COVID 19 Market News

How serious is coronavirus risk for Polish enterprises?

In the first quarter of 2020, due to Novel Coronavirus (2019-nCoV), Chinese GDP growth may even fall below 5%, which is more than 1 p.p. lower than in a previous quarter. Although the impact on the Polish economy will not be strong, the effects of the slowdown may be felt by Polish companies present on Chinese market or those importing significant amounts of products or semi-finished products from China.

China Poland’s second largest trade partner

In 2018, the value of imports from China reached PLN 112.7bn , in the same period products worth PLN 9bn  were exported from Poland to China. Although the largest share in the value of imports are industrial products, machinery or chemicals, products strictly related to the retail sector also play a role. In 2018, among others, food and live animals worth PLN 665m, beverages and tobacco worth PLN 73m and inedible raw materials worth PLN 724m were imported to Poland from China.

Serious problems for LPP, CCC and AmRest?

In the face of globalisation and the growing network of connections, the number of Polish enterprises, especially large ones, is growing, importing some products or semi-finished products from countries where their production is cheaper. Although the epidemic does not mean an automatic suspension of supplies, the introduction of security measures and restrictions on transport or the closure of some plants in China may result in delays in supplies, which in turn may translate into production and sales problems in Poland. It is worth noting that, in 2018, 26% of CCC Group purchases came from the Chinese market. In the case of LPP this share reached 43%. In turn, AmRest has several dozen KFC restaurants on the Chinese market. However, at present, the epidemic in China does not significantly affect even the share price of these listed companies.

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