BizPoland Magazine, May/June 2016

Special Focus: Silesia and Katowice

May–June 2016 vol. 8 no. 2(51) Price: 20 zł

Poland’s Foolish Fixation on Coal

SSC/BPO:

Events:

FDI:

Big investors move into Warsaw: Credit Suisse, BNP Paribas, Dentons

Baltic Sea Business Mixer

Daimler picks Poland for 500 m euro engine deal

GIFT VOUCHER This Gift Voucher, courtesy of.

entitles the bearer to a 3 course dinner for 2 people at

STIXX Bar & Grill Plac Europejski – Warsaw This Gift Voucher is valid from 1 July 2016 to 25 November 2016.

For reservations, please contact +48 504 007 993.

Cover Story 3

Poland’s foolish fixation on coal

5

And in Czech, a different approach: Bankruptcy

Silesia and Katowice 6

Katowice has undergone a metamorphosis

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Automotive and SSC/BPO drive demand for offices and industrial property in Silesia

(14) Polish military mobilized for World Youth Day’s 2 million people in July; Tramwaje Śląskie plans investment (15) China-Europe Economic Forum boosts trade (16) Polish doctors lead Eximo success in trial of blocked artery treatment (17) Food and drink packaging specialists Huhtamaki has acquired the Belfast-based Delta Print and Packaging; 2016 Buick Cascada Production in Gliwice (18) Katowice Special Economic Zone (KSSE) welcomes three new companies; New factory of NGK Ceramics in Dąbrowa Górnicza

SSC/BPO News

(19) DNV GL announces new Global Shared Services Centre in Gdynia; Credit Suisse to open new office in Warsaw with nearly 2,000 new employees (20) Dentons axes 50 UK roles in business services move to Warsaw (21) DLA Piper cuts 200 UK jobs after support staff review, in favour of Warsaw hub; BNP Paribas shifts jobs to Warsaw; cuts in UK (22) Ryanair to open IT Centre in Wrocław in August; ASPIRE inspires with top speakers at annual conference in Kraków

Anniversary 23

CFE celebrates 20 years in Poland

Energy News

(24) Energy – CEEP in Washington (25) Energix Renewable Energies secures financing for major wind project (26) Baltic Pipe: Poland, Denmark plan new gas pipeline to diversify energy

Equities News

(28) Polish stocks count $50 billion cost one year after Duda win

Defence

(29) Missile Defense systems go live amid Russian criticism

FDI Investment News –Incoming

(32) Daimler to open 500 m euro engine factory in Poland (33) Rush hours in Beijing – governmental visit in China (34) SeaChange pays $8 million for Warsaw-based DCC Labs (35) Finnish tools manufacturing factory moves to Poland (36) IMF Staff concludes Poland Mission (37) North Ireland-Poland Investment Summit set for 2 June

FDI Investment News – Outgoing

(38) Colian buys UK confectioner Elizabeth Shaw (39) Japanese success of Velis IT (40) Poland Nonprofit working on 3D-Printed Smart Glasses for Visually Impaired

Events

(41) ASPIRE inspires with top speakers at annual conference in Krakow (42) Baltic Sea Business Mixer highlights the economic potential of Pomerania

2016

9 June 2016

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Cover Story

Poland’s foolish fixation on coal For generations, Poland's coal miners have been a source of pride and heroism. A bulwark against communist rule, the miners have been treated with kids' gloves over the last 25 years by successive governments and shielded from the machinations of markets.

That protective bubble is about to pop.

Or maybe not.

Prime Minister Beata Szydlo, a coal miner's daughter from Silesia, has promised to protect coal-mining jobs, estimated at approximately 100,000 jobs.

With iron-clad control over all branches of the Polish government, there's only one obstacle left in the way: markets. And markets have been a brutal opponent in the last six months, as coal prices have plummeted, exposing the massive structural flaws in Poland's coal mining industry.

Last year Poland's three biggest mining firms, including Kompania Weglowa, KHW and the listed JSW as

metres on average in China, the world's biggest coal producer and consumer. Deeper pits are more costly because more energy and time is required to extract coal and cool the shafts to make working conditions bearable.

Michal Wilczynski, a former chief geologist in Poland and former deputy environment minister, said trying to rescue mines like Kompania Weglowa is futile.

Counting the costs The government is pulling out all the stops – and twisting arms – to support the coal sector. Sectors being sucked into the vortex include the state-controlled utilities, state-controlled banks and statecontrolled industrial firms.

And the costs are mounting, as the government buries its head in the sand, pretending as if it's immune to the costs.

"It's too late to rescue it.

Poland's coal mines will not

But it's not: the market capitalisation of Poland's biggest power group, the state-run PGE fell by over a third, or more than 11 billion zlotys in 2015, mostly because politicians involved it in helping to bail out Kompania Weglowa (KW).

