BizPoland Magazine

July–August 2011 vol. 3 no. 5–7(20–21)

Poland assumes the Presidency Turmoil and tests as Poland takes over EU leadership

Country Focus:

City of Culture:

Equities:

Korean Direct Investment in Poland

Wroclaw takes top prize as location for European Cultural Capital 2016

Eastern European firms storm the stock exchange

(p. 10–15)

(p. 9)

(p. 16–17)

Global Occupier Forum November 28th 2011 Warsaw, Poland – Marriott Hotel Organized by – EuropaProperty & ceegbc.org For further information contact: Craig Smith at +48 604 144 769 or craig@europaproperty.com

Central & Eastern European

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July–August 2011

Table of Contents 4

EU Presidency 4 Turmoil and tests as Poland takes over EU leadership 7 Initial Calendar of the Polish Presidency in the EU 8 Wroclaw wins – will be European Capital of Culture in 2016

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Korea in Poland 10 Korean investment in Poland set to accelerate as Free Trade Agreement with EU begins 11 “Since last year, we see more and more Korean firms looking at Poland” [Interview with Ambassador of the Republic of Korea Joon Jae Lee]

12 “Korean businesses are looking carefully at Poland” [Interview with Mr. Tai-Sik Lee, Director General, Korea Business Center, Warsaw (KOTRA)] Published by: BiznesPolska Media 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, Colin Graham Research team coordinator: Magda Adamczyk Advertising Sales: tel.: 022 831 7062 mobile 508-143-963 Graphic Design: Sławek Parfianowicz sparfianowicz.wordpress.com

14 List of Korean Investors in Poland 15 Map of Korean investments in Poland South Korea’s FTA Strategy (10); GDP and Population – Numbers at a glance (10); Nuclear co-operation with S. Korea (12); EU-Korea FTA: A big win for Korea – and Poland (13); White goods production overtakes Germany, on back of Samsung-Amica deal (15)

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Industries 18 More Polish cities enter the battle for piece of the fast-growing Outsourcing pie

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Equities 16 Eastern European firms storm the stock exchange

22 ICEX and PAIZ sign Memorandum of Understanding • Trade mission to Ukraine • Polish-Azerbaijani economic seminar • FDI up 23% • Japanese investment in Katowice • Polish Mars exploration rover wins “best in the world”, beats NASA-backed team • Credit Suisse to employ more than 800 people in Wrocław Shared Services Centre • Gedia Poland, the supplier of car body press parts, invests 20 million Euro in Nowa Sól

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Events 23 France – Poland friendly match at Legia Stadium

Joon Jae Lee, the Ambassador of the Republic of Korea in Poland

EU Presidency

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Turmoil and tests as Poland takes over EU leadership Riots and tear-gas in Greece.

Crushing interest rates in Spain and Portugal. North Africans pouring into Italy and France. Irish banks on their knees.

This isn’t what Poland bargained for.

It wasn’t supposed to be this way.

The European Council – the series of summits held by member states’ leaders – now has its own president, Herman Van Rompuy, while meetings of foreign ministers are chaired by the head of the External Action Service, Catherine Ashton. With these tasks no longer within its remit, the rotating presidency is left to chair only the remaining council meetings between agriculture ministers, transport ministers, environment ministers and so on. It is little wonder, then, that Poland’s predecessors – Spain, Belgium and most-recently Hungary – have struggled to define the role and make a major impact.

As shown in the accompanying Calendar of EU Presidency events in BizPoland Magazine, the schedule of meetings is packed to the gills, mostly in Warsaw, Wroclaw and Gdansk/Sopot.

One of Poland’s main opportunities to steer Europe’s course will be in the negotiations over the EU’s next multiannual financial framework - the seven-year budget which will take effect in 2014. Poland is the single largest beneficiary among the newest EU members, so it will want to make an impact.

Although no budget deal will be concluded during 2011, the Presidency gives Poland the chance to influence one of the most important debates in the EU. Poland wants to align the budget closely with the Europe 2020 strategy for “smart, sustainable and inclusive growth” and one of its key objectives will be to maintain the status of Cohesion

As Europe’s frayed fringes struggle to hold on, Poland’s assumption in July of the Pre- Holidays, anyone? sidency of the European Union may be more In the new system the country holding the about fighting fires and less about long-term rotating presidency can best make use of its turn at the top by attempting to shape the strategic ideals.

Although the German government blin- EU’s policy agenda for six months according ked in late June, coming to the financial res- to its own priorities – although the long cue in the face of near-certain Greek default, the urgency of doing debt deals may overshadow the planned pleasantries of hundreds of EU Presidency meetings in Poland, packed into four busy months from September to December.

EU Commissioner José Manuel Barroso told Poland, as it geared up to take over the EU’s rotating presidency, to “be prepared, beEU Commissioner Jose Manuel Barroso cause something may happen”. “Something” is already happening.

Emergencies - mostly hailing from southern Europe – may dilute the impact of Po- summer holidays as well as the Christmas Policy – those funds which are dispensed to land’s EU presidency. Or may present break mean that time will be tight for Po- less well-off regions in the EU to promote dePoland with an opportunity to showcase its land. velopment.

Nevertheless, at the end of May, Poland leadership and strengths at operating in a tuSince entering the EU in 2004 Poland has presented the program for its presidency, a enjoyed the benefits of regional policy more multuous environment.

Poland assumes the presidency in July five-page document stating that “the main than any other country, receiving about €67 for the first time and has been praised for task of the Polish presidency is to lead the billion between 2007 and 2013. While some its extensive and comprehensive prepara- European Union on a path to faster econo- wealthier member states want to limit the tions. Poland will be the fourth country to mic growth and an enhanced political com- scope of cohesion funds to the very poorest take on the rotating presidency since the munity”. It sets out three general priorities: parts of Europe, this is one area where Porole was remodelled in 2009 following the “European integration as the source for land is likely to fight hard to at least mainimplementation of the Lisbon Treaty. Whe- growth, a secure Europe, and a Europe bene- tain the status quo. reas it used to carry significant responsibi- fiting from openness.”

But there is a reasonably high probability Europe has been focused for months on that the negotiations may descend into a lities and influence – an opportunity for member states not normally in the spot- solving the sovereign debt crisis and now Po- squabble between member states – not over light to make their mark – it has now been land wants to turn its attention to boosting the detail of how the EU spends its money stripped of some of that prestige and be- growth which will, it says, “guarantee the but simply the size of its budget. The Eurocome somewhat lost in the increasingly tan- well-being of EU citizens”. Shifting the pean Parliament has called for a 5 per cent gled web of the EU’s many presidencies and agenda is no easy task and as long as Eu- increase, as well as EU-wide taxes to raise rope’s debt problems continue. councils. extra resources and an end to national reba-

Be prepared, because “ something may happen ”

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July–August 2011

EU Presidency

www.bizpoland.pl tes. These measures are opposed by a number of countries, including some of the biggest contributors to the budget including the UK, Germany and Finland, who insist that any rise should not exceed the rate of inflation. And the European Commission’s own proposals for the budget were published in late June – meaning Poland will have to react quickly to the official opinion.

Farmers and Internet According to its proposed EU program for growth, Poland wants to give small and medium sized enterprises – which account for 60 per cent of Europe’s GDP and create 70 per cent of jobs – easier access to credit and reduce their costs. It is also focused on the development of e-government and the emarket – “this will mean taking action to abolish the barriers which block cross border online transactions, as well as continuing works on reducing roaming charges”. It claims that 60 per cent of online transactions fail to be completed due to legal barriers.

Reform of the Common Agricultural Policy will be another tough battle – and again, one in which Poland has a large stake, with its large agricultural sector. The sector remains largely unreformed and politically potent.

While there is no reason to doubt Poland’s commitment to making progress on CAP, there is also no reason to believe it will succeed where the rest of the EU has failed for a number of years.

Another objective is to create the basis for an external energy policy. On energy, Poland is desperate to reduce its own dependence on Russia. The Polish presidency is expected to promote the potential of shale gas – and the government will make every effort to counteract the recent decision by France to ban fracking, the key technique to extract gas from shale rock. Poland’s top government officials fear being squeezed by a sub-

tle and unspoken alliance between western European socialists/environmentalists and entrenched Russian gas interests, which will suffer greatly if Poland begins to export substantial amounts of gas to western Europe.

While Poland is building its first nuclear power station, Germany has announced, following the crisis at Fukushima, that it will phase out nuclear by 2022. Meanwhile Poland’s support for and reliance on coal power sits uneasily with the EU’s attempts to promote renewable energy. It will be difficult in such an atmosphere to develop a perfectlyaligned European energy policy.

“Go East, young man” With regards to foreign policy, Poland is putting the eastern partnership at the top of the agenda. It wants to expand the zone and develop free trade areas and association agreements with countries such as Ukraine and Moldova. The Eastern Partnership summit in September will give Poland a chance to make an impact. And the plan put forth

by Poland states: “With regard to Belarus, the aim of the union is to encourage this country to work with the west, provided it respects the fundamental rules of democracy and human rights.”

For months Europe’s attention has been fixed on turmoil on its southern flank, facing North Africa. While Lady Ashton has insisted that no funds are being shifted from east to south, the feeling that Europe’s eastern borders are being neglected has been gaining traction. Poland aims to shift the EU’s focus to development and improvement of relations with its eastern neighbors.

Poland will also be keen to show its continued support of North Africa. Foreign Minister Radoslaw Sikorski has visited Libya twice recently and is aware of the reputational impact - his wife is a journalist - of supporting refugees and promoting democracy.

continued on page 6

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July–August 2011

EU Presidency

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Poland assumes_ the Presidency_

ding Serbia, which recently boosted its chances of membership with the arrest of Ratko Mladic, now at The Hague awaiting trial for war crimes.

continued from page 5

Bulgaria and Romania’s entry into the Schengen passport-free zone will also be pressed during Poland’s presidency. Strongly cognizant of the benefits that Polish citizens have gained since 2004 from free movement within the Schengen zone, Poland wants to complete changes to the regulation on Frontex, the EU’s border agency in an effort to make it more efficient and effective in crisis situations such as the influx of migrants from North Africa in the wake of the Arab Spring.

