BizPoland Magazine - October 2014

October 2014 vol. 7 no. 7(45) Price: 20 zł

Łódź Rises

Special Focus

Luxury

Brands

in Poland

Advisory:

Equities:

FDI :

Foster, Matraszek, Schnell and Smith

Mark Mobius on Investing

World’s largest sawmill in Poland

Table of Contents European Economic Forum – Łódź (4–9) Łódź Rises – European Economic Forum – Łódź (10–12) Lodz SEZ breaks records (13) Renovation of Grohman’s factory (14–16) Interview with Mayor of Łódź (18) New Center of Łódź (20) Poland’s Fashion City (22) Retail, Offices and Logistics

October 2014 vol. 7 no. 7(45)

Published by: BiznesPolska sp.z o.o. ul. Długa 44/50, bud. D, lok 704, 00-241 Warszawa tel.: 022 831 7062

Advisory (26) Foster talks Taxes

General Manager and Editor: Thom Barnhardt (tb@bizpoland.pl) Editorial staff and writers: Leon Paczyński, Monika Tutak Research team coordinator: Magda Adamczyk Advertising Sales: Wiktor Gliński (wglinski@biznespolska.pl) Barbara Kwiatkowska (bkwiatkowska@biznespolska.pl) tel.: 022 831 7062 Project Manager of EEC - Łódź Report and Luxury Brands Poland: Wiktor Gliński Graphic Design: Sławek Parfianowicz (sparfianowicz.wordpress.com)

(27) Matraszek on Politics and Ewa Kopacz (28) Schnell on Polish power market (29) Smith sniffs out scams

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Equities (30) Mark Mobius on Investing (31) Stock exchange’s big push into D&D

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Anniversary Special – Subway

33 36 43 46

FDI News Cities News Chambers of Commerce News Events (46) Andels Łódź celebrates 5 years

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European Economic Forum – Łódź

Cover Story

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Łódź Rises A Special Report on the City’s Rejuvenation Like the mythological phoenix, the City of Łódź and the Łódzkie area are on an

and BSH, the majority of which are operating within the Lodz Special Economic Zone. Łódź has become an important destination for the business services sector (BPO/SSC), which currently

Sterlinga Business Center (12,600 sq m) and Park Biznesu Teofilów I (8,600 sq m) which all represent the highest market standards. At the moment 35,300 sq m of office space is under construction.

Older offices in tenement houses from the 1950s and 1960s have been refurbished or redeveloped, most notably on Piotrkowska street. In addition, an increasing number of post-industrial plants and sites have undergone

occupies 44% of all office space in the city. UPS, the global giant, just announced plans to invest $25 million in the area, including a shared-services center in Łódź.

The increased interest in Łódź from companies such as Accenture, Bosch, Infosys, Unicredit, Indesit, Fujitsu and Dell was reflected in rapid reaction from office developers. In 20112013 alone, the modern office stock grew by an additional 20,000 sq m per annum. As a result, almost 50% of all office space in Łódź is in buildings that are less than five years old.

In general, the quality of office stock in Łódź is gradually rising. This is illustrated by the completion of offices such as GTC’s University Business Park I (18,700 sq m), Skanska’s Green Horizon I&II (30,500 sq m),

refurbishment in Łódź such as Textorial Park, Synergia, Fabryka or Zenit, which all now offer A and B class office space for lease.

While the giant Manufaktura long kept other shopping center developers away, Łódź now has a number of exciting new shopping centers coming from top developers such as InterIKEA and Capital Park, a testament to the increasing purchase-power and employment prospects of Łódź’s citizens.

The city and region has a lot of work ahead of it, to continue its transformation from a postindustrial to new-economy hub for top talent and global investors. It’s well on its way, as revealed in the detailed report that follows, published on the occasion of the annual European Economic Forum - Łódź.

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upward trajectory. With a global-scale city renovation project underway, sparkling new transportation infrastructure, and a ‘Who’s-who’ of international firms investing, the city and region is building a world-class foundation for the future.

Although Łódź has slipped from Poland’s second largest to third largest city, city authorities are making huge progress in transforming the city, with major projects such as spectacular New Center of Łódź project. Łódź is benefiting from its “centre-of-Poland” location with the two main A highways passing nearby, drawing large investments from logistics firms. The BPO/SSC sector accounts for nearly half of all new investment in the city, and the soon-to-opened fast-train will cut the travel time to Warsaw to less than hour.

As mentioned in the interviews on the following pages of BizPoland Magazine’s Special Report on Łódź Province, the area is building on its industrial and creative base, building momentum with new investors, and creating jobs in new sectors such as IT and Shared Services. Its proximity to Warsaw – sometimes considered a disadvantage – is being parlayed into an asset.

Central Poland, centred around Łódź, benefits from its strategic location in the heart of the country, with the junction of the two main motorways in Stryków, connecting the A1 motorway (North–South) and the A2 motorway (East–West).

There is also an expressway network planned – the S8 to Wrocław should be completed by the end of 2014, the S14 will form the western bypass of Łódź and the S74 which will provide a connection with southeastern Poland and the Ukraine.

Major industry sectors in the region include the white goods industry, fuel and energy, pharmaceutical and building materials.

The most significant companies here are Dell, RR Donnelley, Corning Cable, Unilever, Indesit

October 2014

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European Economic Forum – Šódź Interview with Witold Stępień, Marshal of Šódź Voivodeship What is EEF - Šódź? Who is this event targeted to and for what reason?

Realizing that economic forums are now organized in various cities in Poland, we try not to duplicate topics discussed there, but I think we have found our place on the map of such meetings. At our congress we propose to combine the interests of business and administration. In one place, one can meet entrepreneurs, representatives of major corporations, politicians, local government and scientists.

These are people from different worlds, but those whose interaction is necessary for the exchange of ideas, and to create innovation in the Polish and European economy. For them, this is the forum.

And what is its purpose? Finding a cooperation platform for science, business and local government for the introduction of innovation in business, searching for new technologies and maximizing creativity among the participants. This is one of the ways of doing business within a policy environment.

Discussions also apply to the current economic situation, and focus on the potential of the regions.

European Economic Forum – Šódź

Interview

This is the seventh edition of the EEF - Šódź. What is different about this year’s Forum since the first edition?

Regional authorities have as an aim to stimulate entrepreneurship in their region. We organized the Forum in the formula I mentioned – and I do not think we were wrong, because EEF has become increasingly

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Interview European Economic Forum – Łódź

Within the framework of the Forum will be special summits “Poland – Turkey” and “Poland - Balkans”.

What is the nature of these meetings?

I will start with what is most satisfying for our local businesses – direct B2B meetings. Last year, they were very popular, and resulted in several specific contracts and cooperation plans. We will also speak Polish economic cooperation with the countries of South - Eastern Europe, opportunities for exporters and importers, and incentives and investment opportunities arising from the new financial perspective of the European Union.

popular. On the first edition we had about 200 guests, yet last year we had nearly 10 times more with 2,000 guests. The European Economic Forum now deserves its name, as it annually attracts visitors from different parts of our continent, and themes and issues that we discuss here go far beyond our region and Poland. The event has become a brand in itself.

The main theme this year is energy. What specific topics will participants discuss at the Forum?

In short I would say that the main theme will be bio-economy based on energy. We are embracing a subject that is very popular recently in the European Union and in certain “power salons”, namely distributed energy among the citizenship. We will talk about energy in buildings, smart transmission networks, and of course renewable energy sources.

We will also address the country’s strategic energy issues in the discussion led by Olgierd Dziekoński, Minister of the Presidential Chancellery.

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The Forum is accompanied by the conference “Made with Poland”. What is its subject?

The conference “Made with Poland” is to serve as a platform for exchange of knowledge and business experience for all who think about Poland, and in particular about Łódź, as a potential investment location, and place for “know-how” transfer. “Made with Poland” is an idea and inspiration for investors to do business with Poland, and with Polish, and in Poland.

The meeting will be held under the patronage of the Polish Information and Foreign Investment Agency (PAIZ). It has invited its contacts from around the world who are thinking about investing in Poland, but it will also include foreigners who have already successfully developed their business in Poland. It will be a great opportunity to exchange experience and business contacts, establish cooperation, provide information for investors, as well as networking.

Mr. Marshal, let us talk about the economic development of the region. What are the biggest barriers to development of Łódź Province?

A unusual sort of barrier for us is our proximity to Warsaw. For many companies, the obvious choice is the capital, as a headquarters, and the next location is often a more-distant city. The second thing is the outflow of population to Warsaw. The Łódź Province, however, is trying to transform this into an asset, hence our agreements on the creation of a central “macro-region”, to include the Voivods of Mazovia and Łódź. The proximity to Warsaw also creates difficulty with the development of the Łódź Airport. Another barrier that comes to mind - this is the perception of our province within Poland. Due to this proxim-

It will be an economy connecting knowledge and business. It is here that we will give birth to innovative ideas and new technologies. Creative people will come here to seek and implement their ideas, even the most unlikely. I say this with such conviction, because it is this focused policy of the Łódź Province carried out in cooperation with universities and deeplyrooted in our region. ity to Warsaw, next to the intersection of the main A highways (often viewed as an advantage), our region is sometimes considered as “transit”. Yet we intend to draw in these people to stop here, because we have a lot to offer both for business and tourists.

What concrete actions take the regional authorities to develop the region’s economy?

Support for entrepreneurs in the region with business-friendly policies, focus on the creation of new

October 2014

www.bizpoland.pl jobs, as well as seeking ways to develop innovation in enterprises and their cooperation with research centers. Thanks to the work of Marshal Office in these areas, first of all we channeled enormous financial resources for entrepreneurs in the previous EU budget period. The Regional Operational Programme for the Łódź Region for 2007-2013 granted entrepreneurs more than PLN 1 billion. This was money to build brands, participate in fairs, for R&D and to develop companies. Łódź was in the top four provinces in the country to have implemented the EU program Jeremie, which promotes the use of financial engineering instruments to improve access to finance for SMEs. Business is also treated in a special way in the distribution of EU funds in the next budget period.

The province supports to a large extent the development of the Science and Technology Park – an incubator for new-technology companies in the Łódź Region. We promote our companies through the organization of the European Economic Forum, and we work closely with Łódź Regional Development Agency. Within the Marshal’s Office, we also operate an Investors and Exporters Services Centre, offering professional assistance to potential investors.

What are the biggest development projects of the province for 2014-2020?

Negotiations on enterprise support and the Regional Operational Programme are not yet completed,

but I can tell you that among the most important investments in the region are the expansion and modernization of the railway station in Łódź; construction of the related tunnel near Łódź allowing quick passage through the city; and the construction of the railway line from Warsaw to Łódź as foundation for the proposed High Speed Rail (KDP) line. In the plans are also the Łódź Center for New Media, Center for Bioeconomy, and finishing the Łódź Metropolitan Tram.

The most important center of the region is Łódź.

Are other towns in the Łódź Voivodeship able to effectively attract investments having such a strong competitor? How? The strategy for the Łódzkie Region provides for a balanced development of the region. Cities are selected and supported, and the development of sub-regions is supported. Each of them is assigned sectors of the economy that are developed locally, and EU funds are directed into areas that stimulate their economy. Łódź, like any big city, has a greater potential to attract investors, but smaller centers in our region are doing quite well.

European Economic Forum – Łódź

Interview

What advantages does Łódz Province offer to encourage potential investors?

Our main potential is our location in the center of the country and very good motorway links, which allow for the development of logistics centers. Łódź

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European Economic Forum – Łódź

Interview has a very good base of universities with 120,000 students, as well as highly-skilled and dedicated employees. Our universities and research centers are also valued highly in the country for their top scientific and research potential. And we have wonderful natural resources in the region, including coal, which drives the economy of Bełchatów, and soon will start mining in and around Złoczew. We also have geothermal sources - Uniejów is tapping this resource to build a health resort with pools to attract tourists.

What large companies have invested in the region?

Which cities are the most effective in attracting investors?

Among the biggest companies that have invested in the region are: ABB, AIG Lincoln, Amcor, BSH, DELL, Euroglas, Fuji Seal Group, Fujitsu, GE Power Controls, Gillette, Hutchinson, Indesit, Infosys, LG Group, Merloni Elektrodomestic, Metro AG, Procter & Gamble, and SouthWestern BPO. Of course, most of these companies are based in Łódź, but companies often choose neighboring cities, with strong infrastructure such as Kutno, Radom and Piotrków.

Parlaying its location near highways, Stryków has profited nicely in recent years.

A promising direction of development seems to be China. Regular freight rail now connects Łódź

www.bizpoland.pl to China. And the Łódź Province also launched its permanent office in Chengdu. Does this put Łódź “on the map” for Chinese investors?

China is one of the most powerful economies in the world, with the largest population of potential customers in the world. This fact must be used, and do it fast enough so as not to fall behind the competition.

No longer is culture, differences in political systems, and geographical distances a barrier to cooperation.

Targeting Chinese investment and partnerships is a necessity. The European Union has set the direction with its “Go China” program, quickly followed by individual countries and regions. Łódź Province Marshal Office is trying to establish relationships with local provinces, especially Sichuan and Canton. These actions stem from our belief that closer ties to the Chinese economy is a huge opportunity for companies in our region.

What will the economy of Łódź Voivodeship look like in 5 to 10 years?

It will be an economy connecting knowledge and business. It is here that we will give birth to innovative ideas and new technologies. Creative people will come here to seek and implement their ideas, even the most unlikely. I say this with such conviction, because it is this focused policy of the Łódź Province carried out in cooperation with universities and deeply-rooted in our region.

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Łódź Voivodeship attracts global investors The Łódź Region is inhabited by approximately 2.5 million people, and its capital is one of the largest Polish cities – Łódź, with a population of more than 7 million. The province is located in the center of Poland, and is an engine of growth for the whole country.

Key transportation routes cross in this region, connecting to important European transport networks A1 (Gdańsk - Vienna) and A2 (Berlin - Moscow) making Łódź an ideal base for manufacturing and logistics. The airport in Łódź offers regular connections through Munich, with many European cities, including the UK. Advantages for investors include access to its strategic location, relatively low prices for industrial investment, factories, warehouses, offices, a well-educated population and a strong industrial tradition. A decision to invest in the Łódź Region gives entrepreneurs access to the vast markets of both countries of the European Union, as well as other countries of Central and Eastern Europe, including Belarus, Ukraine, Russia - and China, thanks to a direct connection, launched in 2014, of rail cargo from Łódź to Chengdu, China in Sichuan Province.

Academic life in the Łódź region revolves around the city. Łódź is an important academic center in the country (27 universities, including 6 public ones, educating more than 100,000 students) and the city is an important center for international scientific cooperation. The University of Łódź, Łódź Politechnkia, and the Medical University are among the largest universities in the country. Łódź Region is friendly towards investors and their activities supporting the development of new technologies. The region has a special economic zone to

2014 October

attract new investments, and offers both corporate income tax advantages, as well as excellent technical infrastructure.

Lodz Special Economic Zone has already issued approximately 250 permits for businesses, which have created more than 25,000 jobs and invested a total of over 9 billion pln. According to a report

started operations, including ABB, Indesit, BSH Bosch & Siemens Hausgeräte, Dell, Nordea, Procter & Gamble, GE, Infosys, Gillette, Hutchinson, Ikea and many others. All these companies receive comprehensive, professional support and advice from the city and voivod at every stage of the project: from the initial

by KPMG Lodz Special Economic Zone is best-judged by investors among all special economic zones in Poland. The Zone also took 3rd place Europe-wide and 18th in the world in FDI Magazine (Financial Times) Global Free Zones of the Future 2012/2013.

The attractiveness of the region for investors has led to the establishment of one of the largest rail cargo terminals in Europe Łódź-Olechów, which allowed the launch of the first direct cargo connection with China (Chengdu City in Sichuan Province).

In the Łódź Region, many international companies have

requests for cooperation, when making decisions, and after its adoption and action in our voivod.

Local authorities have selected the following key industries to support strategically, identified as having the greatest potential for growth til 2030: • modern textiles and fashion (including design) • advanced building materials • medicine, pharmacy, cosmetics • energy, including renewable energy sources • innovative agriculture and agri-food • computer science and telecommunications Q

European Economic Forum – Łódź

Łódź Voivodeship

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European Economic Forum – Łódź

Interview

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It is worth to invest in Łódź Interview with Tomasz Sadzyński, President of the Board of Lodz Special Economic Zone

Mr. President, what is the attractiveness of the Zone compared to other economic zones? What is the biggest asset of the Łódź area?

I think the biggest advantage of the Zone is the support our team offers - we take care of your enterprise. Obviously there are also external conditions: a great, central location, good cooperation with local governments, and fully-equipped attractive investment areas, as well as vocational education geared to the needs of investors and international school for children of our international managers.

The first half of 2014 was a period of increased activity of new investors in Special Economic Zones across Poland, ahead of regulatory changes. What was the situation in Łódź? Has the area managed to attract many investors?

The year 2014 is probably unique for all zones. In the Lodz SEZ, we issued a record 36 permits in the first half of the year. Investors stated they would invest PLN 1.5 billion here. The result will be the creation of 2378 new jobs, and 5810 retained. It is worth noting that 19 of these projects were submitted by existing investors in our Zone. This suggests that these businesses are doing well and exactly here they intend to develop further their business.

Is the extension of the tax-advantaged period for the Special Economic Zones in Poland to 2026 a sufficient step to ensure a steady supply of new investors?

Extending the functioning of SEZs in Poland til 2026 was a long-awaited and great news for us and investors. Firstly, due to these changes, the companies have more time to plan, execute and take full advantage of their existing tax relief.

Second, it significantly increases the appeal and ratings of Poland versus other Central European countries, with whom we often compete for new investments.

However, the prolongation – as a stand-alone action - does not provide a steady flow of new investors. Investors are not only interested in the financial aspects, state aid, etc. but also access

10 October 2014

to appropriately qualified staff, well-developed infrastructure, friendly business environment and the cooperation of local authorities. These factors - combined with the extended period of the SEZs - provide a fertile ground for new investment projects.

The year 2014 is probably unique for all zones. In the Lodz SEZ, we issued a record 36 permits in the first half of the year.

As for the business profile of investors present in the Zone, which sectors are most represented?

Our investors act mostly in industries such as building ceramics, household appliances, pharmaceuticals, cosmetics, and packaging. We are also emphasising the IT and BPO industries.

Are foreign investors a large part of the companies investing in the Zone? How do they evaluate cooperation with Lodz SEZ and the their decisions to invest in the Zone?

Interview Foreign investors account for nearly 50% of all enterprises concentrated in the Zone. Among them are small and medium-sized enterprises, as well as international corporations. Many of them decide to reinvest (for example, well-known brands such as P & G, BSH, Indesit, Haering), which means that they feel good in Poland and especially in the region of Łódź. It is for their innovative and efficiency of operations that several foreign companies have been awarded by fDi Magazine, a prestigious British bimonthly (Financial Times Group) with the fDi award IPA Innovation Award 2013. It is also worth noting that in 2009-2012 Lodz SEZ was one of the most highly-rated by investors among all Zones in Poland (according to KPMG).

What are the most distinct successes of the Zone for 2014?

An undoubted success is the number of permits issued and the jobs created. We received another award associated with our activity. We’ve intensified cooperation in vocational education and the promotion of the British International School of the University of Łódź, with whom we are a partner, and which educates already more than 60 children of foreign investors. Also, for the first time we organized the Grand Speed Business Mixer (March), which was a success, and which was attended by over 200 companies.

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European Economic Forum – Łódź

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European Economic Forum – Łódź

Lodz Special Economic Zone

Record first half of the year in Lodz Special Economic Zone Never before in the 17-year history of the Lodz Special Economic Zone has there been such a strong start of the year – the Zone approved 36 new-investment permits, including 19 projects from existing investors.

