BizPoland Magazine - March 2015

March 2015 vol. 7 no. 2(48) Price: 20 zł

“This will be huge” Prop Trader Ian Firla targets niche of corporate FX needs

Advisory:

Energy:

Equities:

Matraszek on the coming Elections

Shale gas gasps

Mobius keen on Poland

FDI Poland Investor Awards 15 October 2015

3rd annual FDI Poland Investor Awards, recognizing top foreign companies operating in Poland

Nearly 300 international guests.

Top executives from 23 countries.

Awards categories for 19 countries/regions.

Special discounts for 17 Chambers of Commerce members: UK, France, Japan, Korea, Poland-China Chamber, Spain, Portugal, Switzerland, Austria, Germany, US, Italy, Scandinavia, Belgium, Netherlands, Canada, Ireland.

Premier Sponsor

Awards Sponsors

Associated Sponsors

Supporting Chambers of Commerce

Organizer

Organizer

WWW.FDIPOLANDAWARDS.PL

FDI Poland Investor Awards 15 October 2015

FDI Poland Investor Awards 2014 Winners Top Technology Park of the Year

Top Special Economic Zone of the Year

Top CEE (Central East Europe) Investor

Top German or Austrian Investor

Top Swiss Investor

Top French Investor

Top Benelux Investor

Top Iberian Investor

Top Scandinavian Investor

Top UK/Irish Investor

Top Indian Investor

Top Japanese Investor

Top Korean Investor

Top Chinese Investor

Top Investor of the Year – Rest of World

Top Canadian Investor

Top U.S. Investor

FDI Poland Investor Awards 2014 Jury Steve Rank

Marek Matraszek

Senior Trade Commissioner - Central Europ, Australian Trade Commission

Founding Partner, CEC Government Relations

Karl Schmidt

Minister-Counsellor, Embassy of France

Commercial Counselorm, Austrian Embassy in Warsaw

Antoni F. Reczek

Chairman, British-Polish Chamber of Commerce

Nicolas Lepage

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

Edward Zhu

Jean-Marc Fenet Michael Kern

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

Kari Vähäkangas Commercial Counsellor, Head of Finpro Poland

Amit Lath

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

Mike Hogan

Commercial Counsellor, Embassy of Ireland

Tal Harmelin

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

Yoshito Okada

President / Zwiazek Pracodawcow Shokokai, Japanese Chamber of Commerce

Kwon Dong-seok

Counselor, Embassy of the Republic of Korea in Poland

Inese Sulzanoka

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

Ernesto Malda

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

Stefan Bekir Assanowicz

Chairman, Polish-Spanish Chamber of Commerce

Vladislav Chlipala Commercial Counsellor, Embassy of the Slovak Republic

Chi-young Chen

Slawomir Majman

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

Antonio Castro

Director, UKTI Poland

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

vicepresident, PolskoChinska Rada Biznesu

WWW.FDIPOLANDAWARDS.PL

Martin Oxley

Nguyen Duc Thanh Commercial Counselor, Vietnam Embassy

Table of Contents Cover Story 5

“This will be huge”

BPO/Shared Servies News 8

CEE Shared Services and Outsourcing Awards

March 2015

vol. 7 no. 2(48)

Advisory: (13) A plea for some common sense (14) Scary acronyms that are changing international business (15) The Final Straight (16) Renewable Energies Act final version adopted

Energy

(17) Shale gas dreams boosted by San Leon gas discovery; EBRD targets renewable energy sector for investment (18) CCoal miners clash (19) Australian Balamara bullish on Polish coal

Equities 20

Mark Mobius of Templeton Emerging Markets Group keen on Poland

FDI Investment

(22) Tenders in for 70 Military Helicopters (23 ) eWork Scandinavia sets up operations in Poland; Poland signs agreement for World Exposition in Milan, EXPO 2015; Contest for the store operator at EXPO 2015; MTU Aero Engines in Aviation Valley gets bigger; Polish farmers to continue protests against new land sale laws; Polish President on business mission to Japan; S3 - The Route linking Sweden to Greece via Poland; New PLN 9 million investment in machine factory; Samsung Electronics launches first appliances factory in EU – in Poland; New programme for Śląsk and Małopolska to attract investors

City Investment News

(27) Gdańsk/Gdynia (29) Łódź (30) Kraków (31) Wrocław; Katowice (32) Poznań

Chambers of Commerce News

Polish capital market awards

Leadership & Discipline 38

General Manager and Editor: Thom Barnhardt (tb@bizpoland.pl) Editorial staff and writers: Leon Paczyński, Monika Tutak Advertising Sales: Gerard Szrama (gerard@biznespolska.pl) tel.: 022 831 7062 Research: Ula Tsytsyk (ula@biznespolska.pl) Graphic Design: Sławek Parfianowicz (sparfianowicz.wordpress.com)

Subscribe to BizPoland Magazine Annual subscribers to BizPoland Magazine receive our monthly magazine, as well as all our business supplements for free: CEE Shared Services & Outsourcing, City Invest Poland, Top Shopping Centres Poland, Wind Energy Poland, Food Exports Poland.

500 zł for one year.

(33) Austria; Finland; Portugal (34) Scandinavia; Taiwan (35) U.S.; Vietnam

Events 36

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

Marcin Gortat: The Forbes Interview

Details at subs@bizpoland.pl or call +48-22-831-7062

www.bizpoland.pl

Cover Story

“This will be huge” Prop Trader Ian Firla targets niche of corporate FX needs OSTC Poland, the first proprietaty futures trading firm in Poland, sees a big business opportunity in targeting the growing foreign exchange (FX) needs of Poland’s corporate market. While Poland’s large banks are looking after their largest clients first, OSTC sees a niche between the retail and banking FX markets.

“This will be huge”, said Ian Firla in a recent interview in his offices with BizPoland Magazine.

Clients in the mid-market may be under-served, suggested Firla, adding that the energy sector and export sector are particularly of interest for the market of “deliverable” foreign exchange.

Firla and OSTC pioneered proprietary trading in Poland, with the establishment of OSTC Poland in 2005. “Proprietary

“We’ve become one of the biggest in the world in terms of transacted volumes for exchangetraded futures”, said Firla. He said that the OSTC is trading FX volumes of about 15-20 million pln each month now.

“Ten years ago, we started with very small volumes.

Now we are trading well over 100 million annually”.

The proprietary trading side of OSTC has no clients, so its employees are trading the shareholders’ funds against banks and hedge funds via recognised exchanges such as LIFFE, EUREX, the Intercontinental Exchange (ICE).

As a “market neutral” trading company with a risk-averse disposition, the firm focuses on trading the “spread”, mostly in interest rate and

countries such as Poland, India or Hungary, which offer lower running costs and an equally adept workforce, Firla argues that lower personnel costs are not the reason for operating from Poland. “We’re here because we think there is a great deal of talent here”, said Firla, suggesting that the absence in Poland of large prop-trading firms like Goldman Sachs and JP Morgan puts OSTC at an advantage.

OSTC maintains strong contacts with global exchanges such as Liffe and the Chicago Mercantile Exchange, and operates a new line of business in educational training working with CME and muliple universities across Poland.

The global derivatives market is still largely unknown in Poland and the company considers its budding educational initiatives as one way to raise awareness of the market’s potential.

“Ten years ago, we started with very small volumes. Now we are trading So with a successful track-record well over 100 million annually” of proprietary trading, OSTC is launching two new business lines: education and FX for corporates. trading was not being done in FX futures. Firla said that traders “There is a strong demand for Poland”, said Firla. Many bright trade high volumes on so-called trading knowledge”, said Firla. minds who wanted to trade had “calendar spreads”, which reduces The new business line of to move to London or New York their risks relative to outright posieducation will target traders – or trade retail for themselves. tions. The firm is active in trading of and treasury departments of top Firla was born in Poland, and fixed-income securities, commodities, banks, energy companies and left to the United Kingdom in 1974 energy, and interest rate contracts. large exporters, with the intenat the age of 4. In 2005, Firla was While several prop houses have tion of purely education, “not tapped by OSTC’s UK team to set set up their futures operations in to sell a product”, according to up the Poland operations, with the company owned amongst Firla and the five UK-based directors. Prior to OSTC, Firla had his own IT consultancy and was living in Milan.

In addition to running the Poland operations, Firla serves as the group Chief Operations Officer.

OSTC started with one office in Warsaw and nine traders. As of early 2015, OSTC Poland, operating from offices in Warsaw, Poznan, Lodz, Krakow, Gdansk and Wroclaw, employs more than 250 traders and a back office of about 30 people. These top cities have large student centres and top class economics faculties.

2015 March

5

www.bizpoland.pl

Cover Story Firla. He is keen to underline that OSTC’s education business is not a “Trojan horse” to sell its products, suggesting that competing educational programs are often used to promote that bank’s FX/ futures solutions exclusively.

The firm’s educational initiatives are being pursued in collaboration with multiple universities, including the University of Warsaw’s economics faculty, which will offer trading training programs in cooperation with CME. A kind of “training wheels” for students to hone their skills, the program aims to be a feeder to banks and other traders like OSTC who need well-trained traders for their operations.

OSTC has planned 50 eductional programs in 2015,

from the university-based to tailor-made trainings inside corporates and banks.

Disruptive FX deals But the expansion into the FX business clearly has the potential for explosive growth.

OSTC will target finance directors and cash and treasury-managers of businesses with frequent and sizable deliverable foreign exchange needs. For example, an importer of Chinese clothing must settle the trade, giving rise to a foreign exchange need. Or an exporter of Polish meat must clear his final deal, converting foreign currency to Polish zloty.

For the most part, these foreign exchange needs in Poland are handled by the client’s bank.

OSTC believes that this huge market (not just in Poland, but globally as evidenced by their push into FX in the UK homebase) is poorly served, and that the margins charged by banks are too high and their service quality too low. “Banks are looking after their biggest clients first”, said Firla, suggesting that the large swath of middle-market clients could be served better.

OSTC’s Firla said the firm will look to form long-term, transparent relationships with companies where any margins or fees it earns are fully disclosed. It will also offer a free audit to companies where it will assess historic foreign exchange transactions and demonstrate any savings that could have been made.

OSTC UK expands aggressively into FX for corporates A Welsh, serial entrepreneur raised almost £1m – in mid2014 - to launch a new foreign exchange business. To be known as OSTC Foreign Exchange, the firm aims to serve companies exchanging large sums of money.

Debra Williams, a former member of the executive board of Tesco Bank, former managing director of online price comparison site Confused.com and a non-executive director of Ospreys Rugby, has launched the venture in partnership with OSTC, the largest derivatives trading house in the UK outside London.

OSTC Foreign Exchange (OSTC FX) has secured a £400,000 grant from the Wales Economic Growth Fund, which has been complemented by private investment from the shareholders in the new business: OSTC and Debra Williams.

OSTC FX will target the finance directors of businesses with overseas trading activities. Currently, these businesses either use their banks to exchange money or are forced to call around London-based brokers seeking a better deal.

OSTC FX’s offering will be pan-UK and the business is already exploring the possibility of opening offices in other UK cities. OSTC FX will look to form long-term, transparent relationships with companies where any margins or fees it earns are fully disclosed.

It will also offer a free audit to companies where it will assess historic foreign exchange transactions and demonstrate any savings that could have been made.

In order to more aggressively develop business with corporate clients, Derek Redmond, the former British 400m record breaker and Olympian, has joined foreign exchange start-up OSTC FX as a business development manager. The former Commonwealth and European Champion in the 4×400 Relay as well as the World Silver medalist in 1987 is tasked in his role at OSTC with developing relationships with companies across the UK with exposures to foreign exchange

rates. OSTC UK expands aggressively into FX for corporates A Welsh, serial entrepreneur raised almost £1m – in mid-2014 - to launch a new foreign exchange business. To be known as OSTC Foreign Exchange, the firm aims to serve companies exchanging large sums of money.

Debra Williams, a former member of the executive board of Tesco Bank, former managing director of online price comparison site Confused.com and a non-executive director of Ospreys Rugby, has launched the venture in partnership with OSTC, the largest derivatives trading house in the UK outside London.

OSTC Foreign Exchange (OSTC FX) has secured a £400,000 grant from the Wales Economic Growth Fund, which has been complemented by private investment from the shareholders in the new business: OSTC and Debra Williams.

OSTC FX will target the finance directors of businesses with overseas trading activities. Currently, these businesses either use their banks to exchange money or are forced to call around London-based brokers seeking a better deal.

OSTC FX’s offering will be pan-UK and the business is already exploring the possibility of opening offices in other UK cities. OSTC FX will look to form long-term, transparent relationships with companies where any margins or fees it earns are fully disclosed.

It will also offer a free audit to companies where it will assess historic foreign exchange transactions and demonstrate any savings that could have been made.

In order to more aggressively develop business with corporate clients, Derek Redmond, the former British 400m record breaker and Olympian, has joined foreign exchange start-up OSTC FX as a business development manager. The former Commonwealth and European Champion in the 4×400 Relay as well as the World Silver medalist in 1987 is tasked in his role at OSTC with developing relationships with companies across the UK with exposures to foreign exchange rates. n

6 March 2015

www.bizpoland.pl

Cover Story According to Paul Langley, managing director of OSTC FX in the UK: “The reality is that foreign exchange remains a cumbersome and opaque market which lacks choice and transparency for companies. It is our intention that OSTC FX becomes a disruptive player in this sector.

By forming long-term relationships with clients based on trust and transparency it is our aim to change the ways in which finance directors think about foreign exchange while illustrating some substantial savings that can be made by firms.”

Michael Shirley, Managing Director of OSTC, said: “The incumbent players make their money by charging clients a margin over the exchange rate they secure in the open markets. While there is nothing wrong with this, the extent of this margin is seldom disclosed and is rarely consistent.”

OSTC - Profile The OSTC Group, or OSTC Limited, is a proprietary trading and electronic market making firm based in London.

OSTC was formed following the integration of Onscreen Trading and Trading Connections in 2005. The firm was founded in 1999 by Jonny Aucamp, Rob Brophy, Peter Green, Danny Langley and Mark Slade, former Liffe traders in London, and has over 300 employees. The firm’s primary business is proprietary trading and electronic market making, and specialises in the trading of interest rates and commodity derivatives. It has offices in United Kingdom, Poland, Spain, Portugal, Canada, Mauritius and India.

Its core focus is on market neutral strategies through high-volumes on derivatives products on CME, CBOT, NYSE Euronext Liffe and ICE that benefits from liquidity provision schemes.

While an independent trading house, it is an active participant at the world’s major exchanges, including NYSE Euonext Liffe, CME, CBOT, and ICE. OSTC was founded by five friends and ex-LIFFE traders – Johnny Aucamp, Robert Brophy, Peter Green, Danny Langley and Mark Slade – in 2005 after merging their two companies OST and TC (acronyms “On-Screen Trading” and “Trading Connections”).