Following the European Commission’s announcement that the last four chapters in Croatia’s accession negotiations should be closed and that the country should join the EU in July 2013 – Poland may well, towards the end of its presidency, oversee the signing of the accession treaty. Even more significantly, Poland strongly supports Turkey’s application which has stagnated in the face of French, German and Austrian opposition.

Poland will also support negotiations with Iceland and other Balkan countries – inclu-

Elections for Presidency collide with Presidency One complication for Poland will be the fact that parliamentary elections are due in Octo-

The Polish presidency is expected to promote the potential of shale gas – and the government will make every effort to counteract the recent decision

by France to ban fracking.

“

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ber, in the middle of its presidency. In an open letter to the Polish newspaper Gazeta Wyborcza, a group of think-tank heads

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wrote: “The election campaign will come in September and October when the presidency should be in full swing. That leaves little time for attention to be paid to the presidency itself.”

Opposition leader Jaroslaw Kaczynski said that Prime Minister Donald Tusk purposely timed an October vote to coincide with Poland’s presidency to boost his ruling

party’s chances. “Everything suggests that leaving the election until the autumn was aimed at using the presidency to attract more support for PO,” said Kaczynski. “The election should clearly have been held in the spring, ahead of Poland’s EU presidency. It is such a logistical burden, it is impossible to handle both at the same time,” Mr Kaczynski said. “The effectiveness of the operation will hinge on whether Poles can be deceived that the presidency is really something extraordinary,” he added.

Tusk and his ministers are aware that the EU Presidency provides a European and global platform that should impress voters in the countdown to the election. If re-elected, PO would be the first party to win re-election in Poland since the fall of communism in 1989.

Changing perceptions: From “eastern” to “central” to “northern” Europe Perhaps the EU Presidency will allow Poland to complete, in some sense, the 20-year journey of transforming itself from a hobbled “eastern” European country, a financial drain and political liability, to a part of “northern” Europe, a region inhabited by well-organized and efficient Germans and savvy Scandinavians. Foreign Minister Sikorski repeatedly uses language that places Poland in this elite club. With “southern” Europe seemingly unable to pull itself out of trouble, Poland increasingly appears to be not only not part of the problem, but a part of the solution to Eun rope’s woes.

July–August 2011

EU Presidency

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Initial Calendar of the Polish Presidency in the EU (certainly subject to changes, additions, and cancellations)

July_ 28-29 Ministers for European Affairs – discussions on the EU budget for 2014-2020 28-29 informal meeting of Ministers of Health in Sopot 28-29 meeting of the Polish government and the European Commission in Warsaw 28-29 High Level Energy meeting in Bełchatów 28-29 Economic and Financial Affairs Council in Brussels

September_ 2-3 5 5-6 7-9

informal meeting of Ministers of Foreign Affairs in Sopot conference on Corporate Social Responsibility in Gdańsk informal meeting of Ministers of Transport, Sopot 21st annual European Economic Forum, Krynica

8-11 9 12 12 11-13

12 13-14 13 14-16 15

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16-17

17-18

Cultural Congress in Wrocław informal meeting of Ministers of Culture, Wrocław General Affairs Council (GAC), Brussels Foreign Affairs Council (FAC), Brussels informal meeting of Council of Agriculture and Fisheries (AGRIFISH), Wrocław conference „E-Volunteers”, Warsaw conference: „From volunteering to sports leadership”, Warsaw first meeting of the European Council Eurofi Financial Forum, Wrocław Ministerial conference – “Ownership Transformation in Poland - Evaluation and Future Prospects”, Warsaw Ministerial conference - Ministers of Economy on the occasion of the 15th year of Poland’s membership in the OECD, Warsaw informal meeting of Economic and Financial Affairs Council (ECOFIN), Wrocław European Congress of Women

19-20 Council of Agriculture and Fisheries (AGRIFISH), Brussels 19-20 informal meeting of Council of Transport, Telecoms and Energy (TTE), Wrocław 22-23 Council for Justice and Internal Affairs (JHA), Brussels 22-23 informal meeting of Ministers of Defense, Wrocław 26 Foreign Affairs Council (FAC), Brussels 26 informal meeting of Trade Ministers, Brussels 26-28 annual conference Enterprise Europe Network in Warsaw 27-30 Ministerial conference - “Forestry management for climate and biodiversity” with meeting of directors of forestry and ecology management, Białowieża 29-30 Advisory Board of Competition (COMPET), Brussels 29-30 informal meeting of Ministers of Defence in Warsaw 29-30 Eastern Partnership Summit - Warsaw continued on page 8

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July–August 2011

EU Presidency Calendar of the Polish _ Presidency in the EU_ continued from page 7

October_ 3

3-4 3-4 4 5-7 6 10 10-11

10–11

10-11

10-12 11 11-12 13-14 13 13 17 17-18 17-18 18-19

19-20

Council for Employment, Social Politics, Health and Consumer Protection (EPSCO), Luxembourg Internal Market Forum (SIMFO) in Krakow EU Ministerial Forum – Western Balkans Economic and Financial Affairs Council (ECOFIN), Luxembourg informal meeting of Ministers of Tourism, Kraków Council of Transport, Telecoms and Energy (TTE - Transport), Luxembourg Council of Environment (ENVI), Luxembourg Ministerial conference on energy policy with the General Assembly of the Council of European Energy Regulators (CEER) and the Council of Regulators, (ACER), Krakow Permanent Cooperation Council, the European Union - Russia in the field of Justice and Home Affairs, Warsaw Conference of Minister – Employment issues and challenges in the face of demographic changes, Warsaw European Heritage Forum, Wrocław Ministerial Seminar, Gdańsk Conference: preparations for the Rio+20 World Summit, Warsaw informal meeting of Ministers of Sport in Krakow General Affairs Council (GAC), Luxembourg Foreign Affairs Council (FAC), Luxembourg Tripartite Social Summit, Brussels second meeting of the European Council in Brussels European Convention against Poverty, Kraków Ministerial Conference: “Development of the European Statistical System in the light of the Eastern Partnership - the direction and strategy”, Kraków Ministerial Conference: “ Prospects for development of the electronic communications market in the EU”, Warsaw

www.bizpoland.pl 19-20 European Congress of Rural Development, Warsaw 19-21 The Conference of Heads of Customs under the EU Eastern Partnership, Kraków 20-21 Council of Agriculture and Fisheries (AGRIFISH), Luxembourg 20-21 meeting of senior officials of the Union for the Mediterranean, Kraków 20- 21 informal meeting of Ministers for Family Affairs and Gender Equality, Kraków 24-25 Meeting of ministers of Transport, in the context of Eastern Partnership, Kraków 24-27 EU Strategic Forum for Baltic Sea and Baltic Development Forum, Gdańsk 25-26 Conference: European Migration Network, Warsaw 26 Conference: Support of Initiatives and European Partnership for Innovation (EPI), Warsaw 27-28 Ministerial conference: “Alignment of regulations of Eastern Partnership members with EU regulations on veterinary issues, and food safety and quality”, Krakow 27-28 Council of Justice and Internal Affairs (JHA), Luxembourg

December_ 1

November_ 3-4 7-8

8 9-10 10

14-15 14-15 14-15

17 18 21 22 22 23-24 24

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intelligent, inclusive and sustainable Europe”, Poznan 24 council for Transport, Telecommunication and Energy in Brussels 24-25 European Competition Day, Poznań 25 informal meeting of ministers of regional politics and city-development, Poznań 28-29 Council of Euducation, Youth and Sports (EYCS), Brussels 30 Economic and Financial Affairs Council (ECOFIN), Brussels

2nd Conference: “Building Migration Partnerships in Action”, Poznań ministerial conference: „Solidarity in health - Reducing disparities in health between the countries of the European Union, Poznań Economic and Financial Affairs Council (ECOFIN), Brussels ministerial conference: “European Contract Law”, Warsaw Foreign Affairs Council, in association with Ministers of Economic Development, Brussels Agriculture and Fisheries Council Equality Summit, Poznań Ministerial meeting: EU – USA in the areas of internal affairs and justice, Washington Meeting of Ministers of Electronic Administration, Poznań Council for Economic and Financial Affairs - Budget (ECOFIN), Brussels meeting of the Foreign Affairs Council in Brussels Council of European Economic Area, Brussels General Affairs Council (GAC), Brussels Conference: “5th year of REACH”, Warsaw Ministerial meeting:” An integrated approach to development - the key to an

Employment, Social Policy, Health and Consumer Affairs Council, (EPSCO), Brussels 1-2 Conference: Basic Rights, 2011, Warsaw 1-2 High-level conference for countries of North Africa regarding political transformations - dedicated to the Polish experience and the countries of CEE, Warsaw 2 Employment, Social Policy, Health and Consumer Affairs Council (EPSCO Health), Brussels 5-6 General Affairs Council (GAC), Brussels 5-6 Competitiveness Council, (COMPET), Brussels 5-6 Foreign Affairs Council (FAC), Brussels 5-6 “European conference: legal assistance with government administration”, Warsaw 9 meeting of the European Council in Brussels 12 Council of Transport, Telecoms and Energy (TTE - Transport), Brussels 13-14 Council for Justice and Internal Affairs (JHA), Brussels 15-16 Council of Agriculture and Fisheries (AGRIFISH), Brussels 15-16 European Development Days, Warsaw 16 General Affairs Council (GAC), Brussels 16 Foreign Affairs Council (FAC), ministerial conference WTO, Geneva 19 Environmental Affairs Council (ENVI), n Brussels

July–August 2011

EU Presidency

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Wroclaw wins – will be European Capital of Culture in 2016

It will host the title along with one Spanish city.