“Foreign investors consider Poland as the most attractive location for new projects in Central and Eastern Europe”, says Janusz Piechociński, Deputy Prime Minister and Minister of Economy.

“Thanks to this, more and more companies are opening operations and expanding business. This is confirmed by the first half of 2014, which is the best half in the history of the special economic zones.

This is in general the best half year in the history of the Polish economy the past 25 years. We have declarations from investors in these first six months to invest

in the next few years 21.6 billion pln - as a result, the creation of more than 20,500 new jobs.”

“As of 30 June, the Lodz SEZ issued 36 permits”, says Tomasz Sadzyński, President of the Zone. “Investors declared the creation of 2378 new and to retain 5810 existing jobs, with a total of 1.5 billion pln

investment. What really makes us happy is the fact that our existing investors account for 19 of these projects. This suggests that our businessses are pleased and that we have earned their trust, which is so necessary in building long-term business success.

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Largest investors (ranked in terms of new jobs created) (since inception of the Zone): Infosys BPO Poland Sp. z o.o.

Indesit Company Polska Sp. z o.o.

Correct - K. Błaszczyk i wspólnicy S-ka Komandytowa Hutchinson Poland Sp. z o.o.

Haering Polska Sp. z o.o.

Ceramika Paradyż Sp. z o.o.

Gillette Poland International Sp. z o.o.

HTL - Strefa S.A.

2133 2068 1489 1480 1403 1296 1208 1202

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Lodz Special Economic Zone

Renovation of Ludwik Grohman’s factory The project is a prime example of post-industrial revitalization and transformation to modern office space with conference facilities.

In 2013, the historic, nineteenthcentury factory of Ludwik Grohman was renovated. The renovated building includes conference rooms (the largest holds 250 people), modern office space, and offices of the Lodz Special Economic Zone. Revitalization of

the factory (December 2011 - June 2013) consisted of the renovation of existing buildings and superstructure in two of its sections, and an addition of a new section, which is a continuation of the construction boiler project from 1938.

The group of factory buildings is located on the banks of the former “fire pond”. Their characteristic element is its five-storey tower. Materials in the revitalization included

building materials, bricks and paving from that industrial era.

The project’s implementation was distinguished multiple times: the Prime Property Prize Łódź (awards for the best in real estate), Eurobuild Awards in 2013 (Top Reconstruction project in Poland), and in the contest John Jacob Astor Competition, organized at the international real estate fair ExpoReal. The project was considered the best and most unique commercial real estate project among 40 projects submitted from around the world.

The project and Grohman factory renovation can be seen in a “virtual walk-through” at this address: www.sse.lodz.pl/spacerwirtualny. Q

European Economic Forum – Łódź

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European Economic Forum – Łódź

Interview

A work life balance – the hallmark of Łódź Interview with Hanna Zdanowska, Mayor of Łódź What is different about Łódź in 2014 from that of 2010?

Today Łódź is a city of innovation, drawing inspiration from the city’s rich traditions and tapping into the potential of its residents. Łódź still has not developed such a strong brand as Wrocław, for example. What is so special about Łódź as distinct from other cities? Łódź started promotional activities related to the brand of the city in 2011, following the adoption of a clear Brand Strategy. We are therefore at the beginning of the road associated with building the city’s image and visibility among Polish citizens and Europe. Even though we have just started, the effects are already visible. We are conducting campaigns nationwide, including outdoor, press, internet, radio and television.

What is special about Łódź is the extraordinary potential of its people, creative energy, diversity and ability to adapt to new conditions, combining entrepreneurship and creativity. The unusual architecture of post-industrial buildings, the climate of the city and a slightly different pace of life and work in comparison to other major Polish cities. All this supports the hallmark of our city: a work life balance.

The proximity of Warsaw has its advantages and disadvantages. Soon travel from Łódź to Warsaw will be via high-speed trains (2016), reducing travel time to just 70 minutes. This will ease the lives of many travelers. Do you think that easier access to

Thanks to actions taken earlier, today Łódź is one of the largest business centers in Poland and Central and Eastern Europe.

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Warsaw also carries potential risks for the development of Łódź?

The proximity of Warsaw means that you can work in Łódź and, if necessary, arrange something in the capital and return on the same day, without having to relocate. Our major redevelopement projects will positively affect the attractiveness of the city, and investors’ interest in Łódź leads us

to believe that the proximity of the two cities will only be an asset.

In the mind of many people from outside the region, Łódź is a city where the population is decreasing faster than in other large Polish cities. The main problems seem to be: weak economic growth and high unemployment. What are your recipes to overcome these tendencies? Will Łódź be able to again attract people from other regions and what do you need to do to make it happen?

In 2005, we identified specific industries whose development would provide jobs both for those people who are professionally educted with these traditional industries, as well as for those who

have just completed their studies. Thanks to those actions taken earlier, today Łódź is one of the largest business centers in Poland and Central and Eastern Europe. In Łódź, new industries have been attractted to the city: business service centers (BPO and IT), logistics and transport, consumer electronics, industrial electronics, and biotechnology.

Through our active image campaign implemented in 2014, we are encouraging residents of other cities to work here. In Łódź, they will find companies waiting for them with a promising career path with professional development. We are aiming to attract ambitious people who also want a balance between work and private life.

What is your idea of the image of Łódź in Poland and Europe?

In line with our Brand Strategy, we want to be known for the creativity and entrepreneurship of our citizens, innovative approaches to business, rich culture and excellent tourism. We have wonderful venues for “city- breaks”, and the revitalization of our postindustrial sites are both attractive visually and as good investments.

October 2014

Interview award-winning architectural competition for former heating plant EC1, called – due to the characteristic shape of the facade – Vader’s Masks.

In connection with the next EU financial budget for 2014-2020, Łódź has very ambitious investment plans.

Can you tell about the largest planned urban projects?

The investment in infrastructure, as well as the implementation of regeneration projects such as townhouses Mia100 makes Łódź more attractive. A very important project which will be ongoing until 2020 is the Revitalization of the Centre of Łódź. Modernization of the roads connecting to the city from east and west will be complete next year. Recently we opened a new Upper Bypass, which greatly facilitates the passage through the city from the south.

Our goal is to maintain a high assessment of the City in the eyes of investors.

The flagship project of the development of the city is New Centre of Łódź - the largest public investment in Europe. Tell us about the project and how it will help the city?

It is today the only project of this size in our part of Europe. The project involves the revitalization of post-industrial area of 100 hectares located in the heart of the City. Soon will be completed the modernization of the railway station, located in the heart of New Centre of Łódź, reducing travel time to Warsaw to less than one hour. The project involves the expansion of transport infrastructure, with particular emphasis on the needs of public transport by creating a multi-modal transport hub connecting railways with the urban rail network, and suburban and regional networks. And to take your breath away, the modern,

2014 October

High unemployment forces the city to attract external investment for economic development. What is the investment potential of Łódź and the unique ways the city council has encouraged investors?

Our goal is to maintain a high assessment of the City in the eyes of investors. Therefore, we prepare tailormade investment offers for our partner. Łódź stands apart from other metro areas by our competitive business costs, support from the local authorities and low prices for Class A office space. One of the greatest strengths of Łódź is its academic potential. About 100,000 students are enrolled at 22 universities, most of whom are fluent in at least one foreign language.

We have created programs, unique in the country, such as the project “Young Łódź”, an instrument often used by local companies. Through the campaign “Łódź creates jobs”, we are supporting recruitment processes in Łódź companies. Confirmation of our favorable business climate comes from the opinions of Łódź entrepreneurs whose cooperation with the City is via the City’s Investor Services Center. It is a key public partner, supporting strategic investors in Łódź.

European Economic Forum – Łódź

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Investors from which sectors most often come to Łódź? Does it coincide with those industries that the city council considers a priority?

We see industries developing here that use the position and potential of our city: logistics and transport, business services centers (BPO and IT and SSC), consumer electronics, industrial electronics, and biotechnology.

The city is making a bit bet on BPO/IT. What are the prospects for the further development of this industry in the coming years? What does Investor Services Center do to ensure that new investors find a sufficient number of qualified employees? Łódź is one of the biggest outsourcing centers in Poland. The sector employs over 11,000 people.

Thanks to new investments and new projects, this figure is still growing. To meet the expectations of our partners we undertake a number of activities to support their activity. Unique is also the program “Youth in Łódź - Językowzięci”, whose aim is to educate young people in the field of rare languages, the most sought after among employers of the BPO/IT sectors. Only the University of Łódź has implemented a linguistics faculty of business, which is in response to the needs of the modern labor market. The study program is tailored to the needs of Łódź entrepreneurs, and prepares young people for work in Łódź companies.

What large companies have invested in Łódź in recent years? Are they satisfied with the choice of this location, collaboration with the city and do they plan further investments?

Increasingly, leaders in the IT and BPO industries are choosing Łódź as a location for their investments.

Among them is HP, the American company which last year opened in Łódź its BPO center.

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European Economic Forum – Łódź

Interview Our innovative projects and improvement of Łódź shows companies that the city has gained a reputation as one of the leading centers dedicated to modern business services and centers of modern technology. Intensive development of the ITO and IT sectors is shown through the activities of companies such as Veolia, SAP Center, Tom Tom, Ericpol – and most recently UPS.

Among the main advantages of Łódź are its central location, expanding communications infrastructure and access to experienced and well-educated staff.

Close cooperation between the city and academia and business makes our city appreciated by companies looking for a location for their R & D centers. Global companies such as B/S/H, CitiHandlowy and Samsung have opened in the Łódź Research and Development Center.

Developers wishing to build in Łódź often complain about the shortcomings of spatial development plans. What is the City Hall doing to meet those expectations?

It is true, however, from year to year the percentage of the city covered by zoning plans increases.

At the end of the year we should adopt the Unitary Development Plan for the most important investment project in town, that is, the New Center of Łódź, a 100 ha area, with a new underground railway station, and investment areas for new office buildings, hotels and residential. When we have deficiencies in land use planning, we try to catch up quickly by issuing a zoning decision. Procedures for issuing a decision in Łódź is getting smoother, and the waiting time shortened to a minimum.

What do consider to be the greatest success of your term - and what has not been achieved and why?

To me, the most valuable success has been the Citizens Budget, which more than 120,000 people voted on last year, a national record. It is a great satisfaction to me that during my term residents were given the opportunity to make decisions for themselves in many important cases. Is also important for me the success of the project Mia100 houses. For the first time in years, we have begun renovations of houses on such a large scale, renovating more and faster than in Wrocław, which for years was the leader. Soon we will finish the largest transport investment of Łódź. When finished, you will ride faster, more comfortably and safer.

Can you indicate the three greatest strengths of the city, which can convince investors to choose Łódź?

Among the main advantages of Łódź are its central location, expanding communications infrastructure and access to experienced and well-educated staff. Q

Innovative project of programmers from Łódź T€ON accounts EU subsidies.

The T€ON application was created for entities, which are implementing investment projects financed from external funds, including EU grants, consulting

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firms and accounting offices.

When working with the program, users can create, among others, electronic invoices archive, contracts, bank statements and reports. The program allows the coordination of multiple projects

simultaneously and can be used for continuous inventory of an investment that is in progress, individually for each task.

- Correct cycle and documentation registry, and continuous monitoring of financial operations are essential for proper clearance, and consequently the success of the project carried out. Implementation of investment projects using the T€ON application is not only time saving but also data security, employees productivity increase and assurance that the documents will be prepared according to the requirements of Management Institution says Krzysztof Świątczak, CEO of 3S IT Sp. z o.o, distributor of own T€ON application.

So far more than 300 companies and Institutions across the Poland are interested in application. Presentations and trainings remain, which beside of cognitive function, have advice character and experience exchange. T€ON application is used by companies and Institutions which are implementing projects in perspective 2007-2014. 175 mln zł is cleared so far and 205 mln zł is ongoing.

After consultation period is ended and new rules are known, application will be adapted so the grants clearance can be performed in new perspective 2014-2020 – claims Świątczak. There are also performed activities to introduce application to foreign market. For now authors of T€ON do not want to reveal the details.

Q

October 2014

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Apartment in the city centre – a good idea for an investment A prestigious housing estate Narutowicza Residence is being created in the centre of Łódź A purchase of premises in order to lease them constitutes a long-term investment and one of the most popular methods of investing savings. Landlords most frequently choose investments in the centre of a big city located nearby business centres and universities. The Narutowicza Residence – a housing estate with living premises and luxurious apartments being built in Łódź offers all of the above mentioned advantages.

Excellent location Location is one of the most important criteria for choosing living premises for lease. This is what the potential tenants care most about and what has great influence on the amount of the rent. Tenants most frequently choose one or two-bedroom premises located in the city centre near the offices of big companies and universities. – The Narutowicza Residence housing estate is being constructed in a quiet and well-maintained part of Śródmieście district, nearby a park and recreational and sports area, just a few-minute walk distance from Piotrkowska Street, Manufaktura shopping centre, New Center of Łódź area and the business centre, as well as the campus of the University of Łódź – says Wojciech Krasowski, the president of the management board of Tree Development Group. Excellent location, good communication with all of the city districts, as well as quick access to the A1 and A2 motorways to Warsaw, Poznań and Gdańsk make a purchase of an apartment in the Narutowicza Residence a great investment. – The proximity of the campus of the University of Łódź, the new Łódź Fabryczna railway station and the cultural and entertainment attractions offered by the city makes it easier to rent the living premises to students – adds Krasowski.

Good offer, attractive price At the first stage of construction of the Narutowicza Residence housing estate, three eight-storey buildings will be

2014 October

The planned date of finishing the first premises: first part of 2016. Apart from the premises, the housing estate offers also playgrounds, open air gym area and private gardens with various plants. Moreover, there will be an individual reception desk in the hall of every building and at the entrance to the housing estate. Total value of the entire investment amounts to PLN 115 million.

European Economic Forum – Łódź

Advertorial

erected: all in all 207 living premises and apartments with spacious terraces.

The offer includes premises of living space from 30 to 77 sqm and penthouses of living space of 96 and 106 sqm.

They are offered now on presale starting from PLN 4,099/sqm. The promotion requires an advance payment in the amount of 10% of the premises value. This is a really attractive offer, taking into consideration the fact that the average price of living premises in Łódź amounts to almost PLN 5,000/sqm* and the prices in the closest neighbourhood of the investment amount to PLN 5,100-5,800/sqm.

– The idea behind the project is creation of a modern complex ensuring safety, comfort and luxury at attractive prices. We use the top quality finishing materials, and the high standard apartments offer, amongst others, spacious terraces, of area of more than 45 sqm. The terraces will be finished with natural stone, wood and glass balustrades. – Wojciech Krasowski, Tree Development Group.

www.narutowicza.pl +48 42 661 99 77 info@treedevelopment.com * Report on the living premises market – September 2014, Real estate market report, Bankier, OtoDom.pl

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European Economic Forum – Łódź

Infrastructure

New Center of Łódź The spectacular programme for the regeneration of 100 hectares right in the heart of Łódź

Nowadays the central location on the maps of Poland and Europe and the constantly improving transport connections with the world make the city the perfect location both for business and for living.

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Łódź is situated at the crossroads of trans-European motorways, just 120 kilometres from Warsaw, with which it has convenient and fast motorway and railway connections.

The rapidly expanding Władysław Reymont Airport and the reconstruction of the Łódź railway junction will strengthen the accessibility of Łódź, shortening the travel time to European capital cities.

100 ha Right in the City Centre The spectacular programme for the regeneration of 100 hectares right in the heart of Łódź is a huge urban undertaking, the result of which will be the construction of a modern, vibrant district pulsing with life 24/7. It will help central Łódź to regain its splendour and determine the character of Łódź for the coming years - as the city of creative industries and a candidate to host the International Expo exhibition devoted to revitalization. The New Centre of Łódź programme was established following the decision of the Municipal Council of Łódź in 2007. As a result of this, the huge space around the Łódź Fabryczna railway station, which has been dead for many years, will become a perfect place for cultural, residential, service and office development.

By implementing the NCŁ programme, the city authorities want to create a new functional central area connected with the historical heart of the city, based around the axis of Piotrkowska Street. This goal will be achieved, among others, thanks to the creation of safe and attractive public spaces and the creative use of the unique historical urban tissue from the end of the 19th and the beginning of the 20th century. New functions are being introduced to the post-industrial and railway properties, maintaining the essential elements of the urban tissue determining the identity and history of that area, and revitalizing districts with urban redevelopment.

Within the NCŁ programme the public sector is implementing

October 2014

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There Is No Strong City Without A Strong City Centre The City of Łódź has drafted a local area development plan for

the New Centre of Łódź. This plan constitutes a local law that guarantees the establishment of a public space, attractive both for investors and for residents. The functions fulfilled by this area must be properly selected and

diverse, so that none of them is too dominant.

While encouraging investment in the New Centre of Łódź, the city authorities, at the same time, want to promote a specific formula for collaboration based

European Economic Forum – Łódź

over 50 projects whose value is close to PLN 4 billion

Infrastructure

Therefore the 100-hectare area has been divided into three urban zones: ZONE 1 with an area of 40 ha between Kilińskiego and Nowotargowa Streets ZONE 2 with an area of 30 ha between Nowotargowa and Kopcińskiego Streets ZONE 3 with an area of 30 ha between Kilińskiego and Piotrkowska Streets

2014 October

on building permanent relationships between investors and Łódź, identifying themselves with the city and its residents.

The NCŁ, as the real heart of the city, will become a place with a well-defined brand; therefore it is important that any investor choosing this area is aware of its high prestige. This formula also includes the belief that the collaboration with the investor will take place on many levels, not only that of business.

It will cover, among others, the introduction of common functional solutions into the tissue of the city, improving its aesthetics, developing the cultural, entertainment and recreational facilities, and other amenities for the residents.

Q

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European Economic Forum – Łódź

Ptak Fashion City

A first in Europe: Poland’s Fashion City Ptak Fashion City launched in late summer, inaugurating the first such City of Fashion in Europe.

The event was accompanied by International Fashion Fair Ptak Expo and Economic Forum. This is the first such large-scale Polish undertaking, which has a chance to become the most important center of clothes trading in Europe.

Ptak Fashion City is the only facility in Europe, which allows complex production, purchase and distribution of clothing in one place on a large scale. Its formation is a response to the needs of Polish traders and buyers in the textile industry who annually export more and more clothes to foreign markets. According to Apparel.info, the value of materials and textiles exported from Poland in the first quarter of 2014 was 1.34 billion euro, while the overall clothing market is nearly 5 billion euro.

The process of developing Ptak Fashion City stretches back 20 years. “Since the beginning, the buildings of Fashion City were designed in such a way as to match the style and architecture of the “glory days” of Łódź, which as a city was the main center for producing and exporting knitwear all over the world”, says Tomasz Szypuła, Member of the Supervisory of Ptak SA. “We want to be associated with the continuity of this centuries-old tradition of trade in textiles”, he adds.

Ptak Fashion City is a project of signifinance for the Polish economy, generating indirect employment for about 70 000 people, and directly employing 7 000 people.

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during the next two years, this number can be doubled, driven by events like the International Fashion Fair Ptak Expo, organized for the first time in August this year. It aims to become the most important fashion event of its kind in Poland, and one of the key fashion expos in Europe.

At this year’s expo, about 100,000 traders attended, from Poland and abroad, to visit more than 3,000 exhibitors.

Manufacturers, importers and distributors of clothing, footwear and accessories from around the world can make purchases and pick up the goods immediately from the warehouse exhibitors on site during the event.

Ptak Fashion City will be continuously developed. Over the next 10 years, investments are planned in logistics centers, hotels and the adjacent residential zone. Together with already existing buildings, the area will

cover one million square meters.

