BizPoland Magazine - January 2014

January 2014 vol. 7 no. 1(39) Price: 20 zł

Gdansk’s Deepwater Port opens up Poland to the world Infrastructure investments beginning to pay substantial dividends for government and businesses – says Adam Żołnowski Energy:

City News:

Equities:

8th annual Energy Forum in Sopot

EU to grant 6.7 bln zł for Western Pomerania

Energa IPO biggest in CEE for 2013

Table of Contents January 2014 vol. 7 no. 1(39)

Published by: BiznesPolska sp.z o.o. ul. Długa 44/50, bud. D, lok 704, 00-241 Warszawa tel.: 022 831 7062 General Manager and Editor: Thom Barnhardt (tb@bizpoland.pl) Publisher: Craig Smith (cs@bizpoland.pl) Editorial staff and writers: Leon Paczyński, Monika Tutak Research team coordinator: Magda Adamczyk Advertising Sales: Wiktor Gliński (wglinski@biznespolska.pl) tel.: 022 831 7062 Graphic Design: Sławek Parfianowicz sparfianowicz.wordpress.com

Cover Story 4

Gdansk’s Deepwater Port opens up Poland to the world

(6) Drydocks World inks deal with Poland fund; Macquarie European Infrastructure Fund to expand in Poland (7) P3: Big three container shipping lines’ alliance under scrutiny; Maersk and Gdansk’s Single-client Terminal

Energy 8

8th annual Energy Forum in Sopot

Advisory 10 11

2014: Setting the Stage New Legal Framework for the Energy Sector expected in 2014

Equities News

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(12) Vienna stock exchange coy in ongoing talks with Warsaw; no urgency seen; T-Mobile to sell banking services of Alior; Energa IPO biggest in CEE for 2013 (13) Capital Park debuts after IPO, shares down; FCE Group is planning to enter NewConnect; Tauron to take full control of local miner for $102 million (14) Newag rolling stock holds PLN 2 billion backlog, could beat 2014 guidance; Wood brokerage picks six stocks – and three to short (15) WSE to call for repair measures from companies with stock valuation below 0.5 zł; KGHM slumps as CEO predicts a tough 2014 for copper (16) Boryszew industrials on prospects for its automotive segment; Integer acquisition target wins tender with PLN 497 mln bids (17) Plaza Centers continues battle to stay out of bankruptcy liquidation

BPO/Shared Services 18

Midsize Cities in Poland develop as Service Hubs for Outsourcing Industry

FDI News

(21) Poland looking at UAE as key partner outside Eurozone (22) International Paper’s mill investment at Kwidzyn in Q1; Volkswagen Group Polska invests in a new distribution centre; Promoting Poland as a logistics hub (23) Designed in Poland exhibition dazzles Rome; Turkish business promotion in Poland; Investment attractiveness of Polish provinces (24) Wałbrzych lands 233 million of new investments; New investments in Malopolska; Procter & Gamble in big expansion in Warsaw (25) Wloclawek: Around 300 new jobs at the new plant of Wika Poland

Chambers of Commerce News

(26) Australia; Austria; France (28) Canada; Britain (29) Ireland (30) Gulf States (31) Swiss; United States; Scandinavia

Cities News

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(32) Trójmiasto (33)Szczecin; Łódź (34) Poznań (35) Wrocław; Katowice (36) Kraków (37) Lublin; Rzeszów; Białystok; Kielce

Events 39

HUSH Warsaw fashion fair

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Cover Story

Gdansk’s Deepwater Port opens up Poland to the world

Infrastructure investments beginning to pay substantial dividends for government and businesses Australia-based Macquarie’s 200 million euro investment in Gdansk’s Deepwater Container Terminal (DCT), combined with

Headline Industry Data

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• 2014 port of Gdansk tonnage throughput forecast to grow 10.9% to 38.779mn tonnes. Over the medium term to 2018, projected at an 8.7% average annual increase.

• 2014 port of Gdansk container throughput forecast to grow 17.6% to 1.485mn twenty-foot equivalent units (TEUs). Over the medium term, projected at a 12.3% average annual increase.

• Port of Gdynia tonnage to increase 2.6% to 16.339mn tonnes, with five-year average annual growth at 3.6%.

• Port of Gdynia container handling growth predicted to be 6.8% in 2014, to 779,114 TEUs, with growth set to average 6.5% on the medium term to 2018 • 2014 total trade growth forecast at 3.25%, up from an estimated 2.5% n in 2013.

government investment in Poland’s A1 motorway network, means Poland is taking business away from German and Dutch ports, said Adam Zolnowski, the CFO of DCT Gdansk.

And as DCT plans its next major expansion – T2 – capacity will be doubled, with the 600-metre dock able to accommodate the largest container ships in the world.

Gdansk is blessed with deepwater access of 16 metres. Combined with the recent major capital investments in the port infrastructure, it is now directly receiving 18,000 TEU ships from China and Korea. In addition to its depth, the port is ice-free year-round and has excellent nautical access – meaning that it is also picking up a substantial amount of transshipment business destined for the fast growing Russian market.

“The growth of CEE is fueling the Polish budget. Gdansk is the only direct connection between China and CEE”, said Zolnowski, in an exclusive interview with BizPoland Magazine in his offices overlooking the DCT port. “Revenues that were previously going to the German and Dutch budgets are now being paid to Poland”. He said that amounts to 1.7 billion pln, including VAT, customs duties and excise duties.

According to EU law, 25% of customs fees stay in the country of delivery, while the rest goes to the EU. DCT employs 500 employees directly and “maybe thousands of indirect employees such as customs officials” and supporting staff, according to Zolnowski.

Rising tide lifts all ships While the pun is intentional, the reality is that the investment in port infrastructure is starting to pay major dividends for Poland. With nearly-immediate access to the A1 motorway heading south into Czech and Slovakia, the port of Gdansk is feeding products into Poland’s and CEE’s road and rail network. While road connections have only about a 250 km “efficiency” range, rail connections extend the delivery range to all of CEE, including Belarus and near Russia.

Transshipment is another option allowing DCT to unload the largest container vessels and re-load onto smaller ships for further shipment to Russia. “Gdansk is becoming the key port for Russia”, said Zolnowski.

While Zolnowski would not disclose how much of DCT’s cargo is transshipped, he did say it is “significant”, representing between 30%-60% of incoming cargo to Gdansk.

With the port working at full capacity and the T2 expansion not due to be functional til late 2016, DCT is now adding a sixth crane – at a cost of 20 million euro - at the terminal, which means capacity will be expanded to 1.5 million TUEs. (Twenty-foot equivalent units is the standard term used in the shipping industry to express capacity).

The 18,000 TEU-capacity ships – the largest in the world - are arriving every week in Gdansk, and DCT Gdansk is registering about 10,000 “moves” of cargo per ship, leading to substantial gains in efficiency for the container-ship owners.

January 2014

www.bizpoland.pl From Gdansk, cargo is further transported via 35 cargo-trains per week. These are “block” trains holding 80 containers on average. Zolnowski said that 40% of the cargo moves further via rail, and the rest by road.

Maersk is Gdansk’s single client. As the largest container-ship operator in the world, it “discovered” Gdansk several years ago during the crisis as a further means to reduce costs, according to Zolnowski, and is now achieving the 2nd best “moves” per cargo ship in the world, second only to Los Angeles. Maersk has concentrated its container-ship deliveries in Gdansk, much to the disadvantage of Rotterdam and Hamburg – and neighboring Gdynia.

Zolnowski explained the major cost-efficiencies gained by landing containers at Gdansk, as opposed to points further west, which then requires more expensive overland shipment into CEE by rail or road.

“Direct threat to Gdynia” Maersk’s move from Gdynia to Gdansk has hurt Gdynia financially. Gdynia’s depth simply does not allow the new, larger container ships (and the new-generation mega-ships have costs that are 40% lower per container TEU) to dock.

Zolnowski said that Gdynia could do more near-shoring from Europe, as well as US and Africa.

“The development of the new T2 terminal will make us unbeatable”, said Zolnowski, who previously was an Internal Investment Director at PWC and earlier president of PAIZ, the Polish foreign investment agency.

Cover Story Gdynia is fighting back, however, and has appealed to Brussels, claiming that DCT’s lease of land for the new terminal expansion violated EU law.

Adding fuel to the flames, Maersk is spearheading the P3 alliance, with the world’s number 2 and number 3 container ship operators (China and Swiss-based).

The P3 alliance has recently come under fire from EU and US competition officials, who consider that the alliance – which would give the three carriers a 42 per cent share of the Asia-Europe route – would violate anti-competition regulations and drive up prices.

In the meantime, as competitive disputes boil over, DCT Gdansk continues to grow quickly. The port authority reported that box traffic grew by 34.4% in the first seven months of 2013. Volumes from China and Korea routed through the container Maersk Line AE10 service have been increased by the arrival in July of giant container ships – the 18,200 TEUs of Danish shipowner Maersk.

Coal exports are also playing a significant role, with the year-end traffic recorded of 4.6 million tonnes. Agricultural exports, including cereals, are also growing. Conspicuous by its absence is Russian crude oil, which so far continues to bypass Polish ports.

Double digit growth at Gdansk; Single digits for Gdynia The Gdansk port registered a 26.8% yearon-year (y-o-y) rise in bulk cargo throughput to 16.41mn tonnes in January-July 2013, according to the port authority.

Transhipment of grain cargo, and general

cargo and timber grew by 26.9% y-o-y and 20.8% y-o-y to 622,253 tonnes and 6.06mn tonnes respectively. Transhipment of other bulk cargo fell by 48% y-o-y to 1.42mn tonnes, while coal and liquid bulk cargo jumped 4.1 times and 34.6% y-o-y to 2.92mn tonnes and 5.38mn tonnes respectively. The port authority reported that box traffic grew by 34.4% in the first seven months to reach 665,990TEUs. DCT Gdansk managed to handle 565,622 TEUs in H1 2013. DCT throughput likely exceeded 1.1mn TEUs in 2013.

While at a much lower rate, Gdynia is also expected to grow, having enhanced its container role following its addition as a port of call on Hapag-Lloyd’s service and further improvements of its intermodal links.

As export growth continues, and the global trend towards larger container ships continues unabated, the demand for port services in Poland continues to grow healthily. Whereas the biggest ports in Europe are often crowded and their spatial potential is limited, both Gdansk and Gydnia are proving that there is room for further growth and expansion.

Zolnowski argues that further simplification of Poland’s tax and customs regulations will boost the competitiveness of Polish ports, as well as further development of both the port and inland infrastructure such as road and rail investments. And the Gdansk port is poised to take more market share from Germany and Holland, as clients from industrial regions of southern Poland, CEE and Russia see costs advantages to exporting via Gdansk, and Polish consumer demand for imported products continues to grow. n

Adam Zolnowski DCT Gdansk SA CFO - Member of the Management Board October 2011 – Present 2006 – 2010 PwC, Senior Manager, Inward Investment Leader 2006 Polish Information and Foreign Investment Agency (PAIZ), CEO 2002 – 2006 Office of Competition and Consumer Protection, n Director General

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2014 January

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Cover Story

Drydocks World inks deal with Poland fund Dubai’s ship building unit Drydocks World and Maritime World, a renowned provider of maritime and offshore services to the shipping, oil, gas and energy sectors, has signed a deal with Poland-based MARS Closed-End Investment Fund (FIZ).

MARS manages multiple companies engaged in marine and maritime sectors including shipyards, ship repair services and constructing offshore structures for the oil and energy sectors. The sole shareholder of MS TFI (which manages the fund) is Agencja Rozwoju Przemysłu (Industrial Development Agency), a government agency supporting the development of Polish enterprises. MARS FIZ manages a portfolio of four companies from the ship repair and construction of steel structures for the offshore industry (oil and gas and wind power), industrial companies (manufacturer of boilers) and five companies whose main assets are real estate.

The MoU was signed by Khamis Juma Buamim, the chairman of Drydocks World and Maritime World and Piotr Slupski, the president of the Management Board, MARS on the sidelines of the UAE – Poland Business Forum. The event was organized

by Dubai Chamber of Commerce and industry in collaboration with the Embassy of the Republic of Poland in conjunction with the official visit to the UAE of Bronislaw Komorowski, President of the Republic of Poland.

The mutual areas of cooperation under the MoU will be based on identification of projects suitable for common execution or close partnership as contractors or subcontractors in the offshore services and maritime sectors including the repair, refurbishment, conversion and new building of oil rigs, process modules and semisubmersible platforms, fabrication of steel structures for oil & gas subsea applications

and offshore wind power farms, conversion of Floating Storage and Offloading (FSO) and Floating Production Storage and Offloading (FPSO) units, said a statement from Drydocks World.

This will result in the development of investment opportunities and exchange of knowledge in all aspects of business and industry, including workforce development, education and training, research, and jobs opportunities and facilitate the

exchange of investments in the maritime and marine sectors, it stated.

Speaking on the deal, Khamis Juma Buamim, said, “Our businesses can complement each other especially in areas of mutual interest such as services related to oil & gas and renewable energy. We are always looking at forming meaningful partnerships with global institutions working in the same field and to support the growth of marine and n maritime sectors.”

Macquarie European Infrastructure Fund to expand in Poland

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The lead and majority shareholder in DCT Gdansk, Macquarie is an Australia-based financial behemoth with global investments in financial services and infrastructure. With multiple “infrastructure” funds spanning the globe, the first European Infrastructure fund was set up in 2004, with subsequent funds established with increasingly larger amounts, with its most

recent fund (IV) of €2.4 billion, for a total of more than €10 billion in investor commitments.

In Poland, Macquarie owns 64% of DCT Gdansk (with the remainder mostly owned

by Australian pension and investment funds) and a bulk storage facility. The fund has the firepower and intention to expand further in Poland and CEE. Investors

in the Funds are primarily pension funds and other institutional investors seeking long-term, stable returns - a characteristic of infrastructure businesses. The Funds benefit from the skill applied by MIRA’s experienced team of infrastructure operations and finance experts, backed by MIRA’s strong track-record of responsible n asset management.

January 2014

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Cover Story

P3: Big three container shipping lines’ alliance under scrutiny Plans by the world’s three largest container shipping lines to form an alliance have come under scrutiny by regulators in Washington, including regulators from China and the European Union.

The Federal Maritime Commission, the US watchdog, highlights the level of concern among rivals shipping lines about the impact of the proposed tie-up.

Denmark’s Maersk Line, a unit of AP Møller-Maersk, Swiss-based Mediterranean Shipping Company and CMA CGM of France – the number one, two and three, respectively, in the industry by capacity – have agreed to pool 252 vessels on three routes: Asia-Europe, transPacific and transatlantic.

When the three companies announced the proposed alliance this year, senior executives acknowledged that it would attract scrutiny but appeared optimistic of winning approval, pointing out that the structure of the alliance had been designed in discussions with regulators.

The meeting in Washington is thought to be the first time the three regulators have come together at a high level to examine an alliance in the sector, where most of the big players already have some form of co-operation.

Dubbed the P3 Network, the proposed alliance would give the three carriers a 42 per cent share of the Asia-Europe route, a similar share of the transatlantic market and a 24 per cent share of the trans-Pacific market.

A spokesman for Joaquin Almunia, the European Competition Commissioner said

Brussels was examining the alliance under antitrust rules because it exceeded the 30 per cent market share threshold that applies to maritime consortia.

The move by Maersk to try to create an alliance with its two biggest rivals comes against a backdrop of an industry plagued

by volatile rates and overcapacity. Most container shipping lines have been losing money year on year since the downturn in 2009.

The aim is to put the alliance into operation in 2014 but it remains unclear how long the three regulators will take before pronouncn ing on the proposed tie-up.

Maersk shipping line

Maersk and Gdansk’s Single-client Terminal A.P. Moller – Maersk Group, also known as Maersk, is a Danish business conglomerate.

Maersk Group has activities in a variety of business sectors, primarily within the transportation and energy sectors. It has been the largest container ship operator and supply vessel operator in the world since 1996.

Maersk is based in Copenhagen with subsidiaries and offices in more than 135 countries worl dwide and around 108,000 employees. It ranked 147 on the Fortune Global 500 list for 2010.

Container shipping and related activities is the largest business area for Maersk,

2014 January

providing almost half of the group’s revenue. It comprises worldwide container services, logistics and forwarding solutions and terminal activities under the brand names: Maersk Line, Safmarine and Damco. Since 1996, Mærsk is the largest container shipping company in the world.

The largest operating unit in Maersk by revenue and staff (around 25,000 employees in 2012) is Maersk Line. In 2013 the company described itself as the world’s largest overseas cargo carrier and operated over 600 vessels with 3.8 million TEU container capacity.

In 2006, the largest container ship in the world to that date, the E-class vessel Emma Maersk, was delivered to Maersk Line from Odense Steel Shipyard. Seven other sisterships have since been built, and on 21 February 2011, Maersk ordered 10 even larger container ships from Daewoo, the Triple E class, each with a capacity of 18,000 containers. The first were delivered in 2013.

It held options for 10–20 more, and in June 2011 placed follow-on orders for a second batch of ten sisterships (to the same design) with the same shipyard, but cancelled its n option for a third batch of ten.

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Energy

8th annual Energy Forum in Sopot

EU policies, energy politics and development, and renewables and alternative energy sources were front and center at the annual Energy Forum, held in mid-December in Sopot.

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According to speakers at the Form, to meet the economic challenges, the EU should focus on the development of the three pillars of energy policy at the same time – enlargement of the internal market; enhance of the security of supply and environmental protection. Such a conclusion can be drawn after three days of debates, presentations, reports and expert lectures at the 8th Energy Forum. The three-day conference in Sopot was attended by nearly 600 guests from Poland and abroad – including representatives of energy companies, politicians, and energy experts.

The Deputy Prime Minister and Minister of Economy Janusz Piechociński set the tone of the discussions at the

opening plenary session, arguing that the EU’s climate targets included in the package of 3 × 20, should be extended to include two new targets – a reduction of energy prices by 20 percent, and an increase by 20 percent of the share of industry in GDP of the EU. According to the minister, the reduction in energy prices in the European Union is a priority, in the perspective of the creation of a transatlantic free trade zone. “Since 2005, the average price of electricity in the EU increased by 25 per cent. And in the United States - about 1 percent. United States attracts new investments, including energy-intensive.

Europe begins to drift and has serious tensions in the energy market”, said the Deputy Prime Minister.

A critical opinion on the EU was presented by Member of the European Parliament Konrad Szymański, who reminded that when it comes to climate policy, a balance of the increase of security of supply and protection of both competitiveness and natural environment had been assumed. At this point, the climate policy is very strict and there is a general feeling of

neglecting the economic competitiveness and security of supply.

The worst that could happen would be the repetition of old mistakes in the new policy plan for the period after 2020.