Androulla Vassiliou, the European Commissioner responsible for Education, Culture, Multilingualism and Youth, stated: “I am very happy to see so much enthusiasm in Poland for the 2016 title and I congratulate Wroclaw.

Many cities presented excellent bids, so Wroclaw’s success is a great accomplishment. I hope it will make the most of this unique opportunity, as the title can bring significant cultural, economic and social benefits for the city and its surrounding area. I wish every success to Wroclaw and urge it to see the title as part of a long term cultural strategy.”

Background Poland and Spain are the two Member States hosting a European Capital of Culture in 2016.

The list of countries hosting the title until 2019 was laid down in a decision of the European Parliament and Council of Ministers in 2006.

fot. Mohylek, Wikimedia Commons

In late June, Wroclaw was selected by the EU Council of Ministers to be the European Capital of Culture in 2016, beating out a handful of Polish cities.

six appointed by the Member State concerned and the remaining seven by the European institutions. They examine the applications on the basis of the criteria laid down by the European Parliament and Council decision.

The cities have to prepare a cultural programme with a strong European dimension and foster the participation of citizens living

I hope [Wrocław] will make the most of this unique opportunity, as “ the title can bring significant cultural, economic and social benefits for the city and its surrounding area ” Androulla Vassiliou, the European Commissioner responsible for Education, Culture, Multilingualism and Youth

The European Capitals of Culture are selected by an independent panel: an initial shortlist of cities is drawn up after a pre-selection phase, followed by a final selection nine months later. The two cities chosen (one per country) are then officially designated by the EU’s Council of Ministers.

Eleven cities applied in Poland (Bialystok, Bydgoszcz, Gdansk, Katowice, Lódz, Lublin, Torun, Poznan, Szczecin, Warszawa and Wroclaw) and the cities shortlisted were: Gdansk, Katowice, Lublin, Warszawa and Wroclaw.

Applications were examined by a panel made up of 13 independent cultural experts;

July–August 2011

in the city, in its surroundings and abroad. The European dimension is reflected in the chosen themes and the way in which the events in the programme are organised (cooperation between cultural operators in different EU countries is encouraged). The programme must also have a lasting impact and contribute to the long-term cultural and social development of the city.

The members of the panel appointed by the European institutions were: Appointed by the European Commission: Sir Jeremy Isaacs (UK) a television executive and a former Director of the Royal Opera

House , Covent Garden; Manfred Gaulhofer (AT), Director-General of Graz 2003, who has managed many European projects.

Appointed by the Council: Erna HennicotSchoepges (LU), former Member of the European Parliament, of the Council of Europe Assembly and the Organisation for Security and Co-operation in Europe (OSCE), currently heads various national and international cultural organisations; Constantin Chiriac (RO), Vice President of Sibiu 2007 and currently director of national theatre Radu Stanca.

Appointed by the European Parliament: Andreas Wiesand (DE), consultant and researcher in the field of cultural policy and activities; Danuta Glondys (PL), head of the Villa Decius association, which runs many activities in the field of international culture.

Appointed by the Committee of the Regions: Elisabeth Vitouch (AT), represents the Commission for Culture and Education of the Committee of the Regions and is a member of the Vienna City government.

Following Turku (Finland) and Tallinn (Estonia) this year, Guimarães (Portugal) and Maribor (Slovenia) will be European Capitals of Culture in 2012; Marseille (France) and Kosice (Slovakia) in 2013, Umeå (Sweden) and Riga (Latvia) in 2014 and Mons (Belgium) and n Plzen (Czech Republic) in 2015.

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Korea in Poland

Korean investment in Poland set to accelerate as Free Trade Agreement with EU begins As Korea and the European Union enter into an historic accord to drop nearly all trade barriers and tariffs, Poland stands poised to be the biggest winner – as Korean firms intend to accelerate their direct investment, using the country as a low-cost manufacturing springboard to western Europe.

The EU-Korea Free Trade Agreement, in effect as of 1st July, is just one of several signs that economic relations between Poland and Korea are set for faster growth. Korean firms are expected to increase their involve-

South Korea’s FTA Strategy For nearly a decade, South Korea has been transforming itself into an FTA hub in Northeast Asia. Signing a network of FTAs has been a key part of the national economic strategy of President Lee Myungbak, a conservative, and his predecessor, the left-of-center Roh Moo-hyun. Both presented FTAs as necessary for advancing South Korea’s economic well-being.

Ongoing competitive pressure from Japanese firms, increased competition from Chinese enterprises, and the rapid ageing of the South Korean workforce have heightened the sense of urgency about boosting national competitiveness.

President Lee has set a goal of building a “freetrade network” that by 2014 would enable over 70% of South Korean exports to enjoy duty free access. He has explicitly tried to diversify the composition of South Korea’s FTA partners, simultaneously negotiating FTAs with large advanced economies as well as with natural resourcerich developing countries. The Korean-EU FTA also fits into Lee’s goal of creating a “Global Korea” by expanding South Korea’s engagement with and presence in the international community.

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ment in Poland’s energy sector as well as manufacturing of white goods, automobiles and electronics. And if the current Defense Ministry tender for fighter aircraft trainers is won by Korea, then Korean investment will deepen, propelled by additional offset investments in Poland’s military and industrial sectors.

In this special focus section of BizPoland Magazine, we delve deeply into the economic relationship between Korea (South Korea, that is, or to be precise, the Republic of Korea) and Poland. In a series of interviews with Korean investors, diplomats, bankers and trade officials, the significance of the EU-Korea FTA was repeatedly emphasized. Trade volumes are expected to increase immediately by 30% just within the first year of the new deal, as the wide scope of the FTA will eliminate all tariffs on 95% of exported and imported products.

With most exports from Korea to Poland related to production – particularly automobiles, white goods and electronics – the reduction of tariffs on auto parts to zero will have an immediate impact on profitability and demand for Korean manufactured products – providing further incentives for direct investment by Korean car manufacturers and the cluster of parts suppliers that follow.

The agreement will lead to a next wave of substantial investment from Korea into Poland, said Ambassador of the Republic of Korea Mr. Joon Jae Lee. “My government considers Poland as one of our most important partners – not only

GDP and Population – Numbers at a glance EU GDP: about $14 trillion; population: 492 million Korean GDP: about $1.5 trillion; population: 49 million Poland GDP: about $500 billion; population: 38 million

in Europe, but in the world”, said Ambassador Lee.

Trojan Horse Poland is being used as a base for Korea’s strong industrial and manufacturing sectors, which are attracted by the dual advantages of low production costs and easy access to western European consumer markets. This new, third advantage – free trade with virtually no tariffs – will likely lead to a third wave of direct investment from Korea, according to Korean executives.

If the first wave of initial investment in Poland was in the 1990s, led by Daewoo, the second wave was initiated by LG Electronics, which decided in 2005 to locate its manufacturing site in Kobierzyce with an initial 430 million euro investment. A cluster of subcontractors and suppliers of subcomponents to LG followed, and many established their production sites in Poland.

Approximately 120 Korean firms have now invested in Poland.

LG has now expanded production capabilities, and employs more than 10,000 people at plants in Mlawa and Wroclaw, and has invested about USD 1.5 billion in Poland. 90% of the products made in Poland are sold to western Europe, and Poland remains LG Electronics main manufacturing base for Europe.

Poland is now a larger manufacturer of domestic appliances than the manufacturing behemoth Germany.

The automotive sector, led by KIA and Hyundai, is also pulling more investment into Poland, as many smaller Korean companies have set up operations in southern Poland (such as Gliwice, Dąbrowa Górnicza and

Young-Wan Kim, Deputy Head of Corporate Division at Nordea Bank Polska

continued on page 13

July–August 2011

Korea in Poland

“Korean businesses are looking carefully at Poland” The Ambassador of the Republic of Korea Joon Jae Lee has a lot of good news to talk about.

While diplomats may sometimes spend time spinning a good story out of a bad one, the story of Korea’s involvement in the Polish economy – on the contrary – is a good story getting better.

“Our relations have developed remarkably well”, said Ambassador Lee, citing trade numbers that have increased 35-fold over a 20-year period—to USD 4.4 billion in 2009, from just USD 125 million in 1989. Korea is one of the largest direct investors in Poland, and due to its focus on manufacturing, perhaps the largest employer among foreign investors. According to the Korean Embassy, about 120 companies operate in Poland, and employ about 20,000 people.

“My government considers Poland as one of the most important partners, not only in Europe, but even in the world”, said Ambassador Lee. “And the trends show that our The Ambassador of the Republic of Korea Joon Jae Lee trade relations will continue to grow”.

Ambassador Lee pointed to several advantages that Poland offers to Korean firms, in- of more than 10 Korean companies who In light of the new EU-Korea Free Trade cluding its central location in Europe, a have set up manufacturing operations to Agreement, “Korean businesses are looking rapidly-developing logistics network, and support LG. “There is even a street name carefully at Poland” as an investment destiEU membership. And strength in human re- ulica LG”, he said with a smile. nation and manufacturing base in Europe. sources. “Poland has relatively large numWhile the trade numbers have grown Poland has very important business potenbers of young and well-educated workers”, quickly, the trade deficit between Poland tial for Korean businesses looking at Europe. said Ambassador Lee, adding that Samsung and Korea is out of balance – with exports Many Korean businesses are preparing for Electronics employs about 800 engineers at from Korea to Poland in 2010 of about USD expansion and investment in Poland after its R&D centre in Warsaw, focused primarily 4.65 billion but exports from Poland to the FTA’s implementation”, he said. on mobile technologies.

Korea only about USD 400 million.