It is estimated that the expansion of the Fashion City will cost about 600 million euros. The key investment is the extension of the Expo, but also the introduction of more and more elements supporting young designers and universities with textiles and apparel curriculum. Also, the Fashion City will host annual and seasonal events, in particular linked with fashion, fabrics, and machinery for the production of textiles and clothing.

Development of the infrastructure and the increase of retail space will significantly increase the potential of Fashion City and strengthen its competitiveness, also for Chinese manufacturers. Fashion City is promoting Polish designers and manufacturers and aims to increase their visibility abroad, which will translate directly into new contracts and related businesses clustered around them.

Q

Potential of Ptak Fashion City growing every year Ptak Fashion City attracts more than 6 million customers annually. However, it is estimated that

October 2014

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European Economic Forum – Łódź

Real Estate

Retail Market in Łódź heating up with new projects In September 2014, modern retail stock in the agglomeration of Łódź (Łódź and neighbouring municipalities: Pabianice, Konstantynów Łódzki, Ksawerów, Andrespol, Brojce, Nowosolna, Rzgów, Zgierz, Ozorków Miasto, Stryków, Aleksandrów Łódzki) totalled 601,200 sq m and was dominated by the shopping centre format which represents 80% of the market. The remaining retail formats are: stand-alone retail warehouses (18% of the retail stock) and one outlet centre (2%). As of September 2014, no retail parks were present in the city, however this situation will soon change as the Vis a Vis scheme by Capital Park is currently under construction with completion scheduled for Q4 2014.

In terms of shopping centre density, the Łódź agglomeration with 491 sq m/ 1,000 residents ranks fourth amongst major Polish agglomerations

– below Poznań, Wrocław and Tri-City, but still higher than Kraków, Warsaw, Szczecin and Katowice agglomerations.

Purchasing power of the agglomeration’s population is € 6,490 per capita / year, 11% higher than the national average of € 5,870, but still below the volumes noted in other major agglomerations, and only ahead of the Katowice agglomeration.

Market maturity Currently, there are 13 shopping centres trading in the Łódź agglomeration, which all together offer 482,300 sq m of GLA. Two of them are the largest Polish shopping & leisure centres: Manufaktura (109,500 sq m of GLA) and Port Łódź (104,000 sq m of GLA). Another shopping centre, Sukcesja by Fabryka Biznesu, is in the construction stage. The

scheme is to be completed in 2015 and total GLA area is expected to be around 45,000 sq m. After the project's completion, the density ratio in Łódź will increase to 537 sq m / 1,000 residents. However, due to construction works being carried out in other cities, Łódź will maintain its position in the density ranking. Łódź is not considered a main bridgehead for the expansion of international chains in Poland, however, it remains on the retailers' radars as one of the key locations in the country.

Prime shopping centre rents for a 100 sq m unit shop from the fashion category, prominently located in leading shopping centres in Łódź are estimated between € 50-55 / sq m / month. Higher prime rents can only be found in Warsaw (€90 - 105 / sq m / month).

JLL expects prime rents to remain stable in the short to mid-term. Q

22 October 2014

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Office Market in Łódź dominated

by BPO/Outsourcing Łódź, with office stock totalling 269,600 sq m remains, excluding Warsaw, the sixth largest regional market (3.8% of total modern stock in Poland). It is an important destination especially for the modern business services sector, which currently occupies 44% of all office space in the city.

The increased interest in Łódź from companies such as Accenture, Bosch, Infosys, Unicredit, Indesit,

Evolution of vacancy in Łódź

Fujitsu and Dell was reflected in rapid developers’ reaction between 2005 and 2010. The average supply of around 30,000 sq m of office space a year, along with the record breaking level of projects under construction, gave Łódź over 170,000 sq m of modern office space during this period. In 2011-2013, the modern office stock grew by an additional 20,000 sq m per annum. As a result, almost 50% of all office space in Łódź is in buildings that are less than five years old.

However, the office spaces in tenement houses are still typical for the city. Those from the 1950s and 1960s which have been refurbished or redeveloped offer reasonably good quality office accommodation, especially those which

2014 October

are situated in the City Centre, most notably on Piotrkowska street. In addition, an increasing number of post-industrial plants and sites have undergone refurbishment in Łódź such as Textorial Park, Synergia, Fabryka or Zenit, which all now offer A and B class office space for lease.

In general, the quality of office stock in Łódź is gradually rising.

This is illustrated by the comple-

take-up has already hit 17,700 sq m. We expect demand to come in at a minimum of 40,000-50,000 sq m for 2014 in Łódź. This is down to several large agreements that are currently under negotiation and will be concluded by the end of 2014 (for example Infosys renewal & expansion signed in Q3 for approx. 21,000 sq m in Green Horizon). Moreover, with limited supply, the vacancy rate

Gross take up by quarter in Łódź

tion of offices such as University Business Park I (18,700 sq m), Green Horizon I&II (30,500 sq m), Sterlinga Business Center (12,600 sq m) and Park Biznesu Teofilów I (8,600 sq m) which all represent the highest market standards. At the moment 35,300 sq m of office space is under construction which translates to slightly over 13% of total existing stock. However, H1 2014 brought only 2,600 sq m of new office space to the market (Synergia II C). Moreover, Łódź is not likely to see any significant commencements of new speculative projects in the short term.

We have, however, recorded accelerating leasing activity in Łódź. In 2013, leasing totalled only 20,800 sq m. In H1 2014, gross

has already dropped by 4.5 pp. since Q1 2014 and now stands at 9.2%. This is the lowest ratio ever recorded in Łódź and this number will continue to decrease until the beginning of 2015. At the moment, prospective tenants are able to choose from almost 24,700 sq m of immediately available office space and from 27,300 sq m located in projects under construction.

Moreover, Łódź features relatively low prime rents of €11.5-12.5 / sq m/ month when compared to other regional cities. We do not expect further downward pressure in the short term (i.e. over the next year) however, some lower rents may be recorded in buildings which currently offer a considerable amount of vacant office space. Q

European Economic Forum – Łódź

Real Estate

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European Economic Forum – Łódź

Real Estate

Logistics strong in Łódź Transport and logistics industry is one of the key and most promising industries in Łódź, and was included in the Integrated Development Strategy Łódź 2020+, along with industries such as BPO sectors, domestic appliances, IT, business fairs and exhibitions and tourism. Logistics in Łódź and the region has been growing for many years, mainly due to a very favorable location in the center of the country.

The development of the logistics sector requires the necessary road infrastructure and warehouse space. Łódź as the third-largest city, is well connected to the major transport routes in the country and in Europe. The proximity of the main junction of the A1 (Baltic Sea - Rome) and A2 (Berlin - Moscow), provides access to the

expressways, and Łódź finished construction of a bypass of the city with a length of over 100 km, consisting of a connections between the A1 and A2 motorways and expressways S8 and S14.

The proximity of markets and suppliers is an important element in the global supply chain logistics sector. Strategic location of Łódź in the center of Poland and Europe, it is most advantageous location of many logistics centers and transshipment hubs in the transport of goods in Europe. The inflow of foreign direct investment in the manufacturing sector for Central and Eastern Europe and location of the largest markets in Western Europe, justifies the use of international distribution centers in Central Europe, and competitive labor costs and good

Dell, Hutchinson, Barry Callebaut, Amcor, and Compal located in the region. These investments have created hundreds of jobs, and their products are intended for Western markets. This justifies the creation of logistics centers in the vicinity of production facilities and close routes and highways in the Łódź region. An additional factor for the development of logistics is the Łódź business environment, which operates as a hub for industries such as manufacturing and packaging of IT services and logistics.

The potential and attractiveness of the logistics industry in Łódź is appreciated and already used by the largest, international developers of warehouse space such as SEGRO, Panattoni and AIG Lincoln. In total, these companies have built almost 300,000 sqm

road infrastructure is an added value in the global logistics chain. Łódź is also the site of many industrial investments, with the world’s largest companies such as Indesit, BS / H Bosch und Siemens Hausgeräte, Gillette, ABB, Rossman,

of modern warehouse space and 16,000 sqm is under construction.

The existing warehouse space at 2013 Central Poland is over 1 million sqm (which is responsible for 13% of the total warehouse space in Poland). Vacancy rate of warehouse

Industrial Demand in Central Poland 2005–2014

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largest cities in Poland within 3 hours. Moreover, transportation to the borders with Germany and Russia is only 3 h 30 min. Over the next few years Łódź will be included in the TEN international network of motorways and

October 2014

www.bizpoland.pl space in 2013 was 13.7% (in Central Poland 8%). Cost of warehouse space in Łódź is very competitive and are 2 - 3.40 EUR / sqm. Łódź offers the opportunity for rail transport containers directly from the ports of Gdańsk and

Łódź is well-located with other major cities in Poland: Distance from Łódź:

City

Warszawa (airport) Poznań Wrocław Kraków Gdańsk

125 km 200 km 208 km 260 km 335 km

Travel time

~1 hour. ~2 hour. ~3 hour. ~3 hour. 10 min. ~3 hour. 20min.

Gdynia. The service is provided by Spedcont, and connects and supports inland transshipment terminal with an area of 84 000 sqm and 42 800 sqm storage area. The container terminal is also used for loading and unloading containers

in express rail link to the province of Chengdu in China to Łódź.

China Rail Connection What distinguishes Łódź versus other cities in Poland and Europe is the regular, express rail cargo to China (Chengdu). This regular call was launched in 2012 and currently transport takes place twice a week.

Transported goods are various, including electronics, auto parts, textiles, appliances. The transport of goods also benefits manufacturing companies like Dell.

The undoubted benefit of the logistics sector is competitive transport of goods - up to 14 days from 10,000 miles, and lower cost of transport compared to air transport. Currently, work is also ongoing on the possibility of extending the connection to Shanghai.

The Airport in Łódź also runs freight shipment services and provides scheduled cargo connection to Frankfurt and Copenhagen, operated respectively by Lufthansa Cargo and SAS Cargo. The terminal has been approved by the

Customs Office and has a recognized status as a customs warehouse and temporary storage.

Witold Stępień, Marshal of Łódź Voivodeship, on local Industrial Market development: The location of this region in central Poland creates ideal conditions for the development of logistics.

Is the province attracting a lot of investment in this sector?

“These investments are more and more. This is due to the opening of the next sections of motorways and express roads that run through our region. The province invests in access roads and cities such as Stryków, Brzeziny, and Piotrków – these are big projects. Companies in the logistics sector invest their own capital also in transfer stations in Kutno, Zduńska Wola and Łódź - Olechowo. The largest companies in the logistics industry that have invested with us are: GLS, DHL, Raben, DPD, DB Schenker.

UPS announced the opening soon of a logistics center in Stryków and major service center in Łódź.

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European Economic Forum – Łódź

Real Estate

25 2014 October

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Advisory

Walking a thin line on thin capitalisation Public outcry over tax avoidance by major corporations in the UK has been a recurring theme

ADVISORY

for decades.

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Successive governments have promised to clamp down year after year, but they are about as effective as headless chickens with their irrational fixation on trying to develop a general anti-avoidance rule. Perhaps they should learn from Poland: effective application of the transfer pricing and thin capitalisation rules that we have here would surely deal with most of the high-profile cases that they have in the UK. However, in Poland what until now is a straightforward and manageable set of rules, looks likely to get out of hand from next year. In particular, the thin capitalisation rules are set to become a farce.

First, a reminder of what we are talking about, which is financing of Polish subsidiaries by loans from group companies. It is of course wholly unreasonable to expect a group to make loans to its Polish subsidiary at a commercial rate of interest from its own financial reserves instead of paying lots of interest and fees and signing over all rights to their shares and other assets to a Polish bank - so any group that foolishly decides to finance its Polish operation fully by intragroup loans risks having some of the resulting interest charges disallowed for Polish tax purposes. The rules today say that the tax disallowance applies when the value of group loans exceeds 3 times issued share capital. Regardless of whether this is reasonable in all circumstances, at least the maths is easy, so debt and equity arrangements can be effectively planned and it is cheap and simple to monitor compliance.

Thin cap: the new rules From 2015, the thin capitalisation rules are being adjusted to proper local standards, i.e. badly thought out and probably unworkable. The main changes are that the maximum acceptable debt to equity ratio is reduced from 3:1 to 1:1 and the measure of equity is changed from issued share capital to total shareholders’ funds.

Shareholders’ funds, which includes retained profits and other reserves and is reduced by accumulated losses, will be calculated on the last day of the month before interest payment.

The 1:1 ratio would probably be completely unreasonable for any business, but is especially so for any new business, in which share capital is the only component of equity. It appears to be a kick in teeth for property developers, who would simply stop building in Poland if they were unable to operate under normal commercial terms in their industry.

As for relying on an up-to-date figure for shareholders’ funds, this is only slightly more realistic than ruling that equity will be whatever the jackpot number was in the last Lotto draw. Company accounting teams all across the country will have to get to grips with the idea that the accounting law doesn’t only apply at the

By Steven Foster Process Solutions

Steven Foster is a partner at Process Solutions Sp. z o.o.

T: +48 22 630 8604; steven.foster @ps-bpo.com

year-end. They will also have to achieve something miraculous if interest payments are due within the first week of the month.

Perhaps the most nonsensical aspect of the new rules is that the maximum permitted tax deduction may now be very much dependent on the accounting policies adopted by the borrower. For example from 2015 investment properties may finally start to be accounted for sensibly – based on fair value rather than depreciated historical cost.

For companies whose functional currency is not PLN (for example, with income and borrowings denominated in euro), now may be the time to consider adopting IFRS. This will ensure that all net assets (and hence equity), instead of just borrowings, are adjusted to reflect changes in exchange rates.

The allowed alternative If all this sounds too ridiculous or scary to be true, you’ll be pleased to know that there will be an allowed alternative approach. However, if you expect that the alternative approach will be simpler, you obviously haven’t been in Poland for long enough. The alternative approach is based on gross asset value (as measured for tax purposes), excluding intangible assets, and what the law decides is an acceptable maximum interest rate. The acceptable rate for this purposes is the NBP reference rate plus a 1.25% margin. On first glance this appears to be quite sensible, but of course that would not be true to form. Here are the complications: 1. The asset value is based on the balance sheet at the last day of the year, which could be radically different to the situation when interest payments are made during the year. An obvious example would be unplanned disposal of property soon before the yearend, which was the basis of interest deductions made during the year.

2. There are more complications to deal with if the reference rate changes during the year.

3. In any event, with certain exceptions, interest deductions are limited to 50% of operating profit, which is itself a product of the particular accounting policies and procedures adopted.

4. Excess interest (beyond 50% of operating profit) is carried forward and deductible for up to 5 years, subject always to the 50% of operating profit restriction, thus mirroring the equally absurd r ules for loss relief and completely unreasonable to, for example, developers who earn all profit on a single transaction (property disposal).

5. This approach requires written notification to the tax authorities and a minimum period of 3 years, so guaranteed to trap the unwary taxpayer in future.

There is a way to escape all this trouble. For any projects likely to require loan financing in the new year, you may avoid the new rules by transferring the funding before the end of this year. Otherwise careful planning will be critical to ensure that commercially sound and reasonable financing arrangements do not fall foul of the new rules.

Q

October 2014

www.bizpoland.pl

Advisory

The Ewa Kopacz Government the end of September following the advancement of Donald Tusk to the position of President of the European Council.

Kopacz will now guide Poland until parliamentary elections in late 2015. To ensure stability, she will now have to stamp her authority on her own Cabinet – which may not be an easy task.

The fundamental challenge will be Ewa Kopacz herself. Although she has had a highly visible political career thus far – a former Minister of Health, and for the last three years the Speaker of the Polish Parliament – many feel she will struggle to match Tusk in terms of exerting authority. Kopacz owes her previous positions to Tusk’s direct patronage, and her future position as leader of the PO party is also a function of party statutes that dictate that she, as First Deputy Leader, take over when Tusk resigns that post. She does not lead her own faction in the party, and many suspect her lack of independent stature was the reason Tusk – hoping to retain influence - decided that she should take over as Prime Minister in the first place.

This basic weakness is at the root of key ministerial appointments. Tusk was strong enough to allow himself to appoint competent ministers independent of the party apparatus, and keep out of government strong but competing party figures. Kopacz however has reversed this principle, and appointed two leaders of internal party factions - Grzegorz Schetyna as Foreign Minister and Cezary Grabarczyk as Justice Minister.

The appointment of Schetyna, Tusk’s long-time party rival, was the most surprising appointment.

Schetyna has spent the last few years in the political wilderness as head of the parliamentary Foreign Affairs committee, and was being slowly edged out of the party. His sudden appointment reflects Kopacz’s fears that even a weakened Schetyna outside government would pose a threat to her authority. But it is also a move born of desperation, when successive candidates to take over from former Foreign Minister Radoslaw Sikorski refused the job. President Komorowski vetoed the candidacy of former Finance Minister Jacek Rostowski, and there was almost no-one else available – apart from Schetyna. His appointment will immediately affect Poland’s stature in Europe and NATO. Schetyna speaks only middlish English, is completely unknown outside Poland, and unlike his predecessor has no independent network among Western journalists, politicians or thinktanks. At a time when Europe is engaged in key debates over policy on Russia, Ukraine, Transatlantic relations and the war on terror, this loss of Polish influence will be considerable.

Kopacz’s other appointments are also a function of party politics rather than serious choices about policy.

2014 October

By Marek Matraszek CEC Government Relations

The Ministry of Administration and Digitisation goes to Andrzej Halicki, a long time party activist and close political ally of Schetyna. The appointment of Cezary Grabarczyk as Justice Minister gives a cabinet post to the leader of another party faction, the so-called “cooperative” made up mainly of the party’s regional and provincial bosses. Teresa Piotrowska is another surprising appointment as Minister of Interior, a field in which she has little experience and whose main claim to fame is her close personal friendship with Kopacz.

Maria Wasiak as the new Minister of Infrastructure and Regional Development is an enforced appointment, given former minister Elzbieta Bienkowska’s nomination as Brussels commissioner, and it remains to be seen if her previous job as Chairman of Polish State Railways sees her through the minefields of her ministry.

Mrs Kopacz’s government will therefore be more of an alliance of several PO party factions and the junior PSL coalition partner, rather than a ruthlessly centrally run machine with minimal dissent

At a time of growing challenges at home and abroad, there are genuine fears that this government – albeit in place for a maximum of 15 months – may be overwhelmed by events

Marek Matraszek is the Founding Partner of CEC Government Relations.

He can be emailed at mm@cecgr.com

as it was under Tusk. Many also agree that the new government will mean a shift of strategic power to President Komorowski: his close relationships with both Schetyna and Tomasz Siemoniak, the Minister of Defence and now Deputy Prime Minister, will mean greater influence by the President on strategic national policy.

An added concern is that the Kopacz government will be in power during an intense one-year electoral cycle, involving local elections in November this year, presidential elections in the summer of 2015 and parliamentary in the late autumn of 2015. The focus will be on securing election victories, together with greater caution over deep reforms, especially in the area of welfare. Above all there will be a tendency to administer rather than govern with vision. At a time of growing challenges at home and abroad, there are genuine fears that this government – albeit in place for a maximum of 15 months – may be overwhelmed by events.

If so, tough questions will need to be asked about the missed opportunity that a change of government offered to both former Prime Minister Tusk and current President Komorowski.

Q

ADVISORY

Mrs Ewa Kopacz took over as Prime Minister at

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www.bizpoland.pl

Advisory

Polish power market outlook Until 2010, the Polish wholesale market for electricity was characterised by bilateral power purchase agreement (PPA) and over-the-counter trading of power (OTC). After 2011, trading on power exchanges has become the predominant form for electricity transactions. Volumes on the two power exchange platforms, Polish Power

by Christian Schnell

Exchange (POLPX) and Warsaw Stock Exchange Platform for Trading Electricity (POEE GPW SA) has accounted for more than 84% of national

ADVISORY

consumption in 2012.