The firm deploys a disciplined, risk adverse approach to market making which produces consistent results. As market makers, OSTC provides offers to buy and sell Futures with the goal of making the spread, without taking directional risk. Proprietary firm trading tools back up their traders. In the world of “market-making”, OSTC competes for providing liquidity to the market based on characteristics such as price and order size. n

2015 March

OSTC also has ambitions to begin trading on the Warsaw Stock Exchange this year, said Firla. “The WSE would like us to bring the liquidity. We are massive liquidity providers for exchanges.” He said trading in commodities, interest rate derivatives and government bonds would be of interest to OSTC. “The exchange recognizes that we are a very good marketing tool for them.”

OSTC’s shift from its roots of proprietary trading, with no external clients, to servicing a corporate client-base will present new challenges for the firm, such as the need for marketing and brand-building among Poland’s corporates, as well as business development and client relations. And it will also open a new area of growth for the firm, with a large pool of potential clients heretofore served almost exclusively by Polish banks. n

Domestic foreign exchange market set for growth In 2013 the Bank for International Settlements coordinated a survey on turnover in foreign exchange and over-the-counter derivatives markets. 53 central banks and monetary authorities, including Narodowy Bank Polski, participated in this study. They collected data from around 1,300 financial institutions on the value of transactions concluded in April 2013 in the foreign exchange market (which includes the spot market, outright-forwards, fx swaps, CIRS and currency options) and the OTC interest rate derivatives market (FRA, IRS, including OIS, and interest rate options). Eighteen domestic banks and branches of credit institutions were surveyed in Poland. The purpose was to obtain comprehensive and internationally comparable statistical information on the liquidity and structure of the respective markets.

The most important data concerning the foreign exchange and OTC interest rate derivatives markets in Poland are presented below: • The average daily net turnover in the domestic foreign exchange market in April 2013 amounted to USD 7,564 million, of which USD 5,446 million were transactions involving the Polish zloty; internet trading platforms allowing retail clients to speculate in the foreign exchange market using cash-settled forward transactions have become increasingly popular; • Fx swaps continued to be the most actively traded instruments in the domestic foreign exchange market; average daily turnover in these instruments in April 2013 amounted to USD 4,581 million, of which USD 3,088 million were transactions involving the Polish zloty.

• The average daily turnover in the domestic spot market in April 2013 amounted to USD 2,324 million (an increase of 19% at current exchange rates compared to the value of transactions in April 2010), of which USD 1,730 million were transactions involving the Polish zloty. n

7

BPO/Shared Servies News

www.bizpoland.pl

CEE Shared Services and Outsourcing Awards

26 Companies were distinguished on 5 February at the 3rd annual CEE Shared Services and Outsourcing Awards Gala. More than 275 executives attended, from 21 countries across the CEE region, western Europe, Scandinavia, United States, and India. Winners included:

8

Business Centre Manager of the Year – Shared Services: Richard Piskorz, Head of Operations Asset and Fund Services, BNP Paribas Services Managed 80% growth in headcount in 2014 with intensive process transfer tasks: 25 processes being successfully migrated. Staff growth: 2014 was a challenging and dynamic year for BP2S Warsaw. The year 2014 was also intensive from a process

transfer perspective with 25 processes being successfully migrated.

These were fund services processes (e.g. Fund Dealing Services, Fund Accounting and Transfer Agent). The migration often involved creating a new operating model and training staff in “the internal client” location.

Business Centre Manager of the Year – BPO: Krzysztof Herdzik - General Manager, WNS Poland.

Polish financial director led the setup of one of world’s largest Indian BPO firms operations in Gydnia.

Combines financial background with strong employee-motivation skills.

Emerging City of the Year - Rzeszow 30% growth. Being aware of the huge potential of BPO/SSC industry, Rzeszów City authorities in

August 2014 prepared a Economic Promotion Strategy dedicated to BPO/SSC industry. The main goal of this strategy is to strenghten “soft incentives” by establishing stronger connections with universities and providing potential investors.

Companies that chose Rzeszow in 2014: Randstad - Dutch consulting HR company. Mobica - British IT company plans to hire 130 employees specializing in software engineering for mobile devices.

Emerging City of the Year – CEE: Kaunas 200% in projects, 450% growth in new jobs. New investors included Bentley Systems - BPO, IT 50 new jobs planned. Intermedix - SSC IT support and Development - 500 new jobs planned.

Kaunas has long been a competence center for IT, but has only

March 2015

www.bizpoland.pl recently started to use its potential in SSC/BPO. Close partnership with universities builds talent pool of highly qualified multilingual specialists in IT, HR, finance, business administration, mathematics and statistics. Kaunas municipality is proactive in providing aftercare services, i.e. recently a legislation was passed allowing businesses that create 200 new jobs or more to use parking in the city center for half of the price.

Best City of the Year: Krakow From a well-established base, Krakow grew employment 20%+ in the SSC/BPO sector in 2014.

Newest investors include: Lund­ beck, Getinge, SABMiller, Solarwinds, Softserve, TeleTech, Arvato.

After a few years of intensive work on building an attractive climate for investment in Krakow, there are currently 80 companies engaged in a broad range of services for business, offering employment for about 35,000 people.

Employment in this sector has grown almost 50% increase in just 2 years. For comparison, the global average stands at around 11%.

BPO/Shared Servies News City of the Year -– CEE: Vilnius 56% growth from previous year, and Vilnius is attracting higher added value jobs such as Business Analytics, Anti-Money Laundering, Asset Management Support, IT development. New investors include: Revel Systems; Valuetech; Lindorff; Ahlstrom; Intermedix; GreenCarrier and Swedbank.

New-entrant SSC of the Year: GE Healthcare The GE Healthcare IT&PE (Information Technology and Process Excellence) organization is in the process of establishing and scaling an advanced IT Centre of Excellence (CoE) in Krakow, with projected investment from GE of $50 million til 2019. As part of a global in-sourcing initiative, the organization has identified Krakow as the location with the talent and infrastructure capability to meet its needs. Similar centres already exist in Michigan, USA and Bangalore, India. Over the next two years the centre will grow to over 200 employees, consisting of senior IT professionals.

Shared Services Firm of the Year – CEE: Barclays Nearly 1500 smart employees in Vilnius are an integral part of Barclays’ global network, operating this globally recognized center of excellence (CoE) for both Java and IOS development, as well as for project management. 40 – 60% reduction of running costs over 2010 -2014 for work transferred to BTCL from higher cost locations. Many of Barclays’ global teams are now led from BTCL-Vilnius. The rapid growth of the site over the past 5 years is a testament to the depth of skills and value to the wider Barclays’ organization. It is now the largest of Barclays Technology Centers in Eastern Europe and it continues to expand the services offered – 2014 saw the first non-IT function, HR Operations, being added.

Shared Services Firm of the Year – Poland: Cisco During its first 2,5 years of operation, the center has surpassed expectations both in the ability to attract talent, as well as the quality of the support services delivered and customer satisfaction achieved. As

9 2015 March

BPO/Shared Servies News

www.bizpoland.pl

a result, the center’s growth has exceeded the original plans: 100% of headcount growth between 2012 and 2013; 2013 and 2014. December 2013 – 260 employees; December 2014 – 515 employees; December 2015 – Cisco is planning to double the number of employees in Krakow over next 2 years.

BPO Firm of the Year – CEE: CPL Integrated Services Of CPL’s 4,000+ permanent staff,nearly 1,000 are based in Hungary. Key global clients include Google, HP, Microsoft, IBM. CPL Integrated Services offer a full suite of solutions for Recruitment Process Outsourcing (RPO), Contingent Workforce Solutions (CWS), Managed Service Provider (MSP) programs and Consultancy.|Driving strategic flexibility; Cpl Integrated Services enables companies to adapt to changing business conditions through innovative and adaptive workforce strategies.|CPL Integrated Services in Hungary, Ireland, Tunisia and Netherlands provide worldwide multinational companies, with IT support, order processing, fulfillment and administrative services.

Employment at December 2013: 780; at December 2014: 900; projected at December 2015: 1050

10

Most Unique Services Provider – CEE: Process Solutions Loan staff services are the subject of this nomination as most unique services provider. This is the company’s fastest growing business-line in recent years, which is driven by demand from our SSC clients. Process Solutions is an exArthur Andersen Business Process Outsourcing (BPO) Group now operating a dynamic and rapidly expanding independent accounting business in the European region,

delivering services to some of the largest corporations in the world.

BPO Firm of the Year – Poland: Capita Polska Capita Polska predominately services the British market with key Group Clients including cutting-edge new services via: Capita Company Secretarial Services: provides international clients with all aspects of their company secretarial and governance needs; Capita Investor Relations: manages and delivers tailored investment support to experts.

2014 proved to be a landmark year for Capita Polska with the launch of a contract with Vanquis Bank - the Centre’s first contract to provide services to the Polish Market.

IT Services Firm of the Year – CEE: Bulpros Consulting (Bulgaria) Bulpros is providing the whole spectrum of IT lifecycle services – software development in all core technologies, design and development of web and mobile solutions and applications, IT Infrastructure services with focus on infrastructure consulting for MS technologies and cloud services. To support the operations of the clients’ IT systems Bulpros is providing customer services including helpdesk, application and infrastructure technical support, content and data services as well as telesales and telemarketing service.

Since 2014 also providing Legal Process Outsourcing services.

Approximately 330 employees.

IT Services Firm of the Year – Poland: Atos Services Atos is an international information technology services company, serving a global client base. We have grown from just 500 employees four years ago to more than 4,000 today.

Focus on IT security services is driving growth. Atos has been operating in Poland since 2000. Thanks to acquisition of Siemens IT Solutions and Services in 2011 Atos acquired its present shape. Throughout the recent 3 years the dynamic growth of the company developed its resources from 500 employees into an entity with over 2,5 thousand employees. As for now, Atos in Poland is present in 4 locations: Poland Managed Services Offshore Center in Bydgoszcz, Global Delivery Center Europe in Wroclaw, local Systems Integration Office in Gdansk and Headquarters Office in Warsaw.

Most Unique Services Provider – Poland: Intitek Polska Its competitive advantage on the market is its ability to mobilize instantly engineering teams.

Intitek is taking over engineering projects in its own platform offices or through delegation of its staff.|We permanently work out technical specifications, general

March 2015

www.bizpoland.pl designs, detailed designs, programming, testing, serial launch as well as further optimization. On a daily basis we help local Managers and Directors of technical departments of large corporations to set up teams in order to get their projects delivered on time. Intitek is a global outsourced services provider in the field of mechanical and IT engineering. Intitek is serving many major corporations from the automotive, industrial vehicles, aerospace and IT sectors.

Employer of the Year – Shared Services: Mann+Hummel Service s.r.o.

The shared service centre Mann+Hummel Service s.r.o. has been providing services for other subsidiaries of the Mann+Hummel Group since 2007. The company’s portfo-

lio includes services in the following areas: Research & Development, Project Management, Project Controlling, Accounting, Country Financial Services, Information Technology & SAP support, Material Data Management & Quality, HR Services, Purchasing. Currently we employ more than 250 employees in Nová Ves and Brno (a subsidiary, specializing in R&D, IT and HR services).

Mann+Hummel Service, s.r.o. offers its employees a wide range of benefits, both financial and non-financial.

The most popular benefits and those most frequently used by the employees include the following: Support to reconcile work and family; flexible forms of work; 6 weeks of holiday, part-time employment for parents on maternity leave, possibility to work from home, company English nursery school in Třebíč for children from six months up to 6 years of age, extended operating hours in the kindergarten in Přibyslavice. Current employment: 250+.

2015 March

BPO/Shared Servies News Employer of the Year – BPO: CPL Operating with 900 employees, in 2014 CPL IS have paid out just over 1M EUR in key benefits. CPLIS believes that employee health is a basic requirement for successful and productive work.

Key benefits include the following Employee Perks: Meal vouchers, Local Transport Pass, Accommodation Card, Recreation Card, Dining Card, Voluntary health fund contribution, Voluntary pension fund contribution, Culture events voucher, Schooling support voucher. Discount scheme: 10-20% off in over 25 different outlets across Hungary ranging between restaurants, coffee shops, banks, shops, and health services.

CPLIS believes that employee health is a basic requirement for successful and productive work. Here are some

accounts across Poland.

Key Clients: Lufthansa Global Business Services, SABMiller Global Business Services, Herbalife EMEA Finance and Operations Service Centre, RWE Group Business Services, Capita Polska, RR Donnelley DocumentSolutions.

examples of our initiatives: Office massage; Company doctor visit with free services on-site.

PWC Poland Companies that PWC worked with include Kemira, Amway, Metinvest, Akzo Nobel (BPO), IAG, ALK, Ashland, Fresenius Kabi, Quad Graphics, CEDC. We have also led the projects to design and build solution for PwC’s CEE internal Shared Service Centers.

Recruitment Firm of the Year: Hays Specialist Recruitment Our business grew 20% YoY which a major achievement considering the scale. Biggest client in 2014: Honeywell centre in Romania – over 400 hires in 2014. Hays has been chosen as an RPO supplier for all internal and external Honeywell permanent hires across EMEA region. One of the most important part within that contract was staffing in Romania where Honeywell decided to build a multifunctional centre supporting internal clients at regional and global level.

Executive Search Firm of the Year: Advisory Group TEST Human Resources Razor-sharp focus on ExecSearch for the SSC/BPO sector, having grown up with the sector in Krakow, and now with national

Best Office Development for BPO/SSC Sectors: Vastint LEED Gold certificate for this Poznan-based mega office complex with focus on the SSC/BPO sectors.

Vastint is part of the Inter IKEA Property Division, and has been developing property in Poland since 1992. Business Garden Poznan is a modern office centre with a planned area of 80,000 m2.

General Advisory/Location Advisory firm of the year:

Real Estate Advisory: Jones Lang Lasalle In Poland, JLL advised on ca 30 transactions, signed by business services centres with foreign capital in 2014. It is also worth noting that in 2013, JLL advised on lease agreements, totaling 85,000 sq m of office space (40% market share), which were signed by business services sector companies.

BPO Contract of the Year: Global Remote Services (Romania) and Airport of Rome This is an IT-support contract with the Airport of Rome. GRS won with a price 40% lower than the base-price.

11

BPO/Shared Servies News The contract is also revolutionary, in that an Italian public-sector entity is outsourcing key support services to Romania. This contract was won by GRS after a public auction at which participated 12 bidding companies, located in Italy or abroad.

CSR Initiative of the Year: Poland Business Run We help amputees. In the last three years we collected approximately 1,200,000 PLN, bought 28 prosthesis and changed 20 people’s lives.