He also said that cooperation in the mili“The Samsung model is a good example of But Ambassador Lee was quick to provide tary and industrial sectors would increase cooperation between private Korean compa- context and details about the “headline” substantially if Korean Aerospace wins the nies and Polish educational institutions”, trade deficit. “About 80% of the export current military aircraft tender – “Lead-In said Ambassador Lee. items are spare parts and machinery, which Fighter Training” – that was recently annoHe also said that cooperation in the nuc- supports the large re-export numbers to we- unced by the Ministry of Defense. That delear field is another sign of closer economic stern Europe”. cision is expected sometime before ties between Korea and Poland. Korea geneAt the same time, he encouraged the Po- year-end. Lee said that KAI is the first to rates more than 36% of its electricity from lish government to do more to promote ex- produce supersonic training aircraft on the nuclear, having started its first nuclear ports to Korea. “Poles do not yet know basis of F-16 technology. “Our government power plant in 1979. much about Korea, and vice-versa”, he said, supports the sale of the T-50s (fighter traiLG Electronics’ investment in Poland, of adding that many Korean tourists have visi- ning aircraft), and we will support further about USD 1.5 billion, is “very important”, ted Krakow. He said that Poland has oppor- cooperation with Poland in the fields of misaid Ambassador Lee, adding that “LG’s only tunities to expand food exports to Korea. litary and industrial cooperation, particumanufacturing base in Europe is in Poland, “Meat prices in Poland are one-half to one- larly industrial”, said Ambassador Lee. He and 90% of its manufactured products are quarter of the prices in Korea”. But he added said that KAI, if it wins the tender, will proexported to Europe”. He said that the LG in- that “one can’t just wait. Poles must pro- vide training in Poland and will produce n vestment has contributed to a “LG cluster” mote in Korea”. spare parts here as well.

July–August 2010

11

Korea in Poland

“Since last year, we see more and more Korean firms looking at Poland” If the results of the EU’s free trade agreement with Chile can be used as a metric for the impact of the EU-Korea FTA, trade volumes might surge as much as 30% during the first year, said Mr. Tai-Sik Lee, Director General of KOTRA, the Korean Business Center located in the Warsaw Financial Center.

Mr. Lee’s office acts as a liaison and investment assistance office for Korean firms looking at setting up operations in Poland; therefore, his office helps in the early stages of researching markets as well as later stages of implementation and execution of investment projects.

“If trade volume increases, many Korean firms will open regional offices”, he said. He expects 3-4 companies from the Korean manufacturing and chemicals sectors to open offices during the next 6 months. “Since last year, we see more and more Korean firms looking at Poland”.

He said that the experiences and successes of both LG and Samsung are encouraging for other Korean firms.

In addition to Korean strength in manufacturing, electronics and white goods manufacturing, he said that Korean firms are increasingly interested in establishing positions in renewable energy technology. “In the wind sector, we are trying to catch up with the very best technology”.

Samsung, the largest Korean conglomerate, is investing heavily in the renewable energy sector worldwide, including wind and solar. Other conglomerates like Hyundai and LG have already started manufacturing solar energy products and Hanwha has moved heavily into the solar sector. Daewoo and Hyundai are particularly targeting the wind sector internationally, in some cases

Nuclear co-operation with S. Korea Poland’s plans to open its first nuclear power plant in 2022 will get a boost from cooperation with South Korea.

Co-operation between the two countries “will allow the Polish side to benefit from Korea’s experience in the area of operating nuclear power stations and treating nuclear waste, as well as staff training and public relations,” according to an official statement.

In March 2011, at the Second Seminar on Nuclear Plant Cooperation between

Mr. Tai-Sik Lee, Director General, Korea Business Center, Warsaw (KOTRA)

“Poland is the factory of the

European Union

”

Korea and Poland, Korea’s Vice Minister Park Young June said that the “Polish government’s initiative to adopt nuclear power as a policy to spur economic growth and diversify the country’s energy sources is a very wise move.”

According to plans presented by Poland’s nuclear energy chief Hanna Trojanowska, the launching of the second nuclear plant is scheduled for 2025. The government has said it wants nuclear power to generate 9.3 percent of the country’s electricity by 2030, while coal’s share

buying firms with advanced wind turbine technology or existing large wind farms.

While Lee expects the EU-Korea FTA to have a significant impact on Korean firms’ interest in investing in Poland, he also said that Polish firms have opportunities to export to Korea, particularly in the food sector.

Pork-belly meat (raw, not processed) exports to Korea are nearly USD 40 million per year, and Lee said that natural cosmetics brands, such as Polish brand Ziaja, have also had success exporting to Korea. “We are encouraging Polish exports to Korea”, he said.

In terms of the large trade imbalance between Korea and Poland, he said that 80% of the exports to Poland are parts or spare parts for TVs, electronic components and manufactured products that are currently hard to source in Poland. And since 90% of this production is re-exported, mostly to western Europe, the simple trade numbers don’t tell the full story.

Korea is also making efforts to acquaint Poles with Korean culture, including popular culture like K-Pop, the Korean pop music which has set off a craze in parts of Asia. A Korean cultural centre has been opened in Warsaw, and hosts events such as Korean movie nights and language and cooking courses.

Mr. Lee also said that the Korean investors are attracted to Poland, not only because of its lower costs as a manufacturing base, but also because of the size of the domestic market. “The domestic market is big, if compared to Hungary or the Czech Republic”.

He also applauded the Polish government’s policies aimed at encouraging direct investment, via tax incentives and special n economic zones.

should drop to 60 percent, from the current 94% market share of coal.

Korea has one of the best nuclear power industries in the world. Korea first adopted nuclear power in 1978 and now boasts 21 nuclear power plants in operation, with seven more under construction.

Forty percent of Korea’s electricity comes from nuclear power. “Korean nuclear power experts have a wealth of experience in construction and operation of nuclear power plants”, said Vice Minister Park Young June

12

July–August 2011

Korea in Poland Korean investment _ in Poland_ continued from page 10

Sląsk Cieszyński) with a view to supply Hyundai and Kia factories in Poland, Czech Republic and Slovakia.

The FTA deal is likely to instigate a third wave of major investment, according to Mr Bong-suk Kang, Director at the Korean EximBank in Warsaw. He sees new signs of interest from Korean investors in Poland, including from the manufacturing and industrial sectors, but also in renewable energies and military. The recent tender from Poland’s Ministry of Defense for the “Lead-In Fighter Training” aircraft, if won by Korean Aerospace Industries, would spur another round of investment from Korea into Poland’s industrial-military sector. (The tender is expected to be decided by year-end 2011.) The “LIFT” tender for 16 combat-trainer aircraft carries with it an “offset” provision, equal to

EU-Korea FTA: A big win for Korea – and Poland Effective 1st July, 2011, a Free Trade Agreement between South Korea and the EU came into effect, after 2½ year of bilateral negotiations. The agreement is comprehensive, and will reduce and eliminate tariffs in manufactured goods, agricultural products and services. While the EU stands to benefit modestly from the FTA, the relative impact on Korea – and Poland – is significant.

The long-awaited agreement aims to eliminate about 98% of import duties and other trade barriers in manufactured goods, agricultural products and services over the next five years.

Korea is destination for only about 2% of the EU’s merchandise exports. On the other hand, the much larger EU market of 492 million people with a GDP of $14.4 trillion is much more important to South Korea as an export market. The EU absorbs nearly 15% of total South Korean exports, second only to China.

The Korean GDP is close to one-18th in size in comparison to that of the EU. Therefore, the EU market is far more important to Korea than the other way around. To EU firms, the FTA provides better market access in the Korean markets. It is more meaningful for their exports in the services as well as in processed foods, meat, dairy and agricultural products.

100% of the contract value, meaning that Korean industry would be obliged to substantially increase its investment in Poland’s industrial sector.

Mr. Kang is hopeful that the deal will be won by Korea, as the Korea Eximbank would likely provide substantial long-term financing to support KAI and related major investments.

Big trade deficit ? Not in reality With Poland importing more than $4 billion in products from Korea and exporting less than $500 million, the unbalanced trade deficit has been a cause of concern in some Polish government circles. But when one looks deeper into the details, the re-export numbers of 85-90% of the final manufactured products (TVs, refrigerators, cars, mobile phones, etc.) means that the “adjusted” trade deficit is modest.

Another banker, Young-Wan Kim, Deputy Head of Corporate Division at Nordea Bank Polska, said that “trade will definitely increase between Poland and

Empirical estimates put gains to the Korean GDP in the order of 1 to 2 percent, while that for the EU in the vicinity of 0.05 percent. While studies estimate that the FTA will increase EU trade by 0.2 percent, the gains in trade for Korea could be substantive, as much as 5.3 percent.

Korea is a net exporter of cars to the EU. An IBM study concluded that the auto industry in Korea will benefit far more from the EU-Korea FTA than companies in the EU. Expectations among Korean automakers regarding these gains are high. The present EU tariff on autos is 10 percent. Abolition of this tariff will reduce the purchase price of an average Korean car by 1,000 euros, making them more competitive in the EU markets.

Also, Korean automakers are prepared for production in the EU, with operations in Poland, the Czech Republic and Slovakia. Assembly and export costs of Korean cars in the EU will be reduced if the 4.5 percent tariff on auto parts exported from Korea to the EU is eliminated, with the FTA coming into force.

Automobile industry

Under the agreement, not only will the 8% tariff on EU cars exported to Korea be removed, but EU car makers will be able to sell their products - produced according to EU specifications - without being subject to additional testing.

Korea”. Regarding the potential for Polish agricultural exports, he said: “If there will be no customs duties, who knows what will happen. Even Polish beef could replace some of the beef that Korea currently imports from Australia and America”. Mr. Kim has been with the bank since 1997, which at that time was called LG PetroBank, as LG bought the Lodz-based PetroBank in 1996.

Since most Korean firms worked with the bank, the Korean clients generally remained with the bank when it was sold to Nordea in 2002. “Naturally Nordea inherited the Korean business”, said Mr. Kim, adding that at least 50% of Korean companies in Poland are clients of Nordea.

As to the future of Korean business in Poland, Mr. Hyeon-Sheop Shin, MD at Hanjin Shipping, which has about 8% share of the shipping industry, said “most Korean companies are happy, because every year the market increases. They can make profits n here”.