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POLPX represents the most important exchange platform with 132 TWh of electricity traded on forward and spot markets. The highest share of electricity trades on POLPX takes place in Commodity Forward Instruments Market with Physical Delivery (CFIM) (85%).

In 2013, net consumption amounted to 144 TWh with the highest load in the months December and January. The peak load of 22.5 GW has been observed on 10 December between 5 and 6 pm. Electricity consumption in Poland has increased by 11% since 2005.

However, we observed a 4%-decrease in consumption from 2008 until 2009 due to the economic crisis, followed by a 5 %-recovery in 2010 to before-crisis-levels.

The last three years have been characterised by rather constant yearly consumption. The Polish power market is connected to its neighbouring countries by 4 GW (net transfer capacity, NTC) of exporting capacity and 3 GW of importing capacity (NTC). In 2013, Poland has imported around 8 TWh of electricity, mainly from Germany and at the same time exported 12 TWh, mainly to the Czech Republic and Slovakia. The majority of electricity trading takes places in forward markets. Most liquidity is through trades one or two years ahead of the physical delivery.

Forward prices (OTC one year ahead) decreased from around 62 €/MWh (220 PLN/MWh) in 2008 to 36 €/MWh (154 PLN/MWh) in 2013. Generally, Polish prices are closely link to German prices. Correlation of daily spot prices between Poland and Germany has increased from around 0.42 in 2010 to 0.68 in 2013. In 2014, Polish prices have surpassed German price levels due to the introduction of capacity market measures in Poland. Anyhow, we expect that those differences will disappear again, as soon as restrictions on interconnector flows between Poland and Germany are removed. Compared to other European markets, the Polish spot market shows only a low variation between base and peak prices. The relatively low base/peak spread is driven by a rather homogeneous merit order dominated by coal technologies.

The current Polish power plant park is characterised by a large share of fossil fuel generation with one of the highest capacity dedicated to hard-coal generation

worldwide. Renewable power sources currently represent only a smaller share of installed capacity. Total installed net generation capacity adds up to about 37 GW. Over the last 4 years, the share of RES generation has increased from 1% of total generation in 2010 to 8% in 2013, mainly due to onshore wind and large biomass installations.

Nevertheless, hard-coal and lignite fired power generation is still responsible for 88% of total generation in 2013. The conventional thermal capacity is determined by known new entry and decommissioning of capacity. We assume an increase in new thermal capacity in the period from 2014 until 2025 by 7 GW, i.e. 2.5 GW gas-fired capacities, 0.5 GW lignite capacities, and 4 GW hard coal capacities. At the same time, we expect 4.5 GW decommissioning of power plant capacity: 3 GW of currently existing hard coal capacities and 1.4 GW of lignite coal capacity.

Compared to other European markets, the Polish spot market shows only a low variation between base and peak prices.

dr Christian Schnell, Partner, Solivan.

22-209-5500 cschnell@solivan.pl More information about the Polish power market forecast in “Renewables Investments in Poland.

A Market Outlook for investors”, Frontier Economics, September 2014.

In total, conventional generation capacity increases by 2.5 GW until 2025. Poland has a high level of interconnection capacity to its neighbouring countries. We expect a further increase in interconnection capacity over the next 10 years: The import capacity from neighbouring countries to Poland doubles from 3.3 GW to 6.6 GW. As the EU ETS will remain the central mechanism of climate change in Europe and therefore prices will increase again with the trading periods after 2020 until reaching - under conservative assumptions - a backstop price of about 35 EUR/t CO2, Poland’s future power plant park is highly affected by this policy measures.

Therefore we expect strong growth in Renewable energy generation in Poland in the coming years, mainly from onshore wind, and partly from biomass and small generators. The generation will come from existing units (financed under the exiting green certificate regime) as well as from new installations which will be running under a Contracts-for-Difference model (where the premium will be determined through auctions).

The future production of Renewables will influence the wholesale power market price in Poland. Our projection shows that power prices (wholesale base price) are likely to increase in the long run to 49 €/MWh in 2020, 59 €/ MWh in 2025, 66 €/MWh in 2030 and 70 €/MWh in 2035. This increase is on one hand based on growing demand for electricity in Poland and on the other hand on increasing CO2-prices that increase short-run-marginal costs of conventional power generation and especially marginal coal generation. Increased connectivity to neighbouring countries also plays a role.

Q

October 2014

www.bizpoland.pl

Advisory

Last month we talked about how hard scammers worked—about how scammers literally live their “work” and “work” to live.

Yes, it’s hard to compete with that, but based on what we see on a daily basis, literally, here are a few tips: 1) If you want to prevent the company scam, take and retain ownership of the company.

Too many times we have seen the “branch office” scam the company. This can mean the branch overseas (i.e. in Poland or Central Europe) or the regional branch in a said country. Often we get a call that goes something like this: our branch CEO is probably stealing from the company, but actually we don’t know. We want you to do a discreet, external investigation to figure this out.

As you can probably guess, this is not an easy task.

The company does not actually know whether the CEO is stealing or not. How is that possible? It’s possible because the company owners have worked (usually for tax purposes or even Foreign Corrupt Practices Act/ FCPA purposes) to separate the entities. Often they have gone to great lengths to do this, which means board members are local and shares are owned through offshore companies.

In short, if you work exceptionally hard to separate your official ties from your company or branch, you are creating the perfect situation for a scammer. Time and time again we have been requested to step in and either question employees or even conduct forensics examinations, but in order to do this in Poland, for example, a decision from the board is typically necessary. The board member may be removed through a shareholder vote, but in most cases time is of the essence, and at any rate, a risk consultancy or detective agency cannot simply step onto company property and begin interrogating employees or examining computer records based on a decision from abroad. The current CEO will simply call the police, and yours truly has no desire to be arrested.

Which brings us back to the point. Preventing a scam or the actions of a rogue employee demands active participation in a company. This means a company representative from the mother company needs to at least be on the board at the minimum, but it also means that ownership needs to be direct. Yes, there are more direct risks at that point, but also more direct participation, which should nip some such problems in the bud.

2) Compliance efforts are and will always remain a direct result of your company’s culture.

A company with an extremely stratified pay scale (think the banking sector) often sees board members or even upper-level management raking in up to 25 times that of the “average” cog-in-the-wheel employee.

Now you are saying: just what do you mean? I’ll admit it, paradoxically, the danger is typically not from that low-level employee, but from upper management.

But herein lies the rub: the majority of compliance officers are still neither well-paid nor highly regarded inside of major firms. They are in fact often mistreated.

2014 October

By Preston Smith

Preston Smith is the managing director of CEE Consulting Group, a regional risk consultancy and licensed detective agency specializing in pre- and post-transaction due diligence, multijurisdictional asset trace investigations, FCPA checks and on-theground investigation and surveillance.

Don’t believe me? I have now seen examples in a major Polish telecom, a major Polish bank and a major IT company where compliance concerns were not only relegated to irrelevancy, but where the compliance officers raising serious questions were basically pushed out of the business. (I’ve also seen this with CFOs).

Apart from the fact that this is illegal, this is extremely dangerous for a company both from the financial and FCPA point of view.

Why does it happen? Simply put, if you create the equivalent of a caste system in your company, do not be surprised to find the upper caste treating the rest of the company as untouchables. Which leads to absolute power, etc., etc.

The trick here is to employ active compliance systems and, as hard as it may be to live with them, aggressive personality types. A good compliance professional does not shy away from conflict, and a responsible company does not shy away from such compliance professionals. After all, you are not paying them to lie to you, sweep things under a rug or generally hide the truth (unless maybe you are).

3) Face the pain.

By this I mean be ready for tough decisions. Very often (especially in the pharma industry) we have seen sales professionals de facto control a company. They bring in the money, affect the end-of-year results and yes, it is difficult to discipline such a person. Again, everyth ing from tax-avoidance advice to trying to limit direct lines of responsibility enables the rogue sales man.

Here is how: company A decides to hire Bartek.

Bartek is a genius salesman in his 50s. He has contacts all across Silesia and these extend even into Western Poland. Bartek is a bit of a loose cannon, so a law firm advises to not hire him, but to have him bill from his sole proprietorship. Likewise, a top consultant notes that this will be cheaper than putting him on a full work contract.

Sounds like sound advice, and in fact, in Poland, this is traditional advice. Only Bartek does not work for you when it counts. He runs his own company, creates his own distribution network, and at any time he can pick up and take that network to a competitor. Which means he is impossible to control.

This gets scarier when you learn that he is giving kickbacks to government employees in larger deals.

Which means now you have the worst of both worlds.

You cannot control him—if you even attempt to, he may walk with a large portion of your business—but the line of command still extends to him through US FCPA regulations.

And trust me, that tax avoidance strategy will not look so che ap if your company faces a USD 10 million fine.

And the solution? Take the bull by the horns, my friend. Hire and train in-house sales staff and build your network the hard way, under your personal guidance. Yes, it’s time consuming and yes, it’s painful, but nothing is so painful as having hard cash and even success plucked right from your very pocket.

Q

ADVISORY

Grab the bull by the horns—and stop the scam

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Equities

Behind the Scenes: Investing Takes a Lot More than Number-Crunching Skills

by Mark Mobius Executive Chairman, Templeton Emerging Markets Group at Franklin Templeton Investments

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I’ve often been asked what the keys to my success as a professional investor are. Many people believe it takes an M.B.A., a Ph.D. or the like, and that one has to be a math whiz or a technical genius to succeed as a portfolio manager. The truth is, there is far more to it than academic credentials or the ability to crunch numbers. I try to focus on personal integrity, flexibility, a strong work ethic, my instincts, my convictions and the courage to go against the grain at times. I strongly believe a sense of humility is extremely important too — and the market will certainly do its best to keep you humble! Last, but not least, is teamwork. I couldn’t do what I do without the support of the outstanding professionals at Franklin Templeton and the 50 portfolio managers and analysts within the Templeton Emerging Markets Group.

An On-the-Ground Perspective There are two general philosophies or approaches when it comes to making investment decisions: “top down” and “bottom up.”

Either can be successful. Top down involves looking at the big picture economics of a country first, then drilling down to the stocks that look promising within that overall view. For example, a top-down investor might shy away from investing in certain sectors — or anywhere at all — in a country undergoing poor economic growth or a crisis of some kind. A bottomup investor will examine individual companies first, placing less emphasis on the broader macroeconomic or political environment.

Even in the midst of recessions, geopolitical crises or other impediments, there are companies that can still survive and even thrive in a particular market. We fit into the bottom-up camp; we seek out

individual companies with what we view as having strong prospects at good prices. Additionally, as value investors, we think crisis periods can actually be good times to pick up bargains — assuming you are patient enough to ride out the storm, and you do your homework.

Part of doing the homework involves not only examining financial statements and research reports, but actually seeing with our own eyes what’s going on in a country, and with a particular company. I spend more than 250 days a year traveling the globe, visiting as many countries and companies as I can. It can be exhausting, but it’s extremely fulfilling. I typically travel with different members of my team who have local expertise in a particular market to gain additional insights.

It is truly a collaborative effort at every stage — we continually challenge each other and ask lots of questions of government officials as well as company executives

and management. We like to visit not only corporate headquarters, but factories and the like where production occurs so we can see the conditions and the process, and speak with the workers.

And, we do some exploring.

We walk the streets of the cities we visit, and we visit shopping centers. We see what people are buying and talk to them about what problems they have. We see how much traffic is on the roads and what the infrastructure is like — often a sign of the growth and progress that is taking place in a country. I always travel with a bicycle too, so I can get some exercise and see things I wouldn’t by car.

The job of a globe-trotting investment manager is part mental as well as physical. I try my best to maintain healthy habits, including regular exercise. It takes discipline at times. On some occasions, I’m expected to spend a long evening socializing with hosts in a country after having flown 12 hours, and after a long day of visiting company operations in remote locations. I also have to slip in team meetings, board meetings, media appearances and hundreds of daily emails and calls. So, fitness is a priority for me, and I get some of my best ideas over my exercise breaks. I listen to news podcasts while I work out and mull over the day’s activities as well as what’s going on in the world. I also do a lot of reading in my spare time.

The World Belongs to Optimists If you focus on all the problems in the world today, it’s easy to fall into a sense of despair. While past performance may not be indicative of future results, I think it’s fairly safe to say there have always been problems in the world in the past, and there will always be problems in the future. There are certainly numerous problems in many emerging markets and investing in them does not come without risk. If you focused on only the negative, you’d never

October 2014

www.bizpoland.pl

Equities

Polish bourse plans big push in derivatives and debt markets The Warsaw Stock Exchange (WSE), central Europe’s largest bourse, will prioritise developing its derivatives, commodities and debt capital markets to complement its existing cash equities market in a new strategy to be unveiled in October.

In an interview with Reuters, Pawel Tamborski, WSE’s chief executive and Poland’s former deputy treasury minister, said 2015 could be “a year of change” for the WSE, in which it will focus on expanding in Poland.

Warsaw’s exchange has grown rapidly over the past few years, riding a wave of Polish economic growth and capitalising on the country’s privatisation programme, which had generated a steady stream of public offerings on the bourse. More than 460 companies are listed on its markets, including around 50 foreign firms, which together have a market capitalisation of 930 billion zloty. But it needs to find new sources of growth as stock market flotations have slowed and Polish pension reform has curbed the ability of local pension funds, major players on the exchange, to invest in stocks.

Four Pillars Poland’s treasury ministry, which owns a majority stake in the exchange, wants Tamborski, who was named WSE CEO in June, to

take a risk, and you’d never reap any benefits either. That’s true in life as well as in investing.

However, I see problems as potential opportunities. The fall of communism and the coming together of nations around the world, combined with the emergence of China and India as free market economies, have created opportunities for the creation of wealth that are unparalleled. Today, the rise of social media, smartphones

2014 October

present an updated strategy aimed at increasing liquidity. Tamborski said a plan will be revealed to investors at the end of October, when WSE reports quarterly results. He declined to give specific details but said it will have four pillars: cash equities, derivatives, commodities and corporate debt. It aims to make the WSE the natural choice for issuers in central Europe and develop its derivatives market to include contracts based on foreign exchange, interest rates and commodities.

WSE has had a commodities market for three years, but Tamborski believes adding derivatives could be a “game changer”. “There is a chance to create a really strong international exchange - here I see only potential upside coming from cooperation with other partners.”

Tamborski said the WSE was in constant discussions with potential partners but declined to identify them. He expects a deeper corporate debt market could prove just as successful. Banks remain the primary source of funding for corporates in Poland, but Tamborski believes there is a growing appetite for alternative fundraising. The bourse wants to involve both retail investors as well as foreign investors, who currently account for around 15 percent and more than 50 percent of equities turnover on the WSE’s main market, respectively.

and the like has created greater transparency and helped bring to light corruption, rights abuses and other social ills. Today, people can make their grievances known and inspire revolutionary change. Examples of this kind of change can be seen in the “Arab Spring” in the Middle East, in new openness in Myanmar, and in recent elections in India and Indonesia that have resulted in new government leadership that

“Companies are looking for new sources of financing and I think banks are a little over liquid these days so there is natural competition, and on other hand you have investors, including retail investors, looking for good stories.”

Planned changes to bank licensing, which will allow banks direct access to markets, could also help. “If you want to develop debt capital markets you need to work with big balance sheets. Our aim is to get them closer to the stock exchange,” Tamborski said, adding that banks already act as market makers on the exchange.

“Europe’s Safe Haven” The former investment banker was in London to meet international investors, banks and proprietary trading firms as part of the bourse’s marketing efforts. He said investors had shown interest in Poland, for its combination of emerging market growth and relative stability as a European Union member.

The tensions between Ukraine and Russia were causing some concern, but had also meant Poland compared favourably as an investment destination. “Poland is the safe haven of Europe. When you talk to emerging market investors they say Russia for some time is ‘un-investable’ for us, Turkey is the same, but Poland looks pretty safe actually.”

Q

will (hopefully) encourage reform and promote private enterprise.

Of course, no one has all the answers. Investing always requires making decisions based on insufficient information. There is never enough time to learn all there is to know about an investment and even if there were, equity investments are like living organisms undergoing continuous change.

You have to be able to stomach taking risks at times, and to be wrong sometimes too.

Q

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Subway

SUBWAY® brand – 49 wonderful years and counting!

SUBWAY® brand has reasons to be proud of. It’s been on the market for 49 years and it’s thriving. Apparently, a diet including nutritious sandwiches full of fresh vegetables

Anniversary

brings great results – also in business.

For almost half of the century, the American chain conquered markets in 108 countries worldwide. Fans of the brand owe it a new approach to the idea of a nutritious meal and extras it may include.

In the menu of over 42,500 SUBWAY® restaurants one can find a variety of breads, including flatbread, a paste of avocado which nowadays is glowing its triumphs as a treasure trove of valuable ingredients and many other extras inspired by cuisines from around the world, i.e. Mexican chicken fajita, American type steak or vegetarian veggie patty. A SUB made individually for each customer is recognized not only because of its specific shape, but also by a heap of fresh vegetables, the brand’s identification mark.

The network constantly strives to surprise its customers with further innovations, but also attaches

importance to the tastes and dietary and cultural habits on local markets. Hence, strictly vegetarian Indian restaurants or restaurants offering halal meat in Muslim countries. Thanks to the sandwiches’ popularity the network restaurants can be found in churches, hospitals and military bases. For over 18 months one SUBWAY® store, located in the container and lifted by crane, delivered sandwiches for builders of 105 storey Freedom Tower in New York. Over the years worldfamous personalities have been associated with the brand, among others, Pele – the football legend, and the most successful swimmer in the world – Michael Phelps. The Polish face of the brand was Ewa Farna, a singer.

For years the American chain has stressed the importance of using fresh products in one’s diet, limiting salt and eating vegetables – the approach that boosts an active and positive life. It has been repeatedly appreciated for promoting conscious approach to nutrition.

How would the next year’s celebration of 50th birthday look like - is not yet known. Certainly, however, it will be fresh and tasty!

Q

eat fresh.

32 October 2014

www.bizpoland.pl

FDI News

Nigerian maritime, shipyard development draws in Poland Determined to partner with Nigeria in the development of its maritime sector, Poland has expressed interest to invest in critical infrastructure, such as ship building and maintenance yard, as well as human capacity development.

Andrzej Dycha, Polish deputy minister of economy, said Nigeria’s position in Africa in terms of economy and potential prompted the delegation’s visit to Nigeria, pledging that Poland would cooperate with Nigeria in developing the shipyard and other maritime facilities in the country.

During a recent courtesy visit to Idris Umar, minister of transport, Dycha, who was accompanied by some Polish entrepreneurs,

said that the Polish economy offered a good platform for ventures that could provide good environment for infrastructure development. “We can offer soft loans at below 1 percent interest to finance the development of maritime academy,” he said.

Przemyslaw Niesiolowski, Polish ambassador to Nigeria, who led the delegation, said his country was also interested in investing in development of maritime education in Nigeria. He said Poland has expertise and technical know-how on railway development, transportation network and infrastructure planning, expressing optimism that if bilateral relationship was established

between both countries, there would be great improvement in the maritime industry in Nigeria.

Idris Umar expressed Nigeria’s willingness to partner with Poland in maritime development in order to foster the growth of the industry in Nigeria, adding that Nigeria had a lot of maritime opportunities for investors. The minster highlighted the ongoing development of NIMASA shipyard and dockyard facility which groundbreaking ceremony was performed by President Goodluck Jonathan in May as one the available opportunities.

He noted that the shipyard was expected to build and maintain vessels when completed.

According to Umar, Nigeria was seriously looking for technical partners and private investors in shipyard infrastructural development.

