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Łódź: A Rising Star for Nearshoring in Europe

BUSINESSŁódź: A Rising Star for Nearshoring in Europe

The Łódź agglomeration is one of the most “emerging” locations for nearshoring in Europe, the trend of relocating production closer to the target market. This image of the region is depicted in a new report by KPMG in Poland, published in partnership with the City of Łódź. The investment attractiveness of the region may increase in light of global geopolitical and economic conditions. Currently, Łódź ranks third in the country in terms of the number of logistics and warehouse investments.

In the face of a dynamically changing business landscape driven by globalization and technological advancement, companies worldwide are increasingly adopting strategies that allow them to effectively respond to new challenges and leverage new opportunities. One of these strategies is the modification of supply chains based on more cost-effective locations and relocating production closer to the end customer, known as nearshoring. Bringing supply chains closer to the end consumer also aligns with the ESG agenda, which aims to reduce the carbon footprint of products and create more sustainable business models.

The role that companies can play in this regard is becoming increasingly important to stakeholders, accompanied by a wide range of regulations at the EU level. The concept of a sustainable value chain focuses on making the best use of a geographic region’s competitive advantage in conducting business activities. Poland – as one of the leading nearshoring locations in Europe – has the potential to become one of the main beneficiaries of this trend. The forecasts are supported by specific data – 33% of companies plan to increase their focus on sustainable sourcing as part of their future supply chain strategy, and 37% of businesses have recently replaced manual labor with advanced robotics or automation in their warehouse operations.

In the context of these changes, Łódź has become one of the most promising locations in Poland for business relocation in recent years. This is supported by its advantageous geographic location in Europe, well-developed transportation infrastructure (including, as the only city in Poland, access to a full motorway ring), attractive investment incentive system, well-developed warehouse market, and availability of attractive investment land for production. Łódź, as the fourth largest city in Poland by population, ranks third in the country in terms of modern warehouse space resources.

Łódź’s strategic location on the map of Poland and Europe is just one of the reasons why the popularity of this agglomeration among investors will grow. The region’s advantage is its well-developed infrastructure and wide access to skilled workers from local academic centers. Global companies from various sectors – from logistics to manufacturing, to business services and IT – recognize this potential and consequently increasingly decide to locate their capital in the region, says Monika Dębska-Pastakia, Partner Associate in the Deal Advisory Department, Head of the Real Estate Advisory Team at KPMG in Poland.

Łódź is not only a central location, excellent transportation infrastructure, and a skilled workforce. Łódź is a city that values and cares about the high quality of life of its residents; it is a place that supports entrepreneurs at every stage of investment, stable and conducive to business development. Łódź is a city of almost unlimited possibilities. We believe that Łódź and the Łódź agglomeration will increasingly be considered as a location for nearshoring, emphasizes Adam Pustelnik, First Deputy Mayor of the City of Łódź.

The KPMG advisory report, prepared in partnership with the City of Łódź, titled “Towards Łódź,” lists among the region’s advantages for investors the fact that within a 1,000 km radius of Łódź, 260 million people live, and within a 500 km radius are major centers such as Berlin, Prague, Vienna, Bratislava, Budapest, and Vilnius. Two highways (A1, A2) and two expressways (S8, S14) are located near Łódź, making it the only city in Poland with a complete ring of expressways surrounding the entire city. Additionally, the region benefits from a high availability of attractive investment land, particularly in the Łódź Special Economic Zone. About 400 hectares of land are available here for investors in the manufacturing sector, who can take advantage of modern infrastructure solutions. The list of incentives includes fully prepared investment plots at attractive prices, tax exemptions, and free assistance with formalities related to property tax exemption.

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