EU and South Korea will eliminate all of their tariffs on passenger cars and trucks over five years. Their respective tariffs on auto parts—8% for South Korea and 3% to 4.5% for the EU—would be immediately removed.

Agriculture

In 2009, EU agricultural exports to South Korea ($1.4 billion) accounted for almost 5% of total EU merchandise exports to that country. The leading five agricultural/food products shipped— pork, whiskies, corn, wine, and chocolate—accounted for 42% of the value of the EU’s agricultural exports to the Korean market. In 2009, the EU-27 ranked fourth as the source of Korea’s agricultural imports, while the United States placed first.

The KOR-EU FTA will reduce South Korea’s high tariffs and restrictive quotas on most agricultural imports from the EU. Consumer electronics

By eradicating all duplicative requirements in the form of costly testing and certification procedures, the FTA also removes barriers to trade in consumer electronics and household appliances such as television sets, computers, microwave ovens, mobile phones and telecoms equipment.

The EU has FTAs in force with Chile and Mexico and has been negotiating FTAs with Canada, India, and South Africa.

13

July–August 2010

Korea in Poland

Korean Investors in Poland

14

ACTS 29 Sp. z o.o.

Wrocław Ambipol Sp. z o.o.

Warszawa ARUM-TEC CO., LTD Warszawa CERAGEM Poland Sp. z o.o.

Warszawa Cheil Germany Gmbh Sp. z o.o.

Warszawa Chowel Sp. z o.o.

Warszawa D.K. MFG Sp. z o.o.

Józefin D&D SPRINGS CO. Ltd. Lublin D&J Technology Poland Sp. z o.o.

Kielce DAEDONGSYSTEM Sp. z o.o.

Cieszyn Daewon Poland – D&D Resory Polska Lublin Daewoo Electronics Corporation Pruszków Daewoo Electronics Manufacturing Pruszków Daewoo International Corp.

Warszawa Daewoo IS Polska Sp.z o.o.

Płońsk Deerfos Złotoryja DEERFOS EUROPE SP. z o.o.

Wrocław DK Warszawa Dong Yang Electronics Sp. z o.o.

Mława; Wrocław; Warszawa; Kobierzyce Dongseo Display Sp. z o.o.

Kobierzyce Dontex Polska Sp. z o.o.

Radzymin DSE Logistics Sp. z o.o.

Wrocław East West Connection – Joongpol Mielec Euro Tech Holdings S.A. Warszawa Fine Altech Mlawa Sp. z o.o.

Mława; Warszawa Gloria International Sp. z o.o.

Warszawa GMDAT (GM Daewoo Auto & Technology) Warszawa Grace International Co. Ltd. Janki k. Warszawy GS Engineering & Construction – GS Neo Tech Sp. z o.o.

– Hanjin Shipping Poland Sp. z o.o.

Warszawa HANYANG POLSKA Sp. z o.o.

Lublin Hanyang Precision Co. – Hanyang Za Elbląg; Świdnik

Heesung Electronics Poland Sp. z o.o.

Wrocław; Kobierzyce – Biskupice Podgórne HIT Electronics Sp. z o.o.

Ciechanów HUMAX Poland Sp. z o.o.

Bełchatów; Warszawa Hyundai Motors Poland Sp. z o.o.

Warszawa InPrint Sp. z o.o.

Kobierzyce ITS Global – J.K. Sp. z o.o. Źórawina Joongbo Chemical Ind Co – Joongpol Mielec KASIL Sp. z o.o.

Warszawa KHAN Sp. z o.o.

Sękocinów KIA Motors Polska Sp. z o.o.

Warszawa KINETIC Sp. z o.o.

Warszawa Koram Plastics Co. Warszawa Korea EXIM Bank Warsaw Branch Warszawa KOREA FUEL-TECH Sp. z o.o.

Zabrze KOTRA Warsaw branch Warszawa LG Chem Poland Sp.z o.o.

Wrocław; Kobierzyce – Biskupice Podgórne LG CNS Sp. z o.o.

– LG Display Poland Sp. z o.o.

Wrocław; Kobierzyce LG Electronics Warszawa; Mława LG Electronics Mlawa Sp. z o.o.

Warszawa; Mława LG Electronics Polska Sp. z o.o.

Warszawa LG Electronics Wroclaw Sp. z o.o.

Wrocław; Kobierzyce LG Innotek Poland Sp.z o.o.

Wrocław; Kobierzyce LG International – SK Eurochem Włocławek LG International Corp. (Warszawa office) Warszawa Lucky SMT Wrocław; Kobierzyce – Biskupice Podgórne MAXCALL WILANOW Sp. z o.o.

Warszawa Neotech Sp. z o.o.

Wieluń Panko Republic Sp. z o.o.

Warszawa Pantos Logistics Poland Sp. z o.o.

Warszawa POMATICS Żuromin POS-PPC Sp. z o.o.

Kobierzyce

Ring Net – ROCKET Sp. z o.o.

Gdańsk Saint-Gobain Sekurit Hanglas Polska Dąbrowa Górnicza Samhwa Poland Sp. z o.o.

Wrocław Samsung Deutschland Gmbh, Warszawa office Warszawa Samsung Electronics Poland Sp. z.o.o.

Warszawa Samsung/Amica Warszawa Samwha Sp. z o.o.

Kobierzyce SEONG AN CO. LTD Warszawa SHINCHANG Sp. z o.o.

Gliwice SK Eurochem Poland Sp. z o.o.

Włocławek SK Eurochem Sp. z o.o.

Włocławek SKC Chemicals Dzierżoniów SKC Haas Polska Sp. z o.o.

Dzierżoniów Space Poland Sp. z o.o.

Kobierzyce Ssang Geum Mlawa Sp. z o.o.

Warszawa; Mława Starion Wroclaw Sp. z o.o.

Kobierzyce SUN EXPRESS CORP. Warszawa Sung San Co. Ełk SUNGJIN CHEMICAL Kobierzyce TCS Sp. z o.o.

Wrocław TOPTONE Sp. z o.o.

Mława TOSEN Sp. z o.o.

Bełchatów Trimsol Sp. Z o.o.

Częstochowa Trion Sp. z o.o.

Warszawa UNWHA Industrial Co. Pułtusk Yoo-Jin ENC Wrocław YSP&C POLAND Sp. z o.o.

Pyskowice Zenith-MonAmi Sp. z o.o.

Częstochowa

Sources: PAIZ, Kotra, Embassy of Korea

July–August 2011

Korea in Poland

Gdańsk [1]

Elbląg [1]

Żuromin [1] Włocławek [3]

Wrocław [13] Złotoryja [1] Dzierżoniów [2]

Ełk [1]

Mława [6] Ciechanów Płońsk [1] Pułtusk [1] [1] Radzymin WARSAW [1] Józefin [36] Priszków [1] [2] Janki Sękocin Nw. [1] [1] Bełchatów Lublin Świdnik [2] Kobierzyce [3] Kielce [1] [14] [1] Wieluń Częstochowa Żurawina [1] [1] Pyskowice[2] Dąbrowa Górnicza Gliwice [1] Zabrze [1] Mielec [1] [1] [2] Cieszyn [1]

White goods production overtakes Germany, on back of SamsungAmica deal Production of white goods in Poland is set to rise by 0.5 percent this year, with an estimated 15.5 million various household appliances to come off factory lines across the country. The production figures mean that Poland has overtaken Germany in appliance manufacturing, with the country playing catch-up with Italy. The Polish appliance market is set to be worth a record 3 billion euro this year.

One of the catalysts for the rise is Korean giant Samsung Electronics, which bought out a plant producing refrigerators and washing machines from Polish company Amica in late 2009.

Samsung paid about USD 76 million to buy Amica’s factories, and the firm has since invested an additional USD 170 million. Samsung, which seeks to become the number one home appliance manufacturer in Europe, now has a low-cost production base in Europe. In the deal, Samsung acquired Amica’s 65 year old factory and their assembly lines located near Poznan,

where they manufacture refrigerators, washing machines, and microwaves.

These assembly lines are capable of manufacturing more than 600,000 home appliances annually.

A Samsung Electronics representative said: “This is the first time we have established a factory in Europe. This deal makes it more convenient for us to compete in the European market.” Up until 2010, most of Samsung’s appliance products sold in Europe were made in either China or other Southeast Asia countries.

15

July–August 2010

Equities

www.bizpoland.pl

CEE IPO Summit_

Eastern European firms storm the stock exchange The CEE IPO Summit, held in the last week of May at the Warsaw Stock Exchange, showed the strong interest of non-Polish firms in tapping into the Polish capital markets.

16

Poland has benefited as other stock markets in the region were ravished during the crisis, and, in the case of Hungary, the government nationalized all private pension funds, a key source of capital for companies. As “the only man left standing”, Poland and the Warsaw Stock Exchange have gained substantially as competitors have weakened.

In the opening address, Ludwik Sobolewski, president of the Warsaw Stock Exchange, said that the debate about competition between Warsaw and Vienna for regional leadership is decided. “The competition is over”, he said. He rattled off a series of numbers showing the Warsaw Stock Exchange’s definitive dominance over Vienna, including number of IPOs and market capitalization. “Even Austrian companies have decided to issue bonds in Warsaw via our Catalyst bond exchange”, he said, with barely concealed glee.

The format of the 2-day summit was a combination of seminars, discussion panels, and presentations.

Among the firms presenting were CIG Pannonia, an insurance firm that listed last year on the Budapest Stock Exchange. “We are thinking about expanding our business to Poland, and a listing in Warsaw would help with that”, said Sandor Benedek, responsible for investor relations. Currently there are just two Hungarian firms listed on the WSE: the oil&gas group MOL, and E-Star from the renewable energies sector. OTP Bank’s representatives also attended the CEE IPO Summit.

The largest foreign contingent was from Ukraine, with 7 firms presenting at the CEE IPO Summit. Media group UMH presented, as did a few agricultural firms, such as Creativ Group, a producer of sunflower-seed oil.