Among Poland's utilities, Energa has the biggest portfolio of renewables; its shares were crushed when it announced it would invest in KW. The ministry has also been trying to convince Poland's refiner PKN Orlen to get involved in KW. And KGHM. And LOTOS. And Weglokoks. And TF Silesia.

And FIPP. You get the idea.

An effort to get banks to convert their debt to equity failed. Instead the banks have accepted new bonds with longer maturities and lower payouts. Banks like BZ WBK

“It’s too late to rescue it. Poland’s coal mines will not be effective, no matter how deep the cost cuts are, because of geology,” Wilczynski said. “Rejecting the global trends would take us back to the Communist era with an isolated economy.”

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well as three state-run power producers, which burn the mines' coal booked a net loss of almost 10 billion zlotys.

Part of Poland's problem is the depth of the seams - up to 1,200 metres compared to 465

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be effective, no matter how deep the cost cuts are, because of geology," Wilczynski said. "Rejecting the global trends would take us back to the Communist era with an isolated economy."

May–June 2016

Cover Story

JSW coal miner hopes to keep afloat on asset sale alone Listed coal miner JSW hopes it can stay afloat on asset sales alone, although it is considering different options for its restructuring process, CEO Tomasz Gawlik said when asked about recent Energy Ministry suggestion of a possible share issue.

“JSW is in the restructuring process, we are mulling different options,” Gawlik said when asked about a potential share issue. “We believe we will manage to make ends meet” on asset sales alone, he said.

The company plans no further asset sales beyond energy units and stakes in its coking plants, the CEO added.

JSW hopes that its pending deal with state agencies for stakes in coke assets will give JSW a call option on those stakes should the coal market improve, he indicated.

On May 18, Poland’s Energy Minister Krzysztof Tchorzewski said that JSW may require a rights share issue to raise capital, with the issue possible at the turn of the year. Poland would likely forego participation and reduce its stake in JSW to possibly below 50%. No decisions have been made yet, Tchorzewski indicated.

Poland currently holds a 55.16% stake in JSW. n

and BNP Paribas, with 150 million pln in debt just to KW, have been caught in the government's net.

The deal is as follows: Six Polish state-controlled companies, including utilities PGE and Energa, agreed in late April to invest 2.4 billion pln into a newly established state coal mining group, PGG, as part of the rescue plan to save the EU's largest hard coal miner Kompania Weglowa.

KW, the state-owned Katowicebased miner, recorded losses of more than Zloty 1. 5 billion pln in 2015, and 2016 is not looking promising. Its debts exceed 8.5 billion pln. Under the plan, the newly created PGG (Polish Coalmining Group) will take over KW's 11 mines, which employ 32,500 workers. According to the business plan PGG will break even in late 2017.

Among these six investors, PGE, Energa and PGNiG each agreed to buy 500 million pln in minority equity stakes in PGG. State-owned hard coal trader Weglokoks will invest 217 million pln, while state investment funds TF Silesia and FIPP will invest 400 million pln and 300 million pln respectively.

Six state-controlled and privately-owned banks declined a government offer to convert the KW debt they hold into PGG shares. Instead, the banks, as well as Weglokoks, will subscribe for new bonds worth 1.37 billion pln.

While labor cost cuts are in the plan, they are miniscule in scale. Union leaders agreed to suspend payment of an annual monthly bonus in 2017-2018, which will result in estimated savings of 200 million pln.

Canary in coalmine Industry analysts say the smart approach would be to plan an orderly retreat from coal - currently more than 85 percent of the energy mix - to more diverse supplies, including solar and wind, which they say is often the cheapest new source.

But the government just passed regulations that would make life difficult for new onshore wind.

"This is as if someone said - we are done with the mobile phones technology, we will only have fixed lines from now," said Zbigniew Prokopowicz,

5 2016 May–June

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Cover Story the former CEO of Polenerga, a privately owned Polish utility.

Yet the very forces that the government fights – market forces – may indeed finally force their hand. Government debt downgrades, erosion of support among both domestic and international investors for blunt government intervention, and rapid technological improvements in the solar and wind sectors may be the final catalyst that forces abrupt and positive change on a 19th century industry that keeps a stranglehold on Poland.

Luddites or Leaders ?

While the Polish government looks under every rock for more money to pour down the seemingly endless sink-hole of the coal sector, its effort to position itself as a leader in innovation rings hollow.

Instead of embracing ambitious energy-generation technologies, Poland's infamy for reliance on coal remains entrenched.

Government backs off – slightly – on hit to Wind Farms

KHW miner unable to service its debts

On 20 May, Poland’s parliament approved a bill that introduces extra requirements for building wind parks.