A thoughtful revision of this policy is a matter of European raison d’État, Szymański explained. Deputy Minister of Economy, Witold Pietrewicz, stated that capital which searches for a profit reduces its costs and emigrates to the US, because the energy prices are stable there.

The economy trapped by high energy prices was a topic discussed also by the President of Lotos Group, Paweł Olechnowicz, Chairman of the Board of PSE Operator Henryk Majchrzak and President of PERN Marcin Moskalewicz, as well as Surojit Ghosh, Member of the Board of Arcelor Mittal. They all unanimously claimed that the increase of competitiveness of European economy is the only way to overcome the consequences of the Economic crises.

A similar point of view was presented by Pascal Charriau, President of a French research company Enerdata, who presented

January 2014

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Energy Andrzej Dycha, Deputy Minister of the Economy, addressed the issue of emissions trading. In his opinion, the system is flawed and does not fulfill its basic objectives. First of all, it undermines the competitiveness of the European economy because it increases production costs resulting in many companies shifting to the parts of the world where there are no such restrictions.

Legal regulations, argued in turn by representatives of the banking sector, are critical when it comes to financing renewable energy sources and their importance is hard to be overstated.

They called on the government to speed up work on the law on RES and to introduce clear rules of the game. In the opinion of Wojciech Kwaśniak, VicePresident of the Financial Supervisory Commission, delays in the implementation of regulatory standards translate into a lower number of investments, and therefore into a weaker dynamics of economic growth. “Banks expect predictability regardless of whether the system is based on auctions or energy certificates. As long as there is no stable system, banks will withhold funding,” said Kwaśniak.

Energy security – infrastructure and energy mix

the report that opened the Forum. “The problem is that when we have a high energy intensity, for example in China or India, the economy grows much faster. Those countries aren’t limited with strict regulations, which apply in the EU.”

2014 January

Giles Dickson, Deputy President for Environmental Policy in Alstom Group said that a gradual shift of the economy for a low emission one and modernization of infrastructure and industry results in growth of competitiveness in all sectors.

According to Jaroslav Neverovic, Lithuanian Minister for Energy, one of the ways to facilitate the transition of the European energy policy is to strengthen cooperation while creating a single European energy market. He stressed that EU countries must bet on the full liberalization of the transmission network, because only then the market will grow.

“This is a crucial element of energy security”, he argued. Krzysztof Kwiatkowski, President of the Supreme Audit Office, said that Poland’s energy security is gradually improving thanks to regulations adopted following its accession to the EU, development of cross-border infrastructure or investments such as the LNG terminal in Swinoujście.

Also the participants of the debate on nuclear energy discussed the security and predictability of supplies and the costs.

A representative of the German nuclear industry, Nicolas Wendler, admitted that after the disaster in Fukushima there was taken a political decision on the gradual abandonment of the atom. “The problem is that we really do not know what to replace it with. Renewable energy is less predictable and needs a solid complen ment”, he said.

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Advisory

2014: Setting the Stage As the New Year kicks off for business, so 2014 looks to be a fascinating year for Polish politicians, voters, and observers alike.

By Marek Matraszek

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Almost like a perfect storm, a string of political anniversaries and political trends are coming together in way that will leave the political scene by the end of the year looking poten tially much different than it does today. After over six years of relative stability and predictability, that is probably no bad thing – and it will be certainly interesting to watch.

The fundamental trend around which events will flow is the increasingly static poll ratings of the ruling Civic Platform (PO) party, at a level which makes the prospect of Prime Minister Donald Tusk winning the next parliamentary election unlikely. After his victory in the last election for a unique second time two years ago, and after four to five years of consistently leading in the opinion polls, it is now the opposition Law and Justice (PiS) party which has entrenched itself as the electoral front runner. This has surprised most observers, who for a long time were convinced by the mantra that the party of opposition leader Jaroslaw Kaczynski was “unelectable”. It is true that in terms of absolute voter numbers, the level of support for PiS has not shifted much, but under Poland’s complex proportional representation system the results of an election held today would push the PO into a distant second place.

The PO’s fundamental problem is the demobilisation of what until now has been their core vote – broadly, young voters, entrepreneurs, and ordinary taxpayers. These voters enthusiastically backed Donald Tusk in 2007, and again in 2011, on the basis that he would act vigorously to liberalise the economy, reduce unemployment, decrease the tax burden, and in general move Poland forward into a less bureaucratic, more competitive economy.

Now, in 2014, they feel disappointed. Taxes remain high, jobs are hard to come by, and some hard fought free-market reforms, such as Poland’s private OFE pension system, are being reversed. Tusk’s political

strategy of minimalist reforms and a purely managerial style of political leadership paid dividends at a time of large inflows of EU funds and relatively high growth, but now that both have slowed, to many voters the political cupboard of the ruling PO is looking increasingly threadbare.

In terms of election results, if combined with a relatively low turnout, that voter apathy will result in an electoral victory for Kaczynski in at least three out of four upcoming elections: European in May 2014, local government in the autumn of 2014, and parliamentary in the autumn of 2015. For Tusk, these upcoming electoral battles make it even less likely that he will return to his original free market intellectual roots, fearing social backlash from necessary but painful reforms. Instead his strategy has been to excite the voters with a governmental reshuffle, and to launch populist measures such as the proposed crackdown on drink-driving, but thus far the effect on the opinion polls has been limited.

Although the immediate beneficiary of Tusk’s stumble in the polls has been PiS, the other seeming winner is the leader of Poland’s third party, Leszek Miller, of the post-communist Democratic Left Alliance (SLD) party. Written off by many in the last decade after a lost election, corruption

scandals and political isolation, Miller persisted in advocating his brand of nonnonsense socialism – and it has started to bear fruit, pushing his party within reaching distance of the now second-place PO. Although the chances of Miller overtaking Tusk in the polls are slim, Miller is increasingly seen as a natural coalition partner for Tusk after the next elections. It may indeed be the case that even if PiS does manage to win the next elections in terms of a plurality of seats in parliament, it will be outmanoeuvred by Tusk and Miller – perhaps with a third junior party – and remain in opposition for a further third term. That may be politically attractive to both Tusk and Miller, but the benefits to Poland of being governed by an openly centre-left coalition at a time of required reforms is less obvious.

There are other contenders for the attention of Poles, it seems inevitable that in they will remain relative bystanders. Current Deputy Prime Minister and Minister of Economy Janusz Piechocinski has failed to extend the reach of his Polish Peasant Party (PSL) much above the electoral threshold. The hitherto star of the populist left – Janusz Palikot and his Your Movement (TR) party – has faded seemingly permanently, and the attempt by the former Justice Minister Jaroslaw Gowin to create a niche free-market conservative party is an interesting experiment probably doomed to noble failure.

2014 will therefore see a major a tug of war between three main players – PiS, PO and the SLD – over Polish voters, and interspersing the excitements of elections will be range of historical anniversaries that each will seek to colour with their own political narrative. The tenth anniversary of EU membership, the fifteenth anniversary of NATO accession, and the 25th anniversary of the fall of communism will all be a platform on which the competing claims for the hearts and minds of Polish voters by these very different political parties will be displayed. By the end of the year, we will much wiser as to who has emerged victorious from this political theatre, and thus who will be best placed to direct the main political play – that of winning parliamenn tary elections in 2015.

Marek Matraszek is the Founding Partner of CEC Government Relations. He can be emailed at mm@cecgr.com

January 2014

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Advisory

New Legal Framework for the Energy Sector expected in 2014 dr Christian Schnell

Energy Policy 2030 The Ministry of the Economy is working on a paper for the Energy Policy 2030. It should be noted that the Strategy Department of the Prime Minister’s Office worked out a second version of the paper Energy Mix 2060 which was published 12 November, 2013. So the Energy Policy 2030 paper might be based on these findings, but also on the Greenpaper Energy Policy 2030 published by the EU Commission in May 2013. The Energy Policy 2030 should be published for public consultation in Q1 2014.

A significant point related to the energy policy is the national program for nuclear power (PPEJ) with ongoing international consultations for almost 4 years. These consultations finished in 2013 but lead to an officially confirmed delay for the commissioning of the first Polish nuclear power plant to be expected in 2024. The consortium established between Polish state owned utilities PGE, Tauron, Enea and KGHM will continue its work in 2014, so the political decision to found the future of Polish base load partly on nuclear power has been made which has a major impact on the slowly phase out of lignite and black coal firing. Nevertheless a final decision about the Polish nuclear power plant haven’t been made yet, as approval for state aid is required.

Goodbye tri-pack, welcome RES Act The (large) tri-pack is already history. Both the Energy Directive and the Gas Directive have been implemented sufficiently by the “small tri-pack” and just the RES Act remained. The Ministry of the Economy accelerated work and on 31 December, 2013 published a new version 4.1 of the RES Act draft published 12 November 2013. The Permanent Committee of the Council of Ministers (a representation of the ViceMinisters) will deal with the draft most probably in the second half of January, but it seems that the recently published draft will still require some political decisions before the Council of Ministers will deal with a final resolution to send the RES Act draft to Parliament, mainly the change from a feed-in tariff as proposed by the Ministry of the Economy to a feed-in premium as recommended by the European Commission and the Prime Minister’s Office. Therefore, it might take a month

2014 January

to overcome this hurdle, but the most relevant political decision makers seem to be determined to push the RES Act forward.

A more sophisticated part of the legislation process is the notification to the General Directorate for Competition in Brussels.

The standpoint of the EU Commission that a certificate system to support green energy production means state aid is already known, as the notification of the prolongation of the support system for Combined Heat Power by yellow and red certificates until mid of 2015 has been ongoing for more than 9 months without any decision made yet.

The first time notification of the green certificate system may raise time-consuming questions. Less problematic should be the notification of the new auction system, at least if Poland switches to a feed-in premium system (in the means of contracts for difference), as the EU Commission clearly finds favour with feed-in premiums and intends to phase out fee-in tariffs.

Combined heat power and energy efficiency – lacking implementation of EU law No solution for combined heat power is visible yet. Since spring 2013 the support system for CHP (besides violet certificates for mine gas) has not been applied by the Energy Regulation Authority. As the notification turned out to be more problematic than the Ministry of the Economy expected, the Polish Parliament decided before Christmas to proceed further with the prolongation of the support system until 2015.

Nevertheless, the stand-still clause of the EU treaty applies during notification procedure so the prolongation will not enter into force before a final decision of the EU Commission. There is an additional legal risk related to larger cogeneration installations with electricity capacity exceeding 200 MW with a requirement of notification of individual aid due to the above-mentioned guidelines for state aid from 2008.

By 2015/2016 a new support system should replace the yellow and red (and violet) certificate system. The system was at a first glance presented by engineering company Energoprojekt Katowice at the Polish parliament in autumn this year. The proposed support system consists of a feed-in premium (might be in the means of contracts for difference) with a few variables, i.e. the electricity price, the fuel price, the CO2 certificates price and finally the heat price, which is quite often cross-sponsored by the electricity price for social reasons.

Near the end of November 2013, the European Committee of the Council of Ministers accepted the draft of the Sustainable Building act to implement the EU directive 2010/31. This draft law indicates that, from 2019 all new governmental buildings and from 2021 all remaining buildings must qualify as zero-emission buildings. The second energy efficiency directive 2012/27/EC which must be implemented by June this year and has a major impact on sustainable buildings and CHP hasn’t been drafted yet.

Shale gas - reload After replacement of the Minister for Environmental Protection and then the Chief Geologist Piotr Wozniak, the future of shale gas exploitation in Poland looks again more promising. The most harmful draft regulations concerning taxation and exploitation via an equity stake of a national operator (NOKE), should be weakened to attract foreign investment (again). Natural (shale) gas will likely play a more important role in the future especially with Combined heat power. But state owned utilities, beside PGNiG, will rather not engage themselves, as the consortium agreement between PGNiG, PGE, Tauron, Enea and KGHM was terminated by the end of 2013. dr Christian Schnell, DeBenedetti Majewski Szcześniak Kancelaria Prawnicza Sp.K.; coordination/transactions/venture agreements; cschnell@dms.net.pl

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Equities News In Brief Recycling leader moves from unregulated market to WSE market

Vienna stock exchange coy in ongoing talks with Warsaw; no urgency seen Talks on a tie-up between the Vienna and Warsaw stock exchanges are not set for a quick conclusion, the co-CEO of the Vienna Stock Exchange told the Wirtschaftsblatt paper. “We respect one another, are in contact and talk. But talking will probably go on for some time still”, Michael Buhl was quoted as saying in an interview. The Warsaw bourse aimed to conclude talks on a tie-up with the Vienna stock exchange within months, the chief executive of its operator GPW had told Reuters in September. Statecontrolled GPW had said this year it was in talks with the Vienna bourse operator that n could lead to a merger.

Shares in Elemental Holding, the largest non-ferrous metals and electro-waste recycling company in Poland, debuted on the main Warsaw Stock Exchange (WSE) market in November, with an IPO worth 61.25 million zloty. Individual investors were offered 4.9 million shares and institutions 19.6 million shares in the company, which was previously listed on the alternative NewConnect market. In 2012, Elemental Holdings revenues reached 215 million euros.

Orco files bankruptcy for its Hungarian subsidiaries Orco Property Group, S.A. announced on 13 December that its three Hungarian subsidiaries requested the opening of insolvency reorganization proceedings with the Metropolitan Court in Budapest. The respective subsidiaries hold the assets known as the Paris Department Store, Vaci 1 (former stock exchange building) and Szervita. The reorganization filing takes place after an unsuccessful negotiation with the financing bank to restructure the debt. The 120 day moratorium provided by the reorganization procedure affords these subsidiaries with the possibility to settle with their creditors.

Cereal Planet started trading on Warsaw Stock Exchange, share price fell by 18.6% According to the official statement released by the company, Cereal Planet has officially been registered on Warsaw Stock Exchange on December 5, 2013. Shares started trading on December 9, 2013. Company opened trading with PLN 15 per share, while its closing price was documented at PLN 12.21 per share.UkrAgroConsult commented: “Cereal Planet will become a new addition to the Ukrainian Agrarian Index. As the company owns and operates elevators as well as land bank of approximately 7000 hectares, we think that market capitalization of the company will reflect performance of Ukrainian Agrarian sector, which is the ultimate goal of UAIndex.”

Comarch IT firm increases its stake in... football club Cracovia

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IT firm Comarch increased its stake in soccer club Cracovia to 66.11% after purchasing 22,800 Cracovia shares for PLN 9.4 mln, the company said in a market filing.

T-Mobile to sell banking services of Alior WSE-listed Alior Bank and one of Poland`s four major mobile operators T-Mobile signed a cooperation agreement, according to which the telco will act as a sales agent for the bank, Alior said in a market filing. The cooperation agreement pertains to preparation of a complex offer of products and banking services and ensuring access to them by several channels under the T-Mobile brand, the filing reads. Under the agreement, T-Mobile will act as an agent of the bank, offering strong brand and marketing activities. T-Mobile`s remuneration will consist of three elements: a payment per each new client meeting pre-defined criteria, a monthly payment depending on the

number of new clients meeting pre-defined criteria and an equivalent of gross 35% of the calculated pre-tax profit of a bank branch.

Alior is counting on substantial client acquisition rate and profitability increase, the bank said. The bank wants to attract a substantial number of the telco`s 16 million clients, equip them and existing holders of Alior Sync bank accounts with state-of-the-art technology in internet banking and to offer unique products combining the advantages of cooperation between a bank and a telecom. T-Mobile`s clients will be acquainted with the new offer in H1 2014, T-Mobile CEO Miroslav Rakowski said n as cited in a separate press release.

Energa IPO biggest in CEE for 2013 “The presence of another key company of the Polish economy on Warsaw Stock Exchange demonstrates the growing importance of the capital market to the economy. I am positive that the coming year will be as successful for the market and that more private companies will be floated on the exchange, helping us to continue building a capital hub in Warsaw.

This is a real challenge for all entities responsible for the development of the market”, said Adam Maciejewski, President of the Management Board of WSE. The PLN 2.4 billion IPO of Energa SA is the biggest IPO in CEE this year. It is also the biggest initia l public offering in Poland since the PLN 5.37 billion IPO of Jastrzębska Społka Węglowa in July 2011 on WSE. The public offering of Energa included 141 million shares held by the State Treasury which represent 34.18 percent of the company’s capital. Two tranches were allocated to individual

investors. Large individual investors could subscribe for up to 6000 Energa shares each.

Small individual investors could subscribe for up to 1500 shares each. The average reduction rate of both individual investor tranches of the Energa IPO was 55.9 percent. Energa is the 448th company listed on the WSE Main Market and the 20th new listing in 2013.

Energa Group is one of Poland’s four major energy groups (next to PGE, Tauron and Enea) and has the leading position on the Polish market as measured by the share of electricity generated from renewable energy sources.

The core business of the Group includes distribution, generation and trade in electricity.

The Group supplies and sells power to more than 2.9 million clients including households and companies. The total electric capacity installed in the Group’s power plants is 1.3 GW, of which 38 percent (0.5 GW) are renewable n energy sources (RES).

January 2014

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Equities News

Capital Park debuts after IPO, shares down

Shares in real estate developer Capital Park fell sharply after the firm`s debut on the Warsaw Stock Exchange in midDecember. Capital Park is the 21st company to list on the Warsaw bourse in

2013 as the buoyant economy and low interest rates have boosted investors appetite for new listings. But unlike the rail freight company PKP Cargo or train maker Newag, the debut of Capital Park and also Energa earlier this week have fallen flat as the market turned bearish.

Investors have become more cautious in anticipation of a scaling back of economic stimulus by the U.S. Federal Reserve.

The company had set the price for its stock market listing at 6.5 zlotys per share last month. Capital Park plans to use the 136 million zlotys from the share sale for its commercial and housing projects in Warsaw.

Source: Reuters

FCE Group is planning to enter NewConnect Freight Car Energy (FCE) Group, one of the world’s leading suppliers of products and technologies for rail freight transport, is planning to debut on the WSE alternative market in 2014. The next step will be entering the main floor of the Warsaw Stock Exchange. The currently implemented investment program of the company includes launching the production of freight cars intended for fuels transport in the Middle East, Asia and Africa - the markets where the railway infrastructure is still under development. The value of the FCE Group’s investment program planned for years til 2020 is USD 56 million, of which USD 16 million the company has completed so far using its own funds. Over the past four years FCE Group increased its sales from USD 11 million in the financial year 2009/2010 to more than USD 88 million in the financial year 2012/2013.

FCE Group focuses on the production of certified high quality wheel sets, bogies for freight cars, brake equipment and electronic components, and is currently launching the production of the advanced freight cars. “The main purpose of listing on the WSE alternative market is to build the company’s value before the important next step: the entrance to the main market of the Warsaw Stock Exchange.