Galnaftogaz, which operates a network of fuel stations, and developer TMM, based in Kiev, also presented. Ukrainian battery producer Westa has successfully raised 120 million pln of new capital in June – and was subsequently listed on the Warsaw Stock Exchange on 15 June.

Two banks from Georgia – TBC and LiDiscussion panels addressed key sectors berty Bank - also attended. Bulgarian phar- that are represented by the Warsaw Stock maceutical firm Sopharma said they plan to Exchange, including agriculture, energy, list in Warsaw during 2011. And Serbian in- consumer goods, and banking. Geoffrey tegrated food-processor Victoria Group also Crossley of Eurocash S.A. presented the touted its business, saying it was “exploring” “David and Goliath” story of Eurocash’s possibilities of listing in Warsaw. rapid development from miniscule player Other firms presenting – each had 30 mi- to top of the retailing sector in Poland. He nutes for a short pitch – were MTI, Ukrnafta, said that the key to Eurocash’s success has MPG Group, TMM, Westa, and Polish firms been its “capital-light” business model and Kolporter and Wittchen. Wittchen’s presen- ability to grow rapidly by using “negative tation was led by Monika Wittchen, who working capital”. The firm has the highest said that the firm plans an IPO during 2011, sales per square meter of all retailers in Poand will use proceeds to expand further into land, he said. the luxury market, particularly with the Andrei Verevski of Ukrainian firm Kerlaunch of a new network of upscale shoes, to nel, which was the second Ukrainian firm be called “Wittchen Shoes”. to be listed in Warsaw, said the listing was

July–August 2011

Equities

www.bizpoland.pl

Monika Wittchen, Wittchen S.A.

Geoffrey Crossley, Eurocash S.A.

“a purely rational decision. We got advice velop new instruments and innovate fafrom our bankers to look more closely at Po- ster. He said that “companies want to list land, with a big investment appetite co- hybrids and subordinated debt”, instruming from domestic pension funds and ments that do not yet exist on the Warsaw insurance funds – as well as the fact that in- Stock Exchange. stitutional investors have no restrictions Sobolewski said that the WSE is targeting on investing in Poland”. “all countries of central and eastern Europe”, Czech-based New World Resources said and suggested that WSE may have a future listing in Poland was consistent with their role as catering to SMEs across Europe, as strategy focused on mining. “The future of the global exchanges such as NYSE and Lonmining in CEE is in Poland, so investors have been receptive to the investment theme. Our largest minority investors are Polish pension funds”, said Marek Jelinek of NWR. In addition to firms that are currently listed or plan to list, the CEE IPO Summit was successful at attracting investors, such as pension funds, investment funds, foreign investors, and retail Polish investors.

Slovenian bank Nova KBM, led by Matjaz Kovacic, said that the WSE needs to de-

don focus on mega-issues and global firms.

He also said that the WSE has expansion potential within Poland as “30% of the WIG20 firms are state-owned – this is great potential for us. Big chunks of ownership are locked up – but the government wants to exit these shareholdings.” He also said that a clear trend is that individuals in Poland will increasingly shift their savings from bank acn counts to equities and mutual funds.

Top Shopping Centres

2012

in Poland

Esotiq: One of the most recent firms to list on NewConnect is the apparel firm Esotiq & Henderson SA, based in Gdansk. The firm is the 74th firm to list in 2011, and the 255th to list on the NewConnect alternative market. The firm raised 15 million pln by listing new shares, and the owners also sold 15 million pln of existing shares. Esotiq’s top promoter is model Joanna Krupa. Esotiq operates in the underwear market, selling lingerie under the brand Esotiq and mens underwear under the brand Henderson, with all production in the Far East. Esotiq operates a network of 32 retail salons in shopping centres, 74 franchised retail locations, and an additional 13 partner retail outlets.

4th edition

distribution at MIPIM, Cannes

Enquiries to Magdalena Adamczyk: madamczyk@biznespolska.pl

17

July–August

Outsourcing

www.bizpoland.pl

More Polish cities enter the battle for piece of the fast-growing Outsourcing pie As Poland’s leading sharedservices cities strive to attract more “knowledgebased” services, smaller cities are investing in infrastructure to support their bid for outsourcers

Process areas SSCs & BPOs are planning to expand their services in the next 18-36 months

Legal Services

82%

Innovation Services

72%

52%

HR

68% 68%

Software Development

66% 63% 59%

Finance & Accounting Marketing & Sales Call Centers

56%

Supply Chain

53%

Knowledge Services 2010

82% 66%

2009

Source: Duke University Offshoring Research Network Service Provider Survey

of support for the SSC/outsourcing sector continues to grow. New modern offices are being built specifically targeting the needs of investors from the sector, city officials are increasingly aware that quality-of-life is key to keeping qualified workers, and universities are listening (sometimes) to the human resource needs of private enterprise. Even the mostly-friendly competition between the two main associations serving the industry – ABSL and ASPIRE - benefits investors and managers in the sector, who attend their trainings, seminars, conferences and networking events.

as G & il O

an

d Fi In nn su a ra ce nc e So ft w an ar d e so H ci ea al lt as h O th sis ca er ta re nc m e an uf ac Te tu le ri co ng m m un ic Pr at of io es ns sio na ls er vi ce & s Ph ar B m io ac te eu ch tic al U til Ed iti uc es at io n se rv ic es

45 40 35 30 25 20 15 10 5 0

18

76%

58% 59% 56% 61%

Expected high growth in healthcare went mostly unrealized in 2010. FSI, Telecom and Software saw strong levels of growth.

Top client industries in 2009

70%

55%

IT Infrastructure

With three Polish cities now ranked in the Top 100 outsourcing cities in the world, city officials across the country continue their bid to get into the top ranks. Driven by the political “win” of attracting more jobs for young educated workers in the city, as well as the economic benefits of higher local tax revenues, cities are hiring world-class consultants and investing in infrastructure to make their city more attractive for BPO and SSC investors.

Krakow further solidified its reputation, by taking the number one ranking among “emerging” cities world-wide and 11th position overall, wedged one notch behind Shanghai and one ahead of Beijing. Warsaw comes in at 38th and Wroclaw at 84th.

Yet no city can rest on its laurels. Competition is coming from all corners of the globe as well as from Poland’s backyard – as cities such as Szczecin strive to establish their position, and “eastern” Polish cities such as Lublin and Kielce tap into EU grants to turbo-charge their infrastructure development.

The net result of keener competition amongst Polish cities is that Poland’s ecosystem

100%

Top client industries in 2010

Anticipated growth in 2010

Source: Duke University Offshoring Research Network Service Provider Survey (2007-2010)

Some cities are taking the competition very seriously. Lodz and Katowice – so far lagging the leading cities – have hired world-class consultants McKinsey to advise them on development strategies, including in the outsourcing/SSC sectors.

From our many meetings and interviews and research for this publication, it’s clear that Poland’s biggest natural advantage is its highly-qualified pool of university graduates, with strong language and technical skills.

The match with the needs of BPO and SSC employers is excellent, since these investors need employees with European and English language skills, accounting, and IT and software programming skills. Poland’s educational traditions, steeped in liberal arts and technical/ engineering, are serving the sector well. Enrollment at Polish universities is nearly 2 million today, and the large number of annual graduates, spread out among many cities, is an important “feeder” for the long-term growth of Poland’s outsourcing sector.

While the numbers can’t compete with the armies of Indian laborers, the skills-sets allow Polish cities to move into higher value-added services, such as financial analysis, pharmaceutical research, and software development. For example, Mentor Graphics’ biggest European R&D offices are based in Katowice with more than 200 employees, Motorola employs more than 1100 at its R&D facilities in Krakow, and Samsung Electronics main European software

July–August 2011

Outsourcing

www.bizpoland.pl

Wrocław’s Main Market Square

Criteria used to select future SSCs (maximum 100 points) 26

Qualified employees

30

Labor costs and legislation

21 28

Proximity to core business locations(s)

14 10

Location support infrastructure

13 12

Economic environment

9 7 5

Quality of life Other

Growth among Polish firms and the public sector

9 9

Co-location with other functions 4 1 0

Key Factors Influencing the choice of location of the current SSC Key factors influencing the choice of location of future SSCs Source: PwC Shared Service Centres – The Second Generation 2011

development offices employ more than 200 engineers at offices in Warsaw. McKinsey has set up a KPO centre in Wroclaw, as has Indian firm Irevana, which employs MBAs, chartered accountants, and actuaries at its KPO Mathematics centre.

“Virtual circle” All of the activity in the sector - within the cities and amongst the cities - means that the skill sets and the ecosystems of support are constantly improving.

July–August 2011

compared to the high-mobility rates in the U.S. But workers move frequently within a city to a different outsourcing employer, meaning employers are offering more employee benefits such as private healthcare, and more intellectually-stimulating growth opportunities to retain their best workers. Top employees want to take on more complex tasks, and new project work such as KPO, is a good way to further develop staff skills.

Consultants, HR advisors, office developers and brokers, accounting firms and law firms often have a national network of offices throughout Poland, serving clients in Szczecin as easily as in Rzeszow. Increasingly, they offer tailor-made solutions for shared-services and outsourcing clients. And those learnings and solutions generally benefit the next client from the sector.

While some workers have shown that they are open to moving from one city to another, labor mobility in Poland remains low, when

Poland can expect annual growth of as much as 30% over the next five years, say some experts. Employment numbers in the sector will grow substantially. While some outsourcing firms are quite content with their numbers and costs, others are already looking for growth from new clients and ways to reduce costs further. Southwestern, based in Ireland, set up operations in Lodz in 2007 and has successfully developed a client-base in the public sector and health services sector in Ireland and the UK. In Poland, these sectors remain virtually untouched, and a source of deep long-term potential. And while most of the activity in Poland’s outsourcing sector is driven by international firms, Polish companies are increasingly aware of the potential to reduce

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Outsourcing

to all BizPoland Magazine subscribers 20

486 436

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96

CEE

North America

Total number of SSC's today

Latin America

Asia-Pacific

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45

41

69

60

9 Europe Western

Middle East and Africa

Total

Total number of SSCs anticipated in 3 years Source: PwC Shared Service Centres – The Second Generation 2011

costs, use capital more efficiently and remain focused on their main business.

