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Confined to its size and proximity to Germany and other large mature markets, Poland seems unlikely to support a nonwovens industry of global significance. However, this is not the case. In fact, the demand for nonwovens in Poland is comparable to that of more populous developed countries such as Italy and the United Kingdom, and the market is expected to grow at an above-average rate of 3.2 percent per year until 2022.

So, what is driving the booming Polish nonwovens market?

1. Economic growth and expanding export markets give nonwovens sales support

Poland's steadily growing economy and domestic consumption base helped to some extent. In October 2018, the London-based Financial Times and the British Stock Exchange (FTSE) upgraded Poland's credit rating to developed status, making it the first post-Soviet country to receive this distinction. As long as Polish consumers benefit from this, they are bound to buy more goods containing nonwovens, such as personal hygiene products and wipes, and strongly support industries that use these goods (such as construction, manufacturing and services).

However, foreign trade is the basis for the growth of the market, so Poland exports a large number of personal hygiene products, such as baby diapers, feminine hygiene products, adult incontinence products and wet wipes (such as baby wipes, household cleaning wipes, industrial wipes), most of which are exported to: Australia; Czech Republic; Germany; Romania; Russia; Ukraine

In the highly globalized market of personal hygiene products, wipes and other products containing nonwovens (including construction materials, filter media, medical/surgical supplies and motor vehicles), Poland is ready to further increase profits and provide nonwoven suppliers with ample opportunities.

2. Bright prospects attract a lot of international investment

The main global producers of personal hygiene end products with significant investments in Poland are:

1) Procter & Gamble: Operates a factory in Warsaw, producing 1000 Pampers diapers per minute for 37 national markets.

2)Ontex: opened a new production plant in Radomsko to supply its sales office in Warsaw, Poland. The new plant currently has only one production line, but four are expected to be fully operational by 2020.

Poland is also home to TZMO, the country's largest local manufacturer of personal hygiene products, wipes and medical/surgical supplies. TZMO is a market leader not only in Poland, but also in neighboring countries such as Russia. Even in Germany, a country with its own nonwovens industrial base, TZMO has a 22% market share in its fast-growing adult urinary incontinence market. Now, TZMO is looking for ways to break into the competitive U.S. market and the fast-growing Indian market.

3. At present, domestic producers in Poland win with low labor costs and high quality products

As the recently upgraded FTSE rating shows, Poland is in a period of economic transition, while benefiting from low labor costs in developing countries, reducing overall production costs, but with high product quality, which is more in line with the characteristics of developed countries.

As a result, Polish producers of nonwovens products are able to compete effectively on the basis of quality and price. TZMO's brand is clearly thriving, and P & G has a reputation to maintain as a globally recognized brand. (Although Ontex's Radomsko business will focus on supplying private-label products, given its reputation as a global market leader, the company's store-branded products may also be of good quality.)

However, as the Polish economy develops, labor costs may rise and production costs will also rise. In fact, the Polish government has proposed a 7% increase in the minimum wage in 2019, which may curb growth to some extent. In addition, as the market matures, it is expected that by 2022, the development rate of the Polish nonwovens market will slow down significantly compared with the previous decade.

4. Local production shortages bring opportunities

While the Polish market for nonwovens end products is already quite solid, the country's trade deficit in nonwovens totaled nearly 100000 metric tons in 2017. Although the end-use industry has seen significant growth in the past 20 years, the nonwovens industry has not fully caught up, causing end-use product manufacturers to rely heavily on imported materials to meet production needs. While many of these imports originate from neighbouring countries, such as Germany, the Czech Republic and Sweden, a significant portion is shipped from more distant places such as China, France and Italy, where increased transport costs may raise the price of the finished product or lead manufacturers to substitute with lower quality materials.

Thus, the trade deficit provides an opportunity for nonwovens producers to build new production lines in Poland. With the booming development of many local-based end product manufacturers, there is a large demand for low-cost, high-quality nonwovens. In addition, Poland has access to key markets throughout Europe, including other EU member states and its own growing consumer base, making it a key strategic location for multinational suppliers.

Nonwovens suppliers are beginning to mobilize. In August 2018, Texsus announced an investment of € 30 million million in the construction of a new manufacturing facility for nonwovens for personal hygiene products, which is expected to go online in the first quarter of 2020. However, the trade deficit is expected to remain high through 2022, leaving ample opportunity for further investment.

(Source: Asia Nonwovens Industry)