The presence on the WSE will help us to build and strengthen business relationships with customers in Europe, Middle East and Africa. Moreover, raising funds from the new investors will enable us to carry out investments on a larger scale than we would do on our own”, said Sergij Mokrousov, CEO of FCE Group. In the financial year 2012/2013 (ended June 30th, 2013) FCE Group achieved total revenues of USD 88.46 million and net profit n amounted to USD 9.54 million.

Tauron to take full control of local miner for $102 million The second-biggest power producer Tauron will buy 47.5 percent of Poludniowy Koncern Weglowy (PKW) for 310 million zlotys to take full control of the local coal miner.

Tauron had a majority stake in PKW before and has now agreed to buy out the holding of Poland’s troubled Kompania Weglowa.

Shares in state-controlled Tauron fell 3 percent in a flat market immediately after the news was released. State-owned Kompania

2014 January

Weglowa, which is the biggest hard coal producer in the European Union, is suffering from record low coal prices as an economic slowdown has forced clients to cut production. It is undergoing a restructuring process and planning to sell some of its assets.

In November Kompania Weglowa signed a leter of intent with coking coal producer JSW to sell one of its mines in the south of n Poland.

In Brief Polish investment funds record PLN 2.2 bln net inflows in November Polish investment funds enjoyed PLN 2.23 billion net inflows in November, the biggest sum since May, with PLN 0.8 billion inflows to equity funds. November was the 14th consecutive month of net inflows, the report stated. The YTD balance thus came to a positive PLN 21 bln, Analizy Online said.

Getin Holding finalizes takeover of bank in Romania Bank Getin Holding finalized the takeover of Romanian International Bank (RIB), the company said in a press release. RIB is the fifth foreign bank in Getin Holding group, the company said. The Romanian bank has over 80,000 clients, its balance sheet at end-Q2 was RON 436.4 mln (PLN 424.3 mln). The bank has 34 branches in major Romanian cities.

Budimex signs PLN 64.8 mln contract for a waterworks modernization in Warsaw Listed builder Budimex in consortium with Cadagua, a unit of Budimex`s parent Ferrovial, signed a net PLN 64.8 mln contract for a waterworks modernization in Warsaw, Budimex said in a market filing. The consortium will receive a down payment of 20% of gross value of the contract, the filing said.

Delivery firm Siodemka plans debut on Warsaw bourse Siodemka plans a flotation on the Warsaw Stock Exchange, two sources familiar with the matter said, joining a wave of stock market listings seen in late 2013. Siodemka, owned by private equity fund Abris Capital Partners, is one of Poland’s biggest delivery firms, competing with such global players as DHL, UPS and Fedex as well as locally based Pocztex. In 2012, the company reported a net profit of 15.5 million zlotys on sales of 305 million. Source: Reuters

PKO Bank to sell its real estate development arm, bringing experiment to a close Listed bank PKO BP intends to conclude the sale of its real estate unit Qualia Development in H1 2014, and will send teasers to sector investors in early January, deputy CEO Jakub Papierski said. “Next week we intend to send teasers to select sector investors”, Papierski said.”We plan to close the transaction in H1 2014. The bank wants to sell its entire stake in Qualia Development at once,” Papierski added.

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Equities News In Brief TPSA telco to lay off 2,250 staff in 2014-2015, raise pay by at least 2.5% Listed telco TPSA will lay off 2,250 employees in the years 2014-2015, while committing to a minimum 2.5% annual wage increase in the period, according to an agreement with trade unions, head of TPSA`s trade union Blekitna Linia Robert Materna told PAP. “In the end 2,250 employees will be affected”, Materna said of negotiations between the management and trade unions. In 2014 1,150 employees will leave the firm. TPSA management is also obliged to implement at least 2.5% wage hikes in 2014 and 2015, Materna said. The meeting is still underway, with the sides negotiating terms for the Orange Customer Service unit, the unionist added.

Sygnity IT holds PLN 321 mln backlog, up by PLN 50 mln y/y IT firm Sygnity has a backlog of PLN 321 mln for the fiscal year 2013/14, up by PLN 50 mln compared to the year prior period, the management said in a comment to FY2012/13 results. In FY2013/14 the management wants to consequently build margins, while focusing on strengthening revenues to the level set in the 3-year strategic plan for the group, the management also said. Sygnity’s strategy assumes average net margin in years 20132015 at 4.8%, EBIT margin at 6.2% and average annual revenues at PLN 550 mln.

Newag rolling stock holds PLN 2 billion backlog, could beat 2014 guidance Rolling stock producer Newag, which debuted on the WSE late in 2013, has an almost PLN 2 bln order portfolio and has good chances of beating the 2014 forecasts presented in the issue prospectus, CEO Zbigniew Konieczek said. “After having signed a PLN 150 mln contract with Italians our order portfolio for the coming two years is full and amounts to ca.

PLN 2 bln”, Konieczek said. “Nevertheless, we participate in several tenders more.

Newag is confident of meeting 2013 guidance and might even exceed forecasts for 2014”, the CEO also said. “We will certainly meet 2013 guidance”, he said. “Next year will certainly not be worse than what we said in the guidance. I do not rule out it could even be more.” Newag expects PLN 37.9 mln net profit on PLN 755.6 mln revenues in 2013 and PLN 79.3 mln profit on PLN 919 mln revenues in 2014, the company said in its IPO prospectus. Newag’s share price rose 20.8% upon its

Wood brokerage picks six stocks – and three to short

Equity managers say capture what you can, but admit upped “Overweight” can’t hold

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Polish asset managers cranked up their equity allocations yet again for December amid signs of still-increasing confidence but issued a rather strong signal that a line has been crossed and the current level of overweight can’t hold forever, the PAP Market Insider December Fund Manager survey has shown.

Equity allocation is high, with nearly 90% of the panel claiming to be overweight vis-avis benchmark. The average declaration has inched up for four months running to what is now the second highest level in PAP’s sevenyear research history. The top six readings have all come since March, interrupted only by a dip in Q3, perhaps in part on pension overhaul concerns. But forecasts for equity allocations have turned a corner after having mostly called for further increases on 3M and 12M horizons during the 2013 equity run-up.

The run up in the equity overweight comes as forecast trends in corporate earnings have advanced to yet another all-time high.

IPO debut. Newag`s current shareholders sold 48.4% of the company in the IPO. Stock market mogul Zbigniew Jabubas is the current lead shareholder of the firm with a 78.5% stake. Other key shareholders are Zbigniew Konieczek (8%), Wieslaw Piwowar (6%) and Bogdan Borek (4%). Newag specializes in production, modernization and repair of rolling stock, especially passenger trains, locomotives, trams and metro cars.

Source: PAP

Banks Alior and Getin Noble Bank (GNB), postal services provider Integer as well as LPP fashion retailer, TPSA telco and TVN media are among top picks of Wood &Co. analysts in the EME-6 region, the brokerage`s December EME Equity Outlook report showed. The two banks offer secular growth stories, but also profit from a supportive macro environment, the report reads. Alior provides the fastest organic growth within the firm’s banking sector coverage, while GNB has a potential for a 24% results improvement versus the brokerages estimates, mainly on the back of NIM improvement, the report reads. TPSA telco investment case is based on the assumptions that the end of a price war should boost

cash flows, the network sharing agreement with T-Mobile could lead to up to PLN 500 mln cost savings visible in 2014-2015, and a 2014 loan repayment could lead to PLN 150 mln in financial cost savings, according to the report.

TVN media, in turn, should benefit from the TV ad market recovery and show EBITDA margin improvement thanks to cost saving efforts, analysts wrote. LPP fashion retailer`s like-for-like (LfL) sales may benefit from improving consumer sentiment which, coupled with retail space growth, should improve LPP`s results even further, analysts point out. Finally, Integer postal services has excellent growth prospects in mail services, and is a high conviction call on the innovation in parcel delivery for e-commerce, the analysts said. On the other hand, mBank, Grupa Azoty chemicals and AmRest are the brokerage’s top shorts, with the analysts pointing to a stretched valuation in the case of mBank, pressure on AmRest LfL sales and weak fertilizer market fundamentals as well as depressed nitrogen fertilizer and soft commodity prices in the case of Grupa n Azoty.

January 2014

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Equities News

WSE to call for repair measures from companies with stock valuation below 0.5 zł

In Brief Search for investors for PHN real estate

All listed companies with share prices below PLN 0.5, irrespective of the level of price volatility, will be drawn onto a list of alerts and required to adopt a repair program aimed at raising the valuation above the threshold, WSE operator GPW said in a press release. “Issuers whose shares are qualified to the list of alerts segment for the second time in a row, i.e. as a result of two subsequent quarterly revisions, will be obliged to prepare and publish - within 30 days of the repeated qualification - a repair program showing measures that it intends to take in order to raise valuation above the

theshold”, GPW said. Failure to take effective measures will entail a risk of trade suspension or even exclusion from the WSE, GPW warned. Changes will take effect as of January 1, 2014, with the first quarterly revision of the list of alerts planned for March 27, GPW said. The PLN 0.5 threshold will be in place from March 27 to the September quarterly revision, the statement read.

The threshold will be lifted to PLN 1 from the December 2014 revision. The proposed changes have been approved by the financial market regulator KNF, GPW said in a n separate statement.

KGHM slumps as CEO predicts a tough 2014 for copper

Poland started the process of searching for investors interested in buying a stake in listed commercial real estate developer Polski Holding Nieruchonosci (PHN), deputy Treasury Minister Pawel Tamborski told reporters. “Offering banks sent teasers to potential investors; we will wait for submissions for a few weeks”, Tamborski said. By end-Q1 2014 potential investors will conduct an examination of the company and will be acquainted with its asset valuation at end-2013. Deutsche Bank and Societe Generale are advising the State Treasury in the process of selling PHN. Poland currently holds a 73% stake in PHN. On November 14, PHN informed it would allow investors interested in purchasing the shares of the firm via a tender offer to conduct due diligence of the firm via a virtual data room.

Eurocash wholesale strikes deal with Kolporter on tobacco businesses Listed distribution firm Eurocash signed an initial deal with its unit KDWT and press distributor Kolporter, assuming Kolporter will take over 25% + one share in KDWT in exchange for transferring its tobacco and FMCG business assets, Eurocash said in a market filing. The deal is subject to a number of conditions, including consent by anti-monopoly office UOKiK. KDWT is the Eurocash unit focusing on tobacco and impulse purchase products. Kolporter is a leading press distributor in Poland. Kolporter’s FMCG business generated just over PLN 2 billion in sales in 2012, Eurocash added.

Polish housing market in 2014

KGHM Polska Miedz SA, Poland’s sole copper and silver producer, fell the most in two weeks after Chief Executive Officer Herbert Wirth said declining metals prices will have a significant impact on earnings next year. The shares lost as much as 4.9 percent. KGHM was the worst-performing stock in Warsaw’s benchmark WIG30 Index in 2013, losing 38 percent. Next year will be tough and the state-controlled company is working on a cost-cutting program to offset dropping prices, Wirth told reporters. “The comments might have come as a surprise to those investors who bet on improvement in the global economy and a copper price rebound”, Tomasz Duda, a Warsaw-based analyst at Erste Group Bank

2014 January

AG, said. Wirth would not comment on next year’s profit forecast. Net income will exceed 3 billion zloty in 2013, in line with the company’s forecast of 3.2 billion zloty, he added. KGHM’s net income will probably slump to 2.57 billion zloty next year from this year’s 2.99 billion zloty, according to the mean estimate in a Bloomberg survey of 17 analysts. Copper for delivery in three months fell 0.2 percent to $7,005 a ton on the London Metal Exchange today, extending this year’s decline to 12 percent. KGHM sees copper to trade between $6,800 and $7,200 a ton next year, Wirth said, adding that prices will probably ren bound in 2015.

Source: Bloomberg

The housing market is expected to undergo a recovery next year, with growth in apartment prices, transaction volumes and lending, Amron market researcher expert Jerzy Ptaszynski told PAP. “Most factors affecting the real estate market show clearly that in 2014 we will observe a recovery on the housing market”, Ptaszynski said. “You should expect growth of apartment prices, growth of transaction volume and lending growth. But the scale of recovery is yet hard to estimate”, according to Ptaszynski. The value of transactions on the housing market will grow as the profile of acquired apartments changes, with the average floor area of apartments expected to increase, the expert also said. The main reasons for the recovery will be of macroeconomic nature. “Macroeconomic factors and low interest rates will be the main elements shaping the market next year”, Ptaszynski said. The new government program of subsidizing the purchase of first apartment by persons up to 35 will also be a stimulus, he added. Source: GPW

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Equities News Kernel posts $33.8 mln net loss in Q1 2013 vs. $17.4 mln profit expected Listed edible oil producer Kernel Holding disappointed with a net loss of $33.8 mln in the fiscal Q1 ended September 30, 2013, below consensus expectations for $17.4 mln profit, as the results were depressed by increased costs related to consolidation of acquired farming assets, the quarterly report showed. Group revenues of $412.9 mln were 3.6% below expectations as they fell 20% y/y. The decline reflected lower sunflower oil sales and lower prices across all grains and sunflower oil, the firm said. Weak performance in the bulk oil and farming segments brought about EBITDA decline to $3 mln from $74.8 mln in the prior-year period, even as grain marketing and related services made strong contributions, Kernel said. Combined EBITDA from bulk and bottled oil amounted to $4.5 mln, the report showed. The sunflower oil business proved disappointing due to low crushing volumes and low carry-over stock of oil as well as weak margin.

The farming segment made a $6.4 mln negative contribution on the EBITDA level as increased productivity was cancelled out by a sharp drop in prices. Kernel posted a group operating loss of $22.8 mln, which compared to $55.6 mln profit in the prior-year quarter, as the result was dragged down by increased depreciation and amortization charges related to the consolidation of acquired farming enterprises ($25.7 mln in Q1 FY2014 versus $19.3 mln in Q1 FY2013). That effect added to poor contribution from sunflower oil sales and the non-cash loss in the farming segment. Consolidation of acquired farming assets also increased G&A costs, which came to $22.3 mln from $16.8 mln in FQ1 2012/13. n

Mortgage loans sales hit 9.53 bln zł in Q3, up from 9.16 bln zł in Q2

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Polish banks sold 45.77k mortgage loans worth 9.53 bln zł in Q3, up from 44.1k loans worth 9.16 bln zł in the previous quarter, data by market monitor AMRON and banking lobby ZBP show. Growth both in terms of the number of new mortgage loans and their value was recorded for the second quarter in a row, Jacek Furga of ZBP pointed out. A similar pace of 4% should be maintained in Q4, but FY 2013 results will nevertheless still show deterioration vis-avis the post-crisis year 2009, Furga said as cited in the report summary. The average value of a mortgage loan issued in Q3 edged up by 0.58% q/q to 201.66k zł, the data showed. The total housing debt at end-Q3 came to 329.86 bln zł, up by 1.19 bln zł or 0.36% q/q. As for the loan-tovalue ratio (LtV), the percentage of loans with LtV above 80% increased by 6 ppt to almost 53%, the percentage of loans with LtV between 50-80% declined by over 3 ppt to little over 34% and and the percentage of loans with LtV between 30-50% fell by over 2 ppt to 9%. n

Boryszew industrials on prospects for its automotive segment Listed industrials group Boryszew holds some EUR 2 billion backlog in the automotive segment and expects its profitability to improve in the coming years, Pawel Surowka, Boryszew management board member for development of automotive segment told PAP. Following are highlights of the interview: AUTOMOTIVE ORDER PORTFOLIO. The current order portfolio in Boryszew`s automotive segment is worth some EUR 2 bln, including EUR 1.5 bln contracted for the coming three years. Maflow will realize mainly new contracts in 2014. At Boryszew Automotive Plastics new orders are gradually entering into realization. As of 2015 Maflow will have almost all new orders in the portfolio (an 80/20 split), while at BAP the split between new and old orders will be 50/50. Such a level of revenues will not only be maintained in the long term, but will grow in the coming years.

BORYSZEW AUTOMOTIVE PLASTICS. 2014 will not yet be a turning point for BAP. Most new orders will be launched only in Q4 2014 and at the beginning of 2015. Only then can we count on a significant improvement of profitability in the segment. In the last two weeks BAP received nomination letters from the Volkswagen group of aggregate value of PLN 240 mln, of which half will be realized in a new plant currently being built in Torun. This is very important as it shows that Volkswagen trusts Boryszew.

NEW TORUN PLANT. Capex for the new plant in Torun will amount to EUR 15 mln. We hope that the investment will pay off in a very short time since the production onset. The plant will be launched in July-August 2014, with selected production lines being transferred there already as of the beginning of next year.

GERMAN PLANTS. We intend to arrive at such a situation where the German plants will produce only such products where the proximity of plants of German producers results in competitive advantage logistics-wise. As a group, we are increasing production capacity so the erection of the Torun plant need not happen at the cost of German plants.

RUSSIA. Russia`s strong growth has decelerated but as we are only beginning to build up our market share, we don`t feel it. The plant in Russia is becoming more and more attractive for our clients - evidence of that is the fact that we receive new orders not only from the VW group, but also from Daimler. Our presence in Russia helps us attract new clients because they appreciate the fact that we can secure production on the internal market. We are also counting on cooperation with Mitsubishi, which has expressed interest in us on account of the plant in Russia.

The concept of the facility in Russia allows for tripling the current capacity.

I assume that we will have to expand it within a year to a year and a half.

MEXICO. We are seriously considering an investment in Mexico, as we are receiving inquiries about it from clients.

That market in itself is interesting, and moreover our presence there may become a foothold for expansion on the American market.

CHINA. In China our presence is limited to Maflow, the plant there is producing not only pipings but also rubber, for which we are the only firm to hold quality certificates from a VW client. Orders from clients will allow the Chinese plant to double sales in the next three years.

We see substantial potential for development in China, also in cooperation with new clients. We are considering entering China with our plastic products.

Source: GPW

Integer acquisition target wins tender with PLN 497 mln bids Postal services provider Polska Grupa Pocztowa (PGP), a potential acquisition target of listed group Integer, placed two successful bids to the total gross value of PLN 497 mln in the tender for servicing courts and prosecutors offices in the years 20142015, the judiciary purchasing center reported. The procurement was divided into two

parts, hence the two separate bids, which amounted to PLN 460.9 mln and PLN 36 mln respectively. In both cases PGP outbid the incumbent Polish Post. Integer filed for the anti-monopoly approval of the acquisition of PGP in July 2013. The final decision on the takeover is to be made in Q1 2014, CEO Rafal n Brzoska told PAP in September.