Yet the core business proposition of outsourcing – the labor arbitrage that is the very foundation of the business model – begins to weaken when serving Polish firms.

Several firms have set up operations in the Ukrainian city of Lviv to serve Polish clients, taking advantage of labor cost savings of

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City-centric Approach City-level analysis has always been the best approach in identifying corresponding service delivery strengths. As compared to country-wide analysis, a city-centric approach allows a more granular investigation of the inherent capabilities of and the opportunities for each potential city.

City-centric assessments also receive greater traction from large service providers, as cities can better decouple themselves from the broad or oftentimes ‘generic proposition’ of the country.

Cebu City for example has high potential to become a global KPO player but the city’s image is often overshadowed by the Philippines’ voicebased BPO reputation.

For Tier II cities, decoupling will become an increasingly necessary process, especially among emerging cities with very specific skill set propositions. Decoupling from the country image will entail an efficient highlighting of the local value propositions and a more focused marketing and promotions strategy.

Total number of SSCs by region today and planned for next 36 months

180

More Polish cities enter the battle for piece of the fast-growing Outsourcing pie continued from page 19

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more than 50% from the Polish base. The city of Lviv, which was part of Poland before the war, has a large Polish population, and nearly 40% of the population speaks Polish.

Polish-owned call centers, data processing, and accounting centers have already been set up in Ukraine, and the trend is likely to continue as Polish labor costs increase.

Costs, costs, costs – Central Europe pulling work from Western Europe In a recent research report released by PWC (“Shared Service Centres-the 2nd generation”) in May 2011, almost 50% of survey participants have already consolidated their existing SSCs or are currently in the process of doing so. Therefore, the total number of SSCs in western Europe and North America will decrease. However, the number of SSCs will increase in CEE and the Asia-Pacific region.

The clear majority of companies sees more potential for selective outsourcing of finance processes to a low-cost country outside of the company’s region (offshoring).

The key criteria for selecting SSC locations in the past were availability of qualified staff and low salary levels. These criteria will also be used to select the location for future SSCs. Indeed, companies will focus even more on these aspects.

The survey results show that relatively little weight is given to co-location with other corporate functions and the respective economic environment, as most existing SSC locations have become so mature that these criteria have a lower relevance. The main reasons for implementing an SSC were standardisation, automation, compliance, cost reduction and quality improvement. The relevance of standardization and compliance will become even more important in the future.

July–August 2011

Outsourcing

www.bizpoland.pl CEE trumps Asia-Pacific on quality Many companies that decide to implement an SSC want to reduce costs. Therefore one of the most important criteria for selecting the SSC location is the level of labour costs. Asia-Pacific is consequently the region with the highest growth rates regarding new SSCs. SSCs in Asia-Pacific together with SSCs in CEE - show the highest reduction rates with regard to operating costs.

When it comes to quality improvements and process standardization, however, western Europe and CEE show better results compared to the other regions. These cen-

tres also show the highest productivity improvement rates.

The lowest average performance level is achieved by SSCs based in the Latin American region.

Services provided – mass transactions are still the main services Accounts payable and receivable accounting as well as asset and general ledger Accounting are still the typical services provided by finance SSCs. Processes such as treasury, procurement and external reporting are provided by significantly fewer SSCs. The results show that the majority of companies only transfer transactional

processes, that are easy to standardize and have a low strategic relevance, to their SSC. However, it is expected that the percentage of complex services will increase in the future.

Overall the very high importance of wage levels, legislation and qualified workforce availability will probably result in a trend to establish future SSCs rather in the Asia-Pacific and CEE regions than in Western Europe or the Americas.

As a result the total number of SSCs in Western Europe and North America will decrease while the number of SSCs in Asia-Pan cific and CEE will slightly increase.

The Top 100 Outsourcing Cities City

Country (Region)

Established 1 2 3 4 5 6 7 8 9 10

Bangalore Mumbai Delhi (NCR) Manila (NCR) Chennai Hyderabad Dublin Pune Cebu City Shanghai

India (South Asia) India (South Asia) India (South Asia) Philippines (Southeast Asia) India (South Asia) India (South Asia) Ireland (Western Europe) India (South Asia) Philippines (Southeast Asia) China (East Asia)

Emerging 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

Kraków Beijing Buenos Aires Cairo São Paulo Ho Chi Minh City Dalian (Dairen) Shenzhen Curitiba Colombo Hanoi Prague Kolkata Santiago San José Chandigarh Budapest Johannesburg Toronto Rio de Janeiro Kuala Lumpur Coimbatore St. Petersburg Brno Guangzhou (Canton) Mexico City Belfast Warsaw Singapore Chengdu Jaipur Monterrey Bucharest Brasília Accra Moscow Tianjin Guadalajara Bratislava

Poland (Eastern Europe) China (East Asia) Argentina (South America) Egypt (Middle East and Africa) Brazil (South America) Vietnam (Southeast Asia) China (East Asia) China (East Asia) Brazil (South America) Sri Lanka (South Asia) Vietnam (Southeast Asia) Czech Republic (Eastern Europe) India (South Asia) Chile (South America) Costa Rica (Central America) India (South Asia) Hungary (Eastern Europe) South Africa (Middle East and Africa) Canada (North America) Brazil (South America) Malaysia (Southeast Asia) India (South Asia) Russia (Eastern Europe) Czech Republic (Eastern Europe) China (East Asia) Mexico (Central America) U.K. (Western Europe) Poland (Eastern Europe) Singapore (Southeast Asia) China (East Asia) India (South Asia) Mexico (Eastern Europe) Romania (Eastern Europe) Brazil (South America) Ghana (Middle East and Africa) Russia (Eastern Europe) China (East Asia) Mexico (Central America) Slovakia (Eastern Europe)

July–August 2011

City 50 51 52 53 54 55 56 57 58 59 60 61 62

Country (Region)

Montevideo Uruguay (South America) Sofia Bulgaria (Eastern Europe) Tallinn Estonia (Eastern Europe) Halifax Canada (North America) Ljubljana Slovenia (Eastern Europe) Casablanca (Dar-el-Beida) Morocco (Middle East and Africa) Kyiv Ukraine (Eastern Europe) Alexandria Egypt (Middle East and Africa) Bhubaneswar India (South Asia) Glasgow City U.K. (Western Europe) Istanbul Turkey (Middle East and Africa) Cork Ireland (Western Europe) Jakarta Indonesia (Southeast Asia)

Aspiring 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95

Nizhniy Novgorod Bogotá San Juan Lima Thiruvananthapuram Medellin Davao City Xi’an Córdoba Ahmedabad Cape Town

Russia (Eastern Europe) Colombia (South America) Puerto Rico (Central America) Peru (South America) India (South Asia) Colombia (South America) Philippines (Southeast Asia) China (East Asia) Argentina (South America) India (South Asia)

South Africa (Middle East and Africa) Taipei Taiwan (East Asia) Recife Brazil (South America) San Antonio, Texas U.S.A. (North America) Bangkok Thailand (Southeast Asia) Leeds U.K. (Western Europe) Penang Malaysia (Southeast Asia) Seoul South Korea (East Asia) Perth Australia (Australian) Bucaramanga Colombia (South America) Asunción Paraguay (South America) Wroclaw Poland (Eastern Europe) Amman Jordan (Middle East and Africa) Birmingham, Alabama U.S.A. (North America) St. Louis, Missouri U.S.A. (North America) Santa Rosa, Laguna (or Metro Laguna) Philippines (Southeast Asia) Valparaíso Chile (South America) Port Louis Mauritius (Middle East and Africa) Mysore India (South Asia) Indianapolis, Indiana U.S.A. (North America) Dubai UAE (Middle East and Africa) Oklahoma City, Oklahoma U.S.A. (North America) Belgrade Serbia (Eastern Europe)

City 96 Campinas 97 Novosibirsk 98 Iloilo City 99 Tunis 100 Bacolod City

Country (Region) Brazil (South America) Russia (Eastern Europe) Philippines (Southeast Asia) Tunisia (Middle East and Africa) Philippines (Southeast Asia) Source: Gobal Services and Tholons, May 2011

Kraków has risen to Number 1 in a ranking of the top 50 “emerging” global outsourcing cities in 2010.

In the annual ranking, produced jointly by outsourcing consultancies Global Services and Tholons, Kraków has moved up from 4th place last year and from 5th in 2008. Prague is the next best placed city in CEE in 12th place, with Warsaw the only other Polish city in the top 50. As the top placed emerging city, Kraków’s next challenge is to break into the top 10 “established” cities ranking, dominated by cities in India and the Philipinnes. Andrew Hallam, General Secretary of ASPIRE association based in Krakow commented: “This ranking dispels the notion that Kraków is overheated. It is quite the reverse. The increasing maturity of the market and the burgeoning ecosystem which supports the continuing development of the sector mean that Kraków goes from strength to strength.

31 languages are now served from Kraków and higher value processes are migrating here as a result of the developing capability in the market, the growing pool of outsourcing professionals – those that have gained their experience in Kraków and those from outside the city attracted by what the industry in Kraków has to offer – and equally young people coming out of the universities, who are increasingly attuned to the needs of the market.”

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Manufacturing and FDI ICEX and PAIZ sign Memorandum of Understanding The Spanish-Polish Cooperation Agreement signed on June 14th, 2011 is the beginning of joint promotion and business initiatives.