Q

Raytheon partners for missile shield bid U.S. weapons maker Raytheon has signed a letter of intent with Polish military software producer WB Electronics to cooperate in bidding for a contract to build Poland’s planned anti-missile system. Under the agreement, WB Electronics is to provide software for training and tactical simulations for the system, dubbed “Shield of Poland”. The two companies would also cooperate in seeking export opportunities.

Raytheon, which offers the Patriot missile defense system, is in the running to build Shield of Poland, competing with a consortium of Franco-Italian missile maker MBDA and France’s Thales. The cost of the project is estimated at 26 billion zlotys.

Fifteen years after its admission to NATO, Poland is stepping up military investments, particularly in light of the latest standoff between Ukraine and Russia.

Eastern Europe’s largest economy wants to raise its defense spending to 2 percent of gross domestic product (GDP) from 2016.

Q

2014 October

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www.bizpoland.pl

FDI News Dayco continues expansion push, opens plant in Poland

Spanish bank reports strong profits

Dayco Products L.L.C. has made major strides to expand the production end of its business in the U.S., Mexico, China and India during the last four years. The global producer of timing belt systems and front engine accessory drive products has followed the same course in Europe during the last year with the addition of a new manufacturing plant in Tychy.

Its newest factory is producing pulleys and dampers for original equipment manufacturers in Europe, according to Marketing Manager Brian Wheeler. Dayco’s Poland plant “is our latest and a very critical piece of our strategy to continue to be successful, not only in Europe, but globally,” said James C. Orchard, former CEO of Dayco. The new plant, which held its official opening ceremony in March, employs about 150, spans roughly 200,000 square feet and employs more than 220, Wheeler said.

UPS invests in Poland UPS plans to hire 300 people and invest $25m by establishing two new investment projects in Poland.

The US based giant announced intentions to establish new parcel sorting hub in Stryków. The second investment will take place in Łódź, where its Shared Service centre will be opened.

Both cities were centres selected by UPS because of its central location and proximity to many national business centres. In addition the site offers an excellent transport infrastructure, which allows for further refinement of UPS network connections.

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The Polish unit of Spain’s Banco Santander said it expects to book growth in net profits this year above the market average, despite a squeeze on margins from a sluggish economy and falling interest rates.

Mateusz Morawiecki, chief executive of Santander’s BZ WBK, said it would achieve that target mainly through efficiency gains from absorbing smaller acquisitions into its banking business, which is the third biggest in Poland. He added that BZ WBK plans to maintain its policy of

paying out around 50 percent of its profits as dividend.

“We are going to grow our profits this year, and we’re going to be higher than the market’s average growth pace,” Morawiecki said in an interview at the Reuters Eastern Europe Investment Summit.

“We are also going to grow next year even if some banks say it’s extremely difficult in this rate environment,” he said in the interview at the Reuters office in Warsaw.

Interest rates are at a record low of 2.50 percent and the central bank is planning to cut them, according to market predictions, by a further 100 basis points starting this month. That makes it harder for banks to generate profits.

BZ WBK, known for its commercials featuring football legend Pele and Oscar-winning actor Kevin Spacey, is finishing off its integration with the local unit of Belgium’s KBC, which it acquired in 2012, and is also absorbing Santander’s Polish consumer finance business into the bank.

Morawiecki said these acquisitions allowed the bank, in many cases, to serve more clients with slimmed-down infrastructure.

Morawiecki said he believed that within two to three years BZ WBK can overtake UniCredit’s local arm Bank Pekao to become Poland’s second-biggest lender when measured by assets.

State-run PKO BP is the biggest. “In terms of balance sheet growth and net profit we are able to become the No.2 bank on organic growth, without further acquisitions,” Morawiecki said.

He was bullish on Poland’s economy, the biggest in eastern Europe. “The situation is interpreted too pessimistically. GDP growth will be visibly above 3.0 percent this year,” he said. “The investment cycle is favorable. On top of that, clearly the next round of EU funds have not yet started to be visible in the economy. In the first and second quarters of 2015 they will be visible.”

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Poland shows its assets in the US On 24 September, PAIiIZ business mission to America led

by Agency president Sławomir Majman and deputy president Monika Piątkowska took part in two events: “The Energy Table” and “V4-Google Summit on Digital Economy”.

“We encourage investors from the United States to participate in both kinds of major energy infrastructure investment projects - those ongoing such as the gas port in Świnoujście, the oil port in Gdańsk as well planned ones including the big petrochemical project in Gdańsk”, said Mrs Antoniszyn - Klik during “the Energy RoundTable”.

“Poland with its well skilled workforce is ready to welcome high - tech investments from the US”,

said PAIiIZ president Sławomir Majman during the V4-Google Summit held in Google’s New York office in the presence of president of Poland Bronisław Komorowski and other presidents of member states of The Visegard Group (V4).

The event promoted the innovative potential of the Visegard Group member states as well as young, high-tech companies from the region. Over 200 people took part in the event including Polish high - tech companies as: Brand24, Transition Technologies, Biotrustis, SocialWiFi. On 25 September “The Polish American Investment Dialogue” was arranged by PAIiIZ. Over 150 guests including over 30 representatives of the Eastern Poland macroregion took part in the event. Q

Pomeranian SEZ with Airbus Pomeranian SEZ has signed an agreement with Airbus Helicopters, which belongs to the Airbus Group - a global pioneer in aeronautics, space and defence-related services, creating cutting-edge technology. The agreement aims to create effective linkages between the development of innovative science and entrepreneurship in areas managed by the Pomeranian SEZ. Cooperation between Pomeranian SEZ and Airbus implies the implementation of the development projects for Polish economy, the creation of educational programmes for future employees in the aviation

Autumn with 16+1 in Warsaw This autumn in Warsaw, the founding meeting of the “Secretariat of 16 + 1” will be held, announced PAIiIZ president Sławomir Majman on a recent visit to China. The Chinese side has already invited all Members of “Warsaw Initiative” for the event.

The decision to organise the founding meeting of the “Secretariat 16 + 1” was made during the Contact Mechanism Meeting for the Investment Promotion Agencies of China - CEE Countries that was held in Xiamen, China. The initiative - called “Group 16 + 1” groups China and 16 countries from CEE - was established in April 2012 during the visit of the prime minister of China Wen Jiabao to Poland. Its aim is the increase of the inflow of Chinese investments to Central and Eastern Europe.

Toyota’s millionth engine in Poland sector, information and promotion activities.

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Ikea - the largest sawmill in Poland In Stalowa Wola, Ikea has opened the largest sawmill in Poland, that is also the Ikea Group’s largest plant of this type in the world. The factory operating under Tarnobrzeska SEZ, will produce furniture boards for IKEA stores. Initially, the Swedish employer will hire 75 people and plans to increase the

2014 October

New 150 million investment In August, Bydgoszcz Industrial and Technological Park sold land to the company SPX Flow Technology Poland. The land lies in the Pomeranian Special Economic Zone.

SPX Flow Technology Poland plans to expand production facilities and conduct research and development activities. The company will create 200 new jobs, and the total value of investment will reach PLN 155 mln. SPX is a global company based in Charlotte, USA. The company provides solutions in the field of process engineering, the dairy and food industries.

level of employment to 300 people.

The Swedish company has big plans for expansion on the Polish market.

As Katarzyna Balashov of IKEA Retail Poland said to Newseria Business news agency, during the next 20 years the company wants to increase sales eightfold, from the current 2 billion to PLN16 billion. Q

In early September, the millionth product rolled off the production line of Toyota Motor Industries Poland (TMIP) factory. It was a diesel engine with a capacity of 2.0 liters, designed for Toyota Motor Manufacturing UK (TMUK). The first engine produced in TMIP within the mass production rolled off the assembly line in March 2005. The 500th - in 2009. The Millionth unit “Made in Jelcz-Laskowice” is an engine of the AD family with a capacity of 2.0 liters which will be installed in Toyota Avensis. Next spring, TMIP Company celebrates the 10th anniversary. Q

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Cities News

Tricity BESIX Group wins DCT Gdańsk deal

BESIX Group, one of Belgium’s largest companies operating in the construction industry, has won a contract for the design and construction of a new berth and the adjacent container stacking yards at the DCT Gdańsk (Deepwater Container Terminal Gdańsk).

The new 650m long berth will increase DCT’s annual handling

capacity up to 3 million TEU just in the first stage of the construction. It will be equipped with 5 STS cranes, delivered by Liebherr Container Cranes Ltd., 16 RTG cranes and additional yard equipment. Deadline for the construction of the new berth is s et for early 2016. The winning bid for the project came from BESIX NV,

subsidiary of the BESIX Group, which took part in some of the world’s biggest projects: the Ras Laffan Port expansion in Qatar, the construction of quay walls and dredging in Sohar, Oman and in Port Amazone Rotterdam in the Netherlands as well as the expansion of the Belgian Port of Zeebrugge.

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Gdańsk Port to triple capacity with new terminal

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The construction of a second container terminal at Gdańsk Port, Poland’s largest port, will begin this year, with the PLN1.2bn facility set to open in mid-2016. The investment, which port operator DCT Gdańsk is financing, will nearly triple capacity from 1.25m teu to 3.5m teu and the port will cover almost 30 ha.

Maersk has used Gdańsk, which handled a record 30m tonnes of cargo in 2013, for seven years and managing director of Maersk Central Europe, Ingrid UppelschotenSnelderwaard, welcomed the

development, saying: “We intend to keep a strong presence in Gdańsk. The current terminal has exhausted its capacity. The construction of T2 is good news for us, because the restrictions on services we offer to customers will disappear. The Polish economy is growing faster than other parts of Europe, and the potential for container transport is still not fully exploited.

That is why we are betting on an increase in the demand for shipping services in this region.”

The port is looking to attract the world’s largest shipping lines,

with talk of alliances including the Ocean Three and G6, as well as MSC, using Gdańsk in the future.

Maciek Kwiatkowski, managing director of DCT Gdańsk, said: “The largest shipping groups are showing interest in transporting containers through Gdańsk.

We are working hard on finding new large customers.”

The region’s shipping sector is currently facing challenges including wavering demand for container transport and the new EU Sulphur Directive from January 2015, which will increase transport costs.

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Szczecin Rising Russian tensions put NATO base in Szczecin on map There are no boots on the ground at NATO’s only headquarters behind the former Iron Curtain -- just some top brass sitting at desks with maps on the walls. In fact, the alliance’s lonely outpost at Szczecin in western Poland has created such a tiny footprint over the past 15 years that barely anyone noticed it even existed.

But it is about to get an upgrade in response to what NATO sees as Russia’s aggression in Ukraine.

and are having a galvanizing effect in former Warsaw Pact countries that are most alarmed

by Russia’s annexation of Crimea and fighting in eastern Ukraine.

“It’s great news for me and for the countries of eastern and central Europe that the political leaders of the NATO countries took the decision to increase our combat readiness,” said Lieutenant General Boguslaw Samol, the commander of the base known as the

NATO decided at its summit in Wales last week to raise the combat readiness of the command post and to double its size from 200 officers - from the United States, Germany and 12 eastern European nations - to about 400.

These might appear to be minor changes unlikely to serve as a significant deterrent to ambitions Moscow may have to try to unite Russian-speaking enclaves in parts of eastern Europe whose countries joined NATO after the Cold War. However the NATO moves to bolster the Szczecin base are of considerable symbolic importance

Multinational Corps Northeast, in an interview. “The message sent from the summit is very important not only for Poles and Czechs, and the Baltic countries but also for the rest of Europe: Our countries share a common security policy in this region and they are ready to stand together in the event of conflict to protect our territory,” the Polish commander said.

There is also a broader connotation to the move. Szczecin might be a tongue-twister for English speakers but Winston Churchill mentioned its German name, Stettin, in his famous

2014 October

1946 speech when he defined an “Iron Curtain” that was dividing Europe “From Stettin in the Baltic to Trieste in the Adriatic....”

Right Step At Right Time Eastern European NATO members appealed to the alliance well before the Wales summit to station forces permanently on their territory to deter any Russian attack. But others were leery. In 1997, during a period of better relations, NATO had reached an agreement with Russia under which alliance members said they had no intention of deploying nuclear weapons on the territory of new member states, which began joining in 1999 after the collapse of the Soviet Union.

Under that agreement, NATO also committed to defending its members through reinforcement rather than by permanently stationing additional “substantial combat forces” there. “It’s the right time for this now,” Samol told Reuters in his modest office in one of just 12 buildings that make up the NATO “Baltic Barracks” headquarters.

The NATO decision to expand its presence was big news in Poland, prompting more than 30 Polish reporters to rush immediately to the base just 15 km east of the German border to report on the upgrade. Poland’s President Bronislaw Komorowski also flew to the base to inspect the troops on his way back from Wales to Warsaw.

The exact details of upgrading Szczecin and bolstering NATO’s presence in eastern Europe are still being worked out and analysts have doubts it will impress Moscow’s military planners.

Until now the base has served as a command headquarters for the Multinational Corps Northeast – coordinating NATO exercises and 14 different military systems. There are no tanks here and the campuslike facility has more computers than weapons. “I’m not convinced with the argument that these moves will make Russia quiver in its boots,” said Daniel Keohane, head of strategic affairs at the FRIDE think-thank in Brussels.

“But as a political statement to countries in eastern Europe they’re very important whatever their real military value might be.”

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Cities News Keohane said NATO had no choice but to show the flag in eastern Europe, where the fears of Russia are not theoretical. “These kinds of steps, like upgrading the base in Szczecin, had to be taken.

NATO had to reassure its allies.”

Nato Support There is strong pro-NATO sentiment outside the base on the streets of Szczecin, an industrial port city of 400,000 that was German until the end of World War Two and Swedish in the 17th and 18th centuries. In neighboring Germany there are tensions at times about the presence of NATO bases and fears of those towns being primary targets in any conventional war. But not in Poland.

“I definitely feel a threat from Russia and it’s good that Poland

is a member of NATO,” said Kamil Szanter, an 18-year-old student in Szczecin. “All the endangered countries should stick together.

This is a signal to Russia that you shouldn’t mess with Poland because it’s part of NATO.” Physiotherapist Justyna Krol lives across the street from the Szczecin base and said it was fine with her that NATO was going to expand. “I think it’s a good move because I’m afraid of what Russia is doing. NATO is a very good thing for Poland.”

Poland, Estonia, Latvia and Lithuania wanted a larger and permanent NATO deployment in eastern Europe to deter Russia – up to two NATO divisions, or 20,000 to 30,000 troops. The NATO summit agreed to set up a new rapid-reaction force with

5,000 troops as a spearhead to deploy to a conflict zone within days. But the “spearhead” rapid reaction force will not be based in Poland even though operations could be coordinated from Szczecin. There has also been talk of possibly prepositioning supplies in Szczecin or elsewhere in Poland.

Brigadier General Lutz Niemann, chief of staff at the base, said the details on exactly what Szczecin will be tasked with still have to be worked out but he assumes its IT and communications operations will be greatly expanded. For now, it is just the fact that it is happening that is bringing some comfort to what Niemann said was a “somewhat underrepresented” eastern Europe.

Source: Reuters

Łódź UPS invests in two new Polish facilities

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UPS announced its intentions to establish two new facilities in Poland representing a combined 25 million USD investment. The first is a new parcel sorting hub and center in the town of Stryków. The investment in this facility is the largest of its kind for the company in Poland and construction is scheduled to begin this September. The second facility will house a UPS Global Business Services (GBS) center in the city of Łódź – the second of its kind in the country. Both are scheduled to be operational in the first half of 2015 and will create more than 300 new UPS jobs in Poland.

“This year Poland celebrates 25 years of economic freedom. UPS is happy to continue contributing to the country’s economic development with these two investments,” said Piotr Sitarek, country manager UPS Poland. “The central location of the new parcel sorting center in Stryków will enable us to provide faster service to our customers and the new GBS center in Łódź will allow us to increase the efficiency of our

administrative operations throughout Europe, while offering skilled jobs to the Polish community.”

The new facility in Stryków will operate simultaneously as a package sorting center and a distribution hub for parcels of all sizes to meet the growing needs of the market.

It will have a total operating area of nearly 13,000 square meters, the equivalent of two football fields and will be equipped with sorting technology that can process up to 15,000 packages per hour.

Stryków, near Łódź, was selected by UPS because of its central location and proximity to many national business centers. In addition, the site offers an excellent transport infrastructure, which allows for further refinement of UPS network connections.

GBS is a UPS division which provides shared international services, including information services, customer service, and accounting.

UPS opened its first GBS center in Poland in Wrocław in 2006, where more than 600 people are employed

today. After launching services at the center in Łódź, the company will ultimately employ more than 900 people at both GBS sites combined.

“UPS is proud to partner with Poland as we open a second Global Business Services facility here,” said Larry Darrow, president of UPS Global Business Services. “We conducted a thorough and comprehensive search as we sought to expand our European presence and Łódź stood out as an ideal choice.

We look forward to a long and mutually beneficial relationship and thank the Polish Ministry of Economy, Mayor Hanna Zdanowska and the many other Polish officials who worked very hard to make this new location a reality.”

“Investments by foreign companies are the best recommendation for the city of Łódź as an ideal place for business development,” said Zdanowska. “This is confirmed by the two projects announced by UPS. We are welcoming a company which is known for its high-quality service and valued for its management standards. The presence of such a strong partner in the Łódź market is proof of a properly executed strategy and confirms that our city is one of the most attractive in terms of the development of modern services and the logistics industry.”

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Wrocław LG CNS wins smart grid power deal in Poland LG CNS said that it has won a major smart grid development project worth $46 million in Poland. This is the largest smart grid project

a Korean company has won in Europe. The Korean company said it has signed an agreement with the largest power supplier in Poland, Tauron Dystrybucja S.A., to supply 330,000 units of advanced metering infrastructure (AMI).

AMI is an essential component in a smart grid that sends realtime information on electricity consumption to a central system.

LG CNS said it participated in the bid after forming a consortium with Danish company Eltel Networks and Polish companies Eltel Networks Olsztyn and World IT Systems.

The Korean company said starting this month the AMI will be installed in 330,000 households in Wrocław, southwest Poland, through April 2017. Additionally, a head-end system, which analyzes data transmitted from the AMI, will be established as well.

LG CNS estimated that the AMI market in Poland is expected to grow to 1 trillion won, especially since Poland is following the EU Mandate 2020 that has set a goal of installing AMI in 80 percent of households by 2020 in an effort to conserve energy.

Under this plan, Poland plans to install AMI gradually in all of its 16 million households by 2020.

Other EU member countries are expected to install AMI starting next year. If so, the number of AMI units that will be needed is estimated at 150 million.

LG CNS has been expanding its energy business including energy management systems for buildings and energy storage systems.

“This is LG CNS’s first winning of a national smart grid project and it will act as a bridge for our company’s advance into Europe,” said Kim Ji-seop, managing director of smart grids at LG CNS. “We will do our best effort not only to speed up our entrance into Europe’s energy management market through the successful execution of this project but also to become a leading global energy company that represents Korea.”

Market research company Frost & Sullivan projected that the global smart grid market will likely post an annual growth of 28 percent, expanding the $28.9 billion market in 2011 to $125.2 billion by 2017.

SoftServe Opening Development Centers in Poland SoftServe, Inc., a leading global software application development and consulting company, announced the opening of two software development centers in Kraków and Wrocław. The centers will augment various software development engagements to support the company’s vertical strategy and will be fully functional by year’s end.

The new development centers are a strategic component of the SoftServe plan to establish a strong Eastern European presence around intelligent, specialized software engineering services.

SoftServe provides software development solutions in SaaS/Cloud, mobility and predictive analytics,

2014 October

as well as the full spectrum of consulting and engineering services.