We are the biggest Charity Run in Poland and Poland Business Run 2015 is going to be even bigger and better, with enormous support from private, responsible businesses, led especially by the SSC/ BPO sector. Poland-wide in these cities: Krakow, Poznan, Katowice, Lodz, Warszawa. Poland Business Run is organized by busines (privately-owned firms), the publicsector (local governments) and NGOs (Fundacja Jaska Meli Poza Horyzonty). Support from Luxoft, Radisson Blu Hotel Krakow, UBS, The Krakow ZIS Sports Infrastructure Board; in |Poznan: The City of Poznan, CenturyLink Technology Solutions, Franklin Resources Inc, MAN Accounting Center, Uniwersytet Ekonomiczny

w Poznaniu, Volkswagen. In Katowice: The City of Katowice, Capgemini Polska, ING Services Polska. In Warszawa: Accenture, BNP Paribas Securities Services, Goldman Sachs, Hays Poland, Jones Lang LaSalle, Luxoft, Marriott, MSL GROUP, Stadion Narodowy, UBS. In Lodz: Infosys BPO Poland.

University-Business Cooperation of the Year: CIMA and SGH joint study programme in Management Accounting Warsaw School of Economics in collaboration with CIMA (The Chartered Institute of Management Accountants) offers Interdisciplinary specialty programs in Polish and English at the undergraduate and graduate levels, to prepare students to take up better-paying positions in F&A within internaional SSC organizations.

Interdisciplinary specialty programs are implemented in Polish and English at the undergraduate and graduate levels. At the undergraduate level is the SGH &CIMA Certificate in Business Accounting (SGH & CIMA - CBA), while the graduate level is SGH &CIMA Diploma in Management Accounting (CIMA

www.bizpoland.pl &SGH - DMA) and SGH &CIMA Advanced Diploma in Management Accounting (CIMA & SGH – ADMA).

Special Recognition Award: ASPIRE ASPIRE has created a model for other cities, to show how to spread the message that success is founded on presenting opportunity to people at all levels of society and by leveraging the energies of people working within SSC/ITO centres - that these people are the true heroes of the story. ASPIRE is the representative body of the technology and business services sector in Kraków. Founded in 2008, ASPIRE is widely credited as playing a key role in Kraków’s emergence as an IT and business services hub.

ASPIRE’s mission is to accelerate the development of an ecosystem which will support the continuing development of the IT and business services sector in Kraków, and includes “harnessing the passion, energy and expertise of our members at all levels of their organizations.”

This year in the Tholons global rankings of Top Outsourcing Cities, Kraków ranked for the first time as the top location in Europe overtaking Dublin. The city is now ranked 9th globally. n

12 March 2015

www.bizpoland.pl

Advisory

A plea for some common sense This month I have decided to share two examples of the how thought processes work (or don’t work) amongst two of my favourite groups of people in Poland: the tax authorities and the people who draft new laws.

2015 March

By Steven Foster Process Solutions www.ps-bpo.com Steven.Foster@ps-bpo. com

Financial reporting One of the joys of being a member state of the EU is that from time to time the country is forced to suppress its natural love and affection for excessive red tape and make life easier for businesses. A recent example of this is the introduction of a simplified financial reporting regime for micro-entities. These are entities with annual turnover of up to PLN 3m, gross assets of up to PLN 1.5m and not more than 10 staff. If any 2 out of these 3 criteria apply, there are substantial simplifications in annual reporting requirements.

Although it was not required by EU law, Poland decided to bring not-for-profit organisations (charities, associations, employer federations, chambers of commerce, etc) into the micro-entity reporting regime. The existing simplified reporting rules for not-for profit entities was abolished.

This is all well and good, but there is one small clause which was inserted into the new rules which is a nightmare for organisations such as associations and employer federations: the rules require that the “approving body” (usually the members) hold a meeting and pass a resolution to adopt micro-entity reporting.

Failing that, full financial statements are required, just as for a commercial company.

The new rules apply to all 2014 annual reports. They became law in September 2014, long after the organisations to which they relate had already held the annual member meetings for 2014. Therefore, for one year only, not-for profit organisations and micro-entities were seriously expected to either convene a special meeting of members or to produce full accounts, as for a commercial business.

If all this strikes you as patently absurd, it’s because that’s precisely what it is. Why did the Government do it this way? The justification that was submitted with the bill illustrates the entire thought process from beginning to end: the members should make the decision “because the micro regime is optional.”

Apart from the cost and logistical issues involved in organising member meetings, the Government doesn’t seem to realise that, on the whole, the average member probably couldn’t care less about this. As for ordinary limited companies, it’s about time that general meetings of single-member companies was abolished. Doesn’t anyone in the KRS feel just a bit embarrassed reading minutes of apparent shareholder meetings where the one person present solemnly delivered and approved the agenda and went on to pass resolutions in a secret ballot? n

ADVISORY

State-sponsored theft A shocking interpretation on withholding tax that potentially affects everyone in business was issued by the tax chamber in Katowice on New Year’s Eve 2014. It would be nice to think that their words of wisdom, suggesting that we all take on the might of the world’s airlines on behalf of the Polish tax system, could be dismissed as the drunken ramblings of a demented individual who had decided to crack open the bubbly when midnight stuck in Western Samoa whilst the boss was off skiing. Unfortunately though, no matter how absurd their interpretations, people do tend to take them seriously.

Polish law imposes a duty on businesses to withhold tax on certain payments made to foreign businesses, unless the foreign business is protected by a tax treaty.

The classic examples are payments of dividends, interest and royalties, but Poland also imposes 10% tax on income earned in Poland by foreign airlines. The foreign airlines operating in Poland are undoubtedly all protected by tax treaties. However, this being Poland, it is our job to prove to the tax authorities that a foreign business is in fact foreign. The form of proof required by law is a certificate of tax residency issued by the tax authority of the home country of the foreign business.

In the case of airlines, it’s perfectly obvious that British Airways is British and American Airlines is American, so you would think that we don’t need to worry. However, the Katowice tax chamber has now ruled that any business paying Ryanair and any other foreign airline is required to withhold 10% of the air fare unless they have a certificate of tax residency. If the online booking system can’t be persuaded to collect only 90% of the air fare on the credit card, or if the airline or the tax authority can’t be persuaded to arrange for vast numbers of tax residency certificates to be issued every year, the Polish business is liable for the tax. (If the rest of the world behaved this way, we could be talking about tens of millions of documents).

The tax authorities are fully aware of where major airlines are based, given that the airlines themselves claim treaty protection, and there is no conceivable justification for imposing the letter of the law in this situation, other than as a blatant means of State extortion.

To really understand the nature of the ruling, consider the following: A tax inspector visits a taxpayer one morning, discovers that they have booked flights with Ryanair for their staff and is presented with a valid tax residency certificate. The inspector moves on to the next taxpayer, finds more Ryanair flights and finds that the taxpayer does not have a the residency certificate. The tax inspector already has proof from the earlier visit that Ryanair is Irish. What happens next? The second taxpayer will be crucified for failing to have their own proof that Ryanair

is Irish, costing 10% of all flight costs for up to 7 years, plus a penal interest charge and financial penalties.

It’s to be expected that the law may sometimes appear to hurt in ways that are obviously unintended.

The real problem in Poland is not the law, but rather the strictly legalistic culture of the authorities and complete lack of morality, as exacerbated by the propensity for business to submit ill-judged applications for rulings which are simply inviting disaster.

13

www.bizpoland.pl

Advisory

Scary acronyms that are changing international business

ADVISORY

FCPA. FACTA. FBAR. FCA.

14

If you do not know the meaning behind these rather scary acronyms above—it’s time to get familiar eith them, whether you are a United States citizen (or “person”) or not.

Why get familiar? Well, the Foreign Corrupt Practices Act (FCPA) could sting if your company has a link back to the US stock market—and the link does not need to be direct. Your company could wind up facing millions in fines for a deal gone astray. This could be as innocent as having a sales person rig kickbacks to a hospital worker, but if you are the boss, you could also face prosecution.

Under the Foreign Account Tax Compliance Act (FACTA), you bank—if it happens to be located in a country like Poland that has ratified FACTA legislation—will send information regarding your bank accounts to the United States Department of the Treasury.

If you have not declared such accounts (if they totaled more than USD 10,000 during the course of a year), you could be looking at massive fines and criminal penalties that could effectively change your life.

Then there is FCA (the False Claims Act), which basically has now enabled foreign whistleblowers to de facto represent the United States government when suing your company as “relators”—which means they not only can get large rewards, but the entire apparatus has served as a basis for FCPA whistleblowers, who can receive up to 30 percent of any fine levied against a company that comes to more than USD 1 mln.

Now if the above does not worry you, perhaps it should. FCPA fines against companies came to more than USD 1.5 bln in 2014. Fines against FBAR violators came to approximately USD 5.5 bln. The wave of FCPA whistleblowers is just beginning to hit, and federal agents are now using all of the same techniques—including wire taps, bugging, surveillance, turning witnesses—to prosecute any of the cases above.

And in fact, it’s easy to get in trouble.

Let’s take a typical situation faced by one of our clients. A shipping company executive realized that his account was hacked during transaction negotiations with a foreign client. The hacker convinced the foreign client to set up a bank account in Poland, which was fraudulently created at a Polish bank under a name similar to our client. The money was sent to the fraudulent account and promptly disappeared.

Now technically, our client was not out any money.

He never received the money, and his foreign client was forced to resend the money to the correct account in order for the transaction to go through. Obviously, this did little for client relations, but that was only the beginning of his troubles.

First, the client arguably now had a foreign account set up in his name, which received money and would

By Preston Smith CEE Consulting Group; preston.smith@ceecg.com

fall under FBAR/FACTA. But he could not report the account or the amount in the account, which is necessary to avoid FBAR prosecution, because he could not actually get information on the account from the bank.

Why could he not receive the information? Because he actually did not set up the account in the first place.

This meant liaison work with Polish prosecutors, who would only contact him (through us) once the bank had reported fraud. Keep in mind that the bank would not deal with us directly due to banking secrecy laws—again, the account that could hurt the client was actually not his account.

Next there is the question regarding how to report this to the police. As the client himself was not actually out any money, he did not truly have a case without making fairly complex legal arguments about damage to reputation and potential risk under FBAR prosecution. Polish police (just like any in the world) do not particularly care for extremely-difficult-to-prosecute

Get prepared for the worst with a tight compliance system that weathers a variety of storms—because unfortunately, no matter how well one tries to run the business, these new threats are now forever on the horizon. international cases, as they eat up budget and time and may well be impossible to prosecute. Yet without such a filing, the client did not necessarily have an explanation to provide to FBAR officials.

Another option would be to file a hacking claim on the American side of the pond. Yet again no money was actually lost. Sure, reputation, theoretical damages, but again this is not something a US agent necessarily gets excited about—and there is also another risk: any and all of the above means opening up a business to a de facto audit of books and emails, which in the end will be sent to FBAR officials (read tax officials) for their ultimate perusal.

In the end, this client actually was forced to do all of the above. After a great deal of pain and leaping through hoops, the papers were gotten, filed and the client could move on—but you can imagine that the advice, translation, liaison and legal work on both sides of the Atlantic did not come free.

Now understand that much of the above was not the result of a client being victimized by a crime, but that he suddenly was forced into a legal obstacle course that could foreseeably shut down his business. And the only defense?

Get prepared for the worst with a tight compliance system that weathers a variety of storms—because unfortunately, no matter how well one tries to run the business, these new threats are now forever on the horizon. n

March 2015

www.bizpoland.pl

Advisory

By Marek Matraszek

2015

By Marek Matraszek CEC Government Relations

promises to be an interregnum in political terms, marking a bridge between a long period of government - the years of Donald Tusk and Ewa Kopacz as Prime Minister - when everything seemed to be predictable and set in stone, and a time of flux, new personalities and new alliances. Poland is moving into new political territory.

We have two key elections coming up in the coming months. Firstly, the Presidential elections on May 10th (and May 24th if there is a second round), followed by the parliamentary showdown in October 2015. The two elections are closely connected with each other, meaning we will be witness to a single six-month spectacle, rather than two discrete political events. Even a few weeks ago, it seemed as though the Presidential election would be a walkover for incumbent president Bronislaw Komorowski, who was enjoying high poll ratings, a supportive government, and successfully projecting the image so beloved by Poles of their Presidents - consensual and an arbiter, rather than a partisan and activist campaigner. Against him, the opposition seemed so convinced of the inevitability of a Komorowski victory that they refused to run their party leaders against him, instead choosing proxy candidates whose only task was seemingly to die a glorious political death.

However the first couple of weeks of the campaign suggest that whilst there may be no upset in store, at the very least Komorowski may be in for a tougher battle than expected. He started the campaign badly, with a lackluster opening speech announcing his candidacy, and numerous communication mishaps

By January 2016 Polish politics will look much different than in March 2015. Many of the old protagonists will be the same, but a new dynamic of change and evolution will have been unleashed. blamed on what seems to be a chaotically run campaign office. Secondly, the junior governing party, the PSL, broke ranks and fielded their own candidate, the young but dynamic Adam Jarubas. With other smaller candidates also nibbling away at the vote, it may be that Komorowski will miss by a whisker a victory in the first round, forcing him into a head-to-head contest with Andrzej Duda, the Law and Justice (PiS) candidate. Duda was much scorned by the media at first, but an impressive opening political rally, followed by a

2015 March

barnstorming campaign tour of Poland, put him within shouting distance of 30% of the vote by early March.

All Duda needs for success is to enter the second round against Komorowski, and try to do what the much less dynamic Jaroslaw Kaczynski managed to do in 2010 - polarize the election around a simple choice of us vs. them, with the latter being the governing political establishment, represented by Komorowski himself. Past presidential elections run on such polarizing lines have resulted in very close contests, with even the losing candidate obtaining close to 50% of the vote.

Komorowski should still win such an election, but the party that should be worried by such a narrow result is the Civic Platform (PO) itself. Already led by a leader - Ewa Kopacz - lacking in the eyes of many charisma, political credibility and electoral legitimacy, the party can ill afford to face an opposition party whose candidate garnered between 40 and 50% of the vote in a national election just months earlier. Whereas 45% of the vote loses you an election in a Presidential race, anything above 40% gets you close to victory in a parliamentary race. Much will depend therefore if PiS can keep the Duda vote together and translate it into a surge for PiS in October. If so, an electoral upset of a PiS victory in October may become possible.