The two-day Polish-Spanish Forum for Investment and Business Cooperation was inaugurated by representatives of both countries: the Deputy Minister of Economy Grażyna Henclewska, Ambassador of Spain in Poland Francisco Fernandez-Fabregas, PAIZ President Sławomir Majman and the Deputy President of the Spanish Institute for Foreign Trade ICEX Fernando Salazar.

Fernando Salazar the Deputy President of ICEX focused on the need to intensify trade and investment relations between Poland and Spain.

He mentioned some of the key sectors which offer most business opportunities to Spanish investors: infrastructure, railway and aviation sectors as well as projects connected with the production of wind energy. “Spanish companies have the know-how and capital. We can adapt to local market and we have much experience on international markets. And here in Poland, in many fields, such as tax law, we feel like at home”, said the deputy President of ICEX. Cooperation Agreement signed between PAIZ and ICEX aims to promote the two countries and business opportunities among entrepreneurs in Poland and Spain.

Spanish companies have so far invested in Poland a total of EUR 4 billion, mainly for projects in infrastructure, real estate, production of equipment for the renewable energy sector as well as automotive and BPO sector.

Trade mission to Ukraine

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The Embassy of Ukraine in Poland together with the Ukrainian Chamber of Commerce and the State Administration of the Dnepropetrovsk Oblast are organizing a trade mission to the oblast on July 7-8, 2011.

The trade mission is geared towards the management staff of Polish companies that are interested in finding commercial partners and research opportunities in one of the most developed regions of Ukraine. The organizers invite Polish companies operating in the engineering industry, agriculture, manufacturing, food processing, construction and bio-energy sectors.

Organizers of the mission will arrange an official meeting with the Governor of Dnepropetrovsk Oblast State Administration and with the management of state institutions operating in the Oblast as well as bilateral meetings and visits to leading business enterprises of the Oblast and a presentation of the economic potential of the region and its business conditions. For

more information concerning the mission contact: Anastasia Weżnewets, tel: +48 530 062 030. To register please send a notification via email at: borodiy@ukraine-emb.pl.

Polish-Azerbaijani economic seminar

www.bizpoland.pl Polish direct investment enterprises (EUR 742 million), positive reinvested earnings (EUR 670 million), and net inflow of debt instruments (EUR 64 million). The high level of inflow of equity capital indicates that investors are starting more new projects.

According to the Polish Foreign Investment Agency, the greatest number of projects come from the USA (36), the UK (15), South Korea (14) and China (13). Among sectors it is the automotive sector (25) that is the most active, followed by BPO (24) and the machinery sectors (14).

Japanese investment in Katowice Hasan Aziz ogly Hasano, Ambassador of the Republic of Azerbaijan to Poland

During the June seminar Polish and Azerbaijani representatives discussed ways of reviving the Polish-Azerbaijani economic relationship.

The seminar was attended by: Gummammad Javadov, Deputy Minister for Industry and Energy in the Republic of Azerbaijan and Hasan Aziz ogly Hasano, Ambassador of Azerbaijan to Poland.

Minister Gummammad Javadov presented the current economic situation in Azerbaijan. The Minister emphasized the importance of foreign investments for the Azerbaijani economy, and the country’s aim to diversify the limited set of industries (energy, for example) which now dominate in the Azerbaijan economy. He said that the country is encouraging investment in the food and machine sectors as well as the production of construction materials.

Director Elżbieta Bodio from the Polish Ministry of Economy said that she hoped the meeting would be good preparation for the Azerbaijani visit of President Bronisław Komorowski which will take place in July this year. “The visit of the President will be accompanied by a Business Forum in Baku which will be a chance to intensify business contacts established during this visit to Poland”, she said.

Azerbaijani companies represented the automotive, metallurgy, textile and insurance sectors.

FDI up 23% FDI inflow for the first four months of the year totalled EUR 5.9 billion, a 23% increase from the previous year. In just the month of April, the balance of foreign investment in Poland was positive and was EUR1.5 billion. This balance comprised: net inflow of equity capital to

Yamazaki Mazak, the world’s largest producer of machine tools for metal cutting, will build a technology centre in Katowice.

In 2004 at the beginning of its operations in Poland Yamazaki Mazak chose Katowice due to the location amongst industrial suppliers and access to highly- skilled engineering staff. The firm plans to build a new Technology Centre in Katowice, and will serve as a place for the company’s latest technologies in metalworking and for professional training of specialists.

Yamazaki Mazak was founded in 1919 in the Japanese city of Nagoya. The Japanese manufacturer of weaving machines developed relatively quickly and started producing machines for the processing of wood and metal. In the 1960s Yamazaki Mazak entered the international arena, starting to export its products to the U.S. The firm has nine manufacturing facilities (located in Japan, Singapore, China, USA and UK), employs approximately 7,000 employees, of which about 900 are in Europe. Yamazaki Mazak is the official supplier to Formula 1 Team Vodafone McLaren Mercedes, supplying machine tools, on which this team’s cars are produced.

Polish Mars exploration rover wins “best in the world”, beats NASA-backed team The Polish Robot Magma2, built by a team from the Białystok University of Technology, won the University Rover Challenge (URC), a prestigious international competition in the United States. Two other Polish robots ranked fourth and sixth.

Magma 2’s creators beat Canadians from York University and Americans from Oregon State University who had received the support of NASA. “We proved that Polish constructors are perfectly able to compete with international partners in the field of mobile robotics and we clearly marked our aspirations to join the group of countries which have been exploring the uni-

July–August 2011

Events

www.bizpoland.pl

France – Poland friendly match at Legia Stadium Euro 2012 co-hosts Poland lost 1-0 to France in a friendly that underlined their defensive woes. Defender Tomasz Jodlowiec deflected a shot by France midfielder Charles N’Zogbia into his own goal in the 12th minute, accidentally beating his own keeper Wojciech Szczesny, for the only goal of the game.

France, meanwhile, put in an underwhelming performance which nonetheless extended manager Laurent Blanc’s unbeaten run to 10 games. Like fellow hosts Ukraine, Poland have an automatic berth at Euro 2012 and must rely on friendlies to hone their skills.

Hopes for the France match had been high, after Poland beat an albeit under-strength Argentina 2-1 in Warsaw, on the back of away games in March which saw them draw 0-0 with Greece and lose 2-0 to Lithuania.

The match venue was moved, at the last minute, from Gdansk’s new PGE Arena, due to delays in opening the stadium. The Legia venue in Warsaw impressed its VIP guests in the Gold and Silver sections, and despite the last-minute move, also filled its VIP skyboxes.

The next “friendly” between Poland and Germany, originally planned to be at Warsaw’s National Stadium, will be held on 6 September n – but at the Gdansk PGE Arena.

verse. This is especially important in the context of Poland’s efforts to join the European Space Agency”, said Mateusz Józefowicz from the Mars Society Polska.

The URC competition was held at the Mars Desert Research Station (MDRS) in Utah. For three days the teams had to perform difficult tasks, such as reconnaissance, medical package delivery to a wounded astronaut, remote equipment servicing and the search for traces of life.

Extreme conditions were an additional difficulty - the rovers had to operate in very high temperature and in dust which was supposed to create conditions similar to the conditions on Mars.

The winners of the challenge, apart from financial awards, will have the chance to present their machine at Mars Society Convention where they will have the chance to meet NASA representatives and people from companies which produce equipment for space research.

Magma 2 has a relatively simple construction and is made of light materials. The robot with basic equipment weights 30kg. “This was the first time in the contest history that a flying robot was used. Łazik Magma2 introduced a completely new quality when it comes observation tasks - not only on the URC contest but ge-

July–August 2011

nerally in the mobile robotics. We were used to such technologies in science-fiction productions. Now they stars to be used in reality”,said the winners.

Last year the prototype of Magma 2, Magma created by a team from the Białystok University of Technology and the Mikołaj Kopernik University in Toruń ranked third in the contest.

The two other robots from Poland were constructed by teams of students from the Wroclaw University of Technology (robot Scorpio ranked 4th) and by students and graduates of the University in Toruń (Copernicus robot was classified as 6th).

The Centre will create a team for Quantitative Strategies as well as Legal Support and Compliance. Wrocław’s Centre of Excellence currently employs 550 people and provides support to departments as: private banking, legal and compliance with regulations as well as those departments that support the bank’s functions in Europe, North America and Asia.

Credit Suisse is one of the biggest employers in the financial and banking sector in Lower Silesia region. Besides Wrocław, the bank has “Centers of Excellence” in Singapore, Raleigh (North Carolina) and India (Bombay and Pune), providing support to all of the bank’s branches.

Credit Suisse to employ more than 800 people in Wrocław Shared Services Centre

Gedia Poland, the supplier of car body press parts, invests 20 million Euro in Nowa Sól

The Wrocław centre will be the second largest office of Credit Suisse in the whole EMEA region. Mr. Erich Niederhäuser Chief Executive Officer of the Wrocław’s Centre - said that the planned employment growth reflects directly the quality of the Centre’s work since it was opened in 2007.

The nature of tasks performed in Wrocław is evolving as they are becoming more complex and more knowledge-based.

The firm plans construction of a new production hall with modern press, an assembly hall for car parts, and construction of a hot pressing line. The brand new projects target the automotive industry and are based on new bonding technology - aluminum welding.

Gedia Poland is the largest employer in Nowa Sól. It employs 970 people. The company is placed at the 418th position in the ranking of n the largest employers in Poland.

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VESTY photo

ARABIAN HORSE DAYS POLAND 2011

Janów Podlaski 5-9th of August

33rd POLISH NATIONAL SHOW Janów Podlaski / 5-7th of August, 2011

42nd PRIDE OF POLAND SALE Janów Podlaski / 7th of August, 2011

OPEN DAYS AT THE STATE STUDS: JANÓW PODLASKI, BIAŁKA, MICHAŁÓW 8-9th of August, 2011

Information: POLTURF Al. Wyścigowa 4-B/84, 02-681 Warsaw, Poland phone (48 22) 857 76 44, fax (48 22) 857 76 47, biuro@polturf.pl

www.prideofpoland.pl