January 2014

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Equities News

Plaza Centers continues battle to stay out of bankruptcy liquidation Plaza Centers has been granted a full quarter to negotiate with creditors. The firm released details of its restructuring efforts in late November, as follows: Centre Occupancy: Major tenants were secured at Riga Plaza and Torun Plaza during the period, significantly improving the performance of both assets. A contract with TK Maxx, the multinational fashion retailer, was signed at Torun Plaza (Poland) for 2,717 sqm, creating a two level TK Maxx store. The letting represents circa 7% of the total lettable area of the mall, bringing the total occupancy level to 88%. H&M signed a contract for 2,700 sqm in Riga Plaza (Latvia). The store is scheduled to open in the first quarter of 2014 and it is expected that the mall will be almost fully let by mid-2014 Centre Footfall: The positive trend of increasing footfall continued during the period at the majority of our shopping centres.

Zgorzelec Plaza, once again, had the largest increase with footfall up 42% compared to the corresponding period in 2012, marking a circa 30% cumulative increase since the beginning of the year compared to the same period last year. Other notable increases were seen at Kragujevac Plaza (Serbia), with an improvement in footfall of 17%, a 12% improvement in footfall at Torun Plaza (Poland) and a 10% increase at Riga Plaza (Latvia) compared to the same quarter in 2012. Centre Turnover: The period demonstrated significant progress, with July and August rec ording the strongest turnover growth this year at a number of our shopping centres. In August, a substantial increase of 87% was achieved at Zgorzelec Plaza compared to August 2012, representing a total increase of 80% during the Period compared to same period in 2012. Positive results were also achieved at Kragujevac Plaza, Torun Plaza and Riga Plaza, resulting in a collective circa 20% increase in turnover during the quarter compared to same quarter last year.

Transactions: On 14 November 2013 Plaza announced that it had reached an agreement to sell Koregaon Park Plaza, a retail, entertainment and office scheme located in Pune, India, subject to the satisfaction of certain closing conditions. The transaction valued the asset at euro 40.5 million, the asset`s current book value. Following the repayment of the outstanding related bank loan, Plaza will receive aggregate net cash proceeds from the purchaser totalling circa euro 18.5 million. Subject to fulfilment of certain conditions, including a consent from the financing bank, the Company expects to collect the first part of this, about 10 million,

2014 January

in the coming two months and the remaining consideration in several instalments over the first half of 2014. On 31 October 2013, a consortium of shareholders of Dream Island, in which Plaza holds a 43.5% stake, completed the sale of its Dream Island project land holding to the Hungarian State for circa euro 16.5 million. The proceeds of the transaction will be used by the Consortium to repay a proportion of the securitised related bank debt held against the asset. As a result of a previous non-cash, market driven writedown, the asset is currently held on Plaza`s balance sheet at the value of the loan, which is non-recourse, therefore no accounting loss is incurred.

Finance: On 8 November 2013, the Company’s Latvian 50% subsidiary signed a new euro 59.3 million investment loan with a consortium comprising two banks for its shopping and entertainment centre in Riga, Latvia. The new facility has a duration of four years and therefore substantially lengthens the duration of the debt compared to the previous loan facility, which was due for repayment on 30 June 2014. On 14 November 2013 S&P Maalot, the Israeli credit rating agency which is a division of International Standard & Poor`s, updated the credit rating of Plaza`s two series of Notes from ilB to D. The update followed the company`s announcement on the same date that it will withhold payment on the upcoming maturities of its Israeli and Polish bonds and approach the creditors of the company with a restructuring plan in a formalized restructuring process. As of the reporting date the company holds circa euro 23 million of free cash balances while an additional circa euro 10 million of cash is held as restricted cash on a consolidated basis.

Liquidity situation update: Further to the announcement on 14 November 2013, Plaza announced that it has filed for reorganization proceedings (surseance van betaling) with the District Court of Amsterdam in the Netherlands (the Court) and submitted a restructuring plan to the Court. Pursuant to Dutch reorganization proceedings, the Court appoints an administrator to manage the affairs of the company together with existing management; ordinary unsecured creditors become subject to a stay; and the company has the ability to restructure its debts during the moratorium with the majority consent of its creditors. Ran Shtarkman, President and Chief Executive Officer of Plaza Centers N.V., said: “We have continued to make good progress at the operational level of the business, illustrated by increases against all of our

three key performance metrics of occupancy, footfall and turnover during the period, with the most notable improvements continuing to be seen at our assets in the more resilient economies in CEE. However, the persistent uncertainty in the economic and consumer environment across Europe has constrained our ability to deleverage and reallocate capital realised from the disposal of stabilised completed projects and non-core assets to the core yi elding assets across our portfolio.

As such, and as announced after the period end, we have taken the decision to withhold payment on the upcoming maturities of the bonds and approach creditors with a restructuring plan. We believe this decision is in the best long term interest of our shareholders and bondholders to protect the continuity of the business and are confident that, on the implementation of the plan, we will be able to repay our creditors in full and return to generating significant value for our sharen holders going forward.

3Legs perseveres in Poland shale gas exploration Independent oil and gas group 3Legs Resources and ConocoPhillips have agreed a three-well programme to assess shale reservoir properties in the Baltic Basin.

The programme will begin in the fourth quarter of this year with two vertical pilot wells to delineate the extent of the Sasino and Piasnica horizons and determine the optimum placement for the planned lateral well. The programme will culminate in a long lateral well most likely to be drilled in the Sasino formation by way of side-track from one of the two planned vertical wells, completed with a multi-stage stimulation and tested, in the second-third quarters of 2014.

3Legs chief executive Kamlesh Parmar said: We are delighted to continue our collaboration with ConocoPhillips through agreement on our 2013-14 programme, designed to deliver a flow rate with commercial potential from our next lateral well. The programme is consistent with our strategy to focus the group clearly on our western Baltic Basin concessions, while reducing our commitments elsewhere, and we believe is the right way to unlock value quickly and efficiently for our shareholders. We remain firm believers in the potential for a successful shale gas project in Poland and in the prospectivity of our acreage. The company is listed on the London Stock Exchange – it shares have plummeted from over 34 to nearly 22 in the last 12 months. n

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BPO/Shared Services

Midsize Cities in Poland develop as Service Hubs for Outsourcing Industry* Not long ago, the only way a young Pole like Piotr Wegielewski could find a job worthy of his two master’s degrees would have been hopping on one of the budget flights from the airport near here to go to Western Europe.

Jack Ewing

Instead, Mr. Wegielewski, 29, found a job close to home in an industry that has become one of the largest employers in Poland: outsourcing. He is a project leader in data and system analysis for Infosys, the Indian outsourcing giant with a big office here that serves clients in Amsterdam, London and New York, among other business capitals.

Infosys, based in Bangalore, has its largest site outside India here. About 2,000 people work in a new office building overlooking a traffic circle named for Solidarity, the trade union movement that led Poland out of Communism.

“A lot of my colleagues left,” Mr. Wegielewski said in English. “I wanted to stay.”

In fact, Lodz, a former textile manufacturing center with a population of about 740,000, is just one of several Polish cities that have become service hubs for an international corporate clientele that values Poland’s well-educated and often multilingual work force.

In midsize cities like Wroclaw and Gdansk, Poles are doing back-office work not only for Indian outsourcing companies like Infosys, Wipro and Tata Consulting Services, but also for major corporations like IBM and banks including Citigroup and Bank of New York Mellon.

About 110,000 people work in what is broadly known as the business services industry in Poland. The category includes outsourcers like Infosys that take over

18

such functions as finance or information technology for customers, as well as banks and other companies that set up in-house operations to do their own back-office work.

At current growth rates, it is conceivable that in a few years business services in Poland could overtake the auto industry, which employs about 140,000 people, as a leading source of private sector jobs. (The public sector, employing about a quarter of Poland’s 15.7 million workers, is still the country’s largest source of jobs.)

Business services are part of the explanation for Poland’s steady economic growth in recent years, even amid stagnancy in the 17-nation euro zone, the country’s largest market. Part of Poland’s edge derives from the fact that it has yet to join the euro currency union. Its currency, the zloty, has been relatively stable against the world’s reserve currencies in the last year.

But Poland’s enviable perch is nonetheless precarious. It faces rising competition from other countries in Eastern Europe, like Bulgaria and Romania, and educated enclaves elsewhere, like Spain. That is why industry specialists say Poland must move into more sophisticated services, like research and development, to continue attracting investment and corporate clients.

“The question for Poland is, ‘How do I move up the value chain?’ ” said Peter Schumacher, chief executive of the Value Leadership Group, a management consultancy based in Frankfurt and New York.

“How can I go from basic process management work to more sophisticated creative work?”

Mr. Wegielewski may represent the sort of Pole more than ready to head higher. He has master’s degrees from the University of Lodz in management and in econometrics, a hybrid of economics and math. That makes him well suited to oversee a team that provides services to the retailing industry.

And he is studying part time for a third degree, in philosophy, which could prove useful in tackling difficult intellectual problems but is “just a hobby,” he said.

Mr. Wegielewski looks suited to the academic career he had originally hoped to

pursue. But he said he was happy with the way things had turned out.

“Over two years,” he said, “I’ve grown from a person who didn’t have much experience in business to a person who is participating in global projects for clients.”

In Poland, 39 percent of people 25 to 34 years old have university degrees or the equivalent. This puts the country in second place behind Norway in that category among the nearly three dozen member countries of the Organization for Economic Cooperation and Development.

(The United States, at 35 percent, ranks 11th.)

And Poland’s well-regarded universities have been willing to modify their curriculums to produce graduates with the skills sought by companies like Infosys.

“There is a strong correlation between education and the success of Poland,” said Anurag Srivastava, a New Delhibased practice director at the Everest Group, which advises corporate clients on managing outsourcing and back-office operations.

With competition for skilled workers rising in major cities like Warsaw and Krakow, companies have been opening business service centers in smaller cities like Lodz. That benefits the Polish economy, because the smaller cities tend to have higher unemployment than big cities like Warsaw, which has a jobless rate of only 4.8 percent compared with a national figure of 13 percent.

Lodz, where unemployment is 13.7 percent, is still recovering from the collapse of the textile industry after the fall of Communism and seems caught between two eras. A complex of brick buildings that was once part of the fabric industry has been converted into a hip hotel and shopping mall filled with French and German retail-chain outlets. But much of the city still has the drab, crumbling ambience of Eastern Europe in Communist times.

Labor costs in Poland for people with the skills needed for business services are about half those of Western Europe, though still roughly double those in India.

Even management-level employees in Poland earn substantially less than

* The following article appeared in the 23 December edition of the New York Times, on its front page, and is re-printed here in its entirety.

January 2014

CEE Outsourcing and Shared Services Awards Gala 6 February, 2014

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A

and Sha

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O uts ourc

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BiznesPolska and BizPoland Magazine are proud to host the second annual CEE Outsourcing and Shared Services Awards Gala (previously named “Poland Outsourcing Awards”).

Central and Eastern Europe (CEE) is well-established as a world-class destination for Shared Services centres and BPO investment. With Poland the strongest location in the region, other countries such as the Baltics, Czech Republic and Romania are important investment destinations. Global outsourcing firms, business services projects and sector professionals will be presented with awards of acknowledgment - by an independent jury from the industry - for their contribution to the development of the business services sector in CEE for 2013.

This year we are planning on over 250 guests with more than 50 being international firms interested in setting up or expanding their business services centres in central Europe. The awards gala will be preceded by a half-day of discussion panels covering the shared services and outsourcing sector. The gala and day forum provide an excellent opportunity to make new contacts and renew existing business relationships in a pleasant and social environment.

For full details about Attendance or Sponsorship

www.CEEOutsourcingAwards.com

www.bizpoland.pl

BPO/Shared Services their counterparts in the United States or Western Europe, while offering comparable levels of competence, analysts say. A Polish accounting manager earns an average of 44 percent of the pay of his American counterpart and 41 percent as much as an accounting manager in Germany, according to the Hackett Group consultancy.

Martijn Geerling, a senior director in London for Hackett, said Poland’s main rivals were neighbors like Romania and Bulgaria, where wages are even lower but education levels are high. “Poland and any country needs to understand competition is mostly with Eastern European countries,” Mr. Geerling said.

Infosys assumes that the differences in wages worldwide will shrink over time, and attracting clients will require doing work for them that is not only cheaper but better. “We believe our value proposition in the long run is about the automation and transformation of the processes — not labor arbitrage,” said Krystian Bestry, head of business outsourcing in Europe for Infosys, who is based in Lodz.

The Infosys center in Lodz was established by Philips, the Dutch electronics company, to handle mainly basic

back-office work like processing invoices.

Infosys bought it from Philips in 2007 and shifted to more advanced projects, such as helping companies reorganize functions like internal auditing and tax preparation. In September, for example, AkzoNobel, a Dutch maker of paints and specialty chemicals, hired Infosys in Lodz to centralize its finance and accounting operations.

Not all the Infosys workers in Lodz are Polish, and the operation also serves clients outside Europe, including the United States and Canada. Iván Luna Aparicio Guadalupe is from Monterrey, Mexico, who started with Infosys in Mexico and transferred to Poland when his unit was moved there.

Besides Spanish, Mr. Aparicio Guadalupe, 29, who has a master’s degree in administration, is fluent in English, Italian and French. He was part of a team that, to serve a customer based in Quebec, was training in how to speak with a French Canadian accent.

“I love languages,” said Mr. Aparicio Guadalupe, who may illustrate how outsourcing has become highly globalized and mobile. The work, and increasingly the people, go wherever there are good

broadband connections. Places like South Africa and Argentina have become major outsourcing centers, and Infosys is making big investments in China.

In Poland’s case, its business-services future still looks bright, despite the global competition. Jacek S. Levernes, president of the Association of Business Service Leaders, a Polish industry group, predicted the sector would add 15,000 to 20,000 jobs every year. Lately, banks and investment funds, under regulatory pressure and eager to cut costs, have been setting up centers in Poland.

“It’s really a deep pool of highly motivated graduates,” said Martin Ring, managing director in Poland of Bank of New York Mellon, which has a center in Wroclaw with 350 people. “They are able to pick up financial skills very quickly.”

But Mr. Schumacher of Value Leadership Group said the next goal for Poland should be a higher link on the value chain: for Poles to establish their own business service providers so that the country is less dependent on the whims of foreign investors.

“That,” he said, “is where the future n lies.”

Source: New York Times (Jack Ewing)

FDI Poland Investor Awards Gala 17th October 2013 Hotel Intercontinental, Warsaw 20

January 2014

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FDI News

Poland looking at UAE as key partner outside Eurozone Bronislaw Komorowski, President of the Republic of Poland, visiting the UAE said that his country is looking to make the UAE a key economic partner outside the Eurozone.

Speaking at the UAE-Poland Forum, which was organised by the Dubai Chamber of Commerce and Industry, he said: “The country is a great gateway to the east and capable of being a major partner for Poland in the Middle East.” He added that Dubai is a “global or financial gateway” as well as a good place for dialogue between East and West.

President Komorowski also said there is promising potential to grow further. He urged UAE companies to invest in Poland, which he said is open to foreign investments and encourages companies of all types and sizes, saying that the percentage growth of FDI to the GDP of Poland has increased from 25 per cent in 2002 to 50 per cent in 2012.

“

UAE-Poland bilateral

trade increased 100% and exceeded $1 billion in 2013

”

Bilateral trade between the UAE and Poland grew 100 per cent to approximately $600 million in the first half of 2013 and is expected to reach $1 billion by the end of the year, said Sultan Al Mansouri, UAE Minister of Economy.

“UAE and Poland are enjoying strong economic relations but we should raise the bar higher,” he said.

According to Dubai Chamber of Commerce and Industry, Dubai and Poland already have solid trade growth as the country has risen from Dubai’s 61st largest trade partner in 2011 to 59th place in 2012 while their total non-oil trade was valued at Dh2.5 billion.

Aluminium accounted for 56 per cent of Poland’s imports from the UAE, followed by plastics with 15 per cent, electrical equipment 6 per cent, while the country’s

2014 January

exports to the UAE included electrical equipment at 32 per cent followed by machinery 9 per cent, furniture 5 per cent and cosmetics at 4 per cent, according to the Dubai Chamber.

Al Mansouri added that the launch of direct flights from Dubai to Warsaw

by Emirates last February has helped to strengthen bilateral ties between the business communities of both countries.

It has also supported cooperation in the air transport and tourism sectors as well as investments in the two countries’ high profit yielding sectors.

Al Mansouri also said that Poland is an important partner for the UAE, with the focus on trade, energy, renewable energy, industry, small and medium enterprises and innovation, food and agriculture, investment, information and communication technologies, tourism and transportation.

“We have strengthened our bilateral relations with key agreements on the promotion and protection of investments, avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, establishment of air services, and co-operation in the field of information, culture and science.”

Bilateral cooperation He said the countries have also signed memorandums of understanding on bilateral cooperation between the Federation of UAE Chambers of Commerce and Industry and the Polish Chamber of Commerce, and between the anti-money laundering unit of the UAE and Poland’s general inspector of financial information.

Highlighting investment opportunities in the food sector, Hesham Al Shirawi, Vice 2nd Vice Chairman of Dubai Chamber, said the UAE needs to import 90 per cent of its food and Poland is a potential market.

Al Shirawi also called upon Polish people to increase their investment in the UAE. “Dubai has a growing and diversified economy and is open to foreign investments as opportunities for Polish businesses exist n across a variety of industry sectors.”

Irish farmers take legal action to recoup €21m from Polish fund A group of disgruntled investors – mostly farmers from Munster who invested €21 million in a boomtime Polish property fund only to suffer catastrophic losses – have joined forces to launch legal action against the fund’s promoters and associated property developers.

The Polska Fund was set up in 2005 in a partnership between the investment company SWS Corporate Services and Castle Carbery Properties, a property company founded by Cork dairy farmer-turned-developer Michael Scully.

The highly-geared fund acquired a number of sites in Warsaw and Krakow, which were to be used to build apartments, although it is understood that the proposed €100 million of developments were never built.

The investors are now sitting on massive losses, with almost all of the equity believed to have been eaten up with various fees and costs.

The fund was promoted by SWS Corporate Services, which was later bought

by Merrion stockbrokers. The development work was to have been carried out by Castle Carbery, in partnership with a Polish-based Irish accountant, Padraic Coll. Mr Scully has previously described Castle Carbery as an “advisor” to the fund, and the “manager of its day-to-day operations”.

Lawsuits Some of the investors have teamed up with a Cork law firm, David O’Meara & Sons, in an attempt to recoup some of their losses.

The firm has filed 30 separate lawsuits on behalf of the investors in recent weeks, against Shinagh Estates Corporate Services (formerly SWS), Castle Carbery, Polska Fund Nominees and Merrion.

