received half of the investments in the 15 processing sector

Enterprises operating in food sector listed on the WSE Name Grupa Żywiec SA Kernel Holding SA Astarta Holding NV Kruszwica SA Wawel SA Milkiland NV Kofola SA Agroton Public Limited Belvedere SA Colian SA Elstar Oils SA PKM Duda SA Ambra SA Indykpol SA Mieszko SA ZPC Otmuchów SA Pamapol SA Mispol SA Pepees SA Seko SA Graal SA Makarony Polskie SA Wilbo SA ZM Herman SA Capitalization (PLN million)* 5 649, 24 5 294, 96 1 575, 00 1 496, 45 719, 88 593, 75 486, 29 485, 41 406, 31 358, 4 306, 63 219, 62 155, 27 130, 92 129, 14 85, 41 70, 89 70, 11 65, 57 45, 89 44, 31 39, 04 16, 39 12, 31 In November 2011 25 companies that operates in the food sector were listed on the Warsaw Stock Exchange. Production beer cereals sugar vegetable fats confectionery products milk products sparkling products cereals alcohol production confectionery products vegetable fats meat products wine turkey meat and products confectionery products ready-made dishes canned meat * As for November 8, 2011 potato semi-finished products fish products Source: Polish Information and Foreign noodles Investmenr Agency, Warsaw Stock Exchange fish products meat products 16 Their total capitalizatiom amounted to about 18, 5 billion PLN

Source : European Commission 17

Changes in consumption of selected foodstuffs per capita in Poland kg / per capita 250, 0 200, 0 150, 0 100, 0 50, 0 1961 -1963 Cereals Source: FAOSTAT 1971 -1973 Potato 1981 -1983 1991 -1993 Vegetables 2001 -2003 Fruits 2005 -2007 Sugar 18

Changes in consumption of selected foodstuffs per capita in Poland kg / per capita 60, 0 Bovine meat Pigmeat Poultry meat Fish, seafood 50, 0 40, 0 30, 0 20, 0 10, 0 1961 -1963 Source: FAOSTAT 1971 -1973 1981 -1983 1991 -1993 2001 -2003 2005 -2007 19

Foreign trade in agri-food products Export Import Balance % 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 16, 0 14, 0 % 14 12 12, 0 10 10, 0 8 8, 0 6 6, 0 4 4, 0 2 0, 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011* Source: Institute of Agricultural and Food Economics-National Research Institute (IAFE-NRI), Ministry of Finance 2011* preliminary 20

Geographic structure of Poland’s agrifood export EUR billion 16, 0 14, 0 Export 2004 12, 0 Export 2011* 10, 0 8, 0 6, 0 4, 0 2, 0 0, 0 Total UE-27 UE-15 Source: Ministry of Finance * preliminary data NMS-12 CIS EFTA NAFTA MERCOSUR Other 21

Geographic structure of Poland’s agrifood export in 2010 (EUR 2. 8 bn) (EUR 10. 7 bn) Source: Ministry of Finance * Austria, Belgium, Bulgaria, Cyprus, Denmark, Estonia, Finland, Greece, Spain, Ireland, Lithuania, Luxemburg, Latvia, Malta, Portugal, 22 Romania, Slovenia, Sweden

Geographic structure of Poland’s agrifood import 14, 0 12, 0 Import 2004 Import 2011* 10, 0 8, 0 6, 0 4, 0 2, 0 0, 0 Total UE-25 UE-15 Source: Ministry of Finance * preliminary data NMS-10 CIS EFTA NAFTA MERCOSUR Other 23

Geographic structure of Poland’s agrifood import in 2010 * According to a country of exportation (EUR 2. 0 bn) (EUR 9. 0 bn) Source: Ministry of Finance ** Austria, Bulgaria, Cyprus, Czech Republic, Estonia, Finland, Greece, Ireland, Lithuania, Luxemburg, Latvia, Malta, Portugal, Romania, Slovakia, Slovenia, Great Britain, Hungary 24

Foreign trade in agri-food products Balance of international trade in some agri-food products in 2011 (in EUR million) livestock fish & products oil plants & products Source: IAFE-NRI 25

Agri-food trade with Israel mln EUR 78, 2 80 70 Export Import 65, 7 Balance 60 40 30 20 10 20, 3 21, 0 19, 2 19, 4 30, 3 26, 3 27, 6 23, 5 12, 3 7, 5 34, 7 33, 0 25, 4 22, 7 24, 8 32, 7 29, 5 9, 3 0, 2 0 -10 -20 48, 7 47, 5 50 -8, 1 -13, 5 2003 -2, 9 2004 Source: Ministry of Finance 2005 2006 -2, 7 2008 2009 2010 2011 26

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