That in itself will not guarantee PiS government, as the party still lacks the ability to create a parliamentary majority through lack of parties prepared to do deals with it. It may transpire that the ruling PO will cobble together a grand coalition of the PSL and possibly SLD (Democratic Left Alliance) to keep PiS out of power. Yet that scenario carries its own dangers for PO. Primarily it means that PO cannot guarantee its own candidate as becoming Prime Minister - that prize may go to the PSL’s Janusz Piechocinski. Secondly, a loss to PiS (even with PiS not creating a government) will inevitably unleash the barely concealed centrifugal forces in the PO party, which will be vying to pin blame on electoral defeat on the hapless Mrs Kopacz, and seeking to move quickly to replace her as Party leader. Throwing their hats into the ring will be current Foreign Minister Grzegorz Schetyna, as well as current Defence Minister Tomasz Siemoniak.

By January 2016 Polish politics will look much different than in March 2015. Many of the old protagonists will be the same, but a new dynamic of change and evolution will have been unleashed. That includes the future of Andrzej Duda, who may yet cement his position as the anointed successor to Jaroslaw Kaczynski as PiS leader. After eight years of unchanging certainties, that new dynamic may be no bad thing. n Marek Matraszek is the Founding Partner of CEC Government Relations. He can be reached on mm@cecgr. com, mobile +48601-336040.

ADVISORY

The Final Straight

15

www.bizpoland.pl

Advisory

Renewable Energies Act final version adopted On 20 February 2015 the Sejm finally adopted the RES Act, accepting most of the changes made by the Senate. The RES Act will enter into force after the President signs it into the law and generally 30 days after it is published in the Journal of Laws – presumably in March this year.

ADVISORY

The feed-in tariffs for micro-installations up to 10kW remain at the level originally enacted by the Sejm at its third hearing in mid-January, i.e. PLN 0,75/kWh for PV up to 3kW and PLN 0,65/kWh for up to 10kW - substantially higher than the current PLN 0,52/kWh for PV up to 10kW in Germany. The RES Act introduces a cap of 500 MW for these feed-in tariffs.

This cap might be hard to control as the feed-in tariffs will lead to a short boom for PV microinstallations from spring 2016 and the cap is likely to be reached within the first year.

Consequently the Ministry of the Economy is already working on an amendment to the RES Act.

•

•

•

•

•

•

•

16

The RES Act implements the following timeline: A few changes to the Energy law act will enter into force immediately after publication, i.e. in March 2015. These changes concern the obligation placed on large energy consuming enterprises to consume a certain share of renewable energy and cogeneration energy, the extension of the redemption period for green certificates until end of June and the reorganisation of the registering process for green certificates.

The remaining part of the RES Act generally enters into force 30 days after publication except for the changes to the existing and new support system (chapter 4).

Co-firing installations (so-called “non-dedicated”) will receive 0.5 green certificates per MWh as soon as 30 days after publication of the RES Act; large hydropower plants will continue to receive green certificates until the end of 2015.

The prequalification for the auction system at the Regulatory Office (URE) will start by 1 May 2015.

URE has to qualify a RES generator within 30 days if its documentation is complete. A public tender for the electronic platform to conduct auctions will be held.

The government will publish the amount of energy and its value for the first auction by 31 May 2015 for large RES generators and by 15 June 2015 for RES generators up to 1 MW. The regulations to establish OREO, the agency to settle contracts for difference, will enter into force by 1 October 2015.

All existing grid connection contracts should be adapted within 6 months of the RES Act’s entry into force, i.e. presumably by end of September

by Christian Schnell

• •

•

•

2015, so that the grid connection date is no later than 31 March 2019 (i.e. 48 months after the RES Act enters into force). The RES generator will have to present its proposal for adopting the time schedule within three months of the RES Act entering into force, i.e. presumably by end of June 2015. The timeline for offshore wind is 72 months.

The government will publish the first reference prices by 31 December 2015.

RES generators will have to be connected to the grid and produce their first kWh (by all devices) by 31 December 2015 to enter into the green certificate support system.  URE will publish the first auction by 31 March 2016. The auction will take part a minimum of 30 days after the auction has been published, presumably concluding in the second quarter of 2016.

The regulation of 18 October 2012 – the so-called quotation regulation – will remain in force until no later than the end of 2017. So, if no further changes are adopted sooner, the quotation obligation will increase to 16% in 2017. For the year 2018 the government will have to enact a new quota for the green certificate system.

The government will publish a report about the functioning about the RES support system and will propose legal changes by 31 December 2017. This report can be expected to be the basis for a substantial

The RES Act introduces a cap of 500 MW for these feedin tariffs. This cap might be hard to control as the feed-in tariffs will lead to a short boom for PV microinstallations from spring 2016 and the cap is likely to be reached within the first year. Consequently the Ministry of the Economy is already working on an amendment to the RES Act. downsizing of the quota obligation from 2018. Thus, green certificates prices should stay at an acceptable level until 2017 redemption period (i.e. until 30 June 2018). After this date a downsizing of the quota will take place and prices will be at risk so that a floor of PLN 100/MWh is likely. The cheapest technologies, e.g. large brownfield biomass, dedicated co-firing and onshore wind at the end of its support period, will still be profitable at this price level. So existing RES generators are recommended to switch to the auction system at the third auction in the first half of 2018 at the latest. n

March 2015

www.bizpoland.pl

Energy

Shale gas dreams boosted by San Leon gas discovery European shale gas firm San Leon Energy has made its first commercial gas discovery in Poland.

Rawicz-12, an appraisal well in south-western Poland not far from Poznan, flowed gas at an increasing rate and reached up to 4.1 million cubic feet per day.

The company reported the news in late February, and said the gas quality is in line with expectations and no significant amounts of water have been discovered.

“This is the well we have been waiting for - a significant gas discovery in one of the highestpriced gas markets in Europe”, said San Leon Energy executive chairman Oisin Fanning. San Leon plans to drill another three to five wells to develop the field, with the second well on Rawicz currently being planning. Fanning: “The Rawicz field has existing gas infrastructure nearby and a

development feasibility project has already been completed.”

Flow testing operations were completed on 28 February 2015, after which a phase of data collection will start evaluating pressure build up.

Palomar Natural Resources (PNR) operates the Rawicz project with a 65% interest. San Leon holds a 35% interest in the first two wells. U.S-based Palomar and London-listed gas explorer San Leon expect the first commercial gas flows and sales from the Rawicz gas well in western Poland at the beginning of 2016.

San Leon has previously said that the Rawicz well is likely to produce commercial amounts of conventional gas. Palomar is the operator of seven exploration concessions in Poland and owns 65 percent in the Rawicz venture, with the rest controlled by San Leon.

“Full field development and first gas sales are expected by early 2016,” the companies said.

The Rawicz well began flow testing on Feb. 5 and has to date flowed at an average rate of up to 4.5 million standard cubic feet per day.

Poland consumes around 16 billion cubic metres of gas a year, more than half of which is imported from Russia’s Gazprom . Domestic output at Poland’s gas distributor PGNiG exceeds 4 billion cubic metres.

In July 2014, San Leon Energy signed a joint venture agreement with PNR across seven concessions in Poland’s Permian Basin initially focused on developing the discovered, unproduced Siekierki and Rawicz gas fields. The Rawicz gas field is estimated to contain up to 17 BCF of recoverable methane gas in the Permian Rotliegendes formation with potential upside for oil and gas production in the Zechstein Main Dolomite. n

EBRD targets renewable energy sector for investment The European Bank for Reconstruction and Development (EBRD) plans to invest around 25% more in Poland this year than last year, and is looking for projects in renewable energy and the financial sector, according to EBRD’s Poland director Grzegorz Zielinski.

The EBRD sees a role for itself in Polish banking consolidation, with the likes of Austrian Raiffeisen and General Electric lining up sales of local units.

“We ended last year in Poland with 600 million euros in new investments. We hope that this year the amount will be even higher,” said Zielinski. “We are selective, but if there are suitable projects, I don’t see why

2015 March

our investments should not be 20-30 percent higher this year.”

The EBRD has so far invested almost 7 billion euros in Poland in more than 325 projects.

The EBRD, which last year made overall investments of 8.9 billion euros across the region, usually buys minority stakes for 3-5 years. It has invested in renewable energy in Poland, and provided additional capital to local banks as well as the private sector.

It sees potential for renewed involvement in banking where the number of companies operating in Poland is expected to fall.

“We are examining whether the announced ownership changes and consolidations in the banking sector can be of interest to us,” Zielinski said. “We believe it is possible that we can once again assume our role as an anchor investor. We are also interested in stock market listings of banks.”

Looking across other industries, the EBRD should sign a 119 million euro credit deal with Polish utility Polenergia in the coming weeks, Zielinski said.

But he stressed the EBRD did not plan to participate in energy sector consolidation planned by the Poland’s treasury ministry.

The Polish government plans to merge state-run power producers, such as PGE, Energa, Tauron, and Enea, to boost their investment potential.

“It would be hard for us to engage in the announced consolidation process in the Polish energy sector, as it runs against one of our main aims, which is market liberalisation,” Zielinski said. “We can, however, play a role in providing support for increasing efficiency in energy distribution,” he added. “We also want to engage in changing Poland’s energy mix and reducing the country’s dependency on coal.” n

17

www.bizpoland.pl

Energy

Coal miners clash For decades, Polish coal miners have enjoyed benefits that are the envy of their working class countrymen:

18

An annual bonus of two months’ pay regardless of performance, company-sponsored holidays, retirement before 50, and no weekend shifts.

Today, that legacy of the communist era threatens the mostly stateowned mining sector and is digging a hole in the national budget.

To understand why reform remains elusive, take a drive through Upper Silesia, the coalrich region in southern Poland that’s home to two dozen mines.

The snowy countryside, drained of color in the feeble winter light, is framed by smoking chimney stacks and elevator towers that haul coal up from the pits.

Even as European coal prices have fallen by half in recent years and producers have struggled, powerful unions have foiled government attempts to close failing operations, cut jobs, and restore the sector to profitability.

In January, the Economy Ministry cautioned that without significant restructuring Kompania Weglowa SA -- the European Union’s largest coal producer -- risked bankruptcy.

With their historical ties to Lech Walesa’s Solidarity, Poland’s roughly 100,000 miners are clinging to their jobs. Their unions’ links to the 1980’s movement mean they can easily forge alliances across the political spectrum -- and threaten any reform-minded government with widespread strikes.

“We’re absolutely against any solution that would involve shutting down mines and cutting jobs,” said Przemyslaw Skupin, a union leader at the Pokoj mine, an unprofitable operation in the town of Ruda Slaska that was slated for closure in a restructuring plan the government proposed in January.

Coal prices have dropped more than 20% in the last six months, driven by lower oil and gas prices, and lower global demand.

Briquette Mountains Outside Skupin’s office in the town of Ruda Slaska, the smell of burning coal lingers in the air and blackfaced miners in heavy boots and headlamps file out after their shifts.

The town, with a history of mining that dates to the 13th century, is surrounded by mountains of shiny briquettes that few want to buy. While Poland’s utilities burned 57 million tons of coal last year, the country’s mines produced 69 million tons, the economy ministry estimates, and industry executives say imports may have reached 12 million tons.

A compact man with a trim mustache, Skupin slaps his hand on a Formica-topped table to vent his anger at the suggestion that job cuts may be unavoidable, and says he considers the government an enemy, not a negotiation partner.

He suggests Kompania Weglowa, Pokoj’s owner, increase production despite the glut because “at least we’ll sell more coal and solve our cash-flow problem.”

Such intransigence has hobbled efforts by Prime Minister Ewa Kopacz to keep mining companies afloat. The two sides clashed in January after her centrist government introduced a plan to bolster the finances of Kompania Weglowa, which was running out of cash to pay wages.

The initiative would have shut four of Kompania Weglowa’s 14 mines, eliminating almost 5,000 jobs. If voters expected Kopacz, a bespectacled former pediatrician, to morph into a second Margaret Thatcher, they were disappointed.

With elections for president in May and for parliament in the fall, Kopacz couldn’t afford a general strike and gave in to virtually all of the unions’ demands.

Police Clashes A revised plan, which Kopacz called “a good compromise for Poland’s mining industry,” could cost the state some 2.3 billion zlotys ($614 million) through 2016, the government says. Kompania Weglowa’s unprofitable mines will be transferred to a separate entity to be restructured and sold off. Most other facilities will be folded into a new company to be owned by Weglokoks SA, the country’s state-owned coal trader, and potentially by state-controlled utilities. Miners within four years of retirement will be offered paid leave while others will either keep their jobs or be transferred to different mines.

“In the end Kopacz didn’t solve the coal industry’s cash flow problem at all,” said Otilia Dhand, an analyst at political risk adviser Teneo Intelligence in Brussels. “She just shifted it from one pocket to another.”

Dhand says Kopacz’s failure to enact her original plan showed weakness that has further emboldened the unions. Less than two weeks after the Kompania Weglowa crisis, miners at state-controlled coking coal producer Jastrzebska Spolka Weglowa SA clashed with police during a tense 17-day strike. With the labor strife costing Jastrzebska 27 million zlotys a day in lost sales, the company’s chief executive resigned in exchange for a minor reduction in benefits agreed to by the unions. A Jastrzebska spokeswoman says the company’s mines have returned to normal output.

At Kompania Weglowa’s headquarters, a hulking, four-story pre-war building in the industrial city of Katowice, Chief Executive Officer Krzysztof Sedzikowski says he believes the company can be made profitable. A push to mine more coking coal used by smelters rather than lower-quality fuel burned in power plants could ease overproduction, while costs

March 2015

www.bizpoland.pl

Energy

Australian Balamara bullish on Polish coal ASX-listed Balamara Resources in late February reported that the prefeasibility study (PFS) into its Mariola thermal coal project in Poland had demonstrated robust economics.

Based on a maiden reserve of 39.5-million tonnes, the project was expected to produce some 2.7-million tonnes a year over a mine life of 15 years. The project would require a capital investment of $79 million, and would deliver an after tax net present value of $312.7 million.

Over the planned mine life, the project was expected to deliver a cumulative freecash flow of A$1.13billion.

“This is a tremendous result for our shareholders, which clearly demonstrates the world-class nature of the Mariola asset and vindicates our decision to acquire 100% ownership of this project,” said Balamara MD Mike Ralston.

He noted that the PFS exceeded the company’s expectations in nearly every respect, and demonstrated exceptional returns from

could be trimmed by introducing a six-day working week.

Head Problems Unions can be brought around if management makes a sufficiently compelling case for change, said Sedzikowski, who took over the company in December after earlier helping the government revamp loss-making LOT Polish airlines.

“It’s very easy to say, ‘I can’t do anything because of the unions,’” Sedzikowski said. “The unions are very strong, but if they see specific arguments and if you take a tough position, they’ll show some understanding.”

About 50 kilometers to the south, a mid-sized mine called PG Silesia offers evidence that supports Sedzikowski’s optimism.

In 2010, as Kompania Weglowa was seeking to sell the failing operation, miners there gave up many of their benefits in order to attract a foreign investor.

