Spain - another market where BGK supports Polish companies in foreign expansion

Bank Gospodarstwa Krajowego has granted a loan of several million euros to Polish company BiBP Sp. z o.o., the manufacturer of innovative bag-in-box packaging. The financing enabled the acquisition of a majority stake in the Spanish company Montibox SL, based in Montilla (Andalusia). Spain thus becomes the 86th market in which BGK supports Polish entrepreneurs in their foreign expansion.

BGK granted BiBP a long-term investment loan with insurance from the Export Credit Insurance Corporation. The investment loan with insurance from KUKE (Export Credit Insurance Corporation) enhances financing opportunities for Polish entrepreneurs. This financing structure allows Polish companies, both in the SME sector and large enterprises, to finance investments abroad, including mergers and acquisitions of other companies or expansion of production capacity, among others.

"We are glad that thanks to our financing Polish entrepreneurs also in the SME sector can be bolder in their approach to overseas expansion. In the long run, this will positively affect the condition of our economy and the development of local, family-owned businesses, and at the same time strengthen the competitive position of Polish companies. This is another acquisition financed by BGK, but the first one using KUKE insurance, thanks to which BGK is able to offer entrepreneurs more attractive loan terms such as a higher value or a longer financing period. We believe that BiBP, together with BGK and KUKE, will pave the way for Polish entrepreneurs in Spain, where domestic companies have not been very active so far in the aspect of foreign direct investment" - Małgorzata Płotnicka, expert in the Department of Foreign Expansion and Trade Finance at BGK, says.

"KUKE’s cooperation with the banks financing Polish companies can significantly increase the scale and pace of their international expansion. BGK's investment loan to BiBP is the best example of this. It uses KUKE insurance which gives the bank the certainty of financing repayment. Recent years of rapid disturbances in the global economy have led to a number of investment opportunities in the form of possibilities to acquire foreign competitors or enter new market segments. It is important to highlight that KUKE's instruments protect not only against the insolvency of counterparties and investors, but also against political and force majeure risks, including war or pandemic, for example. We are working on more transactions that will allow Polish companies to expand their operations to other markets, including non-European ones" - Norbert Królikowski of the Insurance and International Cooperation Department in KUKE says.

BGK for Polish exporters

The loan in this amount will allow BiBP to acquire a controlling stake in Montibox. This is the first time BGK has supported a Polish company in its expansion to Spain. This is already the 86th market where Polish exporters and investors are present thanks to financial support from the Polish development bank. In 2015, there were 23 of these markets.

BIBP's strategic premise is to further develop the acquired entity through synergy effects. The acquisition will help strengthen BIBP's competitive advantage by, among other things, increasing production capacity, acquiring almost 30 years of know-how, a long-standing customer base and facilitated access to new markets. The Polish company will thus become one of the European leaders in the "bag-in-box" packaging industry.

"Yet another acquisition that fits perfectly with our strategy of continuous development in line with 'together into the green future’ idea. We are confident that this new experience will make us even more comprehensive than before. We are sailing into wide waters unafraid of challenges" - Leszek Łysoń, CEO of BIBP, says.

Financing Polish exports as well as direct support for the internationalization of Polish capital is part of Bank Gospodarstwa Krajowego's international business and cooperation strategic pillar. BGK finances exports and expansion to countries considered as safe as well as to higher-risk but promising markets. The bank's offer includes direct financing for the Polish exporter and investor, the importer of Polish services and products, and the importer's bank.

Wardyński & Partners Law Firm was BGK's legal advisor on the transaction.

Growing importance of Spain

Spain has been one of Poland's top trade partners for many years. According to GUS (Central Statistical Office), in recent years, merchandise trade with Spain has been on a clear upward trend. In 2022 alone, exports of goods to Spain, expressed in euros, increased by more than 21 percent, and imports by 9 percent. As a result, Spain has become Poland's 10th trading partner. Significantly, Poland is running a solid goods trade surplus. This demonstrates the growing importance of Spain as one of more important export destinations for Polish entrepreneurs, but also indicates the investment potential in terms of internationalization of Polish companies. According to estimates by the National Bank of Poland at the end of 2021, the value of capital invested by Polish companies in Spain amounted to PLN 680.1 million, which will certainly also translate into an increase in trade between the two countries in the long term.