In southern Poland, there is Krakow and there is Katowice. One is a historic city with a pedestrianised centre and picturesque squares, making it a popular tourist destination; the other is in the middle of an urban agglomeration, historically encircled by heavy industry, and comparatively unknown outside of Poland. Having long played second fiddle to neighbouring Krakow, Katowice has recently come into its own.
As the country made the transition to a market economy in the mid-1990s, the Polish government closed the coal mines in and around the city, prompting a substantial urban and cultural transformation. It set up the Katowice Special Economic Zone (SEZ) to promote greenfield investments in post-industrial terrains — a lot of which has come to be dominated by the automotive sector.
Simultaneous plans have pushed through a cultural renaissance, as the city not only repurposes its post-industrial areas for economic enterprises, but also cultural activities utilising its industrial roots to the best of its advantage. In 2016, it received the title of the “city of music” from the Unesco Creative Cities Network. It hosted Cop24 in 2018 in its new international congress centre, which sits on a post-industrial site alongside the Silesian Museum and the Polish National Radio Symphony Orchestra.
The city and surrounding urban area in Upper Silesia, home to two million people, has since metamorphosed further still into a regional services hub. According to the City Hall of Katowice, the mining area of Katowice in 1990 stood at 91% of the city’s area, which dropped to 75% in 2014 and to 45% in 2019. In 2015, Katowice was listed by the Brookings Institution as an emerging gateway city.
The process of post-industrialisation, punctuated by the dominance of the automotive sector, looks to its next step as being one propelled forward by electric vehicles (EVs). With the consolidation of the services sector and the resulting need for new office and logistics space, there are simultaneous concerns over the city’s historic greenfield investments push.
Cars drive change
If cars spearheaded the post-industrialisation of Katowice in the 1990s, EVs are set to dominate the 2020s.
Witold Uhma, deputy head of the audit, analysis and control department at the Katowice SEZ, says that more than 60% of greenfield projects are currently in the automotive sector — either in production or vehicle parts.
Now with the government U-turning on its green infrastructure agenda, as it announced plans in 2020 to phase out the entire country’s coal mines by 2049, there is notable support on the part of the government and foreign companies towards EVs and battery plants.
Poland’s first electric car plant will be built in the town of Jaworzno near Katowice, with production starting in 2024. According to the government’s e-mobility development plan, it has predicted that by 2025, the total number of EVs in Poland will increase to over one million. As the country’s high number of obsolete vehicles contributes to its terrible air quality — the worst in Europe — it is hoped that EVs will be able to improve pollution damage too. The percentage of vehicles older than 16 years old in Poland stands at 55%.
In December, the UK-based Fiat Chrysler Automobiles Group announced it will invest more than $200m in its plant in Tychy, Poland, where production is expected to start on new hybrid and electric Jeep, Fiat and Alfa Romeo models in the second half of 2022.
This follows the South Korea-based SK Innovation’s decision to establish a lithium ion battery separator plant in the neighbouring city of Dabrowa Górnicza for the production of EVs in 2019.
Separate from the post-industrial zones in the surrounding areas, the city centre itself now looks markedly different, its newly built offices occupied by services companies.
Michal Kulig, senior consultant at Savills in Katowice, says that the whole landscape of the city changed rapidly, recalling that when he was a student in Katowice in 2007, it was a “sad city” where you would not brave the railway station after dark. Now, the railway station is part of a mixed-use project, including a large-scale modern shopping centre Galeria Katowicka. The city has 560,000 square metres of new office spaces and started to rival Krakow in terms of attractiveness for both living and business, he asserts.
But the city is not without its problems. As the number of favourable post-industrial plots/terrains decreases, industrial and logistic developers are investing more and more in brownfields, Mr Kulig says. “We have to bring brownfields back to the city and community. Greenfield investments in the closest area of the city centre are really problematic nowadays, due to lack of available plots and rising land prices — in addition to plots that have problems with mining damages.”
Industrial space developers Panattoni and 7R have announced a brownfield logistics projects on post-mining and post-ironworks plots near the city centre, set to be unveiled this year.
Elżbieta Zuzańska-Żyśko, assistant professor at the University of Silesia, maintains that today’s Katowice has succeeded in becoming a “gateway” city, since it impacts other cities in the region, with IT companies taking root in nearby Gliwice and business service companies entering Sosnowiec and Dabrowa Górnicza.
However, the city owes its transformation to city officials and foreign businesses, not the government, Ms Zuzańska-Żyśko stresses.
She adds that both its technological backwardness and degraded natural environment repelled investors initially. But as a polycentric area, it attracted workers from other cities in its region and became a beneficiary of the talent pool coming out of universities and higher education institutions in Upper Silesia. The construction of new regional roadways and public transportation networks were self-financed by the cities in the region.
To keep this transformation moving forward, Ms Zuzańska-Żyśko suggests that the city needs to improve public spaces and attract creative people to cultivate a metropolitan class. At the same time, Katowice as a nucleus city should work harder with its surrounding cities to consolidate its position as a gateway city so it can compete globally in the 21st century.
For Michał Burdziński, the Silesian Museum’s core business director, the cultural regeneration of the city, which has seen it move from a “dark”, depressing industrial centre to a “new source of pride” for its citizens, finds itself up against a great deal of uncertainty, thanks to the pandemic.
As far as finances are concerned, culture and art museums always come last, he says. If money is there, then cultural institutions are able to develop and realise their desired aims, but with the present challenges, it remains unclear what funding museums will be able to rely on from the Ministry of Culture, or indeed whether domestic tourism will return.
Mr Kulig, on the other hand, remains optimistic for business. “I think that in the mid-term the world won’t change much. People will return to their lives as they lived before the pandemic,” he says. He concedes that there are new challenges but expects the e-commerce revolution will bring Katowice and the logistics sector in particular back as an attractive, emerging market, as it was in 2019.
This article first appeared in the February/March print edition of fDi Intelligence. View a digital edition of the magazine here.