Merrion, which did not raise any of the cash for the fund, declined to comment this week. Mr Scully also declined to comment when asked to explain the poor performance of the fund, and referred all queries to Merrion. Accounts for Polska Fund Nominees say that in 2010, the investors invoked “an event of default against the developer overseeing the investment projects”.

Mr Scully was a dairy farmer who during the boom turned first to property syndicates, and later to development, raising much of his capital from the farming community. In 2008, Castle Carbery claimed to have a pipeline of €1 billion of developments in Poland. Its latest accounts show less than €750,000 in shareholders funds.

Source: Irish Times

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FDI News French utility EDF to spend €550 mln on modernization of its Polish plants France’s utility EDF intends to spend EUR 550 million on the modernization of its Polandbased heat-and-power plants in order to meet the new EU environmental requirements to take effect as of 2016, EDF Polska CEO Philippe Castanet said. The investments will also increase the plants efficiency and extend their lifespan to 2035, the official said.

Modernization of the Krakow plant will absorb PLN 530 mln to 2016.

Poland reveals $330 mln investment plans by S.Korean auto company Economy minister Janusz Piechocinski announced in December that a South Korean automobile company planned a 1-billion-Polish zloty investment in Poland.

“We have built a kind of an auto industry cluster in Poland over the last five years,” said Piechocinski. He argued that the industry had chances of further dynamic growth.

“If I succeed in persuading one of the Polish metallurgical plants to launch production of car body sheet metal we will have everything in Poland that is used to build modern, brand-name passenger cars,” he said.

He hoped that the number of new cars produced in Poland will reach over 800,000 units per year in the next few years.

Poland-Kaliningrad trade expands 16% in 2013 The trade turnover between Poland and the Kaliningrad region, Russia’s exclave on the Baltic coast, has risen 16 percent in 2013 to reach about $1 billion. Speaking to journalists, Marek Golkovsky, Poland’s consul in Kaliningrad, credited the growth to the recent reopening of a trade and investment mission in the consulate that had been closed due to political tensions between the two countries few years ago, Interfax reported.

Another driver of trade has been a smallborder traffic law signed in 2011, which allows locals in both countries to apply for documents granting them visa-free passage across the border, said Aleksander Milota, head of trade development at the Polish consulate.

Exports from Kaliningrad have risen by 60 percent, Milota said, outstripping the 10 percent growth in Polish products traveling the other way.

Zawiercie joins PAIZ’s promotions

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Joint action by PAIiIZ and the town of Zawiercie, aiming to make the location more attractive to foreign investors by providing professional service to them, are at the heart of a cooperation agreement signed on 2 December by PAIiIZ deputy president Bożena Czaja.

International Paper’s mill investment at Kwidzyn in Q1 International Paper announced that its investment project at the Kwidzyn mill is progressing well on time. The company disclosed earlier this year its plans for a substantial investment in the mill to further enhance its product quality and service platform for the coated board market in EMEA. The project is expected to be completed in the first quarter 2014.

More specifically, the investment will see International Paper rebuild its coated board machine at Kwidzyn to enable the production of lighter-weight grades. While the sheeter installation is already well underway, the machine rebuild will take place in March 2014 for up to 20 days.

“This investment will enable us to create even greater value for customers and offer more options”, said Michael Krueger, International Paper’s

Commercial Director for Coated Paperboard & Recycled Specialties. “The ability to produce lighter-weight board grades responds directly to the growing demand for economically attractive and environmentally sustainable packaging solutions. The additional sheeting capacity will allow for even greater flexibility and shorter lead times.”

Krueger added: “Naturally, we are working extremely closely with our customers and are taking all necessary steps to ensure uninterrupted supply and service during the rebuild.”

Enabled through the rebuild and consistent with customer demands, International Paper intends to develop and progressively introduce additional differentiated lightweight grades from the second quarter of n 2014 onwards.

Volkswagen Group Polska invests in a new distribution centre Volkswagen Group Polska, the official importer of car brands such as VW, Audi, Seat, Skoda, Porsche and VW Commercial Vehicles for the Polish market, has signed an agreement relating to the construction of a modern logistics centre in Komorniki, near Poznan. The 30,000 sq m facility will be developed within Segro Logistics Park Poznan complex. In terms of surface area, it will be the second largest industrial investment project in the Wielkopolska region and the seventh largest in Poland this year. The choice of location and terms of the agreement were secured by Jones Lang LaSalle.

Ralf Jochen Berckhan, Chairman of the Board of VW Group Polska, said: “We are extremely proud to execute this investment. The new logistics centre will exceed the existing storage capacity by 6,000 sq m, which will result in a substantial growth of productivity and significantly increased efficiency of the logistic process”.

The new logistics centre will also enhance the quality of services provided

and allow for expansion of their range.

Stanislav Pekar, Group After Sale Director at VW Group Polska, explained: “We are preparing for the introduction of the socalled SDD service (Same Day Delivery) which involves the performance of a commissioned order during the same day on which the order was submitted.

Consequently, VW Group Polska will be likely to become the first company in Poland to provide this type of service to such a large number of recipients”.

Volkswagen Group Polska new distribution facility will be constructed within Segro Logistics Park Poznan in the town of Komorniki. The complex is located in the direct vicinity of the A2 motorway between Poznan and Swiecko, thanks to which the traffic volume created by heavy goods vehicles will be considerably reduced in the city centre of Poznan. The commencement of the investment project is scheduled for the first quarter of 2015. In the future, VW Group Polska is planning to expand the new logistics centre. n

Promoting Poland as a logistics hub The British Polish Chamber of Commerce, along with its members CBRE, Raben Group and FreightlinerPL, joined PAIiIZ and the Polish Embassy in London to promote Poland as a logistics hub.

With the news that Amazon will set up three distribution centres in Poland,

which will create 6,000 full-time and 9,000 seasonal jobs, the case for the country’s growing significance on the logistics map of Europe becomes clear.

Amazon’s European director of operations, Tim Collins, spoke in very positive terms about Poland as a centre for

January 2014

www.bizpoland.pl logistics operations, citing the speed, effectiveness and can-do attitude of local authorities and investment support officials, the work ethic demonstrated by the Polish workforce, and the much- improved road network, which means that it is now quicker to service Berlin from Poznan than it is to do so from Amazon’s

FDI News distribution centres located in western Germany. Its central location at the heart of the European continent gives Poland strong advantages in the competition to be the focal point for logistics and distribution covering Central and Eastern Europe and further east towards n the booming Russian market.

Designed in Poland exhibition dazzles Rome The 20th Designed in Poland exhibition was held in Rome’s Alberto Sordi gallery, attracting the attention of thousands of visitors and leading media, such as Vogue magazine. In the centre of Rome, the elegant Art Nouveau interiors of Alberto Sordi gallery were the venue for Polish art and crafts. At the exhibition, Italians interested in contemporary art could look at porcelain, glass, jewellery and fashion accessories from Poland. Among the exhibits were modern works of young Polish designers and true classics such as porcelain figurines from Ćmielów, that have been

placed on the list of 20th Century Poland’s best icons of design. The Designed in Poland exhibtion was visited by over 1,000 visitors a day. The event also attracted most renowned Italian media including top fashion magazines that described Polish projects as the essence of contemporary Polish culture and aesthetics. Designed in Poland is a project promoting Polish art and design, organised outside Poland by PAIiIZ since 2005. The event was prepared

by PAIiIZ and the Department of Trade and Investment Promotion of the Polish n Embassy in Rome.

Turkish business promotion in Poland PAIiIZ held a meeting with entrepreneurs from Turkey and Turkish local government.

The event has been a step towards stronger cooperation between the two countries. The will to introduce a business platform between Poland and Turkey was mentioned during a recent visit of the Turkish prime minister to Poland. During the meeting, PAIiIZ deputy president Anna Polak-Kocińska presented the support system for foreign investors offered by Poland. She also stressed the role of the Agency in helping entrepreneurs from

abroad to enter the Polish market. The cooperation agreement signed in November between PAIiIZ and its Turkish counterpart Investment Support and Promotion Agency - was also discussed. The programme of Turkish study tour also included a visit to the Łódź Special Economic Zone, where guests were provided with information about the Central Poland ICT Cluster. Poland is the biggest Turkish trade partner in Central Europe.

During 2013, the value of bilateral trade exn ceeded $5 billion.

Investment attractiveness of Polish provinces The latest report on the investment attractiveness of Polish regions was presented at PAIiIZ. Mazowsze still reminds the leader, however the other provinces are closing the gap. “There is a significant increase in the attractiveness of rural areas. There has been great progress during the last three years. I am convinced that the next three years will be also so spectacular for those communities. Time should allow the Polish countryside to catch up in terms of its attractiveness with the agglomeration”, said Prof Hanna Godlewska-Majkowska of Warsaw School of Economics (SGH).

In most cases membership in the SEZs is highly connected to the investment

2014 January

attractiveness and success of many cities in Poland. So-called “engines of growth” big cities, which belong to the SEZs, affect the investment development of each region. They create the best conditions to open a new business and also offer state aid, and lower personal income tax.

The report also shows the rise in investment attractiveness of the Lubuskie and Podkarpackie provinces, associated with the success of restructuring, new infrastructure and development of the aviation sector. The report was prepared for PAIiIZ by the Regional and Local Analysis Center under the supervision of Prof Hanna n Godlewska-Majkowska of SGH.

German giant Bilfinger sets up a new factory in Szczecin for offshore wind sector German engineering giant Bilfinger is setting up a new factory in Poland to fabricate steel foundations for the offshore wind sector.

The facility, being built with manufacturer Crist in the Baltic Sea port of Szczecin, is expected to deliver some 80 units a year once up and running in 2015.

“Bilfinger has already been involved in the installation of more than 500 offshore foundations in the North Sea and Baltic Sea”, said executive board member Joachim Enenkel.

“We are thus not only in a position to install steel foundations on the open seas, but can now also produce them ourselves in advance.” The factory is partly financed by Polish state-owned investment fund Mars.

Dutch company in Special Economic Zone In Kielce Techno Park, Tegeno will invest 1.6 million pln by the end of 2015 and create 10 jobs. The company will produce tools, spare parts, machine parts and equipment used in the food and tobacco industry.

Ultimately, the company also plans to diversify Tegeno delivery to enlarge the market share of domestic suppliers of foreign terms.

Dr. Schneider Automotive Poland in Radomierz Dr. Schneider Automotive Poland in Radomierz received permission for future projects in the Kamienna SEZ. “This global automotive giant will invest another 176.5 million pln in their next two innovative projects, and employ at least 80 people, bringing the level of employment in the company close to 900 people”, said the president of Kamienna zone Iwona Krawczyk.

Screws manufacturer in 2 million pln expansion Bea-Star Factory (screws and fasteners) received permission to conduct business in the Starachowice SEZ. The firm will invest PLN 2m.

Euro-Park in 750 million pln expansion EURO-PARK Mielec will expand its area by 53.4 hectares. Half of the latest investment land will be taken by two companies: LERGCHEM Sp. z o.o. in the Dębica Subzone and KSO in the Szczecin Subzone. As a result of extending the boundaries of EURO-PARK Mielec, three new sub-zones - Łańcut, Radymno and Sedziszów Małopolska- have been created. More than 1,800 new jobs will be created due to this. The project is worth about PLN 750m.

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FDI News Morocco cooperates with Poland The Moroccan Investment Development Agency has joined the group of investment agencies with which PAIiIZ has a cooperation agreement. In early December, during the seminar on investment promotion in Morocco, the agreement was signed by PAIiIZ deputy president Bożena Czaja.

During the two-day visit to Morocco, the PAIiIZ delegation visited several Moroccan ministries including those responsible for issues of industry, trade, investment and the digital economy, agriculture and fisheries, housing and urban policy. The mission programme also consisted of Polish entrepreneurs taking part in two economic forums and B2B business talks in Rabat and Casablanca. These meeting were organised jointly by chambers of commerce, industry and services in those cities as well as by the National Chamber of Commerce and the Department of Trade and Investment Promotion in Casablanca.

Invest in CEE conference targets Italian investors On 27 November, PAIiIZ President Sławomir Majman took part in a business conference on investment opportunities in Central and Eastern Europe. The meeting was held in the Czech Republic. The investment opportunities of the CEE region, the most important sectors of its economy and the challenges faced by CEE countries were discussed by participants of the meeting. The event was addressed especially to companies from Italy that operate in Central and Eastern Europe or are interested in entering this market. In addition to PAIiIZ, representatives of the investment agencies from Czech Republic, Slovakia and Hungary also took part in the seminar.

Shell expanding SSC centre in Krakow

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Shell is expanding its Centre for Financial and Accounting in Krakow with immeidate plans to hire more than 150 people, located in the Krakow Special Economic Zone. “Currently Shell Poland employs nearly 2,000 people with the Zone. This is one of the largest service centers with branch offices in Krakow”, said Wieslaw Kornaś - Kita, President of the Kraków Technology Park . The Subzone Zabierzów (Kraków Business Park) was created in June 2005 for companies in the sector of modern business services. Currently, the area covers 7.7 ha area, and is the operations centre for such companies as HSBC Service Delivery, Affiliated Computer Services, Shell Poland, HCL Poland, UBS Service Centre (Poland ), Luxoft Poland and Polish Sabre.

Wałbrzych lands 233 million of new investments New investments in sub-zone Wałbrzyska Special Economic Zone Invest -Park total more than 233 million zł, and is expected to create over 340 new jobs. The Board of WSEZ InvestPark presented (in the castle Ksiaz) 13 new permits for investors to start or expand business in Strzelino, Wroclaw, Skarbimierz Lower Shore, Swidnica Dzierzoniow Srem, Oława and Wałbrzych. “In 2013, we issued investors a total of 27 business licenses, and 28 more are in progress”, explains Barbara Kaśnikowska, President WSEZ Invest-Park . “It’s about five permits more than we issued in 2012.

NSK Steering Systems Europe secured its third license to operate in Walbrzych. The company, with Japanese capital, will invest

nearly 31 million zł and by March 2016 will create at least 50 new jobs with new investments linked to the production of automotive steering columns. “Currently, we employ 800 staff already, of which about 20 percent are persons employed by employment agencies”, says Marek Zych, vice president of NSK Steering Systems Europe.

NSK specialises in steering columns and components manufacturing.

Tristone Flowtech Poland also received its permit to operate in Walbrzych – and plans to invest 4.5 million pln by December 2019. The company manufactures rubber and plastic components for cooling sysn tems in cars.

New investments in Malopolska Three companies – Werner Kenkel, Synth and Supersnow – have received permits to operate in the Kraków Technology Park. Werner Kenkel is a manufacturer of corrugated board and packaging with flexographic and offset printing. The company plans to invest PLN 50m and create at least 50 new jobs.

Werner- Kenkel was established in 1979, and is a supplier to more than five hundred domestic and foreign enterprises. Last year their packaging production amounted to nearly 400 million units.

Synta will invest PLN 6m in the zone and employ at least 20 new employees.

The company intends to build a new plant, in which it will produce flooring systems based on the latest technology.

Supersnow will invest PLN 20m and create at lest 20 new jobs, and will begin the production of innovative snowmaking machines.

Bocheńska Economic Activity Zone will see its first factory in the spring, within the BSAG of Krakow Special Economic Zone.

Maciej Sloma, the director of the Bochnia factories, said that within three years, companies functioning in Bocheńska Economic Activity Zone ( BSAG ) are expected to emn ploy several hundred people.

Procter & Gamble in big expansion in Warsaw Procter & Gamble has opened in Warsaw a new European center for planning and logistics, with plans to hire 500 people who will manage deliveries in 100 countries.

“Today we are opening our next planning and logistics centre. It’s a real milestone, but I assure you, that it is not the last one we plan”, said Werner Geissler, Vice Chairman, Global Operations.

The cosmetics and detergents company has three factories in Poland and a business services center. The new center for planning and logistics has already hired 350 people in 12 months and is now hiring another 150. Yannis Skoufalos, responsible for supply management at P & G, said the Warsaw facility is staffed by people from 34 nationalities who work with 30 factories in 14 countries. Their task is to coordinate the logistics of supplying raw

materials and distribution-drops of products to customers.

“In Poland, we can find the right talent and resources. We have great aspirations and expectations”, Skoufalos said during the conference. Initially, the center will support the countries of Central and Eastern Europe, then other European countries.

“Procter & Gamble is a great ambassador of Poland. It is a global company that has existed for decades, and for more than 20 years developing in “, said Monika Piątkowska, vice president at PAIZ. Representatives of P&G emphasized that Poland coped well with the crisis.

According to Marek Kapuscinski, president of P&G in Poland, there was a noticeable slowdown in demand, but there was no drama, because consumers are not only n looking for the lowest prices.

January 2014

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FDI News

Poland’s Best Investors of 2013 The seventh PAIZ gala celebrating the best investors of the year was held at the Polonia Palace Hotel. The biggest and most significant foreign investments provided in 2013 were honoured at the event.

The list of nominees in the most innovative technologies category included Borg Warner, Samsung Electronics R&D and Hamilton Sunstrand. The award went to the US company Borg Warner which will open a new technical centre and a production plant in Rzeszów. Technologies used by the company contribute to the reduction of fuel consumption and gas emissions. In the company’s newest investment, the company will employ engineers and designers involved in the designing and testing of turbochargers and their

components. Amazon won first prize for the best company of 2013 in employment.

The company announced this year that it will create three logistics centres in Poland, which will employ 6,000 people full-time. IBM was also awarded in the same category. This year, the IT leader decided to extend its presence in Poland by the new investment Delivery Service Centre in Katowice. The biggest investment of the 2013 award went to General Motors Manufacturing Poland. This company will start a production line of fifthgeneration Astras in Gliwice. The total cost of the investment is €95 million. The lifetime achievement prize went to Procter& Gamble. This year P&G celebrates its 20th n anniversary.

Wloclawek: Around 300 new jobs at the new plant of Wika Poland Approximately 300 people will be employed at the factory of WIKA Poland, where production will start in mid- 2014.

Jobs will be on offer for various specialties, especially welders, machine setters and fitters. WIKA Poland SGFwill be a modern factory equipped with intelligent building management system, the construction cost is estimated at over 80 million pln.

Construction work is proceeding according to schedule. The plant will produce mechanical pressure gauges to measure the pressure of stainless steel. The investment

2014 January

compries two production halls with an area of 3900 sqm. each, office building (2000 sqm), and two technical buildings. The purchased land is a natural water reservoir with an area of more than 1.5 ha. The plan here is to create a mini park, which will be filled with benches and paths,and 2 beach volleyball courts.

“WIKA Poland SGF is developing in Poland dynamically and rapidly, creating new job opportunities”, said Jaroslaw Franaszek, Director of Logistics and n Purchasing.