2015 March

the Tier 1 asset, with the potential to underpin a robust, long-life underground coal mining operation.

“This supports Balamara’s aggressive development strategy within the strong Polish coal sector. We are committed to transforming Balamara into a coal producer in the near terms, and Mariola presents the first phase of this initiative.”

With the PFS now completed, Balamara would move ahead with a definitive feasibility study.

In separate news, the company would also be undergoing all necessary permitting to bring the Mariola project into production over the next 12 to 18 months, or before the end of 2016. Balamara is fast-tracking a work program to bring its flagship Nowa Ruda coking coal project in Poland into production, expected by the end of 2016. A significant amount of work is underway with two drill rigs operating, an initial coal resource estimate in preparation and pre-feasibility studies well advanced. n

“We were up against the wall,” said Dariusz Dudek, a threedecade veteran of the mine who heads its Solidarity union chapter. “The prospect of bankruptcy changes your perspective.”

Their flexibility paid off, and a Czech company called EP Holding bought PG Silesia. When the new owners took over, some workers balked at weekend shifts and others left because they didn’t like having their pay tied to output.

But those who remained soon grew accustomed to the new conditions, he said, and the mine has more than doubled its workforce to almost 1,800. PG Silesia is on track to turn a profit this year.

“The problem is only in people’s heads; they just don’t like change,” Dudek said. “We were flexible in our approach to benefits, we found a common language with our owner, and thanks to that we’re still in business.”

Source: Bloomberg

Polenergia orders 48 MW of Vestas wind turbines Danish firm Vestas Wind Systems A/S announced in late February that it will deliver 48 MW of wind turbines to Polish energy company Polenergia SA for a project in the western part of the country.

The wind turbine manufacturer has won a contract to supply, install and commission 24 of the V110-2.0 MW machines for the Mycielin wind project. It comes with a VestasOnline Business SCADA solution and a fiveyear service agreement. Deliveries are expected in the third quarter of 2015, while the commissioning of the Mycielin wind farm is scheduled for the final quarter of the year.

To date, Vestas Poland has supplied some 570 wind turbines with a combined capacity of about 1,200 MW to the Polish market. The firm’s share of the total local installations exceeds 30%.

IKEA acquires new wind energy projects in Poland The IKEA has acquired a new wind energy project near the village of Wroblew in Poland. Additionally, the firm has committed to acquire two more wind farms in the cities of Gizalki and Lubartow, with an aim to become energy independent by the end of 2015.

According to company sources, these three new wind farms will together produce an estimated annual total of 339 GWh of wind energy. In 2011 IKEA bought three wind farms in Podkarpacie region (in Rymanów, Bukowsko and Leki Dukielskie), which produce a total of 134 GWh of energy annually.

Considering the entire acquisitions, IKEA will own six new wind energy projects by the end of the year, which will generate nearly 473 GWh of electricity annually.

The six projects combined are enough to provide clean energy for powering roughly 225,000 homes in Poland. Moreover, the wind projects will be supported by biomass boilers at the company’s factories.

The company now owns and operates 314 wind turbines and 700,000 solar panels around the world. IKEA aims to receive 100 percent of its energy needs through renewable sources by 2020. n

19

Equities – Interview

www.bizpoland.pl

Mark Mobius of Templeton Emerging Markets Group keen on Poland In this exclusive interview with BizPoland Magazine, Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, chastises the government for last year’s pension “reform” but explains why he remains optimistic on Poland.

What is your outlook, broadly speaking, for the Polish equity market in 2015?

Recently, the Polish market has been fluctuating in a rather narrow band which is different from the 31% drop between the 2011 and 2012 highs and lows. We can look forward to a weaker market at the beginning of 2015 but then a recovery. Our outlook for the whole of 2015, therefore, is positive.

What sectors do you find appealing at the moment in the market, and where do you currently see investment opportunity in the market?

Continued, sustained economic growth and development has meant the rise of the Polish consumer over the last two decades. Today, the average Polish consumer is getting wealthier, has access to banks and credit and is spending considerably more compared to even five or six years ago. This proliferation of purchasing power makes the consumer sector a very high potential one.

Indeed, we think a big surge in consumer spending has been very important in boosting Poland’s economy in recent years, as consumer spending accounts for a much larger part of the country’s GDP than it does in Hungary or the Czech Republic, for example. A number of post-Communist-era reforms, particularly the privatization of state-owned companies, resulted in the development of a vibrant capital market, chiefly important for equity investors like us interested in an active stock market.

20

How would you rate Poland’s position in Europe?

Situated in the heart of Europe between Russia and Western Europe, Poland is strategically well-positioned. With a population of 38 million, the country has a large consumer market and a strong workforce. Its border with Germany is an advantage, in our view, since Germany is a major importer and is Poland’s largest trading partner, accounting for more than a quarter of Poland’s exports and imports. With a well-educated workforce, Poland now successfully competes in outsourcing of business services with countries like India. Moreover, the country is benefiting from the continued relocation of factories from Western Europe to Eastern Europe.

Poland’s entry into the EU in 2004 has had a big impact on the economic life of people in Poland

and more importantly it’s had a big impact on the legal and political life because Poland had to meet the legal and societal requirements set by the EU. There are an incredible number of companies in Poland that are exporting products to Germany and other countries in Europe; EU membership offers free access to all European markets and it goes in both directions.

What is your view on the pension reform implemented earlier this year, and in your opinion what potential impact could this have?

In our view, the move by Poland is symptomatic of moves by other governments in Central and Eastern Europe that have been trying to avoid deeper economic reforms in the interest of shortterm political objectives.

The worry is that by scaling back private pension systems, in the future, an aging population will require and demand larger and larger government

March 2015

www.bizpoland.pl support. By stunting the growth of capital markets, which drive investment and economic growth, the economy could suffer, leading to recessions in times of global economic crisis. I think Poland, as one of the largest countries in Central/Eastern Europe, has not set a good example in this regard. Although I have criticized the bond seizure plan, I have kept my faith in the Polish market—and still do. I think as retirement payments grow and become an increasing burden on the government budget, the pressure will grow to return to private pension schemes.

Further afield, what is your view of the CEE region vis-a-vis the Russia and Ukraine situation?

The countries in Central and Eastern Europe are expected to value their membership in the European Union more highly going forward, and will try to better utilize their resources to ensure a stronger posture toward Russia. Of course, there may be some exceptions of a few “Euroskeptics”, but the general trend will be towards a strong European posture, which should be good for the economies of Central and Eastern Europe.

In terms of the wider emerging markets grouping, where you currently seeing the best opportunities?

High economic growth rates will remain a key attraction of many emerging markets this year, in our opinion. Even with major economies like Brazil and Russia slowing down, overall growth in emerging

Equities – Interview markets during 2015 is expected to be comfortably in excess of that achieved by developed markets, with China and India likely to drive the Asian region to particularly strong growth. Moreover, many emerging markets, among them China, India, Indonesia, Mexico and South Korea, have announced or embarked upon significant reform measures that differ in details but are generally aimed at sweeping away bureaucratic barriers to economic growth, encouraging entrepreneurship and exposing inefficient industries to market discipline. Most are also looking to re-balance economic activity away from export- and investment-heavy models to become more oriented toward consumer demand.

Do you expect a strong negative reaction to Fed policy from emerging markets in 2015 as it seeks to raise interest rates?

With regard to developed-market monetary maneuvers, it is important to note that many major developed countries are still loosening policy, with Japanese quantitative easing likely to be highly significant for Southeast Asia. Recently, exceptional levels of money creation have remained largely outside real economies as the velocity of money has slowed sharply, evidenced by the declining loan-todeposit ratios of banks in the US, Europe, Japan and China. As banks become more confident and resume lending activity, stocks of newly created money could begin to influence the real global economy. n

21 2015 March

www.bizpoland.pl

FDI Investment News

Tenders in for 70 Military Helicopters

22

Contrary to the end-of-year rumblings that Sikorsky would withdraw its bid for the Polish military’s requirement for 70 medium-lift utility helicopters, when the announcement of the bidders was made by the Polish Armament Inspectorate on Dec. 30, 2014, Sikorsky’s name was present through subsidiary PZL Mielec, alongside Airbus Helicopters/Heli Invest and AgustaWestland subsidiary PZL Swidnik.

The three competing aircraft being offered are Sikorsky’s S-70i, which is already being produced in Poland and exported internationally, Airbus Helicopters’ EC725 Caracal-Polska and the AgustaWestland AW149.

Sikorsky’s potential exit from the helicopter competition came in a statement from the company at the end of October, which asserted that it would “not submit an offer for the procurement of utility helicopters for the Polish Armed Forces unless the terms of the procedure are amended.” This was met by a counter-statement from the Polish Ministry of National Defense declaring that all parties were clear on the final requirements of the tender and that it saw Sikorsky’s stance as “negotiation tactics.”

According to the Polish Ministry of Defense, the Commission will now review the proposals and a team from the Ministry of Economy will begin negotiations to establish the breadth of offset work to which each bidder will commit. The selection of a winner is expected in the second half of 2015.

The successful type chosen will replace the Army’s current Mil Mi-8/Mi-17 Hip and Mil Mi-14 Haze helicopters, of which Poland currently has around 40 and 10, respectively. They will perform a variety of utility tasks across all of the Polish Armed Forces including transport (48), combat search and rescue (CSAR) (16) and anti-submarine warfare (six) for the Navy.

Last year, Poland revealed that it would be increasing its military spending to $47.7 billion (€31.5 billion) between 2015 and 2022 to modernize its military, which largely meant replacing older Soviet-era equipment. The utility helicopter purchase would take around 10 percent of that total.

Russia’s intervention in Ukraine made it look closely at its priorities for this, and the need to replace its old Mi-24 attack helicopters was brought forward. The prospective new Kruk (Raven) tender would be for around 32 new attack helicopters, with the Boeing AH-64E, AgustaWestland

AW129 Mangusta and Airbus Helicopters EC665 Tiger thought to be the potential front-runners.

The Polish Security Bureau’s White Book, published in 2013, which examined the national security requirements of Poland, urged the need for airborne observation and surveillance coupled to target acquisition. There is a natural fear of surprise attack (largely due to its experience of such from Germany and Russia at the beginning of World War II), and the need to be able to counter these “through the maximum mobility of land forces.”

This should be “primarily based on the use of helicopters.” n

March 2015

www.bizpoland.pl

FDI Investment News

eWork Scandinavia sets up operations in Poland eWork’s Board of Directors has resolved to establish operations in Poland. The objective is to meet a growing demand for consultants in Poland, both from existing Nordic customers and from the local market. Operations will be conducted in a separate subsidiary with an office in Warsaw and are expected to commence in the second quarter of 2015.

“This is an attractive business opportunity for us. We already have several existing customers who have shown great interest, now that we

will establish a strong presence with an experienced and knowledgeable team in place in Warsaw”, said Zoran Covic, president and CEO of eWork.

Warsaw will be eWork’s first office outside the Nordic countries. eWork has successfully established several local offices, not only in the Nordic capitals, but also in various locations in Sweden. As late as 2014, an office was opened in Västerås in connection to eWork signing a contract for consultancy needs to ABB.

“Our business is well positioned for continued positive development in our home markets. Not least our outsourcing assignments have taught us to quickly reproduce our concept for new large customers, in new areas of competence in new locations. Thus, we are well prepared to take this step outside the Nordic region”, says Zoran Covic. The Polish operations will be conducted through a wholly owned subsidiary. The establishment is covered by the existing business development budget in 2015. n

Poland signs agreement for World Exposition in Milan, EXPO 2015.

The celebration of Polish - Italian agreement held on 31 March in Milan was attended by the Undersecretary of State in the Ministry of Economy and the head of the Polish interdepartmental team for EXPO 2015 – Minister Dariusz Bogdan and Commissioner General of Polish Section Expo and President of the Polish Information and Foreign Investment Agency (PAIiIZ) – Sławomir Majman.

“We have made another important step bringing us closer to Expo 2015”, said the Undersecretary of State in the Ministry of Economy, Dariusz Bogdan, head of the Polish interdepartmental team for EXPO 2015.

“The agreement signed today guarantees Poland the location on

a site of 2,400 sq m,” the Deputy Minister stressed. The agreement with Italy gave Poland a prestigious location on which the National Pavilion will sit. The site is located in the heart of EXPO exposition area near the Italian Pavilion and in the immediate vicinity of the French, German, British, Spanish or Hungarian sites.

The Deputy Minister also said that a competition for the architectural concept of the Polish Pavilion and the accompanying arrangement of the adjacent area will be published shortly. – We are coming to a close with our work on the schedule of events accompanying Expo – the Deputy Minister stressed.

“We shall soon begin Poland’s 1840-day promotional marathon

for Expo 2015. We want Poland to have the most Italian-style pavilion among all expositions, besides naturally the Italian Pavilion”, Minister Dariusz Bogdan announced. In his statement, the Minister pointed to many common elements between Poland and Italy such as export success of the main industries of both countries, which are farming and food, and attachment to tradition, love for home cuisine and a feast gathering all at the family table.

“The signature of the agreement

by Poland for is another step forward in the success of Expo 2015, and Poland’s presence means no boredom at the Milan EXPO”, Italian Commissioner General, EXPO 2015, Giuseppe Sala said. n

Contest for the store operator at EXPO 2015 PARP - the organiser of the Polish National Stand at EXPO 2015 in Milan - announced a contest for the operator of the store at the Polish Pavilion during EXPO 2015 and Polish on-line shop dedicated to the event. The winner of the contests

will be responsible for the complex organisation and management of the store at the Polish Pavilion, that will offer high quality Polish food products for all visitors.

The store will be operating from 1 May to 31 October 2015.

Moreover, the store operator will be also responsible for designing, creating and management in three languages: Polish, English and Italian of the on-line shop with Polish products. n

MTU Aero Engines in Aviation Valley gets bigger Affiliate of MTU Aero Engines from Germany, expands its branch in Poland. On 27 February the company officially opened its new 10,000 sq meter production facility in Rzeszów. The new investment increases the built-up area of the

2015 March

company’s branch in Rzeszów by 50 percent. MTU is laying the foundation for the production and volume ramp-up for the new engine programmes.

For the game-changing PW1000G family of geared

turbofan engines, which will power the Airbus A320neo and other aircraft, the Rzeszów facility will produce components and perform preparatory work. The total investment of the project amounts to some €40 million. n

23

www.bizpoland.pl

FDI Investment News

Polish farmers to continue protests against new land sale laws

24

Polish farmers attempted to initiate a series of blockades in the country’s capital, in protest over the government’s new laws regarding the sale of agricultural land. While the farmers could not take their protest directly into the city center as they had not received official permission from the police, hundreds still blockaded roads in the surrounding suburbs, some driving tractors and other farm vehicles.

