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EY Report: CIECH generated PLN 1.7 billion of added value for the Polish economy and over 11 thousand jobs

EY, a global leader in professional business consulting services, has published an expert report on the CIECH Group’s impact on the Polish economy, with particular emphasis on the industrial sector. The elaboration shows that the operations of the CIECH Group are essential for the functioning of numerous industries and supply chains. Glass production serves as an example, for which the CIECH-manufactured soda is used. This sector supports jobs for more than 86 thousand people. According to the calculations of EY Polska, in 2018, CIECH generated PLN 1.7 billion of added value in the Polish economy (the Group's contribution to GDP), 11.3 thousand jobs and PLN 420 million in revenues for the public finance sector.

 

Sustainable development and creating added value for all stakeholders is an important element of the CIECH Group's development strategy for 2019-2021. Accordingly, one of the largest chemical companies in Central and Eastern Europe turned to EY with a proposal to create a comprehensive report reviewing its impact on the Polish economy, individual provinces and counties in which CIECH Group companies carry out their operations.

 

Calculations based on the EY Spectrum model, a proven methodology of the global professional services leader, show that the CIECH Group directly generated PLN 739 million in added value in the Polish economy, and additionally, nearly PLN 1 billion as indirect1 and induced2 effects. Among the sectors that benefited the most from the operating activities of the CIECH Group in terms of added value, we should mention mining and extraction, transport, trade and energy production.

 

In 2018, in Poland, the CIECH Group employed over 3,000 people. According to the presented report, the activities of CIECH additionally supported more than 8 thousand jobs in other businesses - notably in the mining, extraction, transport and trade sectors.

 

According to EY estimates, in 2018, CIECH generated nearly PLN 420 million in revenues for the public finance sector, predominantly, in the form of social security contributions, as well as PIT, excise duty and CIT.

 

CIECH is a global holding company with Polish roots. We are one of the largest Polish exporters and foreign investors. The EY report shows that we are also a company that has a significant impact on the Polish economy, its modernity and competitiveness, both through direct action and influence on many key industries, the development of which is supported by our activities – says Dawid Jakubowicz, President of the Management Board of CIECH S.A.

 

As the EY report shows, the operations of the CIECH Group are also very important for the functioning of many significant branches of the Polish industry, in particular, glass production. Over the years, the cooperation of CIECH, a strategic sodium carbonate producer, a raw material necessary for the production of glass, and suppliers of high-quality sand from Polish deposits, as well as dynamically developing economy with a large share of infrastructure investments, made it possible to create a significant glass production and processing cluster in this part of Europe. In 2018, this business generated PLN 11.2 billion in added value and supported jobs for over 86 thousand people – as indicated by the EY analysis.

 

- The use of our EY Spectrum model enables us to estimate the economic effects not only by sector, but also by region. We estimated what part of the total effects generated in Poland by the CIECH Group can be attributed to the counties where its individual companies are located. It proves that a significant portion of economic effects was generated in the counties where the CIECH Group companies are located - the impact on GDP is almost PLN 1 billion and more than 5 thousand jobs in the area – says Marek Rozkrut, EY Partner and Chief Economist who oversaw the preparation of the report.

 

EY also presented the biggest challenges for the CIECH Group after 2020. The answer to these challenges, included in the company's development strategy for 2019-2021, is to enable CIECH not only to maintain its significant positive impact on the Polish economy, but also to increase it. Innovations are among the most important of these. The intensive research and development activities carried out by the Group are aimed at maintaining the existing and developing new competitive advantages, both in terms of the efficiency of production processes and the creation of new products and business lines. CIECH operates in this area in the Open Innovation formula, collaborating with academic centres, a crowdsourcing platform and other entities engaged in the area of innovation. It also invests in technological start-ups.

 

As the EY report indicates, another important challenge for CIECH is the area of digitisation, which could significantly improve the efficiency of business and production processes. The innovative Industry 4.0 solutions are already being implemented, among others, in the Polish soda plants of the Group. CIECH is currently implementing a project using modern technologies for the development of predictive maintenance, i.e. anticipating any threats to the liquidity of soda production well in advance, and is also working on optimising its production by using a model based on neural networks. Moreover, the projects implemented in cooperation with technology companies in the factories in Inowrocław and German Stassfurt will allow, among others, for the digitisation of soda production control.

 

- Both the results of the analysis carried out by EY experts and the challenges identified together with CIECH indicate that the industry should carry out the transformation process with particular emphasis on two important factors: supporting production digitalisation solutions, which improve efficiency, and environmental protection issues as a result of dynamic changes in the approach to industry in recent years, manifested by a strong focus on reducing CO2 emissions and the use of “green” energy sources – emphasises Bogdan Dobrzeniecki, Director in the EY Strategy Department, responsible for the report's business analysis.

 

 

1 Indirect effects result from the demand generated within the supply chain. In order to be able to produce, the CIECH Group makes its purchases from other companies, and those from yet other companies, etc. Thus, the demand originally reported by the CIECH Group is “spreading” throughout the economy.

2 The induced effects follow the demand generated by the employees of the CIECH Group and employees within the entire supply chain, who use part of their remuneration for consumption.

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