“The value of our “client first” approach stretches far beyond engineering excellence to helping our clients achieve a competitive advantage,” said Alan Harlan, CEO, SoftServe Inc. “We continue to open additional development centers to meet requests for increased speed, value and quality, as well as to provide all of our employees with growth and challenging opportunities. We are bullish that the delivery center expansion will fortify the strong growth of the organization in the second half of 2014 and in 2015.”

The company, which was founded in 1993 in Lviv, Ukraine, has

experienced double-digit growth during the last five years, and expects similar results this year, despite the country’s current political unrest. In March 2014, SoftServe opened a development center in Sofia, Bulgaria. Bulgaria and Poland have similar cultures and market opportunities, along with a world-class engineering pool, bred through an excellent science and math-based university system.

These centers are designed to meet the company’s business goals of collaboration, flexibility, fewer cultural barriers, availability of relevant technology, domain expertise, and less time zone disparity.

“In spite of the changing conditions in Eastern Ukraine

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Cities News with small areas of political and physical conflict, we are doing everything in the company’s control to support our employees and Ukraine. For SoftServe, the business and personal lives, all freedoms of speech, religious freedoms, all modes of transportation, all modes of communication, the entire

infrastructure and all logistics are virtually the same today as prior to the onset of this activity.”

Events earlier this year in Ukraine garnered a fair amount of publicity, but the reality of Ukrainian day-to-day lives and business operations did not and still has not changed for SoftServe employees, software

engagements or operations.

SoftServe has not experienced downtime due to any political issues; however, the company continuously monitors all events to ensure the company’s Business Continuity Plan mitigates client risks and creates safe havens for employees as well as maintains business operations.

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Poznań Legia adds new money, with Wandzel buying 20% stake Polish businessman Maciej Wandzel has acquired a 20% stake in Legia Warsaw from Dariusz Mioduski, the majority shareholder in the club, who now holds 60% of the shares.

Wandzel currently serves as the head of the supervisory board of the Ekstraklasa, the top tier of Poland’s professional football league. To date, the businessman has represented Legia’s rival club Lech Poznań in the body, but will now serve on the board as Legia’s representative.

He is also the chief executive of investment fund Black Lion.

“I have been involved in football for a very long time,

but this is something completely different,” Wandzel said. “I would like to help the club in its relations with the broad public sector and local administration.” In his new role, Wandzel is to be also responsible for overseeing Legia’s business activities and relations with the club’s partners.

The amount of the latest transaction was not disclosed by the club. Mioduski and Bogusław Leśnodorski, chief executive of Legia Warsaw and minority shareholder, acquired the side earlier this year from Polish media group ITI. Leśnodorski has a 20%

stake in the Warsaw-based club.

On a related note, Wandzel’s son, Aleksander Wandzel, is a player with Legia Warsaw.

Legia Warsaw started the season well in the Champions League qualifiers before playing an unregistered player against Celtic in a tie they won 6-1 across the two legs, but with the second game subsequently awarded 3-0 against them forcing them out the competition on away goals.

Legia had an appeal rejected but were still hoping for some financial compensation. The club is competing in this year’s UEFA European League. They are the current Polish champions.

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Katowice Kompania Węglowa plans to cut 20,000 coal-mining jobs

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Kompania Węglowa SA, the European Union’s biggest coal producer, needs to cut its workforce by more than a third while maintaining output to avoid bankruptcy, Chief Executive Officer Mirosław Taras said.

State-owned Kompania, Poland’s third-biggest employer, plans to continue producing about 30 million metric tons of coal annually as its workforce will fall by 20,000 from 55,000 through retirements,

voluntary departures and sales of mines, Taras said.

“We want to do it as quickly as possible, but it won’t happen overnight, it may take years,” Taras said. “If we don’t cut jobs, Kompania will cease to exist.”

Polish mines, one of the few industries in state hands in central Europe’s biggest country, have struggled as global coal prices fall amid sluggish economic growth while production costs remain high. The industry lost 1.1 billion

zloty on thermal-coal sales in the first half of 2014 while stockpiles jumped 26 percent, according to the Economy Ministry.

Revamp Plans The government of Prime Minister Donald Tusk appointed Taras, a former head of the country’s most profitable coal producer Lubelski Węgiel Bogdanka SA, in April after Kompania’s losses on coal sales exceeded 1 billion zloty in 2013. “You can’t cheat on the math, we have

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Cities News

to balance Kompania’s operations,” Taras said. Bogdanka, which went public in 2009, mines 1,950 tons of fuel per employee, compared with 545 tons at Kompania, according to data on the companies’ websites.

Kompania’s plan prepared by the new management last month includes selling four out of its 14 mines and reducing stockpiles by 5.9 million tons to help the Katowice, Poland-based company regain liquidity as the group “can’t afford” to safeguard all jobs, Taras said. “Labor unions are aware that employment must decrease and we’ll talk to them”, Taras said. “They’d rather not cut jobs and we’d like to do it

efficiently, so we need to meet somewhere in the middle.”

New Markets Deputy Economy Minister Jerzy Pietrewicz told Bloomberg News that the government has received Kompania’s plan. “We need to understand that there’re different parties involved in the process and we’re analyzing whether this is the only solution for Kompania,” Pietrewicz said.

Kompania is also looking for new markets as domestic power producers accumulated a record 6.5 million tons of coal. The company is in talks to sell coal to Ukraine after the military conflict

in Poland’s eastern neighbor cut supplies of the fuel to power plants from the Donbas area, Taras said. “Donbas has practically stopped producing coal so there’s an opportunity for Polish mines,” he said. “The only issue is agreeing on the right price.”

DTEK Holdings BV, Ukraine’s biggest utility, said that three of its 31 mines in Ukraine have been shut down due to the fighting.

Ukraine’s July coal output fell 27 percent from a year earlier to 3.88 million tons, the lowest since at least 2012, according to data from the country’s State Statistics Committee.

Source: Bloomberg

World’s newest concert hall opens in Katowice The new 1,800-seat concert hall of NOSPR (National Polish Radio Symphony Orchestra) opened on 1st October in Katowice (the seat of NOSPR) with Brahms’ first piano concerto (soloist: Krystian Zimerman), Beethoven’s ninth symphony and music by Polish composers Penderecki, Kilar and Górecki conducted by Alexander Liebreich.

The new hall is universally hailed as one of the finest architectural projects of its kind in Europe.

Concertmaster Rafał Zambrzycki-Payne: “Everybody

in the orchestra is very excited.

It opens up a lot of new possibilities for the orchestra. It’s a big success for the architects. The hall feels quite intimate, even though it’s not small, seating 1, 600. From the public’s point of view, it feels as if the orchestra was playing next to you.”

On 18th October, the concert hall will host the London Symphony Orchestra, with a special delegation visiting from China.

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Kraków Orange Poland launches second pilot for energy sales Orange Poland is launching a second pilot scheme for energy sales, this time without a partner.

Orange has a licence to sell energy and will offer power to individual retail and business clients. Clients can get a discount on packages.

The pilot will run in Kraków, Katowice and thirteen cities in the Silesian agglomeration. The

2014 October

pilot will run until the end of January 2015.

Orange Energy will be available both for current customers of Orange Poland as well as any other consumers interested in changing power supplier. The energy offering will be especially beneficial when purchased together with at least one telecommunications

service. Contracts for energy services can be signed in one of 33 Orange salons in the territory of Kraków and the Silesian agglomeration. The process of changing energy supplier will follow automatically upon signing the contract.

Customers can find more details about the service on dedicated web sites.

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Eastern Poland Strabag builds section of A4 motorway in Poland A consortium consisting of Strabag Sp. z o.o. and Budimex S.A. has signed the contract to build a 41 km section of the A4 motorway from Rzeszów to Jarosław in south-eastern Poland. The gross contract has a value of about € 170 million. Strabag holds a 50 % share in the consortium.

The contract comprises among others, the construction of the 41 km main roadway as well as three motorway interchanges, 78 bridge structures and 20 wildlife crossings. Work will begin following handover of the construction site in early October. The motorway

is scheduled for completion and should be opened to traffic in the first half of 2016.

The motorway section in the Subcarpathian Region of southeastern Poland is a key investment in the construction of the A4 motorway with a total length of about 670 km.

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New workplaces in Kielce 42

Polish company Transition Technologies has opened centre for innovative IT solutions in Kielce.

Currently 10 programmers are employed in the company’s office

in Kielce. However, this number will grow to 30 people by the end of the year. Moreover, within two years, Transition Technologies plans to increase the employment

to 150 professionals - mainly JAVA programmers who will work for the international automotive companies in Europe such as Ferrari, Honda, Continental and Renault. Q

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Chambers of Commerce

Australia: aviation manufacturing which is ahead of France.

Austrade in partnership with Aviation/ Aerospace Australia (A/AA) and the Polish Aviation Valley are organising an Australian aerospace mission to Poland from 20-22 October 2014. The three day program provides significant business matching opportunities with prime contractors and tier one suppliers and will involve a number of factory visits.

For more information please contact Austrade Warsaw at warsaw@austrade.gov.au

Australian teams at 9th International Mines Rescue Competition in Poland The 9th International Mines Rescue Competition was held in Poland from the 6th to the 13th of September in Bytom, near Katowice. Rescue teams from over 15 countries representing 4 continents were competing in the following areas: simulated rescue action, theoretical knowledge of mines rescue procedures, first aid, equipment and many others.

Australia was represented by 2 teams from Glencore Oaky Creek North and Kestrel Mine - Rio Tinto Coal. MineArc Systems, an Australian manufacturer of mine refuge chambers was a sponsor of the competition. At a mine rescue workshop on 11 September teams from

Belgium Speed Business Meeting in Katowice 09.10.2014 The Belgian Business Chamber together with French-Polish Chamber of Industry and Commerce, PolishSwiss Chamber of Commerce and Scandinavian-Polish Chamber of Commerce have a pleasure to invite to the Speed Business Meeting in Katowice. The Speed Business Meeting is a specific formula of meeting, which consists of number of sessions during which participants have the opportunity to gain new contacts, find customers, partners, investors, etc. For the second part of the event, all participants are invited to a cocktail.

For more information visit www.belgium.pl

2014 October

around the world, including Australia presented on mine rescue procedures and mine safety equipment from their respective countries.

Australian aerospace business mission to Poland The Polish aerospace industry is playing an increasingly important role in the global aviation supply chain. Many major international players like Pratt & Whitney, Safran, Sikorsky and Goodrich Aerospace are now located in Poland as they recognise the significant role Poland plays in this sector. According to a recent report by PWC and The Manufacturing Institute in the United States, Poland is now ranked 8th for

Belgian Business Mixer with Brussels Invest and Export 22.10.2014 Warsaw The Belgian Business Mixer will provide Members and friends of the BBC with the opportunity to meet companies from Brussels coming to Poland as part of the Brussels Trade Mission in Urban Infrastructure. After a short presentation of the companies arriving from Belgium and their representatives by Nicolas Neve, Counsellor of Brussels Invest & Export, a stand-up buffet will be opened. Some representatives of the Polish contracting authorities for urban infrastructure (the City of Warsaw, GDDKiA, Ministry of Transport, Metro Warszawskie, etc.) should also be present at the Mixer as guests of BIE and the BBC. For more information visit www.belgium.pl

Defense firms in Poland Thales Australia presented its next-generation light protected mobility vehicle at the MSPO Defence Show in Kielce.

It’s innovative modular design and simplified assembly enables customers to engage with local industry, create local jobs and provide vital in-country support and services capability.

For more information visit http:// www.hawkei.com/

Germany Dual recipe for youth unemployment Countries with the lowest unemployment among young people, and the shortest time searching for their first job have a dual system of education: Vocational and higher-academic, in which learning occurs in two ways, in school and in practical work-experience. In Poland, in the school year 2013/14 with over 397,000 high school graduates, vocational careers are chosen by about 74,000 students, ie approx. 18.6%. The influential role and impact of vocational education was the topic of a recent conference in Warsaw, organized by the Polish-German Chamber of Industry and Commerce(AHK Poland), entitled “The role and importance of vocational education”.

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Chambers of Commerce Among delegates were Deputy Minister of Education Tadeusz Sawecki, Deputy Minister of Economy Ilona Antoniszyn-Klik, as well as Poland’s deputy labor minister, and head of the European department of the Federal Ministry of Education and Research in Germany Ms. Susanne Burger. Issues discussed included the role of vocational education in Germany and its patterns.

The dual system of vocational education is used in Germany, Austria, Denmark, the Netherlands and Switzerland.

Germany and Austria report the lowest youth unemployment rate in the European Union (7.7 percent, and 8.7 per cent), versus Poland at more than 23 percent, and Spain exceeding 60%!

The dual system effectively prepares young people to enter effectively on the labor market. While the Polish model of education has multiple advantages, the model lacks emphasis on practical training, access to modern technology, and contact with practitioners. “The two-track model has all the right conditions, including practical experience with cutting-edge technologies”, said Maria Montowska, director of the Polish-German Chamber of Industry and Commerce. Not without significance is the impact of chambers of industry and commercein the preparation and carrying out of professional exams,

as well as updating the lists of professions and curricula.

AHK Poland currently directs 9 vocational-education projects, including patronage of 35 classes educating approximately 700 students throughout Poland. These particular industries provide education that is recognized in other European countries: industrial mechanics, mechanical automation industry,precision machine operator, automotive technicians, CNC machine operator, and machine operators.

“Waste management and technology community in Poland and Germany - the perspective of cooperation”.

04.11.2014, Warsaw Organized by the Polish-German Chamber of Industry and Commerce and its partners on behalf of the Federal Ministry of Economy and Energy of Germany in the project export promotion. The aim of the conference is to familiarize participants with the Polish and German specificity of both markets and current trends, and to address frequently occurring problems in cooperation between companies of the two countries. So far, 11 German companies have signed up to participate in the project.

Spain

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The Polish – Spanish Chamber of Commerce in cooperation with member company Domański Zakrzewski Palinka organized two business seminars, where the representatives of various branches had the opportunity to get to know new legal changes and to build and strengthen their network. The topic of the first meeting was “The Consumer Rights Directive 2011/83/EU, which was approved by the European Parliament in October 2011 and has come into effect this year”.

The breakfast was targeted at Spanish businessmen who work in the Polish market, particularly in these areas: retail service, Fast moving consumer goods (FMCG), textiles, and eCommerce. During the meeting we discussed themes such as changes due to directive 2011/83/UE coming into force – status quo?, new obligation to inform, new cell phone contract signing procedures, and assignment of contracts.

To participate in the conference we would like to cordially invite Polish companies in the area of waste management, recycling, infrastructure and technology utilities, local government representatives from government, industry trade organizations, as well as interested companies from other industries. http://ahk.pl/pl/wydarzenia

Baravian Food Producers – visit to Poland.

27.10.2014 - 29.10.2014. Poznań.

A range of producers will attend, including producers of antipastas, sauces, sweets, breads, beers, fruit juices, and meats. http://ahk.pl/pl/wydarzenia/

Taiwan The second seminar topic was “Spanish consortiums in Poland- legal and taxation aspects”.

The seminar was aimed at all Spanish businesses from the industrial area,who work in the Polish market. We talked about the different regulation between the Polish and Spanish Temporary Business Association (TBA). The main point of the meeting was to explain the legislation in order to establish a consortium and the legal and tax problems related to establishment and administration, such as basic differences comparing with the Spanish Temporary Business Association in Poland and in Spain.

Issues also addressed: Foundation of the consortium: is it always necessary?; Is it better to meet the requirements to participate in the project or limit the company risk?; Rules of taxation applicable to the consortium profits; profits division and remuneration to the consortium members.

A Hand Tools and Hardware trade mission A Hand Tools and Hardware trade mission from Taiwan visited Warsaw on September 9, 2014.

For the second time this year, Warsaw hosted a group of Taiwanese companies coming to Europe to find new business partners. This time were 10 companies specializing in tool manufacturing.

According to organizers (TAITRA Taiwan External Trade Development Council) statistics summarizing this Trade Mission, 94 meetings held in the hotel Golden Tulip Warsaw Center were attended by 21 entrepreneurs from Poland.

The fact that Taiwanese companies estimate the possibility of signing contracts worth up to 6 million USD with Polish companies may serve as proof of successful meetings. Taiwanese companies participating in the Trade Mission have high hopes for Polish market. As they observed, developed automotive and

October 2014

www.bizpoland.pl

Chambers of Commerce electronic industry in Poland carries big demand for tools and thereby creates an opportunity for tool exporters.

As Mr Lee Chien Hui, the director of Taiwan Trade Center, Warsaw says: “Taiwan is one of the leading hand tool producers around the world.

Wrenches and pincers are respectively 17% and 8% of Polish hand tools market. The quality of Taiwanese products are highly valued by Polish companies and many of them import or order production of hand tools in Taiwan.”

In addition to Poland, Taiwanese companies also visited Turkey, Hungary and Russia during this year’s Hand Tools Trade Mission. For the majority of Taiwanese entrepreneurs it was the first time to participate in a trade mission to Central and Eastern Europe.

That’s why it was also a chance for them to gain knowledge of those markets and their potential. During this Hardware and Hand Tools Trade Mission a total of 254 trade meetings were held in four countries.

United Kingdom BPCC 22nd Annual Ball, 25th October Join us at this prestigious social event to celebrate 22 years of the BPCC’s success, 25 years of Poland’s democracy and 10 years of Poland’s EU membership.

Entertain your

preferred clients or celebrate in style with your closest business partners.

Urszula Dudziak, a leading Polish jazz vocalist will be performing live at the BPCC 22nd Annual Ball. We guarantee a special programme of culinary excellence, fine wines and a wealth

of splendiferous entertainment! We’ll also be holding a charitable raffle with some tempting prizes.

For more information please visit www.bpcc.org.pl/22ball; ball@bpcc.org.pl, or telephone: 604 16 01 16.

United States US trade secretary seeks more business with Poland Even as the U.S. and European Union seek a major free trade deal, Poland and the U.S. should intensify their commercial ties in areas ranging from construction to energy security, U.S. Secretary for Commerce Penny Pritzker said in late September. Pritzker told a meeting of Polish and U.S. businessmen that bilateral business is below its potential. Poland is currently only America’s 54th largest trading partner, even though its economy ranks among the world’s top 25. U.S. companies have invested some $30 billion in Poland since the early 1990s.

“We know that we are missing an opportunity to work much closer together,” Pritzker told a meeting of the American Chamber of Commerce. “It is in our mutual best interest to have stronger economic ties between our countries, our businesses and our people.”

Traveling to Ukraine, Poland and Turkey with the CEOs of leading U.S. companies like Lockheed-Martin, Xerox, UPS, and ADM, Pritzker is to make a report for President Barack Obama from this “economic diplomacy” mission. She named infrastructure, green building, technology and transport, defense, energy security and IT as “areas of opportunity.”

Poland is keen to boost its developing economy through cooperation in innovative technologies, but also in the food and farming products sector.

As a member of the European Union, Poland is part of negotiations on a free trade agreement with the U.S. Those talks could take months, if not years, to be completed, however.

Pritzker arrived from Ukraine, where she discussed steps that the government should take to develop business with the U.S. She said Ukraine should aim to attract foreign companies by making the economy more efficient and reducing corruption, among other things.

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Events

Andels Łódź celebrates 5 years The Andel’s Hotel Łódź celebrated its 5th anniversary together with 600 friends of the hotel, partners and international media this September. In 2009 Warimpex Finanz- und Beteiligungs AG and Vienna International Hotelmanagement AG (VI) opened together the first 4-star hotel in Łódź, which has given the city a new design and face ever since.