A row has erupted following the government’s introduction of new regulations concerning the sale of farming landing that now allows corporations the right to buy up large swathes, which some say, will threaten the small-scale farming, agricultural enterprise and lead to large land grabs by foreign investment.

Speaking to www.freshfruitportal.com, spokesperson for the International Coalition for the Protection of the Polish Countryside (ICPPC) Joanna Bojczewska explains the demands of protestors who, she says, have so far been ignored by Polish agricultural minister Marek Sawicki.

There are four key issues with the main bone of contention relating to the potential for land grabbing and the consequent damage that would have on fresh produce sectors and other farming sectors like the meat industry, she said.

“The core of the protest is about preventing the sale of Polish agricultural land that might happen from 2016 if the current law continues. This will expose Polish land to be bought by foreign buyers and will threaten small farmers with western capital coming in and land grabs which are already happening in the northwest region of Pomerania,” she said.

“Another issue concerning land is around the inheritance of leased land. At the moment farmers can have very long-term leases of agricultural land which can be inherited by their children. The new law, from 2016, will threaten this system as well and anyone will be able to lease the land with a higher negotiating power.

“Another major issue in Poland currently is that small farmers

are prohibited from the direct sale of their own farm-processed produce. That means even if they pack some carrots in a bag, that’s classified as a processed product.

In Poland farmers are penalized and prosecuted for this.”

Bojczewska says this ‘inhibits small-scale enterprise’ because a farm needs to have a completely separate building where so-called ‘processing’ takes place, whereas many farming sectors have, up until now, been doing this kind of work in ‘their own kitchens’.

“They farmers can sell loose carrots directly for example but any form of processing methods or packaging is prohibited.”

The fourth issue relates to the cultivation of genetically modified (GM) crops, including the trading of GM seeds.

“This is a controversial issue for many Polish farmers who do not want GM crops grown in Poland at all and at any point,” Bojczewska said.

“All of these issues and the government altering the regulations have come about as a result of Poland’s full transition into the European Union.

“So far the farmers have been pretty unsuccessful in getting the leaders of the protest to talk to the minister and this protest was altered at the last-minute because

the application for a legal demonstration was rejected on the grounds that it came in too late.”

More blockades are planned over the coming weeks, and an official application is going into Polish authorities for a protest camp outside governmental buildings in Warsaw where protestors plan to gather for several days.

“The key figures of government have not met with the protest committee and leaders so they are not really properly responding to the calls. In fact, they are more concerned with articulating that farmers are breaching traffic laws or the fact they don’t have the correct insurance to be on the roads,” Bojczewska said.

“So it’s been really hard to gauge what the government’s comments are on these issues, because they are not engaging with the protestors.

“Even before Poland’s introduction to the EU, there has been a massive reduction of small family farms because of the corporate takeover of food distribution chains. Issues have been escalating for some time. Polish farmers are not treated as producers; they are treated as suppliers of raw material which means that they are very limited to make their livelihoods better by adding value to their products. The problems are systemic.” n

March 2015

www.bizpoland.pl

FDI Investment News

Polish President on business mission to Japan The official visit of President of Poland Bronisław Komorowski in Japan took place in late February.

The mission includes government administration and 50 representatives of Polish business. On the first day of the visit a business seminar on Polish-Japanese economic relations was held in Tokio. The meeting, coorganised by PAIiIZ, was moderated by president Sławomir Majman.

“We should aim to diversify Japanese investments in Poland which now focus in the automotive and electronics industry” said president Majman. Among the fields of possible Polish-Japanese cooperation there is clean coal technologies and energy which

could help in the modernisation of the industrial sector. In July 2014, a Japanese company Mitsiu and Kompania Węglowa jointly launched the construction of the power station Czeczott. Other areas with potential do develop business relationships are agrifood and chemical sectors, as well as finance and business services.

As President Komorowski emphasized, the purpose of the visit is to announce the strategic partnership between Poland and Japan. On February 27, president officially opened the PolishJapanese Economic Forum where over 250 Japanese entrepreneurs participated. n

S3 - The Route linking Sweden to Greece via Poland On 19 February, in the presence of deputy minister Ilona Antoniszyn - Klik, PAIiIZ president Sławomir Majman, president of Legnica SEZ Rafał Jurkowlaniec and marshal of Dolnośląskie province, Cezary Przybylski held the ceremony of signing the agreement on establishing joint project entitled S3 - Droga Wielkich Możliwości. (S3 - The Route of Great Opportunities).

The S3 route will be a part of the European route E65 starting in Malmö, Sweden and finishing in Chaniá, Greece. The Polish S3 will link the south of Scandinavia with the north of the Czech Republic

including Hradec Kralovei Pardubice and Prague. The project has been designed as an investment activator of the area along the S3 route. A complex offer for both types of investors: big foreign companies as well as local SMEs interested in investing there will be prepared. Also authorities of Dolny Śląsk province will supervise the provision of workforce for investors who will enter this area.The agreement was signed by: the Ministry of Economy, PAIiIZ, Legnica SEZ, KostrzyńskoSłubicka SEZ, Pomorska SEZ, Wałbrzyska SEZ „INVEST-PARK” and Kamiennogórska SEZ. n

New PLN 9 million investment in machine factory The Management Board of Kamiennogórska SEZ issued its first business permit for 2015.

It went to Kosikowski & Kresky.

The total value of the investment is PLN 9m. Under the investment, the company will buy real estate that it is now rented in Lubań sub-zone. The investor plans to build production and office facilities and buy a modern machine park. The location was chosen due to the access to highly skilled workforce experienced in

2015 March

production of advanced machinery, in Lubań.

Kosikowski & Kresky specializes in the production of wet chemistry machines and slot machines. Over 90% of company’s production is exported. The investor is also providing R&D activity. The total number of employees in the company should reach 60. Kamiennogórska SEZ has already issued 115 investment business permits. n

Linklaters relocates finance support roles to Warsaw Firm to focus finance support in Warsaw as roles transition across from Colchester centre. Linklaters has relocated 10 finance support jobs to its lower-cost services base in Warsaw as it seeks to build up the centre to replace an outsourcing contract terminated last year. Ten support positions across its London and Colchester back office teams are in the process of being transferred to Warsaw.

AkzoNobel Extends IT Services Deal With Infosys BPO IT services major Infosys said paints and coatings maker AkzoNobel has extended partnership with its subsidiary Infosys BPO. It was originally selected by AkzoNobel to accelerate the company’s finance transformation programme and streamline operations for its Decorative Paints business in over 30 countries across Europe, the Middle East and Africa, Infosys said in a statement.

As part of the deal extension now, the transformation programme has been extended across AkzoNobel’s Performance Coating business in Europe and North America as well, it added.

Infosys BPO will deliver finance and accounting services out of its global delivery centres in Poland and India, in English, Spanish and several other European languages, it said.

The subsidiary will partner with AkzoNobel to set up a finance services organisation by consolidating work from seven business groups across 55 locations, it added.

The deal extension involves standardisation and outsourcing of the transactional accounting organisation for the Performance Coating business of AkzoNobel.

New investment in Pomorska SEZ Plastiko received business permit from Pomorska Special Economic Zone. Under the investment, the company will buy and implement a production line. The total value of investment reached €20m. 30 new jobs are expected to be created. n

25

www.bizpoland.pl

FDI Investment News

Samsung Electronics launches first appliances factory in EU – in Poland Samsung Electronics held the ceremony to launch a new production line. “This is 250 new jobs”, commented PAIiIZ president Sławomir Majman. The project focuses on the increase of production capacity and expanding the range of washing machines and refrigerators that will be manufactured in Wronki by 2016. The investment will deliver more than 250 new jobs to the company and about 60 new jobs to the company’s suppliers.

The project received a grant from the programme of supporting the investments of significant importance for Polish economy.

Guests that attended the opening ceremony also visited School No. 1 in Wronki, where Samsung has created a special science centre for students. Due to that, young people can prepare for the demands of employer in terms of know- how of the latest technologies.

“This project is an excellent example of cooperation on dual education system between local government, local education centre and business”, commented deputy prime minister, Janusz Piechociński. After the course the best students may be invited to apprenticeships at the R&D Centre in Samsung’s plant. For Samsung, the factory in Wronki is the first company’s investment in household appliances production in the European Union. n

New programme for Śląsk and Małopolska to attract investors In the presence of deputy minister Ilona Antoniszyn-Klik, authorities from Śląsk and Małopolska presented a number of solutions and proposals regarding activation of both provinces that will be added to the governmental programme of reindustrialisation of Śląsk and Małopolska.

The presentation took place on 11 February in Bytom.

“Balance, revitalization, high technology and opening for new SMEs in these provinces is what we want to achieve”, said deputy minister of economy, Ilona AntoniszynKlik. “We test and implement new

technologies. Here one can notice a rapid growth of business services sector, for example IBM has located its centre in Śląsk”, said marshal of Śląsk, Wojciech Saługa, mentioning the advantages of the region.

“Chemical processing of coal, clean technologies, revitalization of degraded land, vocational education tailored to business needs - these are challenges for the region”, he added. “Depopulation is our main problem. We estimate that in 2050 there will be about 28% less population than today” he said.

Also marshal of Małopolska Jerzy Miller presented his plans

Delegation from Shandon China visits Poland

26

PAIiIZ president Sławomir Majman hosted the delegation from the province of Shandon and the city of Yantai to talk about the investment opportunities.

The discussion also focused on how to increase business relation between Poland and China.

During the meeting Mr Majman encouraged guests to locate investments in Poland. On the other hand, the Chinese declared their interest regarding agri-food sector, electronics and domestic appliances sectors. Currently, PAIiIZ supports 6 Chinese investment project with a total value reaching €52m that in the future can generate over 800 new jobs.

Shandon is the third most developed province of China. The economy of the region bases on heavy industry including mining as well as on production of vegetables.

for developing the western part of Małopolska. “The implementation of the re-industrialisation in both regions needs a support of large companies”, he argued.

He also stressed that supporting R&D and creating common market of science and industry are one of the biggest economic challenges for the region.

A special project entitled “4 Silesia (4S)” based on the activation of investments in areas owned by municipalities and located along the four expressways - A1, DTS, S1 and S69 - has been prepared by Katowice Special Economic Zone. n

Two investments in the Kraków SEZ

to the extension of TSEZ about 1,636 new jobs can be created and nearly PLN Kraków Technology Park issued the first 457m will be invested. permits in 2015. They were given to Nidec Motors & Actuators and Grape Up. IVENA LOG in Słupsk SEZ Reinvestment of Japanese company IVENA LOG is planning to create a Nidec Motors & Actuators will be new Logistic Centre in Słupsk Special based on the expansion of the existing Econimic Zone to provide outsourcplant and equipping it with new produc- ing services there. The total budget tion lines. The value of the investment is of the new investment reached €14m.

PLN 15M. 15 new jobs will be created. The company will also create 12 new Grape Up, a company providing IT ser- jobs. vices plans is to hire 80 employees. The value of the project is PLN 864,000.

LUG Light Factory in Lubuski

Tech Park Tarnobrzeg SEZ expands its territory At the beginning of February, the Council of Ministers adopted an Act extending the Tarnobrzeg Special Economic Zone.

Due to that, new investors can operate in the zone. TSEZ will be extended by 43.7 hectares to reach 1,721 hectares.

Basing on the average results obtained in the zone in 2013, it is estimated that due

In Lubuski Industrial and Technology Park, the construction of a new manufacturing plant of LUG Light company has just started. The new plant will produce hightech lighting equipment made in LED technology. LUG specializes mainly in the production of industrial and decorative lighting for internal and external use. The company develops and sells its products in Poland and around the world. n

March 2015

www.bizpoland.pl

City Investment News

Gdańsk/Gdynia Railway line to link region

In September passenger trains will start operating on the newly built (the first in Poland after 1989) 18 km-long Kolej Kokoszkowska railway line. It will link Gdańsk Wrzeszcz station with Lech Wałęsa international

airport and Gdynia with the southern and western regions of the Pomeranian voivodeship.

Pomorska Kolej Metropolitalna S.A. – a company acting on behalf of the Pomeranian voivodeship – is the investor responsible for delivering this infrastructure.

New trains have been ordered to operate on the new line.

The total cost of the investment is in excess of PLN 1 billion and is the largest investment being made by the Pomeranian voivodeship.

Rail transport is of key importance in the wider Tri-City metropolitan area. Together with the modernisation projects of Szybka Kolej Miejska (SKM), which transports more than 34 million passengers annually, this mean of transport is gaining in importance even more.

New infrastructure will be a significant growth-driver not only for Gdańsk and Lech Wałęsa international airport (which is planning a new Airport City project), but also for the southern and western parts of the Pomeranian voivodeship. The regional authorities intend to fully integrate the new line with the existing road and rail infrastructure of the cities it will go through. Gdańsk may serve as an example of such an approach, where tram infrastructure is being integrated with the Pomeranian Metropolitan Railway (PKM).

The Tri-City is currently one of the largest construction sites in Poland. In addition to the ongoing Pomeranian Metropolitan Railway project, the key investment projects in the region include:

27 2015 March

www.bizpoland.pl

City Investment News

Gdańsk and Gdynia ports development

28

The state-of-the-art Deepwater Container Terminal Gdańsk provides Pomerania with a direct connection with Asia through the Maersk Line service point. It is worth mentioning that the new terminal is able to handle the largest container ships with a capacity exceeding 18,000 TEU. In March 2013, Port of Gdańsk authorities and DCT signed an agreement to further extend the DCT capacity to 4 million TEU. In order to maintain its competitive edge, Gdynia port decided to improve its capacity and transport infrastructure. In January 2014, Port of Gdynia Authority SA. acquired the Gościnne quay from Naval Shipyard Gdynia Poland, which will allow the port to build a new 480 m-diameter turn-table. The next stage of the Gdynia port refurbishment is deepening the port channel by 2 m from 13.5 m to 15.5 m. All these planned improvements will allow Gdynia port to handle 380 m-long container ships of up to 14,000 TEU capacity. The Tri-City’s accessibility from Poland’s hinterland has improved greatly as a result of the completion of the A1 motorway to Stryków and, more recently, as a result of the new Pendolino trains, which have been operating since 14 December 2014.

The journey from Warsaw to the Tri-City takes approximately three hours and it is being operated by five trains which have a maximum speed of 200km/h.

The tunnel under the Martwa Wisła river will facilitate transportation around Gdańsk city centre and improve the accessibility of the Wyspa Portowa island. It will not disturb the only waterway between the Motława river, Martwa Wisła and the open sea.

The tunnel will also reduce transit traffic in Gdańsk city centre.

The Tri-City northern ring road.