Lublin in lift-off LIFT-SERVICE S.A. will launch production facility in Lublin Subzone and employ at least 10 new workers there. The value of the new investment is estimated at €17 million. The company specialises in designing and developing all types of lifts. It also provides modernisation and replacement services of the existing equipment.

Chinese delegation from Jinjiang 100th visit to Poland Over the past two years, PAIiIZ has been visited by more than 100 Chinese delegations. Chinese guests from Jinjiang were welcomed by PAIiIZ deputy president Anna Polak-Kocińska. PAIiIZ Board Advisor Maciej Górski, who moderated the meeting, presented the education system and the labour market in Poland.

Nearly 27% of Polish companies have stated their desire to cooperate with Chinese partners. To support them, PAIiIZ has introduced a Go China programme consisting of a wide range of activities including trade missions, conferences, expert support and the GoChina portal that contains the most important guidelines and information about China, its regions, people and the economy.

Four more gas-fuelled PSVs to be built in Poland Ship operator Siem Offshore has contracted with the Remontowa yard in Poland for four dual fuelled PSVs to the Wärtsilä Ship Design VS 4411 DF design, for delivery in 2015 and 2016.

Siem currently has two other ships to the same design under construction, one at Hellesoy in Norway, which is, scheduled for delivery in 2014 which will be chartered to Total, and the other at Remontowa which, when delivered in 2015, will enter a charter with Norske Shell. The VS 4411 is 89m length oa, 19m beam, 970m2 deck area and 5,500dwt capacity.

The dual fuel systems allow the use of either LNG or MDO as fuel, and the engines and hull design combine to offer lower fuel consumption, lower fuel cost and lower emissions. The vessels will be built to meet the highest requirements for operations on the Norwegian Continental Shelf and are also suited for operations in other geographical areas. They will be equipped for fire fighting, oil spill recovery and rescue/ standby duties for up to 300 personnel, with class notations including Fi-Fi2, Oilrec, safe hose operation, Clean Design and Comfort Class.

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Chambers of Commerce News

Australia Mining mission coming to Poland as follow-up from Sikorski meeting Steve Rank Senior Trade Commissioner from the Australian Trade Commission and Mr Zygmunt Langer from the Polish Ministry of Foreign Affairs hosted a lunchtime roundtable discussion, regarding

Austria Huber Holding opened a new-built factory near Plonsk

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Amongst the VIP attendees at the formal opening ceremony were the Austrian ambassador Thomas Buchsbaum, the Commercial Counselor Ernst Kopp, mayor of Plonsk Andrzej Pietrasik, the county government deputy head Andrzej Stolpa as well as the local government chief Alexander Jaroslawski.

Andreas Huber, the co-owner of HuberHolding presented the factory and also the future plans of the utilizable space of land, which contains now 8549 sm. With the extension of the factory in four stages it will become a workplace for 400 people, the Austrian entrepreneur said. Furthermore, a center for research and development is planned, for which the company wants to apply for support from European funds. At the end of November, production started

follow-up to a Polish mining delegation led

by Mr Radoslaw Sikorski to Australia in mid-2013. This mission provided an excellent opportunity for Polish and Australian mining companies to share their long tradition in deep mining expertise. Present at the roundtable were representatives of major Polish mining companies, service and mining equipment manufacturers as well as representatives of the Polish mining safety and rescue station that attended the

Polish delegation. The feedback from the participants was very positive and a number of companies have already established initial contacts that may lead to further cooperation and business contacts. In order to maintain momentum the Australian Trade Commission is currently planning an Australian Mining mission consisting of key Australian mining equipment, technology and service companies to visit both Poland and the Czech Republic in March 2014. n

with large volumes of packaging produced in this one new factory. The company already employs 70 people employed and 40 more are needed.

Alexander Jaroslawski pointed out that the region around Poczernin is mostly known for agriculture and expressed his pride that Huber-Holding, which works in a very specialized field, has chosen Poczernin for their location. Andrzej Stolpa hopes that this fact will encourage other companies to follow suit and invest in this region and declared full support from his side.

The development of Buzek Kunststoffverarbeitung GmbH, which was founded in 1999 and has its head office in Melk, Austria, is unique: processing synthetic material, which is 100% ecologically sound and biodegradable. The packaging of a washing powder tablet, which is dissolving in a certain temperature and after a certain time, the bag of cement given into the cement mixer dissolving after a certain period and a bottle top which also

dissolves are the great inventions of the Austrian company.

In 2005 the company was enlarged for the first time: Buzek Plastic Poland Sp.zo.o. incorporated its headquarters in Warsaw and founded its first factory in Nowy Dwor. Contact: andreas.huber@hun ber-holding.com

France “Paris glamour” Ball The CCIFP’s 20th-anniversary Gala will be held on 7 February (19:30) at Warsaw’s Sofitel Victoria, with this year’s theme “Paris glamour”. The annual CCIFP Ball has become a tradition and key event on n the calendar for French companies.

January 2014

Gala 20-lecia cciFP

pG LAA MROIUSR pG LAA MROIUSR pG LAA MROIUSR

7/02/2014

HOTEL SOFITEL WARSAW VICTORIA

Jubileuszowa Gala Francuskiej Izby Przemysłowo-Handlowej w Polsce to najbardziej prestiżowe wydarzenie w roku, które jest doskonałą okazją do nawiązania nowych relacji z prezesami francuskich firm obecnych w Polsce.

Tego wieczoru przeniesiemy Państwa do szykownego Paryża, stolicy światowej mody, miasta marzeń o nieodpartym uroku i wyjątkowej atmosferze, a Szef kuchni zaproponuje Państwu kolację na najwyższym poziomie sztuki kulinarnej.

Serdecznie zapraszamy do udziału w tym niezwykłym wydarzeniu i świętowania 20-tych urodzin Francuskiej Izby PrzemysłowoHandlowej w Polsce wspólnie z największymi francuskimi inwestorami. Zachęcamy do rezerwacji biletów już dziś.

W programie: • Inauguracja obchodów 20-lecia CCIFP • elegancka kolacja • pokaz mody

Więcej informacji i rezerwacja biletów: www.ccifp.pl, tel. 022 690 68 80.

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Chambers of Commerce News

Canada Redknee Celebrates Expansion of Poland R&D Center Redknee Solutions Inc., a leading provider of business-critical billing and charging software for communications service providers, recently celebrated the opening of its expanded research and development (R&D) center in Wroclaw, Poland. Redknee’s newly refurbished, state-of-the-art office in the Wroclaw Business Park is one of Redknee’s largest centers, providing operational support, professional services, and research and development (R&D). Redknee is a global provider of billing and customer care software

Britain Food – waste not, want not

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The BPCC held a joint meeting of its Food and CSR policy groups at the British Embassy in late November, together with the Group for Sustainable Consumption at the Ministry of Economy, to consider best practices for the sustainable production and consumption of food.

Two key issues were discussed - the prevention of food waste, and promoting a sustainable supply chain. Paulina Kaczmarek from PwC put the question of food waste into the broader context of sustainability, suggesting that companies throughout the food supply chain embed sustainability deeply into their business model. Patrycja Bejm Maras from Tesco presented the retailer’s approach to minimising food waste, in particular on the journey from producer to consumer. Tesco’s approach was praised by Marek Borowski, president of the Polish federation of food banks, which cooperates with retailers to bring hundreds of thousands of tonnes of food that would otherwise go to waste to needy families. By collecting food with short remaining shelf-life and passing it on to people in need, the food banks effectively prevent unnecessary waste of food.

According to the European Commission, around 9 million tonnes of food goes to waste each year in Poland. About threequarters of that is generated by the food industry. Poland is among the five EU member states that generate the most wastage, along with the UK, Germany, France and the Netherlands. Although the UK is in first place, it turns out that a significant part of the losses there occur as the result of poor practices on part of consumers. In Poland, a

solutions to more than 200 communications service providers around the world.

On December 5, 2013, the new offices were officially opened by Lucas Skoczkowski, Redknee’s CEO. Eileen Gricuk, Executive Director of the Polish Canadian Chamber of Commerce, and Marek Czetwertynski, Board Member of the Polish Canadian Chamber of Commerce, attended the celebrations.

In addition, a host of dignitaries including the Trade Commissioner of the Canadian Embassy and representatives from the Polish Information and Foreign Investment Agency, the Wroclaw Agglomeration Development Agency and the Wroclaw University of Technology attended the opening ceremony.

Skoczkowski commented: “By celebrating the opening of our new facilities in Wroclaw,

Redknee is reiterating its commitment to continue to invest in our talented and growing team, to drive innovative solutions into the market, and to increase our market presence. We are very impressed by the innovation that the team here is contributing to Redknee’s global business, and look to see how we can further expand this over time. n

greater proportion of food waste is generated along the route from field to wholesaler.

The three speakers were joined in a panel discussion by Andrzej Faliński, the director of the Polish retailers’ and wholesalers’ organisation, POHiD. The event was also supported by the Ministry of Agriculture and Rural Development’s Food Economy Council.

scrutiny if it processes data of EU citizens relating to the offering of goods and services to them or to the monitoring of their behaviour.

Further the conditions for granting the consent to the processing personal data will be strengthen, “the consent has to be voluntary and clearly given and in particular explicit,” she said. The Regulation will apply across the EU, to both public and private sector bodies, but will not apply to individuals in the course of their own exclusively personal or household activity. There will be new data categories, such as genetic and biometric data.

Dr Tomaszewska said that “the procedures and mechanisms of data collection and protection will become easier in practice with a particular emphasis on transparent information and communication with regard to the data processing. She pointed out that the new elements of data protection principles relates to the clarification of the data minimization principle and establishment of the comprehensive responsibility and liability of the controller.”

Dr Tomaszewska also explained the planned changes to the Polish data protection act. One of them is that the companies will have the choice of either registering their databases with GIODO, the national data protection authority (as is the case at present), or to recruit an in-house data protection officer (Administrator Bezpieczeństwa Informatycznego, data security administrator or ABI), who once it will be registered in a new register of ABI kept by GIODO, will keep the registrations of databases internally and act within the company to monitor for compliance with data protection rules. The regulations will set out who can be an ABI (in terms of educational status), and what their responsibilities will be.

Wiewiorowski said that the Regulation will do much to reduce the inconsistencies

Data Protection – revolutionary changes on horizon Firms holding data concerning their customers or their staff need to be aware of revolutionary changes that will affect Polish and EU companies within the coming years.

A new European General Data Protection Regulation is being implemented – which, if legislative work proceeds to schedule, should come into force probably in 2016. One law will cover all 28 countries in EU; one set of regulations will be directly applied. At the same time, Polish data protection law is considered to be amended.

On 25 October, 2013, the BPCC held a joint meeting of its Technology, Media & Telecoms and HR policy groups at the British Polish Business Centre at which Dr Wojciech R. Wiewiórowski, the General Inspector of the Polish data protection authority, (GIODO), was the keynote speaker.

Introducing the subject, dr Joanna Tomaszewska, a legal advisor – data privacy specialist at SSW law firm, gave an outline of the changes that the new Regulation on the EU level will introduce. At some time before it comes into force, Polish deregulation laws should lighten the administrative burden that the current Polish data protection law imposes on companies.

Dr Tomaszewska said that controllers not established in the EU will be subject to

January 2014

www.bizpoland.pl between EU member states when it comes to data protection. “The Irish data protection registrar tells me that he’s little more than a registrar of lost pen-drives. Even if data on them is encrypted, their loss must be reported. In the UK, it’s slightly less restrictive, as lost pen-drives carrying encrypted personal data don’t have to be reported to the Information Commissioner’s Office (ICO),” said Dr Wiewiorowski. “In Poland, telecoms firms have to inform GIODO about loss of data. There have been around 100 such cases so far. Only two inspections have arisen as a result of what we were informed about.”

In general, the new Regulation will mean more duties for firms in the UK, and will be less invasive for Polish firms. Little things such as passwords and their changes will become less burdensome, said Dr Wiewiorowski. He also spoke of Privacy Impact Assessments (PIAs), where again the current best practice is to be found in the Anglo-Saxon world. He praised the American National Institute of Health for its PIA, and said that Australia and New Zealand were also exemplars of best practice.

Summing up, Dr Wiewiorowski said that companies should only hold data that’s required for the task in hand and that any additional personal data requires the subjects extra consent. Companies must ensure end-toend protection of the data they hold, from the creation of a data subject to its deletion. In the

Chambers of Commerce News case of and inspection from GIODO, the adequacy to the aim required. End-to-end protection, from the creation of a data subject right through to its deletion. In answer to the question what companies should do now, he said they should prepare an impact assessment of what the new Regulation would mean to them.

Poland builds position as Logistics Hub The British Polish Chamber of Commerce, along with its members CBRE, Raben Group and Freightliner PL, joined PAIiIZ and the Polish Embassy in London to promote Poland as a logistics hub.

With the news that Amazon will set up three distribution centres in Poland, which will create 6,000 full-time and 9,000 seasonal jobs, the case for the country’s growing significance on the logistics map of Europe becomes clear. Its central location at the heart of the European continent gives Poland strong advantages in the competition to be the gravity point for logistics and distribution covering Central and Eastern Europe and further east.

These advantages were presented in two conferences held on two successive days, one at the Polish Embassy in London on 26 November and one the next day in PAIiIZ’s Warsaw headquarters.

The big picture was presented in London by Barbara Chamot from PAIiIZ, and in Warsaw by professors Barbara Ocicka (University of Łódź) and Krzysztof Rutkowski (Warsaw

School of Economics). Putting Poland on a map of Europe, within the context of global supply chains, the speakers made a strong case for the country, given the investment that will take place in the transport infrastructure over the next EU financial perspective 2014-2020. This point was emphasised at the Warsaw event by Rafał Rowiński from the European Commission, who explained the many support mechanisms the EU has in place to complete the TEN-T trans-European transport network by the end of this decade.

Amazon’s European director of operations, Tim Collins, spoke in very positive terms about Poland as a centre for logistics operations, citing the speed, effectiveness and can-do attitude of local authorities and investment support officials, the work ethic demonstrated by the Polish workforce, and the much-improved road network, which means that it is now quicker to service Berlin from Poznan than it is to do so from Amazon’s distribution centres located in western Germany.

Speakers outlined Poland’s strengths as well as the challenges that need to be overcome to increase further the country’s attractiveness as a logistics hub. The availability and future potential of warehouse space was presented in by CBRE’s Colin Waddell in London and Patrick Kurowski in Poland, both of whom stressed that there would be some great opportunities n in Poland for developers.

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2014 January

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Chambers of Commerce News

Gulf States UAE-Poland Business Forum explores joint investment avenues

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Bronislaw Komorowski, President of the Republic of Poland, stated that the UAE is a strategic partner in the Middle East and has all the capabilities to become a major trade partner outside the Euro zone for Poland as he expressed his country’s desire to strengthen bilateral ties with the UAE. The Polish President was speaking at the UAE-Poland Business Forum organised by Dubai Chamber of Commerce and Industry in collaboration with the Embassy of the Republic of Poland at the Armani Hotel in December - in the presence of ministers, dignitaries and representatives of a cross-section of private sector companies from Dubai.

The achievements of the UAE in the last 42 years is exemplary as the emirate of Dubai today is not only an international hub for trade and commerce. Komorowski said that both the UAE and Poland have a lot in common as both have come up the hard way since their formation to become economically sound and to sustain their growth trajectory over the years. Both are gateways to their respective regions and have to utilise this status to their advantage.

Komorowski congratulated Dubai for winning the honour to host World Expo 2020 which he said will be a huge success due to the emirate’s track record and will be an ideal place for the global business leaders to meet and enhance their trade ties. He also confirmed the attendance of Polish companies to the World Expo.

Komorowski pointed out that Poland was playing similar role to that of Dubai to create a network of global business partners as the country is a major gateway to the European region and is the sixth largest economy in the European continent. He called upon the UAE companies to invest in Poland, which he said is open to foreign investments and encourages companies of all types and sizes, stating that the percentage growth of FDI to the GDP of Poland has risen from 25% in 2002 to 50% in 2012.

The Forum was also attended by H.E. Sultan Al Mansouri, UAE Minister of Economy, and Dubai Chamber Board Members.

In his keynote address, H.E. Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, stated that the UAE and Poland share economic synergies that will lead to mutually beneficial relations.

Calling this a historic visit, Al Mansouri stated that the UAE welcomes the serious

commitment on the part of the Polish leadership and the government in sharing with the UAE leadership and government the desire to strengthen our economic relations.

He added that the two countries enjoy excellent locations and access to major global markets and possess lucrative business potential to establish major joint investment projects and this UAE Poland Business Forum is an ideal ground for the two friendly countries to enhance their bilateral ties and to take these to a higher level.

The UAE Minister of Economy further stressed that the volume of trade between the two countries during the first half of this year reached USD 600 million and is expected to reach USD1 billion by the end of the year which is a 100 per cent growth compared to last year.

H.E. Al Mansouri stressed that the high level talks with Poland thus far has focused on enhancing bilateral ties through effective coordination mechanisms including hosting of business forums, launching of joint task forces, networking meetings, and means to explore investment opportunities between the investors of both the countries which all augur well for the longterm trade relationship for both the sides.

The UAE Minister of Economy added that the launch of direct flights from Dubai to Warsaw by Emirates last February has helped in strengthening of bilateral ties between the business communities of both the countries.

In his welcome address, H.E. Hisham Al Shirawi, 2nd Vice Chairman, Dubai Chamber, stated that through this important business forum both Dubai and Poland have to build stronger bilateral ties for the future. With the foundation of the dialogue laid in the earlier two forums in Dubai and Warsaw, now is the time for the two sides to explore new ways that can benefit each other’s strategic location and close economic relationship with the Middle East and Europe, he said.

He urged the Polish business delegation to set up a base in Dubai. “Dubai has a growing and diversified economy and is open to foreign investments as opportunities for Polish businesses exist across a variety of industry sectors. I call upon Polish investors to highlight the emirate’s investment potential while assuring Dubai Chamber’s support and assistance to Polish companies and would like to see their numbers increase considerably from the 30 members currently registered with the Chamber”, he said.

“Poland possesses expertise in a number of sectors that are attractive for Dubai, such as food security, trade and manufacturing while the driving forces of our economy

include trade, financial services, logistics and tourism and we look forward to working with our Polish trade partners in these common areas of interest,” he added.

A Memorandum of Understanding (MoU) on Cooperation between Dubai Drydocks and Maritime World and Mars Fiz/Mars Shipyards and Offshore Group of Poland represented by their chairmen H.E. Khamis Buamim, and Mr. Piotr Słupski was signed on the sidelines of the Forum.

The presentation also highlighted investment opportunities in the food sector as to meet its food security the UAE needs to import 90% of its food requirements while the expectation from the value of food consumption in the country this year is USD8 billion, it said.

