Polish machine tools industry urgently needs new financing options, according to a recent survey conducted by Siemens Financial Services.

As many as 84 percent of the surveyed Original Equipment Manufacturers (OEMs) reported that their customers are experiencing increased difficulty in accessing traditional bank loans to fund equipment acquisition. More than 60 percent has witnessed rising demand for financing options from their customers over the last two years.

The survey included the top 80 global machine tools manufacturers. Respondents were asked about their views in relation to the importance, demand and future trends of equipment sales finance.

On their own

In Poland, machine tools consumption growth between 2007 and 2012 outstripped GDP growth in the same period. Pressure to replace aging industrial infrastructure, substantial foreign direct investment (in particular in the “metal and machinery products” category) as well as special economic zones (SEZ) have all contributed to the advancement.

Yet 2012 saw an unprecedented drop in the inflow of FDI (by 68 per cent, according to the data published by NBP). The benefits associated with investing in SEZs, albeit extended until 2026, have to come to an end eventually, anyway.

The sustainability of the growth in the Polish machine tool industry will thus hinge on the availability of affordable and appropriate finance. At present, small and medium-sized enterprises (SMEs) in Poland sit a little below the EU norm; according to the European Commission’s SME Access to Finance (SMAF) they struggle with accessing traditional bank financing for equipment acquisition.

The supply chain

The availability of appropriate, tailored financing options is particularly significant, as machine tools users are usually the ones who supply other producers, be it vehicles, aircraft, machinery and medical equipment manufacturers.

For example, in 2012 Polish automotive industry accounted for 8.6 percent of GDP (according to the Polish Automotive Industry Association), with over a quarter of this value attributed to automotive manufacturing. However, more recent data indicate that the importance of this sector for the Polish economy is beginning to fall, so the value of a healthy, complete supply chain for sustaining its growth is greater than ever.

Leasing in the foreground

It comes as no surprise that the demand for asset financing is expected to rise through to the end of the decade, with 68 percent of the OEMs survey respondents suggesting that it will continue to be “highly important” in the next five years. Leasing, specifically, has been highlighted by 55 per cent of the respondents as the principal funding source utilized by machine tools users.