After decades of standing empty, the former weaving mill, established in 1878 by textile magnate Izrael Poznański, has been transformed into a shining example of how historic industrial architecture can blend with modern design. ”Without question, the andel’s Łódź is one of the most brilliant hotel developments in Warimpex’ history. After all the efforts of developing a new spirit while preserving the building’s original character it fills me with pride to see how this award winning project is so well received by its guests and also the people of Łódź”, said Franz Jurkowitsch, CEO of Warimpex, owner and developer of the hotel. Warimpex

had renovated the red-brick building within two-and-a-half years, challenging the technical and creative skill of its employees, architects and construction workers like never before.

Since its opening, Anna Olszyńska is General Manager of the andels and proud that around 200,000 people from all over the world have stayed at the multi-awarded design hotel: “It is a special honour for us that we had the chance to host also international stars and celebrities, such as Depeche Mode, Sting, Shakira, Rhianna, Justin Bieber and Plácido Domingo. The hotel shines with its diverse event setting and stage design and has therefore hosted more than 4.125 events and conferences – including the Poland Fashion Week.”

In the last five years the venue has won more than 30 international and national awards for its unique architecture and design as well as its outstanding service.

The andel’s Hotel has won the “Traveller’s Choice Award” from TripAdvisor for the last three years. The andel’s Hotel Łódź has

been certified as “Poland’s Best Hotel” as well as received the prestigious Hermes Statute for the best restaurant as well as many other awards. Rupert Simoner is the new CEO of VI hotel group which manages the subbrand andel’s hotels. Q

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Luxury Brands Fall 2014

in Poland

Table of Contents KPMG Expert’s Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L3 Businessman style – how to create your image knowingly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L6 Unique cars as the hallmark of success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L7 Collecting melee weapons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L8 Business protocol – how to stand out from the competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L10 Worldwide success of Polish brands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L11 Slow food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L12 Chateau Musar – exceptional wine from an exceptional country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L13 Appetite for more leisure time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L16 ‘If you don’t pay, you can’t play . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L18

Expert’s Commentary

last five years. The highest availability is observed in the alcohols and cigars segment as well as in consumer electronics. Polish consumers can choose among Italian, French and Swiss brands, to name only the most important ones (respectively 22%, 17% and 14% of available luxury brands).

According to KPMG in Poland analysis, in 2013 the value of the Polish luxury goods market increased by 5.9%, reaching an estimated level of PLN 10.8 billion.

Luxury and premium cars are currently the biggest segment of the luxury market in Poland, worth as much as PLN 4.5 billion. KPMG estimates that until 2016, the fastest growing segments will be luxury real estate and hotel and SPA services. In 2016 the total value of the Polish luxury market is predicted to reach nearly PLN 13 billion.

By Tomasz Wiśniewski, Partner, Head of Valuation and Modelling Team, Corporate Finance Group, KPMG in Poland

The presence of luxury brands in Poland still increases.

In 2013, 69% of global luxury brands were available in our country. This number is predicted to grow in the future, but probably at a lower pace than during the

Luxury Goods and Services Wealth Investment & Management Private Banking and Concierge Elegance and Life Style Exquisite Travels and Leisure Fashion, Culture, Art and Design

Published Bianually (Spring/ Fall)

In 2013, there were as many as 786,000 people in Poland with annual earnings of more than PLN 85,000 and this number is predicted to increase. Representatives of companies providing luxury goods and services in Poland are very optimistic about the future luxury market in our country. As many as 94% of them expect that the number of their clients will grow within the three following years and 68% assume that the average customer’s spending will also increase in the same period. | The next edition of the KPMG report “Luxury goods market in Poland” will be available in December this year.

Luxury Brands Fall 2014

in Poland

Advisory Articles Professional Reports Profiles of Polish Brands Tests and Reviews

Target Group: 4000 foreign businessmen, permanent residents of Poland, being a top executive of their companies.

If you want to advertise in Spring 2015 Edition, contact us: Wiktor Gliński (wglinski@biznespolska.pl; 694-492-067)

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Dom nad Niprem

is a magical placeâ&#x20AC;Ś for the most demanding only

We select our furniture just like tailored suit - to make them perfectly fit our clients interiors

Dom nad Niprem biuro@domnadniprem.pl tel. +48 793 936 665 www.domnadniprem.pl

Businessman style – how to create your image knowingly For more than five years I have been working as a style coach and cool hunter, helping businessmen in building their image. Thanks to my pieces of advice, they found their own style and achieved much success.

This work helped me to realize real demand for this kind of knowledge, which is why I decided to create first such a project in Poland, Szkoła Męskiego Stylu (Men’s Style School). It is a platform through which businessmen are discovering knowledge, gaining awareness of self-image and acquiring new business contacts.

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Every business meeting is preceded by choosing the proper attire. It is of great importance, because it is psychologically proved that your interlocutor subconsciously creates his opinion of you just within few initial seconds of your first meeting. Appropriately selected outfit helps to build a positive image of us in our business partner’s mind. It also helps us during important negotiations by building up our self-esteem. Finally, it is a tool we can use to generates a positive image of ourself.

Similarly, when considering patterned or glowing suits – as they might be fashionable now and again according to seasonal trends – we should rather substitute them with clothes based on smooth fabric, if planning business meetings.

Good choice for a shirt color is white, blue or pastel shade, as it builds our image of a professional.

By Agnieszka Świst Kamińska, stylist, cool hunter, founder of ASK Szkoła Męskiego Stylu

A common mistake is to underestimate the importance of socks. At business meeting we usually sit and therefore socks must be long enough to hide the calf. Recommended colors for socks are black or navy blue. Socks should be always darker than shoes in business attire.

Shoes then, should be matched with the color of a belt.

If we meet with someone older, we should choose lowkeyed attire consistent with dress code. Some studies show that people quickly accept a person that seems similar to themselves and their environment. The key thing is to choose appropriate clothes for one’s figure. We need to feel at ease, clothes should be matched to our figure and convenient at the same time. IIf you want to add jewelery a watch and wedding rings should be enough.

Shoes should be classic style, low-keyed black, bronze or burgundy. It is advisable that the shoes were leather-soled.

Appropriately selected outfit helps to build positive image of us in our business partner’s mind.

The composition of business attire should be based on the principle of three colors. When choosing a dark blue suit, white shirt and maroon tie, we should not add more colorful elements. Too much of color distracts our interlocutor’s focus, thus affecting the efficiency of our conversation.

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In some cases a sports jacket and trousers in different colors are also acceptable. Do not forget that this attire should also be consistent with business dress code – avoid deep unbuttoned shirt, bright colors or very flashy patterns.

Issues raised above are only a small part of businessman style knowledge. These are the basics that every businessman should be aware of.

At Szkoła Męskiego Stylu, we hand on knowledge of choosing appropriate businness attire, personal development, savoir-vivre, healthy diet and cooking, sports and automotive. I cordially invite you to join one of our lectures. |

Unique cars as the hallmark of success The most expensive models of cars are actually available to every owner of affluent wallet respectively. However, there are some cars only for the selected ones.

Manufacturers of the most luxurious models are also renowned for the production of very small series, even alone selecting potential owners. Thereby, each piece becomes the object of desire of the powerful of this world.

The prices of such cars much exceed the value of the available models; although, the is not essential but its availability. In addition, the real ennoblement is the proposal of the manufacturer to consider such a purchase. Then we are sure that we are a member of the world’s VIP circle.

The possession of the car model, the production has been completed a long time ago, is equally a huge ennoblement, and the model itself is regarded as iconic.

Nevertheless, it is hard to define the luxury, because for everyone it means something else. Inside the cars above we do not experience the modern components, advanced multimedia systems, built-in seat massagers or porcelain trimming. However, we will experience the true history of racetracks or a movie.

By Leszek Cieloch Deputy Chief Editor of Manager 24.pl, automotive journalist, previously associated with the Manager MBA and Businessman.pl. Automotive lecturer in the Szkoła Męskiego Stylu.

Currently, in Poland there are already official representatives of brands like Rolls-Royce, Bentley, Aston-Martin, Ferrari and Maserati.

They are widely seen as a luxury in the Polish market. Why do these cars belong to the superpremium class? Not only from the historical factors, but als primarily due to the production process. These are the hand-made cars. Their annual production is significantly lower than the popular models, which often passes 200 or even 300 thousand PLN (which are also widely regarded as a luxury in Poland).

Producers of the superpremium class know how to encourage their demanding customers. Every owner of Aston Martin will be able to show off that up to 20 cows were selected from a special breeding to create a leather upholstery in his car. An underbelly skin is primarily used. It is the most gentle skin as well as the most tenacious. Furthermore, an engineer who supervised the construction of the model put his signature to engine housing. Thereupon such a person is guaranteed the top quality.

Everyone has their own point of perception of the luxury.

We can find, of course, in offer solutions such as embedded Swarovski crystals and trimming leather with whale penises, but it is worth distinguishing kitsch of luxury. |

Undoubtedly, one of such models is the Bugatti Type 57 SC which price reached more than $30 million in 2010. Then, this auto, produced in the second half of the 30s, became the most expensive model in motorization history. What’s interesting, one of three produced models remains in the collection of Ralph Lauren. Only two years later, in 2012 the name of the most expensive car got Ferrari 250 GTO which the price on auction exceeded $50 million. Everything thanks to the uniqueness and sports results achieved in the most important races of world.

Many cars gained also a name cult thanks to great film productions. There are some movies such as “Bullit”, “60 seconds”, the James Bond series which create the mentioned cult. Having exactly such cars is the purest form of luxury, they aren’t universally available.

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Collecting melee weapons When deciding to collect melee weapons and military decorations it must be taken into account that only few have survived in a very good condition until now. The maelstroms of war, frequent uprisings caused that many specimens of the weapon have gone and lots of them were damaged. Also, many weapons left and stayed abroad in 1939 along with Armed Forces of the Republic of Poland.

By Małgorzata Lalowicz Chairman, “Desa” Dzieła Sztuki i Antyki Sp. z o.o.

31-019 Kraków, ul.Floriańska 13 biuro@desa.art.pl

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On the market as trade goods, there are often copies which some are better or worse compilations. A beginner collector may have trouble with distinguishing whether a weapon is entirely original, or folded, and it is very important for the price of individual objects and the quality of the entire collection.

After the partition of Poland in late 18th century, the equipment of Polish military troops contained military equipment of the invaders, these were Prussia, Austria and Russia.

In 1917, after regaining independence, many sabers were made by small private manufactories in such places as: Sztorc workshop, Zieleniewski Plant in Kraków, as well as in Viennese manufactories e.g. Fiszer manufactory.

In April 1917 the Military Department of Provisional Council of State circumscribed the form of saber model 1917 for the Polish Armed Forces. These were sabers of privates and officers of infantry and cavalry.

The separate pattern of Polish sabers is so-called “krechowieckie” model 1919 / 1920 made by the Warsaw Company of Aleksander Mann. They are considered as the prototype saber of model 1921 introduced by an order of the Ministry of Military Affairs. This saber was manufactured until the outbreak of World War II. It was also produced by a number of manufacturers, but the best one came from the Factory of Gabriel Borowski. These sabers had an ornament consisting of the eagle on wings of the amazon and patriotic maxim, mostly “God, Honour, Homeland”.

The last Polish saber and the last combat saber in the world was the model 1934. It was crafted in Huta Ludwików in Kielce. Miserly frames of the article do not allow us to discuss the other melee weapons, especially the older one from Sarmatian times.

Curved sabers, which come from the 18th and 19th centuries, belong to the specific attractions. It is a weapon with a refined decorative shape, an ornate handle and a scabbard and it refers to the oriental weapons, the combat sabers of the 19th century. In addition to the saber

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Polish sabre of infantry officer model 1917, and Polish commemorative sabre “Orla” (“Eagle”)

there are: swords, broadswords – often with decorative handles, choppers, daggers, cutlasses. Next to the Polish weapons appear specimens of oriental weapons such as swords, daggers, as well as such European weapons e.g.

French sabers – primarily from the 19th century.

Melee weapon has become a decorative element, presented against the backdrop of the Eastern carpet or tapestries from Buczacz. It decorated interiors of houses, mansions, villas and apartments. It was a reference to the history and it created the mood of memories and sentiments associated with the glory of the Polish military and lancer moods.

In this context it still interests buyers and collectors by virtue of artistic form and historical traditions.

Collecting, associated with Polish melee weapons, extends from the times of the 17th century, especially in the 19th century up to the present.

Unfortunately historical specimens rarely appear, for example: sabers “Batorówki” from the 16th century, “Zygmuntówki” from the 17th century or “Augustówki” from the 18th century. These are museum pieces. They were decorative swords with decorations and inscriptions on the blades.

As I mentioned, collecting melee weapons and decorations is a pursuit that requires knowledge and patience.

Collection from this field is built for generations.

The possession of a collection of melee weapons, which is enriched by a collection of medals and badges teaches history and patriotism.

It is meaningful that collecting melee weapons is a very good investment, because as we know the real and good melee weapons is not getting more available on the market, but it is the number of “enthusiastic” collectors which is increasing.

DESA - The Auction House and Gallery Ltd is the oldest company dedicated to selling antiques and the exhibiting of contemporary art in Poland. It was established in 1950, first as a State Enterprise. It pioneered the sale of auction. Several times a year it organizes auctions of a military, in which are presented patriotic memorabilia, weapons, badges and coins. |

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Business protocol – how to stand out from the competition What do customers expect from us? Today business is very demanding. Customers, outside the commodity and service of sufficient quality, want to be respected and treated fairly.

Moreover, they want to participate in something unique, but essentially all they want is to cooperate with a company (a person) with a good reputation, having a powerful

the rules of business protocol provides the development and existence of the company, ease at dealings, and this is one of ways of enhancing the brand.

Glass on the table - that is the question!

Being active in the business we have the opportunity to organize and participate in various meetings at which alcohol is served. Perhaps, somebody will disagree, but it results from my experiences, that the majority of human beings take a glass of wine and hold its bowl, but according to the principles of the protocol and elegance, a glass of wine should be held its stem.

Why? First of all, we heat the wine when we hold the bowl.

Secondly, we willy-nilly leave some marks on the glass which looks unaesthetically. I can also mention that if the gentleman who serves a glass to another person e.g. to a lady, he should hold the saucer and hand it over to her, then, it will be gracefully.

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Therefore, which glasses should be held the bowl? Brandy glass. We propose a toast with a glass of white wine or sparkling wine. So what to do if a person is an abstinent or a driver? Should he/she upraise a glass of water or a glass of juice, or maybe nothing? In this case, a glass of wine has to be uplifted, because the toast is risen (as a formal situation), not necessarily one has to drink the wine after all.

And when does the wine taste the best? I will tell you next time.

Business protocol has a lot of interesting issues:

By Renata Brukiewicz – a business coach, a manager, a business speaker, master of the ceremonies

brand. Therefore, it is worth combining two things: what we do, i.e. KNOWLEDGE, with how we do that, i.e. STYLE. Each of us is a company – a sole trader. We are committed to come positively into existence in minds of other people and strengthen our own brand. On this occasion, it is worthwhile asking ourself: what is our brand? What do our customers say about us when we are around? How do they reverse their opinion, when we are not at hand? This is the key version.

What is more, in our sole trader we fill one of seniorities - we are the managers. Edward Pietkiewicz writes, the higher position is, the greater the scope of authority and greater demand on business protocol, of course. It is known that the knowledge and the proper application of

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Do you know what man needs to create a duo, and what is his hallmark?

What determines the size of the patterns on the tie?

Do you know what it means that a woman dressed in a figure eight?

Where should ladies put their handbags down when it is a tiny one?

Do you know how to entertain a guest gentle way? What does your napkin tells about you when you have a meal?

Do you know why customers often forgo the services of a specificcompany and choose the competition?

On these and more questions I answer at the Szkoła Męskiego Stylu and at my b2b workshops and lectures. |

Worldwide success of Polish brands Despite the fact that the global and European market of luxury goods is highly competitive, some Polish brands have been able to succeed. International expansion coupled with excellent quality of products should guarantee a robust marke t position of Polish brands on the international market of luxury goods in future.

Along with the increasing affluence of the society, Polish luxury and premium brands enjoy a growing popularity on the domestic market, while making efforts to expand outside Poland. In the last few years, some Polish brands have achieved global or European success.

atively new La Mania, which recently opened its own stand in London’s Harrods, or well-known Polish designers such as Eva Minge, Maciej Zień or Gosia Baczyńska. In 2013, Material comes from Luxury goods market in Poland 2013 Report by KPMG in Poland and is used courtesy of KPMG in Poland.

In the case of luxury brands originating from Poland, each segment struggles with the negative impact of the geographic origin, which makes it difficult for companies to make a presence on global markets. Nevertheless, the visible success of domestic brands prove that it is, indeed, possible to make a Polish brand international. The most important factors here include a long term vision of growth, high quality and a carefully crafted expansion strategy.

In the beauty segment, Dr Irena Eris may boast an exceptional success. In 2012, it was invited to join the prestigious Comité Colbert, an association established

by J.J. Guerlain. The success is even greater considering that Dr Irena Eris is one of very few members from outside of France and the only member from Poland.

The fact that Dr Irena Eris products are to be found amongst such brands as Chanel, Dior or Louis Vuitton indicates that their exceptionality is also appreciated abroad.

The clothing segment has also experienced dynamic growth in Poland. New boutiques of Polish designers pop up in numbers in the most renowned Polish commercial streets. Some labels are also recognizable on the international market. These include Twins from Wrocław, offering exclusive men’s clothing, the rel-

Eva Minge received the prestigious International Star Diamond Award from the American Academy of Hospitality Sciences, awarded to companies which stand out on the luxury goods market. Apart from the Polish designer, only Louis Vuitton was honored with the same award.

The yacht market has somewhat different characteristics, featuring such Polish companies as Sunreef Yachts, Galeon and Delphia Yachts. Considering the very small demand in Poland, yachts had to expand into foreign markets. Each company operating in that segment has adopted a different growth strategy. Galeon specializes in manufacturing luxury motor boats, Sunreef concentrates on the niche market of luxury catamarans while Delphia Yachts, which manufactures sail boats, decided to invest in further development through takeovers, and in 2012 it took over the renowned Swedish shipyard Maxi Yachts . Each of those companies is highly successful on the international market.

Takeovers are also recorded on on the market of watches and jewelry. Apart recently purchased the brand of the Swiss watch manufacturer Albert Riele and relaunched production. The takeover of the Swiss brand may help this Polish company raise its international profile.

Another effective method for Polish brands to make a global presence is through a merger with a global corporation. This is how the Belvedere vodka brand from Żyrardów, owned by LVMH, has managed to win international acclaim. Moreover, the market of luxury and premium vodkas has also witnessed the success of other brands which originate from Poland, such as Chopin.

In the case of luxury brands originating from Poland, each segment struggles with the negative impact of the geographic origin, which makes it difficult for companies to make a presence on global markets. Nevertheless, the visible success of domestic brands prove that it is, indeed, possible to make a Polish brand international. The most important factors here include a long term vision of growth, high quality and a carefully crafted expansion strategy. |

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Slow food Do you really know what are the roots and ideas of this movement?

In 1986, the first McDonald’s restaurant was opened in Rome. The location of this large restaurant (over 400 seats) in the one of the most famous historical sites of Rome, Piazza di Spagna, caused the outrage. Nowadays, after almost thirty years, people just got used to Golden Arches of McDonald’s in such places. Then, at the forefront of the protests under the slogan “Slow Food” stood Carlo Petrini, the communistic journalist. Demonstrators offered pedestrians bowls of penne marinara – a traditional Italian dish. The Petrini’s slogan has become truly remarkable. In 1989 was established the International Movement for Protection of Rights of Pleasure, which, as befitting revolutionists, was announced in December 10, by “Slow Food Manifesto”.

Today, Slow Food is a global organization, operating in 150 countries with more than 100 000 members. In the headquarters, in the Italian city – Bra, there are employed over a hundred employees. The head of SF is still Carlo Petrini.