Qatar businessmen urged to invest in Poland Poland’s President Bronislaw Komorowski, on a two-day visit to Qatar, urged Qatar’s businessmen to invest. He met with officials from Qatar Chamber, along with representatives of the Polish business delegation accompanying him. The Polish delegation is exploring business partnerships, particularly in sports infrastructure, with Qatar hosting the 2022 FIFA World Cup, he said.

He highlighted Poland’s experience in organising sports events like the 2012 UEFA European Championship. Representatives of a Warsaw-based architectural firm that designed Poland’s national stadium are showcasing in Qatar their design for a possible floating stadium in Qatar.

Highlighting the strong ties and agreements between Qatar and Poland, Komorowski said Poland would start the process of importing natural gas from Qatar. This would balance its energy needs and open doors for more cooperation between the two countries, which have become stronger after Qatar Airways started flights to Warsaw in 2012.

Qatar Chamber treasurer and board member Abdul Latif al-Missned hailed the meeting as a great opportunity to continue cooperation in all areas and boost bilateral ties between the two countries.

Two Memoranda of Understanding (MoU) were signed yesterday between the Alliance of Polish Companies and Al Baida Group and Al Madinah Energy Company.

The President and his accompanying delegation were seen off upon their departure at Doha International Airport by HE the Minister of Industry and Energy Dr Mohamed bin Saleh al-Sada, HE Qatar’s Ambassador to the Republic of Poland Hadi Nasser Mansour al-Hajri and Ambassador of the Republic of Poland accredited to Qatar Robert Rostek. n

January 2014

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Chambers of Commerce News

Swiss Swiss consider Polish economy in 2014 The “Economic Outlook 2014. Human Resources – trends for 2014” was held in mid-December in Warsaw. The meeting was organized by Swisschamber Poland in cooperation with the Commercial Section of Austrian Embassy.

During the meeting guests Marcin Diakonowicz (Deloitte Poland) and Zbigniew Płaza (Boyden Poland) discussed trends for 2014 in economy and employment, with special emphasis put on the situation in Austria and Switzerland as compared to Poland and chosen CE countries. Presentations were followed by a cocktail and a networking part. n

United States AmCham to chair International Group of Chambers of Commerce The American Chamber of Commerce in Poland has assumed Presidency of the IGCC (International Group of Chambers of Commerce in Poland) for the next six months. AmCham is representing 16 countries and 2000 companies, which employ hundreds of thousands of people, making up close to 90% of foreign investments in Poland. One of AmCham’s main objectives in its role is to promote the Transatlantic Trade and Investment Partnership (TTIP ) within businesses in Poland.

AmCham Christmas Reception On 9 December 2013 the American Chamber of Commerce in Poland held its Annual General Meeting & Christmas Reception at the Marriott Hotel. The highlights of the evening included Deputy Minister of Foreign Affairs, Katarzyna Kacperczyk’s address, as well as Ambassador to Poland, Stephen Mull’s remarks.

The Annual Report, along with the Auditor’s Report and Annual Resolutions were unanimously approved by a quorum of members. This year’s Grand Prize winner of AmCham Student Essay Contest was Livia Popów, representing Finacorp (Polska). The other winners included: Michal Kozlowski, representing CMS Cameron McKenna; Nikola Gutowska,

2014 January

representing Animex; and Weronika Białek, representing Avis.

The AmCham extended special thanks to UTC for being the main sponsor of the Christmas evening reception, as well as Adoria wines, Coca-Cola, and Plagiat.pl for helping support the event – and the Jan Karski Foundation for providing an hisn torical exhibition.

Scandinavia SPCC 10th Anniversary kick-off party – 17 January, Warsaw In 2014 the Scandinavian-Polish Chamber of Commerce celebrates its 10th Anniversary. Therefore we invite all members to start with us this special year and attend our 10th year anniversary kick-off party. Celebrate with us the beginning of the New Year and get ready for the dancefloor!

Ericpol among leading Polish exporters Ericpol has been awarded “Sława Polski” and “Dobra Firma 2013″ in the poll prepared by the Ministry of Economy and Rzeczpospolita. The awards ceremony was held on 2 December in the “Pod Kopułą” Room in the Ministry of Economy in Warsaw.

Ericpol was awarded “Sława Polski”, a distinction for leading Polish exporters, and a special prize for being the largest exporter in the IT industry. “We are glad that so many companies present their offer in foreign markets. The credit for the fact that our country has coped with the crisis so

well goes mainly to these companies,” commented Janusz Piechociński, Deputy PM. Ericpol was also counted among the prestigious twenty companies awarded the title “Dobra Firma 2013″, namely the best-developing and the most innovative undertakings out of the list of 2000 Polish companies prepared by “Rzeczpospolita”.

The winners of the polls were selected by the jury chaired by Janusz Piechociński, Deputy PM and Minister of Economy, and composed of science and business authorities, including Andrzej Sadowski, Vice-President of the Adam Smith Centre, Dariusz Poniewierka, President of KUKE, Marian Goryń, President of the Poznań University of Economics, and Jarosław Bełdowski, Vice-President of BGK. The award ceremony was preceded with a discussion panel entitled “The role of foreign expansion in the development of the competitiveness of Polish companies”, with the participation of Ilona Antoniszyn-Klik, Undersecretary of State in the Ministry of Economy, Prof. Witold Orłowski, Chief Economist in PwC, and Zbigniew Jagiełło, President of PKO BP. Ericpol Sp. z o.o. is an engineering company which has been operating in the international ICT market since 1991. It renders outsourcing and consulting services and provides dedicated solutions in the areas of telecommunications, M2M (machine to machine) communication, and UX (user experience) as well as applications for the medical, financial, and banking sectors and solutions for business. Ericpol has three offices in Poland and three subsidiaries, in Belarus, Ukraine, and Sweden, which together form the Ericpol Group and n employ a total of 1,700 workers.

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Cities News

Trojmiasto Portuguese, German Investors may buy Polish football club Lechia Gdansk The majority shareholder of Polish Ekstraklasa side Lechia Gdansk “is planning to sell its stake in the Polish football club,” according to Jaroslaw Adamowski of INSIDE WORLD FOOTBALL. Wroclawskie Centrum Finansowe, controlled by Andrzej Kuchar (64 years old) and his wife, Ewa Andreasik-Kuchar, owns 71% of the football club and expects to receive about 4 million pln for the stake.

Behind the bid is a consortium of Portugese, German, and Polish investors.

“If everything goes according to the plan of the new owners, Lechia Gdansk can become a powerhouse in our league, with by far the highest budget”, according to one insider.

The consortium is focused around a German businessman Franz Josef Wernze.

While in western Europe, football teams often have investment from investment funds, it’s not the case in Poland – but that may be about to change. While outright ownership by funds is not allowed in Poland, they are a dominant player in Portugal and South America.

During the investigation into the acquisition of Lechia Gdansk, one of the clues lead to Portugal. One of these fund’s shareholder is the president of SL Benfica Luis Filipe Vieira

(65 years old), who has been involved in construction and real estate. It has a 95 percent share holding INLAND, which he co-founded in the 1980s. Rumors swirl that mixing ownership of a football team with a construction firm can have consequences; allegedly Vieira uses Benfica to support his own interests. For example, allegations are that he did business with Atletico Madrid in the construction of the new stadium La Peineta with some unclear quid pro quo in exchange.

In December, Benfica signed a two-year deal with Swedish Atvidabergs, under which agreement both clubs have to exchange experiences in the field of training and scouting. With Lechia one can see a similar kind of cooperation, with perhaps even some players from the Lisbon club playing on the Gdansk football team.

Gdańsk to save millions as energy market opens up Gdańsk boasts that in 2014, along with the municipalities and districts of Gdańsk Metropolitan Area, it will save more than 12 million pln on energy. The savings are the result of a joint purchase of electricity, and the general liberalisation of the energy market in Poland.

In 2014, as part of a consolidation plan to buy energy from one provider, as many as 2,371 points in 26 municipalities and districts of the metropolis (including the Castle Museum in Malbork) will buy energy from Energa.

“This is the second joint request made by members of the GOM. Last year, the joint purchasing of a smaller group, just 10 municipalities and counties, led to savings of 4 million pln. This year, thanks to a bigger scale, the average price of energy will be 255.16 zł / Mwh”, explained Magdalena Kuczyńska of the City of Gdansk. By comparison, the price in 2013 per MWH was 297.12 zł.

“The savings are really huge. In the first half of 2014, we will return for the third time to the President of Gdynia to create a single, joint purchasing group, so that the benefits for our citizens and for our budget savings will be even greater”, said Mayor of Gdansk Pawel Adamowicz .

Poland to receive grant to finance high-speed train fleet The European Commission has ruled that providing €93 million to fund the purchase of new long-distance trains for Polish operator PKP Intercity (PKP IC) is acceptable under EU state aid rules.

PKP IC will use the money to partly finance 20 high-speed Pendolino trains purchased from Alstom in 2011, with additional funding coming in the form of a loan from the European Investment Bank (EIB) to cover the remainder of the €430 million programme.

The EU said the new trains would improve “the country’s territorial cohesion and the accessibility of individual regions” and that using public money would “further

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www.bizpoland.pl EU cohesion and transport objectives without unduly distorting competition”.

Joaquín Almunia, Commission VicePresident in charge of competition policy, said: “The use of high-performance trains will improve the offer of alternative means of passenger transport in Poland. This should result in a more balanced transport system, decrease the negative effects of transport on the environment and limit traffic congestion.”

The new trains, which have now completed 20,000 kilometres in dynamic testing on the Polish network, will operate on routes linking Warsaw with Gdansk, Katowice, Krakow and Wroclaw from n December 2014.

Vistal Gdynia debuts on Warsaw Stock Exchange On January 8th, Vistal Gdynia made its debut on the Warsaw Stock Exchange.

The firm is a manufacturer of steel structures, working mainly for the offshore and maritime segments. The debut was preceded by a public offering of more than 4 million new shares, netting 50 million

Szczecin EU to provide 6.7 billion pln for region Authorities in Zachodnioporskie region (centred around Szczecin) have announced that they expect to be allocated about 6.7 billion pln from the European Union for infrastructure development for the period 2014-2020. Much of this will go towards development of roads, including the S3 connection from Szczecin to Swinoujscie.

It is almost certain that the new budget from the EU will also provide financing of the key “coastal” road S6 Szczecin to Tri-City.

The money will be distributed to various entities under the EU’s Regional Operational Programme. The prior period 2007-2013 saw financing go towards subsidizing various buildings, including the Szczecin Philharmonic and the “Dialogue Centre”. Funds financed a new Hospital Specialist Care Centre for Mothers and Children, and hospital oncology Center for Diagnosis and Therapy of Cancer. In Swinoujscie a marina was built for 400 units.

Additionally, modern trains were purchased for regional connections and the railway line to Wałcza . In Swinoujscie marina was built for 400 units. The city

2014 January

Cities News pln in proceeds for the firm. The public offering was of Series B shares, at PLN 12 each. Institutional investors took 3.6 million shares, while individual investors subscribed to 600,000 shares. Due to oversubscription, the rate of reduction in the retail tranche was 50.8 percent. New shareholders acquired a total of 29.6 per cent of the company. The main shareholder of Vistal Gdynia is Ryszard Matyka, CEO and founder, who owned 75% prior to the IPO. Vistal has been on the market for 22 years, and now consists of 11 companies employing a total of about 380 people. The group has access to 6.5 acres of port land within the Pomeranian Special Economic Zone, the length of the quay of 900 m and key sea routes. This allows the fabrication of construction and transportation by sea.

The company specializes in large-scale structures for the highly promising segments such as offshore market, ie execution of drilling platforms and mining equipment for underwater oil and gas, offshore wind towers, vessels for service platforms, as well as for the infrastructure and energy sectors.

of Stargard rebuilt its Old Town Square.

These are just a few examples of the 1,312 projects that were implemented during that budget period.

The support from the EU for investment plans of road and rail in the region is clear.

In a strategy document, investment plans are confirmed for missing sections of the expressway “sevens “ and modernization of the railway line to Warsaw - but without bypasses around Morawica and Wąchocka.

The Ministry of Infrastructure and Development launched a public consultation project “Implementation of Transport Development to 2020”. This 100-page document outlines which road and rail transport investments will be prioritized for the years 2014-2020, under the framework “Operational Programme Infrastructure and Environment 2014-2020”.

The S7 has a very high fourth place in the ranking which lists 42 priority projects. n

In 2012, the Group ‘s revenues were 230.2 million pln, EBITDA was 10.8 million pln, and net profit was 1.1 million pln. In the first half of 2013, EBITDA amounted to 17.5 million pln, compared year to year, an increase of 63.6 per cent . And net profit reached PLN 6.2 million (an increase of 67.6 per cent). The company has steadily increased its share of export sales income: in 2011, it accounted for just 9%, growing rapidly in 2012 to 42%, and by June 2013 reaching 58%. The current order book shows contracts with a total value of approximately 276 million pln.

Sopot’s new railway station to open soon Sopot’s old railway station was demolished more than one year ago to prepare the ground for the new station, which will include a hotel, restaurant and a media library – as well as a park. In late December, city authorities celebrated the laying of the ceremonial foundation stone. “If everything goes according to plan, construction will be completed in December 2014”, said Anna n Dyksińska of the Sopot municipality.

Łódź Consortium including Wierzbowski Eversheds wins New Łódź City Centre contract On 17 December 2013, the management board of Nowe Centrum Łodzi selected the offer of the consortium of Wierzbowski Eversheds, Mott MacDonald Polska, Mott MacDonald Ltd and KPMG Advisory for the co-ordinating concept for development of the Special Culture Zone in the New Łódź City Centre.

The tender was conducted using the negotiated procedure with publication of a contract notice. The winning offer complied with the terms of reference and received the greatest number of total points for the specific evaluation criteria.

The New Łódź City Centre includes 51 development projects. The Special Culture Zone is an area of about 12 hectares within the New Łódź City Centre, in the dense urban section of Łódź, between two of the largest current projects in the city centre — the Łódź Fabryczna railway station with its adjoining multimodal transit hub and the complex of the former EC 1 heat and power plant.

In the winning consortium, the offer of Wierzbowski Eversheds was prepared by Agnieszka Chylińska and Arwid Mednis.

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Cities News Lodz Airport traffic plummets 23 % in 2013 Lodz Airport recorded a decrease of passenger numbers of more than 23% in 2013.

The airport handled a total of over 353,600 passengers, which is 109,000 fewer travelers than one year earlier.

December marked another month of decline in the number of passengers. As announced in early January, according to spokeswoman for the Lodz Airport Eva Bieńkowska, the airport received only 17,300 passengers in December, down 38% from December 2012.

Charter air traffic decreased in 2013 by 34,500 passengers, a decline of 22.4%.

The lower number of passengers is associated with fewer connections. Currently, Lodz airport operates only one low-cost carrier - Ryanair, which offer connections to London Stansted, Dublin, East Midlands and Liverpool - and SAS offers a connection to Copenhagen.

A sliver of optimism comes from the cargo shipment sector: in 2013, Lodz airport processed 3155 tons of goods, an increase compared to the previous year of 2,107 tons – meaning a huge increase of over 201%.

The largest shareholder in the airport is the city of Lodz, with 94%, and the Lodz region (Voivod) with more than 5%.

Rail station Łódź Fabryczna – work accelerates to meet Q1 2015 deadline

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New permits issued recently will allow work on the rail station to proceed both below-ground and above-ground, concurrently. Permission is primarily concerned with the construction of the railway station and the underground railway infrastructure, bus stop, underground parking, exits from public roads and internal communication system, and networks such as water, sewage, telecommunications and energy connections.

“The new permission will help us move faster”, said Katarzyna Rumowska, a spokeswoman for the main contractor. “We have started construction work at the level of - 8 meters. Simultaneously, work will be carried out under the existing ceiling.

The permission extends to work on the roof, which will consist of three parts.

“At the peak of construction phase this year it will be possible to have simultaneous operation of approximately 1,000 people throughout the construction”, added the spokeswoman.

The whole project should be completed n in the first quarter of 2015.

Poznań Poznań wins bid to host ABSL conference in May The 5th Annual ABSL Conference will be held on May 22nd-23rd 2014 in Poznań.

The annual event attracts hundreds of participants with its unique combination of top quality content and networking opportunities. This year’s edition will feature a special keynote address from one of the most influential figures from the global economic and political arenas, rumored to be either Bill Clinton or Tony Blair.

The annual ABSL event has become a major international conference, as Poland has become the European leader in the business services sector (BPO and Shared Services) leader in Europe – and number 3 worldwide.

With employment exceeding 120,000 people, the ABSL association predicts that the sector can employ 250,000 within just a few years, and the association aims to put Poland in the first position worldwide in this sector.

Discussion topics will include international business service sector and its future; economic situation and outlook; motivation and empowerment of key stakeholders.

Volkswagen eyes Poland for Crafter van plant Volkswagen AG is considering building a new factory in Poland to assemble the Crafter large delivery van, two people familiar with the matter said. Assembling the vehicle in Poland would allow the German group, which already makes the Caddy and T5 commercial vehicles near Poznan, to reduce production costs significantly.

Labour costs in Poland’s manufacturing industry amounted to an hourly 6.65 euros per worker last year, about a sixth of the 36.98 euros in Germany, according to the Cologne-based IW economic institute.

A decision to build a new Polish vehicle plant hasn’t been taken yet, though all signs are pointing in this direction, said one of the sources, who declined to be named because the matter is confidential.

VW said it has been examining possible production sites for the Crafter in a number of countries as it nears the end of its cooperation agreement with rival Daimler, which has built the Crafter in Germany since 2005.

The Crafter and Daimler’s MercedesBenz Sprinter share the same production platform, but Daimler said in September that it will stop building the VW model at the end of 2016 to concentrate on the next generation of the Sprinter.

The outsourcing of Crafter production to Poland would require approval from VW’s supervisory board, which is evenly split between labour and management.

Labour is unlikely to stir up tensions, however, after the board’s approval last month of almost 40 billion euros of spending on VW’s German factories as it steps up its efforts to surpass Toyota and General Motors as the world’s biggest auto manufacturer by 2018.

Polish newspaper Puls Biznesu reported on the possible new VW plant in late December, saying the project would entail 1 billion euros of investment and create 3,000 jobs.

Deputy Polish Prime Minister Janusz Piechocinski said last week that a major global carmaker may unveil production plans in the country this month, without offering more details.

Business Garden Poznań developing rapidly Swede Center’s office complex is developing rapidly, with the first buildings to be ready in early 2015.

The first four of the six-office Business Garden Poznań will be ready in early 2015.

They will not, however, be an ordinary office, says the developer, which is boasting of its eco-friendly facilities for tenants.