The northern by-pass is designed to redirect transit traffic from the centres of Reda, Rumia and Gdynia and to generate attractive investment areas along the regional transportation corridors. The project will also improve the accessibility of the north-western part of the Pomeranian voivodeship from

the Tri-City and the rest of the country, which is one of the priorities of the Development Strategy of the Pomeranian voivodeship.

SKM station Gdańsk Śródmieście is a project that started in August 2013. The SKM rail line will be extended by 1 km and a new station, Gdańsk Śródmieście, will be added to the existing network. The station will be located

European Regional Development Fund within the Infrastructure and Environment Programme.

The ESC, located next to Gdańsk shipyard, has, due to its extraordinary design, become an important historical and architectural symbol of the city. Moreover it is an interesting point on the landscape of the Tri-City area.

The Museum of the Second

next to the Urząd Marszałkowski office and the planned Forum Radunia shopping centre. The project also involves the construction of a new integrated transportation hub. SKM Śródmieście is due to be completed in March 2015.

World War in Gdańsk. The idea for this museum came to life in 2008. The mission of the museum is for it to become an important institution that will show the wartime experiences of both Poland and other European countries. The museum will be located next to Główne Miasto and the Radunia channel. Its completion is planned for 2016.

The Emigration Museum will be located in the building of Dworzec Morski in the Port of Gdynia. It will focus on the history of the emigration from Poland and will combine exhibitional, educational and artistic functions. It is planned for completion in May/ June 2015. n

Other investment projects The Tri-City is an important historical and cultural location and therefore invests in a range of projects in addition to infrastructural improvements. Those projects refer to local history and genius loci and thus enrich the TriCity’s tourist and cultural attractiveness.

The European Solidarity Centre in Gdańsk opened in August 2014. It was co-funded by the

March 2015

www.bizpoland.pl

City Investment News

Łódź Airbus Helicopters opens new office in Łódź In mid-February Airbus Helicopters opened an office in Łódź where about 100 new employers will be hired. The investment was supported by PAIiIZ. This is the fourth office of Airbus in Europe; others are located in France, Germany and Spain. The Polish office will focus on development of R&D projects of the company as well as on designing new constructions and providing modernization of helicopters.

It is expected that graduates of Łódź University of Technology will be among employees of the company’s new office, as for nine years the University has been operating with Airbus. Moreover, a new faculty related to the aviation is to be opened there soon. Airbus and the French embassy will fund scholarships for students. n

FGD upgrade for Łódź cogeneration plant

Veolia and Alstom have signed a turnkey contract for the

construction of a complete Flue Gas Desulphurisation (FGD) plant,

which will treat flue gases of two OP130 and three OP230 steam boilers at a combined heat and power plant in Lodz. Station numbers K1, K2, K3, K6, K9 at Veolia Energia Lodz SA (CHP 3) project will be upgraded under the terms of the deal with completion of the desulphurisation plant due in early 2017.

‘The FGD plant, upon completion, will enable us to continue the operation of all steam boilers of CHP 3 beyond 2016 and in the same time significantly reduce our environmental footprint in Lodz region,’ said Janusz Cieślakowski, Investment and Maintenance Director for Veolia Energia Łódź SA. n

Mecalit receives business permit to operate in Łódź SEZ Mecalit Poland is a supplier of plastic components for home appliances industry. Under the new investment, the company

2015 March

will expand the existing plant and spend at least PLN 12m for that purpose. Also 20 new jobs will be created by the investor. n

29

www.bizpoland.pl

City Investment News

Kraków Three business permits in Krakow Tech Park Elettrostandard Polska, Wind Mobile and Pracownia Ślusarska Bartosz Wójcik - these three companies have received permits from the Kraków Technology Park to conduct business there.

Elettrostandard Polska will reinvest in Niepołomice. The company will expand its manufacturing plant and the office space.

Total expenditures will reach PLN 13.5m. Wind Mobile operating in the telecommunications market, will create 40 new jobs and spend about PLN 1m on new investment.

Manufacturer of gates and metal elements - Pracownia Ślusarska Bartosz Wójcik is to invest at least PLN 2.4m. n

ING Bank arranges EUR 193 million refinancing for TriGranit’s Bonarka City Center ING Bank Śląski S.A. and ING Bank N.V. have jointly signed a EUR 193 million term loan facility to refinance senior debt related to the Bonarka City Center (BCC) shopping mall. The mall has been developed by TriGranit Development Corporation, one of the largest privately owned development corporations in Europe. The loan for Bonarka City Center was closed on 27th February.

Opened in 2009, with a total area of ca 92,500 sqm, BCC is the biggest shopping centre in Krakow.

The shopping centre has long term tenant contracts in place and welcomed more than 13 million visitors in 2014, a 4.4% annual increase in visitor numbers. The success of the transaction demonstrates the project’s potential, the strength of the underlying assets, as well as TriGranit’s solid track record as a developer. n

Cisco invests in Polish NOC

30

Cisco continues to invest in the Global Services centre in Krakow, in its third year of expansion it now features a Network Operations Centre (NOC). Officially opened in May 2012 the Cisco Global Services Center in Krakow is poised to receive further investment in 2015. Located in Krakow’s Podgorze district it hosts a Telepresence room as well as offering services across multiple functional groups, including Consulting and Technical Services, Cloud and Managed Services, Finance, IT, and Global Business Services. Its regional coverage extends to Europe, Middle East, Africa and Russia.

In the last 30 months it has grown from 80 staff to over 500 and its success is owed in part to Polish Government backing, the growing Polish economy and well educated local graduates and employees who appear to be fully engaged. Cisco have now committed to further expansion including the addition of a Network Operations Center (NOC), one of three sites globally.

The NOC will be part of the Cisco Cloud and Managed Services organisation, its purpose being to monitor the status and condition of customers' networks and software infrastructures

and immediately respond to any detected issues. The other two NOC’s are located in India and the USA; the Krakow centre is strategically placed to allow a seamless 24/7 service to be offered to global customers. Although there is approximately only five hours difference between India and Poland, the coverage including the US means that the three NOC can cover the globe fairly easily.

Cisco are clearly happy to continue investing in Poland, said Olivier Kohler, Chief Administration Officer and Senior Vice President, Cisco Global Business Services. n

March 2015

www.bizpoland.pl

City Investment News

Wrocław NewVoiceMedia opens cloud contact centre NewVoiceMedia, a leading cloud contact centre vendor, is furthering its commitment to driving innovation by opening a new European development centre in Poland. The office is located in the Hubska Center in Wroclaw, a city which has recently experienced significant growth in the IT services sector and is home to some of the world’s leading high-tech

businesses. Chosen for its extremely strong talent pool, the hub is close to Wrocław University of Technology which ranks second among the best technical universities in information technology and will provide a base for the company’s team of experts while offering capacity for substantial growth.

Recently ranked among the world’s top 50 cloud service

providers, NewVoiceMedia is outpacing the rapidly expanding cloud contact centre market fivefold and has doubled its number of staff over the last year to meet increased demand for its technology.

The centre will support this expansion, strengthen NewVoiceMedia’s presence in EMEA and offer the company an excellent facility in which to develop its portfolio. n

Katowice GKS Katowice lines up €24m stadium investment from city The City of Katowice is preparing to dip into public funds to build a new stadium for its struggling football club GKS Katowice and support its bid to return to the top division of the Polish league.

The investment is estimated to be worth about PLN 100 million.

The new facility will have a capacity of 12,000 spectators, but with the capability to expand by a further 6,000 seats. The project

was unveiled by Katowice's municipal authorities at a recent meeting with representatives of the club's supporters' association. This is only the latest initiative by the city to increase its support of the operations of GKS Katowice. Last year, the municipal authorities bought shares worth PLN 1.1 million in the club, making a total of PLN 2 million invested to date.

The funds were made available to enable the club to secure the required license to compete in this I Liga season, the second tier of Poland's professional football league. The money also enabled the club to pay off tax debt owed to social security institution ZUS as well as wages owed to former players. As a result of the financial difficulty, the league imposed a limit on players' salaries. n

Poland seeks EU approval to fund failing coal mines Poland is to seek approval from the European Commission for its plan to extend state funding to some loss-making coal mines.

The slump in coal prices, increase in production costs and sliding demand is affecting the financial health of the coal mines, according to Reuters.

Polish Minister in charge of restructuring the industry Wojciech Kowalczyk was quoted

by PAP news agency as saying: “We declared that we will submit the notification application on the aid programme in February.” Kowalczyk had previously said that the country is optimistic about European Commission approval to the state aid proposal.

2015 March

“Restructuring of the four failing mines is estimated to cost $624m, which could increase by 10% to 20%.”

With mounting losses, the country had planned to close some of the loss-making mines run by state-owned company Kompania Weglowa; however, the plan was dropped by the incumbent government following protest from mining workers.

According to EU state aid rules, Poland must gain approval from the European Commission to give state aid to the mines.

Restructuring of the four failing mines is estimated to cost $624m, which could increase by 10% to 20% if the deal is finalised with the mining unions.

Government data shows that Kompania Weglowa recorded losses of about €270m during the January to November 2014 period, and its liabilities have increased to about €1bn.

In January, Kompania Weglowa announced that it will cut jobs, close mines and receive financial support from state-owned power utilities following a rescue plan backed by the government.As part of the plans to close the four mines, one mine will be sold to coal trader Weglokoks and the remaining nine profitable facilities will be moved to a new holding company.

Weglokoks and state-owned power producers are currently in discussions about the sales of stakes in the new group. n

31

www.bizpoland.pl

City Investment News

Poznań Goodman to develop huge warehouse at Poznań airport Global logistics property group Goodman has announced plan to develop a warehousing facility covering an area of 16,000m² at the new Poznań Airport Logistics Centre in Poland. CD Partner, a Polish beverage wholesaler, will be the first customer at the new logistics centre, leasing 4,500m2 of warehouse and office space at the modern facility, with Goodman constructing the remaining 11,500m2 on a speculative basis. Delivery of the warehouse is planned for the second quarter of 2015.

As the first customer at the Goodman Poznan Airport Logistics Centre, CD Partner will lease 4,200 sqm of warehouse space and 300 sqm of office space at the facility. The company will use the site as its new headquarters and will store and distribute a variety of beverages from this central location.

Additionally, Goodman has provided its customer with additional parking spaces to accommodate employees and clients.

“The contract with CD Partner allowed us to launch a new investment in the Poznan market. We see a lot of potential in this region and that is why we decided to begin construction of the first building at the Poznan Airport Logistics Centre. In addition to our other Polish speculative developments in Gdansk, Wroclaw and Kraków, the new project in Poznan illustrates Goodman's strategy to execute strategic investments in key logistics locations across Central and Eastern Europe,” explained Blazej Ciesielczak, Goodman Regional Director for Central and Eastern Europe.

CD Partner and future customers of the ultra-modern facility also will benefit from Goodman's technical and operational property

modern logistics space intended for warehousing or light production, which is available for immediate development.

services expertise and support. A key feature of this is Goodman's flagship property investment plan, a unique benefit Goodman provides to its customers that ensures all properties are maintained to the highest market standards.

“Poznan is one of the fastest growing markets on the Polish warehousing map. Increasing demand and a low vacancy rate is encouraging new investment in the logistics real estate market, such as the Goodman Poznan Airport Logistics Centre. This is thanks to a strong local market, availability of a skilled workforce along with a well-developed road infrastructure,” said Urszula Rasmussen, Associate Partner, Head of Industrial at Sharman Church Chartered Surveyors, who advised on the transaction with CD Partner. n

Burgeoning logistics location Goodman Poznan Airport Logistics Centre, with a target lease area of 52,000 sqm, is located in close vicinity to Lawica Airport, with a direct connection to the A2 motorway via the S11 expressway connecting Poznan with Germany, Central Poland and Warsaw. At the logistics centre, Goodman offers

Sustainability solutions 32

All facilities at Poznan Airport Logistics Centre will be equipped with sustainability features, to help optimize customers' operational costs. For CD Partner in particular,

the warehouse will be divided into lighting zones to minimise energy usage. In the office area, light sensors will be installed to limit light usage to active areas. Additionally a

“Green Lease” clause will be signed with CD Partner, which includes a provision to reduce waste generation and consumption of energy and water. n

March 2015

www.bizpoland.pl

Chambers of Commerce News

Austria Austria Wine promotion The Austrian Wine Promotion Board hosted guests at the Hotel Sofitel Victoria, to promote Austria's wide range of quality wines.

Finland IT business mission to Finland Between 20-24 April 2015, Pomeranian Regional Development Agency in SĹ‚upsk invites representatives of IT sector is to take part

in a trade mission to Finland. Companies from Pomerania can submit applications for financial support for their participation. PAIiIZ took patronage over the mission.

Portugal Portugese wines at Radisson SAS Portugese wineries came to Warsaw to promote their fine wines to Poland’s F&B sectors.

33 2015 March

www.bizpoland.pl

Chambers of Commerce News

Scandinavia SPCC celebrated 10 years of trade and investments between Scandinavia and Poland Last year was marked with the 10th anniversary of Scandinavian-Polish Chamber of Commerce with a record number of chamber representatives, corporate members and partners participating in the SPCC 10th Anniversary Debate.

The event took place on December 4th at the Muranów Conference Center, unique, modern & prestigious venue in Warsaw, with links to Polish-Nordic cooperation: designed by a Finnish architect - Rainer Mahlamaki, the Center operates with the support of the Norwegian grants.

The evening opened Carsten Nilsen, SPCC Chairman with comments on the strong ties Scandinavia has with Poland, the importance of the SPCC network and emphasizing the significant impact SPCC has had on Scandinavian–Polish business relations. He also gave his insights into the report “Scandinavian companies in the Polish landscape”

prepared along with PwC, which was officially announced that day and is summarizing the success of Scandinavian business in Poland & presents the biggest investments.

Anniversary Debate was attended by Mr. Hallador Asgrimsson, Prime Minister of Iceland in 2004-2006 and the Secretary General of the Nordic Council in 2007. The Prime Minister focused on the process of transformation of the Polish economy, challenges of the EU membership in the current situation.

The evening was an excellent opportunity for a debate about the changes that have taken place in Poland over the last ten years, seen through the eyes of Scandinavian investors and what was their role in the process. The Anniversary Debate, led by the expert in Scandinavia related issues - Mr. Michal Kobosko, attended by Mrs. Evelyn Higler, CEO, IKEA Retail Poland, HE Hanna Lehtinen, Ambassador of Finland, Ms. Joanna Pakos, CFO, Member of the Board of Volvo Poland, Mr Per Hammarlund,

Chief Strategist, SEB EM, H.E. Staffan Herrstrom, Ambassador of Sweden, H. E. Steen Hommel, Ambassador of Denmark, H. E. Karsten Klepsvik, Ambassador of Norway, and Mr. Carsten Nielsen, SPCC Chairman, was an excellent opportunity to exchange experiences gathered by Scandinavian investors over the last decade in Poland.