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McDonald’s which has been made a scapegoat for the Slow Food movement even tried to retaliate: in 2010 in the infamous restaurant located in the Piazza di Spagna had its premiere McItaly. The Minister of Agriculture, Luca Zaia, praised the taste of the burger formed exclusively of Italian products and advertised as a combination of American and Italian taste. This sent Petrini into frenzy.

All sins have been attributed to McDonald’s. Even if McDonald’s served penne marinara instead of burgers and also Barolo from 1939 rather than Coca-Cola, it would not have helped the restaurant. McDonald’s provokes every leftish, such as Carlo Petrini, as a red rag to a bull: The company is AMERICAN. Slow Food promotes the so-called “locavorism” (Pol. “bliskożerność”), a nutrition based on local products and regulations, as a recipe for health, lessening pollution and strengthening social relations between consumers and producers. From the PR perspective, the idea seems fantastic, that is why Michelle Obama devoted herself to locavorism by planting vegetables in the White House’s garden.

Unfortunately, keeping the locavore diet consistently results in impoverishment. Not everything can be produced into a contractual circle of 100 food miles, and the reduction of environmental cost of transportation is compensated by the higher costs of production of the food in the magical radius of 100 miles. Apples do not bring crops everywhere, as in Poland… The ecological footprint based on SF is higher.

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By Georg Nowak-Krogh PhD, Austrian culture manager, author of the book “Gentelman. I have rules”, written under the pen name ‘Adam Granville’; the lecturer at the Butlers Academy and the Szkoła Męskiego Stylu

Slow Food contributes to the similar ideas such as Slow Money – invest in a radius of 100 miles and so on.

Slow Food is positive and satisfactory, because – unlike other alter-globalization movements – it is not ascetic; it takes care of simple human pleasures. Meetings do not take place in ordinary conference rooms but on so-called convivias - informal feasts with beverage.

However, an unpleasant face sometimes reveals itself from under the SF’s friendly mask. For instance, when we find out that the products imported from the outside of the 100 food miles will be additionally charged probably by a state (or maybe by SF?). We have already been through it in Venezuela.

Sometimes this face could ever scare: Carlo Petrini during his tour of American universities urged students on ‘returning to the fields’. We have also been through it in Cambodia!

Does it mean that the idea of slow food is wrong? Not at all! Petrini correctly diagnosed the problem, but he failed when it came to the therapy.

How should we pursue the idea of slow food? I’ll write about it in the next issue. |

Chateau Musar – exceptional wine from an exceptional country Lebanon is a small country but full of interesting contrasts. Starting from the blue Mediterranean climates, to the green valley of Bekaa; from barren hills – to the blooming citrus groves.

clarified, only lightly filtered. Even the use of sulphates (common in the production of quality wines) is limited to a minimum. White Musar wine is produced in microscopic quantities of local varieties Merwah and Obaideh, with a similar reverence and attention to detail, the effect of which are long-lived, highly characteristic taste of wine.

A descendant of the founder, Serge Hochar, (Man of the Year 1984 by ‘Decanter Magazine’) does not seek imaginary fruit aromas in their bottles of wine. As he says, “The most important thing is the wine speaks to me about place of its origin. If my wine is not talking to me, I stop drinking it. I’m not interested in wine, which is killed by the technology, I want one that vibrates, the real thing.”

The figure of the owner is charismatic and it is recognized in the world. Small production of the wine and unusual longevity Chateau Musar (reaching over 60 years) makes that the wine is very popular - so collectors (for its assets tasting) and investors (due to the high increase in the value).

By Piotr Kamecki – Sommelier Champion of Poland (1998), finalist of European Sommelier Championship in Reims (1998) and World Sommelier Championship in Montreal (2000), President of the Board of Polish Sommeliers Association, long-time President of the Board of Centrum Wina, co-founder and managing partner of Wine Advisors Portfele Otwarte, co-owner and President of the Board of Wine Taste by Kamecki.

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It is a narrow coastal Mediterranean country with rich cultural heritage, full of archaeological sites, museums, temples and castles of the Roman crusaders.

Lebanon also has rich heritage of wine. The ruins of Baalbek in the Bekaa Valley are nothing like the magnificent remains of the city devoted to Phoenician god Baal – in its heart there is the temple dedicated to the god of wine Bacchus. It is an ancient vineyard – vines have been growing there for thousands of years.

In Lebanon, there are about 1,400 hectares of vineyards, grown in the ideal climate – long, warm and cool summers but frost-free winters with abundant source of natural water which comes from the melting snow from the mountains. It all makes this small, beautiful country produce some of the most distinguished red wines in the world.

Chateau Musar was founded by Gaston Hochar in Ghazir in 1930. In 2010 this company celebrated its 80th anniversary and it is still small, family business, but known worldwide for their longevity, unique in taste wines.

Red Chateau Musar is a composition of varieties, from old bushes, of Cabernet Sauvignon to Cinsault and Carignan.

After fermentation, the wine is being matured for 3 years in cask and French Nevares oak barrels. After process of corking the bottles, it matures in the cellars of the chateau for the next 6-7 years before it goes on sale. The wine is not

Below there are exemplary prices which show the increase in the value of Musar red with time and decreasing the number of available bottles (data of Liv-ex Benchmark Market Price 26/09/2014, quality of indicated vintages is absolutely comparable. Prices are per case of 12 bottles).

• • •

Chateau Musar 1995 – 525 pounds Chateau Musar 1985 – 1,350 pounds Chateau Musar 1975 – 2,300 pounds

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Passion For recreating We specialize in finding forgotten historic tenement houses which have lost their glamour over the years. Such tenement houses that may become the pride of the city one more time.

To some people pre-war Warsaw tenement houses mean nothing more than worthless, shabby buildings. For us they mean much more. We immerse in their moving history. We notice the work of pre-war craftsmen, the beauty hidden in crumbling details slightly covered by dust. We do know that such old houses have their own undying soul and unique value.

All you need is to take care of them, and through hard work and high attention to detail it is possible to turn back the clock and restore the houses to their past splendor.

Our goal is to bring Warsawâ&#x20AC;&#x2122;s Downtown back to its aesthetic position, equal to that of any other European capital city. A charming and lively city centre, as in other metropolises, with its renovated tenement houses dating back to the

beginning of the 20th century is what we want to achieve through our work.

2+)1G*BB*1&01JK-$8/%4$1&%1 $L$)M1H$B/&-N"1OM1B/7&%81H+$1 4/)$1B*1$L$)M1/)4P&B$4B+)/-1 H$B/&-1!$1Q)&%81Q/4713*)G$)1 &H$%B&BM1B*13*)8*BB$%1,-/4$0"1 Not only do the buildings we have renovated delight with the beauty of historic elements but they also impress with modern and functional solutions which meet the current needs of their residents. We have been appreciated and granted awards as the proof of recognition.

Original architecture of buildings is a great treasure that is cherished with undisguised pleasure and high diligence within the Fenix Group. The souls of tenement houses are woken up from a long-lasting sleep by our passion and knowledge.

Renaissance of architecture !!!"#$%&'()*+,",-

./-$01233&4$511 +-"16*/7*!07&$8*19:;<1==>:::1?/)0@/!/A11 B$-"51CDE1<<1D=F1<=19=A1$>G/&-510,)@$H/@I3$%&'8)*+,",-

Live in the heart of Warsaw and feel like in Paris.

Appetite for more leisure time In Poland concierge services market quotes a height of an interest in the offer and it attracts more companies which are willing to take advantage of its potential.

The dynamics of change is not shocking, but it shows that Poles are increasingly willing to seek for quality: in products and services but also the way they relax. Helping out in everyday trifles and support in difficult cases (formally or logistically) constitutes a comfortable mechanism that saves precious hours of concierge services every day. With a team of professional concierges who are ready to work 24/7, one can get nor only more free time but also peace of mind.

These are both small companies with a local interest, as well as big players who have been doing good for years in Europe and Russia. Who is the concierge customer and how does he use this service?

This service is open to different professional market segments. Until now, the concierge service was associated, in Poland, as the value added to private banking or luxury apartments. Nowadays, basic service starts from 1200 PLN per month (and extended – from 6000 PLN) and its

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French name sounds much more familiar. However, the current understanding of the “concierge” can not be easily defined. This is not only an assistant, an organizer, an adviser, a confidant – often he is simply a first aid in any emergency case.

Noble Concierge emerged over seven years ago as the first company providing this kind of service in Poland. It recorded the number of clients rising up from few dozens then to a few thousands now. The number of services delivered monthly, only in the last three years, jumped by 40%. Many clients treat such a service as a tool for saving precious time as free time is a luxury for them. Justifiably, the concierge services market is growing in parallel with growing market of luxury goods and services, and it is reaching growing number of HNWI (high-net-worth individual). According to KPMG, in 2013 the luxury goods market in Poland has risen by 6% YTY, and within the next two years is supposed to grow by another 20%.

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By Iwona Żelazna

How to get the most of the service? Those, who most actively use it, know it very well. They begin and end almost every day in the company of a concierge. They order the wake-up call, they commission such things as: delivering the breakfast and the press, ordering the cleaning the house, receiving children from nursery school, purchasing a set of school textbooks, repairs to a roof, reminding of family landmarks and the organization of occasional parties, or announcing cinema premieres with the appropriate advance.

Concierge service is not only an issue of daily life and burdensome paperwork, but also extraordinary cases – sudden, very delicate and extremely complex. This category includes: booking a table in a restaurant (highlighted with Michelin star) within an hour, organizing nameday surprise diner for a life-partner on the roof of a skyscraper, or finding a smartphone, left in a taxi, instantly. Clients can be creative with their needs: one is seeking personal items he lost, another looking for thick enough clouds over Bydgoszcz, guidance how to find path he lost while trekking in mountains, somewhere in Chile, at midnight (CET) or rare pharmaceutical available only with prescription. What all these people have in common? First of all, very intense professional life. |

“The name Steinway is synonymous for piano and vice versa”– Dakota Jackson In honor of the 160th anniversary of Steinway & Sons, the renowned furniture designer and artist Dakota Jackson has collaborated with Steinway & Sons on a very special project. The stunning result of this collaboration is Arabesque – a Limited Edition with unique design approach.

Like the intimate, lyrical creation by Robert Schumann entitled “Arabesque”, or Debussy’s pensive masterpiece of the same name, the 160th Anniversary Limited Edition Arabesque by Dakota Jackson touches the soul with a pure beauty. Conceived by Dakota Jackson for the 160th anniversary of Steinway & Sons, the instrument captivates with exquisite design accents such as the pentagonal legs, giving an impression of fluidity and movement as they spiral upward. When the lid is raised on its gracefully curved stand it seems to float weightlessly above the piano, revealing the plate beneath glinting in ethereal silver. A pair of slim silver bands encircles the rim, highlighting the timeless elegance of the grand piano shape. The slightly forward slanting angle of the piano’s delicately arched arms brings to mind a graceful dancer’s extension, as befits a piano named for a balletic pose.

The premiere of this unique instrument will be held on October 29 in PianoSalon Steinway & Sons in Warsaw and will be combined in an exhibition of Henry Stażewski image of the famous composer Karol Szymanowski. Having a legendary Steinway environment communicates best taste and prestige of the buyer, so it is not uncommon enormous interest aroused in Poland a single copy of this instrument. | Source: http://www.riffpianosalon.pl/

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‘If you don’t pay, you can’t play’ How does the Polish world of art is seen across the ocean? It turns out that we think about it in much more pessimistic way than it deserves; according to American art historian Joseph Jacobs’s opinion. He talks about cardinal mistakes of wealthy collectors, pitfalls of the market, which are common on both sides of Atlantic Ocean, and also about a way we can guarantee the rise of the collection’s value.

Works of former masters are goods which are getting harder to get while modern art is still produced. That is why I could not speak in the same manner even about these prestigious modern artists. The former masters or impressionists are the sphere not touched by speculations.

What do you think about Polish artists? Some of them made a fantastic career in the west and you surely know

Iwona Żelazna: My first question will not be a surprise for

last names such as Bałka, Opałka, Abakanowicz or

you. People say ad nauseam – at the same breath – about

Uklański.

the Polish art market that it is immature, shallow and opaque. Why has it raised your interest?

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Joseph Jacobs: Honestly speaking, my business partner Katarzyna Morawska persuaded me that in her homeland exists a great need of developing this area. On the other side, when we define the Polish art market in this way, we have to remember that the same definition describes the rest of the world. I mean the developed part. If you do not live in NYC, Paris, London or LA – such a market does not really exist.

In some way it is comforting.

Above all, I would not call the Polish art market a young one. And I must say, what has been interesting for me for 45 years in this field. Even in the artistic world’s mecca, NYC, most collectors have no idea what they are doing. It is easy to lose a lot when buying pieces of art carelessly. I answer the phone with a plea of cleaning up somebody’s mess every week.

Wojciech Fangor also belongs to absolutely fantastic ones.

I was in a house in New Jersey full of his works once. I was speechless – it was fabulous. It was in the early 90s, they cost approximately $5000 back then. I have no clue why I did not purchase them. Now I could get for them $130 000-150 000. Anyway, I still think their price is attractive and I advise every collector to purchase them even now.

Unfortunately it is still an extraordinary case – a very few Polish artists arouse such enthusiasm abroad.

I must say, I have a feeling that in Poland there are more good artists per capita than anywhere else. Besides, now the world of art is an investment device for too many peo-

The market is dominated by collectors from the high finance groups who similarly like lemmings follow the crowd.

The market of art can be very easy if you follow the two simple rules. The first, you have to buy quality. The second, make the best of your time. Of course you can never foresee if and when the price goes up and down, but if you invest in a good piece of work for a good price, you will never lose.

ple. It led to the creation of rankings, such as Artrank, which place certain surnames under labels like “buy”, “sell” and “hold”. The market is dominated by collectors from the high finance groups who similarly like lemmings follow the crowd. This increases the prices and speculations, which I mentioned before.

What do you mean by good pieces of art?

What defines a collection?

Recently, I have observed the results of former masters’ works since 18th century. Francois Boucher, born in 1703, can be an example which I can guarantee. Works on this level are going to gain on quality.

Three paintings make a collection.

What about the modern art, which is getting more popular?

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You are not serious.

No (laughter). In very simple words, it is something that fills in interiors thanks to collector’s passion and heart.

The true passion often reveals when you run out of space

Joseph Jacobs is an expert in the global art market with the 35 years experience as a curator and director of many American museums.

Since 2003 he has been working with private collectors which portfolios he intends to expand by Polish art lovers.

at home and you need to rent a storage. Of course, I would not say that the interior designer is a collector.

Do people with whom you work treat collecting as passion

Should pieces of collection co-operate with each other?

Not necessarily. You can purchase an ancient Roman bust of Venus with richly sculpted draperies, which you can place next to Rembrandt, Picasso or Sasnal’s works. It is not a problem for me.

Well... it is a really difficult question. I think most wise and clever art buyers want to buy ones which value will increase over time. They are aware of the financial benefits at the same time caring for these works which have a high artistic quality. Other buyers are driven only by the style, which again is not very reasonable.

Therefore, in your opinion, should we plan creating a

Do you have any warnings for the beginners?

or an investment? What are the proportions?

collection ahead?

It depends on the collector’s taste, which sometimes can be awful. The adviser’s role is to get to know expectations and adjust needs to certain style. In the 90% of cases those needs require to be adjust to the conditions

The market of art can be very easy if you follow the two simple rules.

The first, you have to buy quality.

The second, make the best of your time.

in which selected objects will be exhibited, including the color of couch or the space above the fireplace. It sounds like a joke, but unfortunately it is the overwhelming majority of cases. The most famous collectors with lots of pieces of art set up their own galleries and museums – often open to public.

There are many risks. You need to check the conditions of the works, extra payments such as packaging, transportation or insurance. You also need to beware of specific aura that surrounds the art works from the famous collection, they are affecting the demand and cost. People often make the huge mistake of buying directly from the artists studio, thinking that this is the cheapest way. It is a myth.

And another perverse advice is that sometimes if you want to get something valuable, it is worth paying more for it.

History that supports this theory is quite short. In the mid 80s, I wanted to buy one of Warhol’s graphics, so I went to the auction and intended to spend not more than $500.

The work was sold for $525. Next time I established my limit on the $600 and the auction ended at $650, so again I did not get it. When I was absolutely determined I had to pay almost $6000 for it. Now these Warhol’s graphics cost $50 000 – 60 000. I summarize it by saying ‘If you don’t pay, you can’t play’. |

Interview originally published in Private Banking magazine No. 83, 2014.

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Dom nad Niprem

T

here are passionated individuals who find neglected historical objects and, in process of careful and thorough renovation, bring them back to old glory. They have been looking for the finest antiques for all over the Europe. Therefore, valuable and shabby furniture get back their unique charm and quality - to be useful for the long time again.

For the most elite clients, they offer incomparable possibilities of creating

unique interiors with exclusive furniture that perfectly emphasize owners' passion for art and luxury.

Precious antiques are being reconstructed in compliance with guidelines of art historian and clients’ expectations.

Experts of Dom nad Niprem are not cutting corners. They are a group of experienced professionals who – besides restoring antique furniture – can furnish a house, an apartment or a palace in a complex way.

According to the most demanding clients, exclusiveness, elegance and uniqueness of design constitute the biggest value. Dom nad Niprem offers pieces of furniture that are exceptional and unique. Clients can satisfy their dreams of original and chic interiors thanks to the variety of available specimen. Interiors that are cosy to live in and that show excellent style of the owner. Interiors full of unique furniture suitable to clients’ needs and mood – just like a tailor-made suit.

FDI Poland Investor Awards 16 October 2014

FDI Poland Investor Awards 2014 Shortlisted Companies

FDI Poland Investor Awards 2014 Jury Steve Rank

Marek Matraszek

Senior Trade Commissioner – Central Europe, Australian Trade Commission

Founding Partner, CEC Government Relations

Karl Schmidt

Minister-Counsellor, Embassy of France

Commercial Counsellor, Austrian Embassy in Warsaw

Antoni F. Reczek

Chairman, British-Polish Chamber of Commerce

Nicolas Lepage

Counsellor (Commercial) and Senior Trade Commissioner, Embassy of Canada in Poland

Edward Zhu

Jean-Marc Fenet Michael Kern

Chairman, Polish-German Chamber of Industry and Commerce (AHK Poland)

Kari Vähäkangas

Commercial Counsellor, Head of Finpro Poland

Amit Lath

Sr. Vice President, Indo-Polish Chamber of Commerce & Industry

Mike Hogan

Commercial Counsellor, Embassy of Ireland

Tal Harmelin

Director for Economic Affairs to Poland and Czech Republic, Embassy of Israel to Poland

Yoshito Okada

President / Zwiazek Pracodawcow Shokokai, Japanese Chamber of Commerce

Kwon Dong-seok

Counselor, Embassy of the Republic of Korea in Poland

Inese Sulzanoka

Head of the Representative Office in Poland, Investment and Development Agency of Latvia

Ernesto Malda

Head for Commercial and Economic Affairs, Embassy of Mexico to Poland

Stefan Bekir Assanowicz

Chairman, Polish-Spanish Chamber of Commerce

Vladislav Chlipala Commercial Counsellor, Embassy of the Slovak Republic

Chi-young Chen

Slawomir Majman

Director, Economic Division of Taipei Economic and Cultural Office in Poland

Antonio Castro

Director, UKTI Poland

President, Polish Information and Foreign Investment Agency S.A. (PAIiIZ) Vice-President, Polish Portuguese Chamber of Commerce (PPCC)

Vicepresident, PolskoChinska Rada Biznesu

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Martin Oxley

Nguyen Duc Thanh Commercial Counselor, Vietnam Embassy