Key features will also lead to major operational costs savings for tenants, including energy saving light bulbs, ventilation and motion sensors that will be lit in communal areas only when necessary. Rainwater will be collected and re-used for multiple purposes, including for the sewage system and for watering the property’s grounds.

The first development stage includes four buildings, with another two to follow and potentially three more after that. n

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www.bizpoland.pl

Wrocław Wroclaw best-improved city worldwide for BPO/Outsourcing sector In the 2014 Tholons Top 100 Outsourcing Destinations ranking recently published, the city of Wroclaw recorded the greatest improvement worldwide, rising 12 spots to the 65th position.

Eurolot launches flights from Wroclaw to Paris Eurolot airline announced a new connection between Paris CDG and Wroclaw, starting from 3 March, at 3 frequencies per week on Mondays, Wednesdays and Fridays. This is the second connection of Eurolot to Paris, since Eurolot already provides flights from Paris Beauvais to Rzeszow, on a schedule twice per week, on Tuesdays and Saturdays.

Wroclaw adopts budget for 2014 Wroclaw council in late December adopted a budget for the capital of Lower Silesia for 2014 that assumes that the revenues of the city in the next year will reach nearly 3.67 billion pln, and spending nearly 3.86 billion pln, of which 663 million will be

Katowice Katowice – what to expect in 2014 • Pendolino.

Super fast trains are the unfulfilled dream of Polish passengers. But in 2014, Katowice will join the club, with Pendolino trains traveling to Warsaw at speeds of 200 km per hour. PKP InterCity’s 20 Pendolino trains, purchased from Italy, will run on modernized tracks, shortening the Warsaw-Katowice travel time to just over 2 hours. Service is due to start in December 2014, and connect Katowice to Warsaw, Gliwice and Bielsko -Biala.

• October for music lovers.

The new building of the National Polish Radio Symphony Orchestra in the former mine will open in October. Events accompanying the opening concert in the month long music festival include hosting the London Symphony Orchestra, Wiener Symphoniker, musician Krystian Zimerman and the world famous singer Peter Beczała. The full

2014 January

Cities News allocated to infrastructure investment.

The vote garnered support of 31 councilors, while five were against, mostly from PiS. The budget assumes that total expenses of the city will rise by 10%, while income lags, at just 3.9% growth over the previous year.

“Careful planning of income stems from the prolonged economic downturn and the absence of significant signs of recovery in the economy, as well as the reduction of EU funds during the transition to the next budget.

Wroclaw authorities said in 2014 that they will spend 663 million pln on investment, including for the construction of a necessary bypass, the National Forum of Music, a new cultural center, and expansion of the key bus depot on the street.

Investment in road infrastructure is planned at level of 30 million pln.

Nearly 948 million pln is allocated to education, more than 661 million pln for transport and communication, and for culture and protection of national heritage over 312 million pln.

Construction of Lower Silesian Technology Incubator The new Lower Silesian Technology Incubator and Innovation Center in

program of events will be published in June 2014.

• Silesian Museum.

Probably at the same time will open the new headquarters of the Silesian Museum. The huge exhibition halls will allow for visibility of most of the museum’s collections simultaneously.

• Silesian Police station renovations.

This year will be marked by a brush and spatula, as several large renovations are underway or about to start – including of several police stations.

The younger inspector Piotr Kuci, responsible for the logistics of the Silesian deputy police, managed to convince the heads of the Interior Ministry that the police can not work in undignified conditions.

• Disasters will be judged.

The courts will be tasked to resolve the issues of two tragic events th at occurred in the region in recent years.

Before the court in Katowice lies a final judgment about for the collapse of the exhibition hall of the ICC, which killed 65 people in January 2006. The judges

Wroclaw will target micro, small and medium-sized enterprises. Renovation on an existing building will take up about 9 million pln and is due to be completed in autumn 2014. This will be the second incubator in the capital of Lower Silesia.

Managing Director of the Lower Silesian Agency for Economic Cooperation said that the Innovation Center will be a place to support people who dare to create innovative businesses, and companies that want to develop existing ones. Both manufacturing and service companies that need modern infrastructure and space for research and development will lease space here.

In the first year of the lease rent for leased office space is lower by 30 per cent, and in the second year by 15 percent. Additionally, businesses can benefit from free VIP room and rental of conference space on preferential terms. The incubator hopes to attract companies from the sectors information technology, marketing, property, events organization, design and engineering services, and even nutritional advice.

In the future, DAWG intends to develop business incubators throughout the Lower Silesia in smaller cities, including n Jelenia Gora.

will answer to the question of whether the blame for this tragedy lies with the hall’s designers, builders, or building manager. The prosecutor claims that the responsibility is distributed across all of them, because the building was poorly designed, defectively built, and the manager did not remove heavy snowfall from the roof.

In contrast, the court in Gliwice will assess who is responsible for the tragedy in Halemba mine in Ruda Slaska. In November 2006, a methane explosion killed 23 miners. For the first time in the history of the Silesian mining industry, miners who suffered death or serious personal injury have accused the director of the mine and more than 20 foremen of negligence. According to the prosecutor’s office they knew that the underground methane level exceeded legal limits, but forced people to work, because the closure would generate losses.

• Politicians in the race for power.

In 2014 starts a two-year marathon of elections. In the autumn - local elections, which should be rather boring and predictable. In Gliwice, Zygmunt Frankiewicz is likely to win, and in Katowice - Piotr Uszok. But in Sosnowiec

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Cities News an ambitious member of the regional authorities Arkadiusz Checinski intends to challenge Kazimierz Gorski.

• A year for seniors.

In Wodzisław will be opened Poland’s first commercial home for retirees.

Kraków Kraków 2022 hires McLatchey’s EKS to help with Olympic bid

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Kraków has signed renowned consultancy firm Event Knowledge Services (EKS) to orchestrate its bid for the 2022 Winter Olympics and Paralympics. Based in Switzerland, EKS was formed in 1998 as part of an effort by the International Olympic Committee (IOC) to formalise the transfer of knowledge from one Olympic Games organiser to the next.

Its chief executive Craig McLatchey is one of the most respected figures in the Olympic Movement, with more than 20 years experience. He was part of the senior leadership team for Sydney 2000 and provided strategic support services for Athens 2004, Turin 2006, Beijing 2008, Vancouver 2010 and Rio 2016, as well as for other major events including Commonwealth, Asian and Pan American Games.

For his services to Sydney 2000, McLatchey was awarded the Gold Olympic Rings by then IOC President Juan Antonio Samaranch and was made a Member of the Order of Australia (OAM) in the Australia Day Honours List 2002 for his services to the Olympic Games and sport.

McLatchey has also been involved in the bidding process for other Games, including the most recent race for the 2020 Olympics and Paralympics, when EKS was employed by Istanbul, who were lost out to Tokyo.

After beginning their bidding process at an IOC orientation seminar in Lausanne last month, the six are now answering a detailed questionnaire to be submitted next March, shortly after they attend Sochi 2014 as official observers.

As with the other European cities, the foremost challenge for EKS and the Kraków team is likely to involve public opposition both to the bid, and to its cost.

This was highlighted this week as Kraków’s plans and projected costs

The new facilities will actually cater to retirees needs, rather than just taking his money and treating him poorly.

• On skis will ride in Beskydy.

After a long period of troubles, the region’s mountains - with a new

attracted criticism, while there are calls for a referendum to measure public interest.

Another challenge involves the “dual nature” of the bid, as the snow events would be held across the border in Slovakia - the IOC has never awarded an Olympics to two countries before.

However, both challenges were played down by Kraków 2022 bid leader Jagna Marczułajtis-Walczak when she told insidethegames last month that the bid is distinctly Polish but with some events held across the Slovakian border for “topographical and geographical reasons”.

She also cited the strength of public and government support, as well as the city’s “big potential as a strong brand and by being well known as a cultural city”.

Poland’s Plastmot to launch new plastics factory Polish injection moulder Plastmot is planning to launch a new production facility in Zator. The company will invest 6m zloty in setting up the plant. The new factory will be located in the Kraków Technology Park (KPT), a special economic zone located in Małopolskie and Podkarpackie region.

In late December 2013, the injection moulder secured permission to implement its planned investment, KPT said in a statement. The Zator-based plant will be Plastmot’s second production facility in Poland.

Locating the investment in the KPT will grant the manufacturer preferential tax treatment until the end of 2026.

Plastmot has committed itself to create new jobs at the plant under the licence allowing it to operate in the zone. Zator is located about 50 km from the city of Kraków.

The Polish company’s product portfolio includes a wide range of plastic products for the automotive and gardening industry. These include buckets, chains, boxes, containers and components for automotive manufacturers. Plastmot makes its output with the use of various

ski museum – are beginning to be transformed into a modern and interesting region. Two new slopes were recently launched Ustrori and Szczyrk , and in early 2014 will be completed slopes in Wisla, and n Szczyrk Korbielowie .

plastics, including PP, according to data from the Oświęcim-based firm.

Krakow’s Sheraton sold French specialist hotel company Algonquin acquired the Sheraton hotel for about €38m, representing a price per room of approximately €164,000.

Angus Wade, Executive Vice President at Jones Lang LaSalle Hotels & Hospitality Group London, which acted as the exclusive sales agents and advisors to Quinn Insurance and its administrators at Grant Thornton Dublin said: “The sale represents the first large corporate hotel transaction in the CEE region for approximately 3 years. Increased interest in this region has been triggered by a mismatch in pricing with core Western European markets and we expect 2014 to be an interesting year for investors looking for secure investments in CEE. Our experience in this sale puts Jones Lang LaSalle Hotels & Hospitality Group in a strong position to dominate these types of sales in the region.”

The CEE Investment Team at Jones Lang La Salle Hotels & Hospitality Group, in the sale of two prime hotels in Central Europe including one in Bulgaria, achieved a combined price of €62m. CMS acted as legal advisors to Quinn Insurance throughout the sales process.

The Sheraton Krakow hotel is a modern 232 bedroom hotel that opened in 2004 and is located in a prominent position on the banks of the river Vistula, close to the historic Wawel castle in Poland’s second largest city. Krakow is also particularly famous for its historic architecture and is Poland’s top tourist destination.

January 2014

www.bizpoland.pl

Eastern Poland Lublin Lublin ideal for business process outsourcing - Warsaw conference The City of Lublin continued its push for more outsourcing investment, with a conference in Warsaw in late November. The city is pitching itself as an ideal location for companies looking to re-locate key parts of their operations in business process outsourcing, service or knowledge centres, and this Lublin-Gateway to Eastern Markets conference held in Warsaw addressed the benefits for foreign firms.

Rzeszów PSK Rzeszów for sale The Ministry of Treasury plans to sell 85 per cent of Action Enterprises Shopping and Service PSK Rzeszow sp. The asking price is more than 4.3 million. PHU PSK Rzeszow mainly deals with wholesale and retail distribution of coal, fine coal and coke supply. The company has bonded carbon in Jaslo, Krosno, Łańcut, Rzeszów and Sandomierz. As reported on their websites, the date of the auction is 20 January. Interested parties participating in

Cities News the auction must pay a deposit of EUR 400,000.

The starting price for the package is 4,000,000 pln. The Treasury holds 100 per cent of shares in the Rzeszow company and wants to sell 85 per cent at the auction. The remaining 15 percent will be owned by the workers. This is another attempt to privatize the company, since previous efforts failed to find a buyer.

Białystok Energy savings from collective purchasing The municipality of Bialystok will pay nearly 10.1 million pln for electricity purchased in the tender collectively for nearly 160 units.

That’s nearly 1.2 million zł less than in 2013, said spokeswoman Urszula Mirończuk.

Mirończuk recalled that in 2013 the city paid nearly 11.2 million pln, and it was about 4 million zł less than the sum of 2012.

In 2013, Białystok bought electricity for the first time collectively. In 2014, the city will pay for electricity up to 10.1 million pln.

Mirończuk said that the bill will cover 300 energy meters. “We see the savings. They are meaningful”, said Mirończuk.

Also, in 2014, will begin operations of the Białystok Science and Technology Park, which admittedly was included in the tender in 2013, but the unit was under construction.

Kielce 91 million zł for Kielce Technology Park Three production halls and technology incubators wil be created through the 91 million pln investment, which Kielce Technology Park receives from the EU’s Operational Programme Development of Eastern Poland. Representatives of Kielce and the Polish Agency for Enterprise Development (PARP ) signed the agreement by which Kielce Technology Park (KTP) will receive additional funds from the Operational Programme Development of Eastern Poland. According to KPT director Szymon Mazurkiewicz , these measures “will allow the development of institutions, increased space and strengthening the scientific aspects of activity”. According to him, this will attract new investors to Kielce and the creation of new jobs.

Kielce Technology Park was established in April 2008. The main objective was to create a multifunctional area of economic activity. In October, Kielce Technology Park has been accepted as an international association of IASP (International Association of Science Parks and Areas of Innovation), which brings together techn nology parks around the world.

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2014 January

Publishing Calendar 2014 Directory providing key listings data for international buyers of Polish food, targeted at international food fairs and expos.

Distribution at: Special Edition for: Wielka Gala Liderów Polskiego Biznesu

January

Wielka Gala Liderów Polskiego Biznesu Jan 2014 Warsaw

February

GulFood Feb 2014, Dubai EuroSeafood Expo May 2014,Brussels FancyFood, Jun–Jul 2014,New York

This directory is for companies seeking office space, with complete listings of modern office buildings in Polnad’s largest 25 cities.

March

MIPIM Cannes Mar 2014 EXPOReal Munich Oct 2014 other real estate and general business conferences in 2014 in Poland and abroad

April

PSEW Polish Wind Energy Association’s annual Conference and Expo, May 2014

An excellent directory of wind developers and investors, as well as strategies of wind farm developers, maps of all wind farms in Poland, and relevant articles.

Green Power Expo Poznań, May 2014

May

Annual ASPIRE Conference May 2014 Annual ABSL Conference 2014 ILA Berlin Air Show May 2014

June

The most-complete directory of all BPO/ Outsourcing and Shared Services companies in Poland. Information includes services provided, target sectors, top management, list of client companies, and strategic plans.

Farnborough Int’l Airshow Jul 2014 Międzynarodowy Salon Przemysłu Obronnego Kielce, Sep 2014

Special Edition for: Wrocław Global Forum

July

Wrocław Global Forum Jun 2014 IPO Summitt Warsaw, June 2014

Guide focusing on Poland’s aerospace and aviation industries, including lists of key manufacturers and suppliers.

August

Special Edition for: Krynica Economic Forum

Guide to Warsaw Stock Exchange-listed companies. Targets foreign institutional investors, as well as large private investors.

September

SIAL Paris, Oct 2014

October For foreign direct investors, particularly in the BPO/ outsourcing, greenfield manufacturing, and real estsectors. Provid es essential data and key contacts in ate Poland’s major cities/regions, and special economic zones.

Krynica Economic Forum Sep 2014

ExpoReal Munich, Oct 2014 MIPIM Cannes, Mar 2015

November

Business Conferences in Warsaw (Q4 2014–2015) MAPIC Nov 2014, Cannes CEE Retail Awards Feb 2015, Warsaw

December

Shopping Centre forums during 2015

Contact: This directory provides retailers and developers with listings of the top 200 modern shopping centres in Poland’s largest 25 cities.

Thom Barnhardt tel. kom.: (0-508) 143 963 barnhardt@biznespolska.pl Wiktor Gliński tel. kom.: 694 492 067 wglinski@biznespolska.pl

www.bizpoland.pl

Events

HUSH Warsaw fashion fair The winter fashion fair HUSH dazzled guests at Warsaw’s Royal Castle in early December, who turned out in droves to see exhibitions of more than 200 fashion designers. The organizers - Anna Pięta and Magda Korcz - counted nearly 3,000 attendees at the fashion fair, with exhibitions on tables set up in the Arkady Kubickiego.

Both well-known and upstart brands competed for attention, and included those such as Wojtek Haratyk, Mariusz Przybylski, Ania Orska, Ania Kuczyńska, Agnieszka Orlińska, Wiola Wołczyńska and Konrad Parol. There were also new projects from abroad, from Georgia, Lithuania and Hungary. Wine tastings added a spice of life to the fair. In addition to fashion exhibitors, retailers also sponsored the event, including Flavour Essence by H&M Home, Kristoff porcelain, wine depot Vinoteka, natural cosmetics Pat&Rub and books from Bookoff library.

HUSH Warsaw is created for designers, to help them reach a wider range of clients. For many brands which are starting out on the market, HUSH Warsaw can be compared to a promotional trampoline. A fashion contest for the designers, newlyannounced for this December edition of the fair, gave additional PR and promotion to some of the brands, under the following categories: T-Mobile Fashion awarded to Michał Mrzygłód for “very courageous” debut K MAG “face first” award to Est By Es and Malgorzata Turczynska for the very best image-session and they awarded as well Domi Grzybek and Monika Jelińska in the same category ELLE awarded brand Lous with the “quality mark” for ELLE Spirit HUSH Warsaw awarded with the “quality mark” for the vision brand Dud.zin.ska.

The Gala was led by an ambassador of Polish design - Paulina SmaszczKurzajewska - and the statues were made by Polish designer Emilia Kohut of Superfine Jewellery.

Sponsors of the event included H&M and Pat&Rub, and fair partners were T-Mobile Fashion, Showroom.pl, and H7 Advertising & Marketing Agency.

Media patronage was extensive, from Elle, Onet.pl, Futu, Gazeta.pl, K MAG, Co Jest Grane, Malemen, and Label n Magazine.

2014 January

39

PolandFood&BeveragesExpo — 11 June 2014, Royal Castle, Arkady Kubickiego, Warsaw — Concept: The Poland Food and Beverages Expo (PFEX) aims to connect buyers with sellers – both Polish food exporters with western European food buyers, but also European food producers with buyers and retailers in Poland.

Poland’s food export sector is growing solidly, as Polish foods are increasingly attractive to western European consumers. At the same time, the Polish market for western European food producers is more and more interesting as an export destination.

Organized by media group BiznesPolska, which also publishes the annual directory Food

Exports Poland, the Expo will be accompanied by an evening networking business mixer on 11 June – to further build contacts between buyers and producers.

• Private Label • Beverages and the drinks sector will be also represented by wine and beer producers, specialty drinks, and fortified drinks.

Exhibitors:

Attendees:

We expect more than 100 exhibitors from: • Food producers and major exporters from Poland, and • Foreign food and beverages producers seeking to expand in Poland Exhibitors from Poland include: • Producesrs of: meat, fish, dairy, sweets, fruits and vegetables (fresh and processed)

• International buyers and retailers from western Europe • Polish food buyers and retail networks • International Food and beverages producers seeking to expand in Poland • Polish Food and beverages producers seeking to export to western Europe

www.PFEX.pl