Market insight Poland: Current situation and prospects of the processing machines market
Universal processing machines, until recently quite popular, are slowly being replaced by intelligent and customised machines, adapted to work in future smart factory environments. To make such a production formula competitive, far reaching automation and digitisation of businesses is required. This challenge will also apply to the Polish suppliers of processing machines.
In 2016 the value of global processing machinery production amounted to 68 billion Euros or even 92 to 95 billion Euros, including the supply of equipment (accessories, tools) and spare parts. This means a decline in relation to the previous year, resulting from the overproduction of processing machines in 2015 (mainly in China) and temporary market saturation, particularly in the multi-purpose machinery sector. At the same time, since the beginning of the decade, the focal point in the structure of the global processing machine market has clearly shifted towards the Asian countries at the expense of European and American suppliers, who continue to play a significant role in the segment of technologically advanced processing machines.
The list of the world's leading manufacturers of processing machines has long included the same countries, i.e. China with more than 25% of global sales, Japan (16%), Germany (16%), USA (8%), Italy (7%) and South Korea (6%) in 2016 . Against this background Poland forms the second league with its global market share not exceeding 0.4%, which is much lower than in the case of Czech Republic (0.9%) that leads the supply of such machinery in Central and Eastern Europe.
In 2017 about 4 thousand metal processing machines were manufactured in Poland, the vast majority (2.8 thousand) of which were multi-purpose machines. In relation to 2010 the share of machining centres, single- and multi-station machines clearly decreased in 2017 and was around 29% in 2017. Although the production volume of metalworking machines increased by 1/4 in 2015, national deliveries - as a result of the balance of these machines on the domestic market - cover less than 30% of the demand of the Polish market, which is due to the fact that some of the machines produced in Poland are exported.
Therefore it is necessary to import many machines from Germany, USA, China and other Asian countries. However, while imports from China mainly relate to machines classified as average technology products (which is no longer the norm), imports from developed countries, particularly Germany (354 million in 2016), comprise largely technologically advanced processing machines manufactured in small quantities in Poland and only for certain customers. The fact that a high deficit was recorded in the international import and export of processing machines (almost 500 million euros in 2016, of which more than 300 million euros in Germany) clearly shows that foreign deliveries are necessary to maintain the continuity of Polish market supply.
Information from the Ministry of Entrepreneurship and Technology shows that in 2017 there were about 220 entrepreneurs in Poland, including 5 large companies with more than 250 employees. Of the entire group of companies, only several entrepreneurs manufacture complete machines, about 20 companies act as representatives of foreign groups and the rest are active in the production of components, spare parts, accessories and equipment for processing machines. The product range of local manufacturers is complemented by a wide range of machines from many well-known global companies and their Chinese or Korean counterparts.
What is the future of the Polish processing machine industry?
The macroeconomic conditions under which the sector operates seem to be quite favourable. This is reflected not only in the accelerated economic growth (up to 4.6% in 2017) but also in the high and increasing dynamics of overall industrial processing (7.3%), which reflect the increase in production in many industries, including those that often use processing machinery.
In April 2018, for example, the PMI index for Polish industry was just under 54 points, well above the threshold of 50 points (separation of recovery and recession) - proof of the optimistic perception of current and future prosperity by entrepreneurs.
This is possible thanks to the economic achievements of the manufacturing machinery industry, which in 2017 again achieved a net financial result of over PLN 2 billion and profitable net turnover (5.7%). A signal indicating the stable situation of manufacturers of machinery and equipment (including processing machines) is the growing employment - at the end of 2017 the number of companies in the sector amounted to 122 thousand people, which meant the fourth consecutive year of growth.
Taking into account the different options, it appears that the optimal choice from the perspective of the long-term market position of the industry is the Smart Specialization. This is happening in the most important Polish companies which came to the conclusion that the chances of a good business should be sought in the area of specialized machinery, e.g. large processing machines used in the construction of the rolling stock, in the marine industry or in the defence sector.