While the bill forces new turbines to be located further away from homes, which will halt some new projects after a record expansion of wind energy last year, lawmakers removed regulations for detailed audits and more technical supervision over the turbines.

“We want to eliminate the import of used, outdated turbines from western countries,” Deputy Energy Minister Andrzej Piotrowski said in parliament on May 18.

Compulsory paid audits every two years would have cost the industry as much as 150 million zloty.

The government also plans to rework an earlier plan to introduce renewable energy auctions in an attempt to reduce support for wind and solar power. n

Ailing coal miner KHW will trim unit losses on selling coal to PLN 8/ton in 2016 from PLN 23/ton in 2015 thanks to an improved sales mix, CEO Zygmunt Lukaszczyk said, reiterating that the firm needs PLN 500 mln in fresh capital in order to service its debt.

The bond repayment peak will come in 2018, which means that the firm "has 1.5-2.0 years for making the next step in restructuring," the CEO said.

Enea power group and Weglokoks coal trader are currently conducting due diligence at KHW, the CEO said.

KHW is working on an amended restructuring plans and also conducting analyses on which assets could be transferred to SRK mine restructuring vehicle. n

And in Czech, a different approach: Bankruptcy

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The insolvency of OKD, the Czech Republic’s only hard coal miner, is slowly beginning to register in north Moravia, the country’s industrial heartland. But for some miners the likely end of their way of life is hard to comprehend.

“They are in denial,” one politician tells bne IntelliNews after the meetings. “They ask, ‘Why should we do something else? We want to mine coal’.”

“People are shaken,” Josef Stredula, president of the CzechMoravian Confederation of Trade Unions, tells bne IntelliNews.

“People want to believe in the future but are without information.”

OKD could be the Czech Republic’s most costly industrial failure. The miner declared itself insolvent on May 3 – a filing approved by a court on May 9 – after the government refused to inject cash to tide the company over until coal prices recover.

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OKD currently employs 9,800 permanent workers and 2,700 contract staff. Under the loss-making company’s previous proposal for a gradual restructuring, half the group’s mines would be closed over the next two years. Paskov mine would be shuttered in early 2017, and Lazy and Darkov mines’ underground operations would cease in early 2018. CSM North mine would be significantly downsized but it would continue operations, together with CSM South and CSA. Now these closures will be accelerated. OKD could employ less than half of the permanent workers by the end of next year.

The consolation for the Czech Republic is that much of the coal industry’s downsizing has already been done, with OKD only employing 12% of the 105,000 workers it had in 1990. In neighbouring Polish Silesia, the hard coal mining industry still employs almost 100,000,

around a quarter of the 400,000 workforce it had when communism collapsed. “Our situation is much more comfortable,” said Industry Minister Jan Mladek. “We are approaching the final stage.”

Moravia-Silesia has also begun to successfully diversify away from coal and steel. Since Hyundai started mass production at its plant at Nosovice in November 2008, an automotive cluster has grown up which now employs 20,000, said Pavel Juricek, CEO of automotive group Brano.

“We were very careful to show that we were not providing public support,” says Mladek. “They tried to use us as an excuse not to declare bankruptcy.”

A source close to the industry ministry puts it more bluntly: “They thought they could squeeze us, that the government was scared shitless of bankruptcy. It was a very wrong strategic assumption.” n

May–June 2016

Katowice has undergone a metamorphosis An Interview with the Mayor of Katowice Marcin Krupa What is different about Katowice in 2016 from that of 5 years ago?

Katowice has changed its image completely as a result of major reconstruction projects. One of the most important was the project of reconstructing the centre together with that of the “Culture Zone”, consisting of the International Congress Centre, the new seat of Polish Radio’s National

Symphonic Orchestra and the Silesian Museum.

Development of this new, high-quality cultural space is a flagship achievement, and one that aims to improve the quality of life of the city’s inhabitants.

Katowice has successfully focused on attracting investors from the business services to diversify its economy. This has been appreciated many times, and we’ve obtained many awards in this area, such as: Newcomer City of the Year (CEE SSO Awards), City Outsourcing Star, and InvestorFriendly City. Recently, we have once again been recognised by the prestigious fDi Magazine, achieving 5th place amongst large European

2016 May–June

cities in the category of strategies for attracting FDI, surpassing such cities as Rotterdam and Frankfurt.

We are at the forefront of Polish cities with the greatest number of companies from the business services sector. This proves that we are perceived as an attractive place for business, rather than just the centre of a region dominated by heavy industries.

Katowice has also become an important centre for business tourism; according to the report “Business Tourism in Katowice”, last year the total number of conference meetings in Katowice exceeded 6,000, and the estimated number of participants in all conference meetings and business events surpassed 500,000 people.

In connection with the next EU financial budget for 2014-2020, Katowice has very ambitious investment plans. Can you tell us about the most significant urban and infrastructure projects?

