Dominant enterprise (industry) in economic monoculture regions – a discussion of its role and importance accompanied by the analysis presented in other studies on the KGHM situation. Selected project findings.
According to the official statistics and KGHM Polska Miedź SA data, the Company has been deeply rooted in the region, not only on account of the region’s natural resources (the local occurrence of mineral deposits), but also mainly through its strong economic links and social commitment .
KGHM comprises a parent entity, 10 branches and over 70 subsidiaries (as of 2017), all making up the KGHM Capital Group. This employs a workforce of nearly 32,000, with almost 26,000 of those being Copper Belt inhabitants. The number of KGHM’s suppliers stands at over 26,000, of which one-third are from Lower Silesia and 10 percent from the Copper Belt. As the Company’s data show, in 2017 KGHM paid a total of PLN 583 million in taxes, fees and contributions to local self-governing authorities.
However, the real importance of the copper industry for the social and economic structures of the region is far more crucial. Analysis has been conducted as part of the studies carried out across the Copper Belt by WSB University, together with the Polish Copper Employers’ Association, with organizational support provided by KGHM Polska Miedź SA. This focused on examining the impact of the copper industry on the economy and social life of the region. It confirmed not only the previous assumptions, but also brought to light new areas where this impact has been occurring. The study was based on a multifaceted analysis, investigating the strength of the impact. It covered the regional employment structures and local governments’ revenues, involved a detailed examination of business networks and interactions between local businesses and the copper industry, and investigated the impact on the inhabitants’ lives. The results revealed several key behaviours of major, local economic and social players, among them the local community, local authorities and representatives of the business sector.
The prevailing view among the regions’ inhabitants is that KGHM exerts a strong positive impact on their lives and the development of the region. Their belief is that the Company is not only a leading employer offering stable employment and substantial earnings, but it is also an active driver of the life of the community. Yet, this is not only due to the high standard of living that KGHM provides to its employees and their families, but by its social initiatives with access for all. The Company has a positive effect on the living standards of the region’s entire population, thus contributing favourably to how it is perceived by investors and people from other regions. One could venture to characterise KGHM’s image, as viewed by the community, by drawing on five key areas where the Group’s impact on the social and economic life across the Copper Belt can be most profoundly felt.
– it affects the professional careers of the region’s inhabitants,
– it plays the role of a “donor and protector” for them,
– it is certainly a regional brand,
– it is “an object of desire” while developing a career path,
– it is a source of specific threats.
From the perspective of local businesses, mainly the SME sector, KGHM is a key partner in a number of areas, and a reliable and stable payer. It does, however, pose threats to the labour market in that it offers wages and bonuses unattainable for other businesses.
The attitudes adopted by the local governments towards this major employer could be delineated into two main strategies. Although numerous specific solutions may exist, it is possible to place them within a space bounded by two extreme attitudes ranging from tightening the links with the copper industry to searching for other alternatives for growth and development.
The analysis of the research material derived from the official statistics, KGHM’s own sources and the quantitative survey carried out on the region’s population enabled a picture to be drawn of the relationship between the inhabitants of the Legnica-Głogów Copper Basin (LGOM) and KGHM PM (Polish Copper) SA, the major player in the regional labour market, and a company exerting influence on actually every sphere of operation of the region, as well as its people. The latter are well aware, not only of the company’s influence on the region’s growth as reflected in the population’s welfare, but also of the threats brought about by this specific situation and the threats generated by working in the copper industry. Nevertheless, KGHM’s image among the people continues to be favourable.
More details in attached report.
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