Sharp rise in bankruptcies in Poland

With 414 bankruptcies of firms listed so far this year, experts fear that the number could double by the close of 2012.

The statistics, collected by Coface Poland and Bisnode Polska, are as much as 108 percent worse than in 2008, before the so-called credit crunch began.

“It's the highest number of bankruptcies in the last four years,” confirmed Tomasz Starzyk of Bisnode Polska, in an interview with the Dziennik Gazeta Prawna daily.

The data reveals that the construction industry is especially badly hit. A quarter of all the bankruptcies this year were in this category.

Meat industry struggling

In a separate report by trade credit insurer Euler Hermes, in this case focused on the food production industry, statistics show that meat producers are also struggling.

The report shows that 15 food producers went bankrupt in the first five months of 2012.

The data is comparable to figures from 2011, where 36 such firms went under by the end of the year. In both cases, meat manufacturers made up the main group of insolvent companies.

What has changed, however, is that the economic woes are affecting bigger firms, as the largest company to declare insolvency this year had enjoyed a turnover of 150 million zloty (around 35 million euro). Last year, the biggest company to go belly-up had had a yield that was five times lower.

The authors of the report claim that the troubles in the meat sector may be attributed to fierce competition and a surplus in manufacturing capacity.

Also, having deducted expenditures, such as the costs of fuel, utility bills or the so-called slotting fee charged for space on retailers’ shelves, the companies are left with meagre profits, with a margin of one to two percent. This makes it increasingly difficult for the meat manufacturers to pay off loans obtained for investment projects undertaken in recent years. (nh/aba)