The cultural highlight of the evening was a piano recital by Leszek Możdżer, an outstanding pianist, composer and producer, who is widely considered to be the greatest revelation of the Polish jazz of the last decade and who has gathered an enthusiastic applause.

The SPCC 10th Anniversary Debate with the standing dinner reception at the end, was attended by over 300 invited guests, including ambassadors of the Nordic countries, presidents and directors of member companies, representatives of the Polish government and regional authorities, representatives of other bilateral chamber of commerce, key business organizations and other prominent guests. n

Taiwan 2015 TAIPEI AMPA & AutoTronics Taipei

34

Asia’ s most professional and comprehensive auto show! On behalf of the organizers we have the pleasure to invite you to the 5-in-1 AMPA Show: Taipei AMPA, AutoTronics, Motorcycle Taiwan, EV Taiwan, and Tuning and Car Care Taiwan Show will be held together in Taipei from April 8 - 11, 2015. Boosting 4,000 booths and 8,000 professional buyers from 130 countries worldwide presents a wide range of exhibits and an excellent procurement opportunity not to be missed. The organizer will also hold an award ceremony for innovative products during the opening of the show, one-on-one procurement meetings, various industry seminars, exhibitions for

tuning cars and relevant promotion activities.

Show Dates: April 8 to 11, 2015 Venue: Taipei World Trade Center Nangang Exhibition Hall Gross Exhibit Space: 60,000 sm Number of Exhibitors: 1,500 exhibitors / 4,000 booths Visitors: 50,868 professionals Exhibits Profile: Auto Parts, Auto Accessories, Tuning & Restyling, Engine Parts, Chassis System Automobile Frame and Parts, Repair & Maintenance Automobile Electronic Components & Parts, Automobile Electronic Products Organizer: Taiwan External Trade Development Council (TAITRA) and Taiwan Electrical and

Electronic Manufacturers’’ Association (TEEMA) We invite you to contact our office if your company intends to visit our trade show. We provide information that can help in the organization of travel and registration, which allows guest to receive free promotional materials and admission to the exhibition prior to the trade show.

In addition, we encourage you to participate in a year-round program of Online Meetings (videoconferences) with Taiwanese companies, we offer free assistance in finding suitable business partners in Taiwan to meet your individual requirements.

Contact: Sandra Piotrowska; sandra@ttcw.it.pl, tel.(48-22) 288-82-00~01 n

March 2015

www.bizpoland.pl

Chambers of Commerce News

United States The new Officers of the AmCham Board On December 8, 2014, the American Chamber of Commerce in Poland held its Annual General Meeting & Christmas Reception at the Regent Hotel in Warsaw. The business part of the evening included the presentation of the Auditor’s Report and the Annual Report, approved by a quorum of members.

Highlights of the evening included an address by Ambassador Stephen Mull, a speech by Professor Leszek Balcerowicz, student essay contest winners, and the election of a new Board of Directors for the 20152016 term. On January, 2015, new Officers were elected by the AmCham Board of Directors. Tony

Housh, Senior Counselor at APCO Worldwide has been elected as the Chairman. The Vice-Chairs are Judith Gliniecki, Partner at CEE Equity Partners and Joanna Bensz, Country Manager at CH2MHill.

Treasurer is Paul Fogo, Managing Partner at JF Legal, and Secretary is Richard Lada. n

The full Board of Directors for the term 2015-2016: Tony Housh, APCO Worldwide, Chairman; Joanna Bensz, CH2M Hill, Vice-Chairman; Judith Gliniecki, CEE Equity Partners, ViceChairman; Richard Lada, Secretary;

Vietnam

Paul Fogo, JF Legal, Treasurer; Magdalena Burnat-Mikosz, Deloitte, Member; Anna Jakubowski, CocaCola Company, Member; Jolanta Jaworska, IBM Poland and Baltics,

Member; Marek Kapuscinski, Procter & Gamble, Member; John Lynch, Lynka, Member; Joseph Wancer, Bank BGZ, Member; Roman Rewald, Weil, Gotshal & Manges, Member. n

The Ambassador of Vietnam hosted a small business delegation, to mark the commencement of flights to Vietnam via Doha and Qatar Airways.

35 2015 March

www.bizpoland.pl

Events

Polish capital market awards Held at the headquarters of the Warsaw Stock Exchange, the annual Gala attracted leading issuers, exchange members, brokerages, and capital markets lawyers and advisers. A grand total of 30 awards were handed out. Guest of honor at the event was Wojciech Kowalczyk, the Secretary of State of Ministry of Treasury.

Prizes were awarded in the following categories: Special prizes were awarded to: • Katarzyna Kacperczyk, Undersecretary of State for African, Asian and Middle Eastern policy at the Ministry of Foreign Affairs, for the promotion of the Warsaw Stock Exchange abroad.

• PKO BP Brokerage house Broker of the Year 2014

36

Awards in the “Equities” category: • Deutsche Bank for the highest value of placed shares in 2014.

• Banco Espirito Santo de Investimento for the organization of initial public offerings with the highest total value in 2014.

• Alumetal SA for the highest value IPO in 2014.

• LOTOS SA for the highest value secondary listing in 2014.

• Trigon Brokerage House for the largest number of companies listed on the Main Market of shares in 2014.

• DMBH for the highest marketshare in stock trading on the Main Market in 2014.

• INC SA for the largest number of companies listed on NewConnect in 2014.

• mBank Brokerage House for the highest share in trading shares and allotment session on NewConnect (excluding market maker transactions) in 2014.

• BDM Brokerage House for the highest share in trading shares and allotment session on NewConnect in 2014.

KDPW (securities clearing and custody) Awards: • DM BOS - the first participant KDPW_CCP that fully implemented netting in securities • X-Trade Brokers - provided the largest number of reports in 2014.

• Raiffeisen Bank International - foreign participant who first created and actively uses the omnibus account at KDPW.

March 2015

www.bizpoland.pl

Events Awards in the “Debt” category: • PZU FINANCE AB for the highest value debut on the Catalyst bond market in 2014.

• mBank Brokerage House for the highest value of non-Treasury bonds trading on Catalyst.

• PKO BP SA brokerage house as best “market maker” in nonTreasury bonds on Catalyst.

• mBank for the highest value of Treasury debt instruments introduced on Catalyst.

• Noble Securities for the introduction of many series of corporate bonds on Catalyst.

• mBank mortgage for the highest activity on the mortgage bond market in 2014.

• Bank Pekao SA as underwriter for the highest value of outstanding bonds on the Catalyst market.

Awards BondSpot: • ING Bank for highest turnover in the cash market and for highest turnover in TreasuryBondSpot.

• Bank Handlowy - leader of market-making on TreasuryBondSpot Poland in 2014.

Awards in the “derivatives” market: • mBank Brokerage House and BOS Bank Brokerage for the highest volume in futures trading.

• BZ WBK for the highest market share (without options) as market maker in 2014.

• PKO BP Brokerage for the highest market share (options) as market maker in 2014.

WSE data distribution awards: • Noble Securities SA, which is the first to begin providing its clients with real-time data from TGE and BondSpot.

• PKO BP Bankowy PTE for presentation of the widest range of WSE information products.

The organizer of the Gala was the Warsaw Stock Exchange and Gala partners were KDPW and BondSpot S.A. n

37 2015 March

Leadership & Discipline

The Marcin Gortat interview with Forbes Polska.

The NBA basketball star lays out his views on his investments, his “black soul,”, Polish patriotism, and the “Gortat Brand.”

FORBES: Teammates say you have a black soul.

What does it mean?

It has something to do with my basketball education. When I played in Germany, I was spending a lot of time being surrounded by American players.

I was curious how the NBA looks, how is life there. I felt good around them, because I could communicate in English. I quickly learned the slang of black players. I contracted their sense of humor and it quickly became my nature. I like to laugh, that’s why I often fool around and clown in the locker room, hoping that everyone will laugh out loud.

It’s your eighth year in the States.

Have you changed more as a man or as a player?

I’ve changed in both of those aspects. It’s inextricably linked together. I learned here that life is about the effort, devotion, and trying. It’s about, what Americans call “a good effort,” which means that you can get up in the morning and fully devote yourself to making your dreams come true. For me it was making it to the NBA, then surviving in the league, and becoming a better player. You wake up in the morning with sore ankles, knees, spine, and you have to fight it every day. You have to go to the gym and endlessly repeat the same exercises.

Shoot, and shoot… That’s what ultimately molded my personality in the States.

You’re changing, but the passion for fast cars still remains. You’ve got a Ferrari, Porsche, BMW and a Mercedes …

I’ve also got an SUV and a pickup. I used to have the most fun with the 800-horsepower BMW, but I’ve kind of grown up. I plan on selling that car, but it won’t be easy. I dedicated myself to that car, it’s my little love. I’ve got to sell that car somewhere to the other side of the world, so I can’t see it anymore.

38

How else—besides the cars—do you spend money?

I don’t change cars too often. I did it recently, after five years, because I signed a new contract with the Wizards. I don’t have any

www.bizpoland.pl

other expensive hobbies. I also spend money on clothes, mainly on suits, but that’s only about $25-35,000 a year. I don’t wear diamond necklaces or stuff like that.

What do you invest in?

I’m not interested in high profits, but the stable and relatively sure ones. My investments are very diverse. It’s the stocks, obligations, land, real estate. I surround myself with specialists and counselors who know their way around various kinds of assets, but they also have a great knowledge of economics.

Can you give an example of an investment that you’ve come up with by yourself?

Most of it is real estate. For example in Łódź.

Do you invest more in Poland or in the States?

It’s quite even between the two countries, between different kinds of assets. Your portfolio has to be diversified, accordingly to the rule that you don’t put all your eggs into one basket. Thanks to that diversity I’m able to meet new people and develop on multiple grounds.

Do you invest on the Warsaw Stock Market, too?

As of now, only on Wall Street. And we’re doing really good. I’m building my portfolio calmly. I’m going to need that money in five or six years, once I’m retired.

More than 70 percent of American pro basketball players go bankrupt when they’re done playing.

Aren’t you afraid of that statistic?

The average budget of an NBA player is $50-60,000 a month. For that money they can maintain 2-3 houses, and 4-8 cars. The insurance alone is expensive. After 10 years you retire, and then realize that you can only spend $10-15,000 a month. A large number of players cannot accept it and they live the way they used to, until they run out of money.

Personally, I can’t be 100 percent sure that I won’t lose the assets I accumulated. Any time there can be a war or things can go wrong, and American economy can go down. I’m not afraid, though, that it would happen because of my sloppiness or my life style. I’m working with high-class specialists in money management, and I have a lot of valuable contacts. I’m trying not to make any misguided moves that could deplete my estate. However, some business mistakes occur sometimes, and it hurts.

March 2015

www.bizpoland.pl

Leadership & Discipline

The name Marcin Gortat has become a brand. Do you want to gain something from it?

Yes. My next dream is to be remembered. For who I was, and what I did. I’m consequently going in that direction—on, and off the court. I’m really engaged in charity work. On one hand, it gives me a lot of fun, and on the other hand, it fulfills my inner need of sharing. I want to give back to the

My dad used to be in the military. Army and military is my hobby. I’m interested in the gear, tactics, and weapons. The aim of my work is to restore the respect that’s due to the uniform.

community this way. I want to thank the people who support me, who root for me. I’ve also got the satisfaction that I don’t need to sell my private pictures or to schedule a session with paparazzi, or say something outrageous, for people to write about me. Thanks to the position I’m in, I can create new projects, which makes me happy.

Projects like supporting the army or children’s development.

Playing in the NBA is stressful. You shoulder the burden of some more things, and in the summer, instead of resting, you drive around Poland organizing camps for kids. Not too much of a burden?

Sometimes it is. People don’t realize with how much mental pressure, and physical exhaustion, NBA players have to deal with. When I wake up in the morning, sometimes it hurts so much that I can barely get to the bathroom. When I play a bad game, an agent or a manager comes up and asks what happened. You play a couple of bad games and you get benched.

Are you considering promoting the Gortat brand in the USA as well?

I focus on Poland, and I’d rather be on the cover of the Polish edition of Forbes than on the American.

Maybe some manager or businessman will read what I have to say, and he will think that this Gortat guy is a cool dude, he does valuable stuff, and it’s worth joining him. Maybe someone will send their kid to one of my summer camps and the kid will become a good player?

You could say that you’re a patriot—is that one of the reasons why you’re supporting all those charitysocial projects in Poland?

Yeah, I am a patriot. I think rationally. In the States, a 15-year-old basketball player has five pairs of shoes, his team receives jerseys from the sponsors, support from the school, and a bus to travel with a day before the game. In Poland, the same team would ride a public bus straight to the gym,

2015 March

each player would have one pair of shoes, and one set of jerseys for four seasons. I trained in Poland, in the gyms where windows were smashed, and during the winter, snow would fall inside. Do the States need that support or Poland? If one day some young man achieves success, gets called to play for the national team, or even plays in the NBA, and then says that he started playing at the Gortat Camp, and thanks to the foundation he was given a better chance to develop, I will say that this is one of the biggest achievements of my life.

Apart from the social and charity work, you also support the army. Why? My dad used to be in the military. Army and military is my hobby. I’m interested in the gear, tactics, and weapons. The aim of my work is to restore the respect that’s due to the uniform.

Particularly, I don’t like how we treat the veterans in Poland, who fought on the missions abroad. They train hard for many years to risk their lives for us. People who go on missions are going through hell. I had an opportunity to be in Afghanistan and—I assure you—it’s not idyllic.

Not everyone gets the chance to return home. But, if it wasn’t for the devotion of the soldiers, a man wouldn’t be able to sit safely in a warm apartment.

Sometimes we forget that a capable army makes for the strength of the nation.

I can’t be 100 percent sure that I won’t lose the assets I accumulated. […] I’m trying not to make any misguided moves that could deplete my estate. However, some business mistakes occur sometimes, and it hurts.

That’s a very American motivation.

I’m not denying that the projects involving the army were inspired by the USA. Here, the cult of the veterans is very strong. I’ve seen many times people spontaneously approaching the soldiers to thank them for their service. The moment when 20,000 people at the game get up and cheer for the veterans of war, it’s beautiful. It’s not like that in Poland yet, but I have a dream to change it. I want to contribute. That’s one of the reasons I organize the “Gortat Team vs. Polish Army” game every year.

That’s why I visit the military bases, that’s why I organize the camps for the kids of soldiers, that’s why I invite the families of fallen heroes to the States.

Would you be ready to go on a mission as a soldier?

After adequate training—of course. It’s a tremendous honor to fight for your country. Would I be happy being there, on a mission? I doubt it. I’m glad there is no need for me to go there, and I can contribute in different ways. n

39