Victim Of Zloty
Krosno Glass
As Polish Zloty get stronger, Poland's exporters get hurt
Classified Polnews
Warsaw, Poland - 17 April, 2008 The Polish zloty has been dropping to new lows against the US dollar. And as the zloty drops exports from Poland's factories are dropping with it. Factories are closing and people are being laid off.
The exchange rates quoted by the National Bank of Poland for all currencies is updated on line each day and can be seen at NBP
Poland has been long known for its factories that supply very high quality products at relatively low prices. Many foreign companies have chosen to buy Polish products and pay a higher price than they would pay for products from the Far East because both of this quality and the proximity of Poland to Western markets.
But as the US dollar weakens on one hand and on the other hand as the Zloty continues to strengthen against the Euro, Polish factories are experiencing a significant reduction in orders.
Glass from the famous Krosno region of Poland has been hit particularly hard. Not only are they affected by the currency exchange rate of the Zloty but they have also felt the effects of an increase in the price of gas and energy. One factory, for example, is laying off 1200 people.
The Christmas ornament industry, famed for its extremely high-quality handmade Christmas ornaments, has also been effected. One factory that had long been known in the United States as a primary supplier of high-quality ornaments attempted to maintain the market in spite of price increases by shifting manufacturing to China. Unfortunately, the quality of the product dropped and that factory has suffered significantly.
Another Christmas ornament factory has simply closed one location and has reduced its order minimums in order to try and stay in business.
Crystal manufacturers report a significant slowdown and have even taken to making special offers on some products.
The Zoty and energy prices are not the only reason Polish companies are suffering.
Polish factories suffer also from their failure to develop a network of independent sales agents. Many of the factories continue to try to sell their products in a way reminiscent of the days of communism where customers are expected to line up and wait their turn in order to get product.
Factories do not leave room for commissions for sales agents. When a sales agent brings a customer to the factory the sales agent can be fairly well assured that the factory will not protect him and the factory will sell around him at the first chance it gets.
The long-term effect of abusing sales agents has not really been felt by the factories until the value of the Zloty increased. But there is no indication of factories recognizing that they require a sales force to remain competitive.
It appears that the Zloty will stay strong for some time. How long Polish factories will be able to withstand the effects of the strong Zloty is open to question. And whether they will understand the importance of independent sales agents before it is too late is questionable.
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