Poland emerges as ideal IT foothold for Korea in heart of the new Europe By Peter W. Strydom / Senior Editor Poland signed an agreement on economic cooperation with Korea in December 2004. During the Polish-Korean Economic Forum in Warsaw president Aleksander Kwas niewski said that the value of Korean investments in 2003 exceeded US$1 billion. However, the largest Korean investor in Poland by far is LG Electronics, and Poland expects to develop cooperation with the Republic of Korea in sectors, such as IT, electronics, telecoms, agriculture, chemicals, metallurgy and aviation, and possibly also logistics. LG Electronics (LG), a leader in consumer electronics and telecommunications, signed an investment contract last month with the Polish Government to build a plant in Wroclaw to produce home appliances and LCD TVs. With a total investment of 101 million euros by 2011, the plant will have an annual production capacity of 500,000 units of refrigerators and 3,500,000 units of LCD TVs. While construction of the plant will start early this year, the plant will be fully operated in the first quarter of 2007. LG.Philips LCD will break ground for the plant in the first half of 2006. The first modules will come off the production line a year later. The plant's initial capacity will amount to 3 million modules per year. The company will invest a total of EUR 429 million in the plant by 2011, at which time LG.Philips LCD Poland Sp. z.o.o. is scheduled to reach its design capacity of 11 million units per year. According to the estimates of the Polish side, by the end of 2017 the state budget will have earned around PLN 1.2 billion. The new plant will hire approx. 3,000 employees. Overall, around 12,000 new jobs will be created in the region as the result of the investment. The new plant will be one of the most modern factories of LG.Philips LCD, one of the world's leading innovators of thin-film transistor liquid crystal display (TFT-LCD) technology. LG.Philips LCD plans to allocate the capacity of the local plant to the production of large and wide LCD TV modules, such as 26-inches, 32-inches, 37-inches and 42- inches, as well as LCD monitors of 19 inches and above. The module production process is the last step in the production of TFT-LCD panels, where TFT-LCD panels are finished by attaching back light units, light polarizing films, driver ICs, and product cases to the cells produced at panel factories. After the module production process, TFT-LCD panels are sold to TV or PC makers to be installed in LCD TVs, monitors or notebook PCs. LG.Philips LCD is currently the biggest module producer in the world and employs a total of approximately 15,000 employees globally. The investment in Kobierzyce will be the company's first plant in Europe. Samsung reaping benefits since 2000 The R&D centre of Samsung Electronics was established in Warsaw in 2000. The decision to locate it in Poland was influenced by availability of numerous and well-educated Polish engineers. The communities of such academic centres as the Warsaw University of Technology and the Warsaw University were in the past and still will be the main partners of the company. Another argument in favor of Poland is an access to a large amount of satellite digital television signals transmitted live. Research and Software Development Centre of Samsung Electronics in Poland is the most important centre of the company in Europe. Similar R&D European centre is also in London. Samsung Electronics has 17 R&D centres worldwide. Six of them is localized in the South Korea, others are e.g., in Russia, USA and Israel. The digital television division - a new part of the Research and Software Development Center of Samsung Electronics in Poland was established. By the end of 2007 it will employ about 600- 700 people. The new division aims to improve software for television sets (mainly with plasma and LCD screens) that enable reception of terrestrial digital TV. There are also plans concerning works on further development of the Multimedia Home Platform, which will turn the traditional television into a state-of-the-art interactive medium. Only a software conforming with the DVB (Digital Video Broadcasting) standards for decoders of digital satellite, cable and terrestrial TV (so-called set-top-box) has been created till now in the Polish R&D center of Samsung. In 2005 roughly 1.2 million of TV decoders with software made in the Warsaw center were sold worldwide. Competitive advantages of Polish economy for Korean business. Poland is one of the medium sized European countries, both in area and in the number of inhabitants (nearly 40 million). At the same time Poland is the largest country in Central Europe. Poland is an unquestioned leader among the countries of Central and Eastern Europe in respect to economic growth and without interruption has been undergoing profound systemic transformations. Four of its neighbors are members of the European Union, to which Poland also belongs since May 2004. Poland, with her natural resources, highly skilled and still relatively cheap work-force as well as economic indexes showing fast growth and good prospects for Korean businesses. Its membership in European Union should also attract more and more Korean investors and businesses in the coming years. Economic cooperation between Republic of Korea and Poland is growing and has great potential. It is driven by rising trade exchange between the countries with surplus of Korean export to Poland that includes mainly electronics and machinery as well as cars and car parts. In addition, there has recently been a massive increase of interest of Korean companies to choose Poland as investment location.