As part of the financial perspective, Katowice is planning projects with a total value exceeding 1 billion PLN, and expects to be subsidised by approximately 800 million PLN. Projects in the area of the low-emission economy will contribute primarily to the quality of the living environment by improving the functioning of transport and the energy efficiency of buildings. The most important, systemic solution, with a value exceeding 330 million PLN, is the Katowice System of Integrated Transfer Interchanges (6 interchanges). The project aims to develop environmentally-friendly, lowemission municipal transport systems and promote urban mobility consistent with the sustainable transport principles. It is used for ensuring transfer possibilities between different modes of individual and group transport and for the integration of international, national, regional and municipal bus transport. Under improvement in transport accessibility, applications will be submitted for EU support for the project “Expansion of National Road 81 from the interchange of A4 motorway from National Road 86 to the built interchange from Armii Krajowej street – stage I and IV”, with value approximately 535 million PLN. Another important project is the “Complex thermal modernization of public utility buildings”, consisting of over 30 structures. The total project’s value exceeds 87 million PLN, of which 61 million will come from EU. It aims to improve energy efficiency in public infrastructure and to increase the production and distribution of energy from renewable sources.

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Katowice & Śląsk

Interview

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Katowice & Śląsk

Interview

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The city is doing well attracting investments in the Shared Services/BPO/ITO sectors. What are the prospects for the further development of this industry in the coming years?

Development prospects in the business services sector are very favourable. Work in the sector is extremely lucrative, not only for specialists but also for graduates and final-year students. The development of the sector is also closely correlated with the development of the real estate market, so Katowice is undertaking a number of activities to attract investments.

In addition to Katowice City Hall’s Investor Assistance Department, we offer a range of investment incentives, including, for example recruitment process support. Furthermore, the District Employment Agency offers investors creating new jobs different forms of support such as employee internships, intervention work, etc.

Katowice is also able to adjust public transport for employees of a given strategic investor. Katowice City Hall provides full support for the employees’ recruitment process in cooperation with the District Employment Agency and Academic Career Centres.

In the business services sector, one of the most important recent investors has been Sapiens International Corporation. This company is a leading global software supplier for the insurance industry and financial sector. However, the greatest growth in employment has been experienced by companies already present in Katowice and constantly increasing their employment. Katowice is home to Capgemini, Ericsson, IBM, ING Services, Kroll Ontrack, Mentor Graphics, PwC, Rockwell Automation, Sopra Steria, and Unilever.

What is the investment potential of Katowice and what other sectors are important to Katowice?

Katowice’s investment potential is huge. It is the capital of more than 2 million people in the Katowice Agglomeration and 4.6 milion in the Silesian Province. Katowice is located at the intersection of major European transport routes. The location of Katowice in the centre of 14 Silesian cities, with access to 9 million people within a radius of 100 km is one of our greatest strengths.

Katowice is a city of young well-educated people speaking foreign languages. The Katowice Agglomeration is one of the major academic centres in Poland.

I would like to note that we believe in a diversified economy, which is the basis for development of any city aiming to increase its attractiveness to investment and to improve the quality of life.

In the minds of many people from outside the region, Katowice still suffers a bit from an “image” perspective. What are you doing to change this?

Katowice has undergone a metamorphosis which has been appreciated, even abroad. This is the result of many years of work. We try to show that Katowice is, first of all, a modern city with rich cultural offerings, and here we should mention

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events such as “Rawa Blues”, “Mayday”, “OFF Festival” and “Tauron Nowa Muzyka”. But the city is also known for its numerous sporting events such as the 2014 World Men’s Volleyball Championship, the 2016 European Men’s Handball Championship and the World Hockey Championship Division 1A. I would also like to mention the most recent of the city’s awards, that of UNESCO Creative City in the field of music. This is an elite distinction,

“The location of Katowice in the centre of 14 Silesian cities, with access to 9 million people within a radius of 100 km is one of our greatest strengths.” emphasising the potential of Katowice, consisting of numerous festivals of classical, alternative and electronic music. So far, the title has been awarded to six European cities (Bologna, Ghent, Glasgow, Hannover, Mannheim, Seville) and three nonEuropean ones (Bogota, Hamamatsu, Brazzaville).

Being granted such a prestigious award strengthens the visibility of the city on the international stage.

Which strengths of the city convince investors to choose Katowice?

Firstly, Katowice is the heart of the Katowice Agglomeration, what means every investor has access to more than 2 million inhabitants, facilitated by the Silesian Intercity Road, being its transport core. This is certainly one of our greatest strengths, and it should be emphasized that Katowice Agglomeration is the largest urban area in CEE. According to the latest PwC Report on Polish metropolises, Katowice is the 3rd best regional centre in Poland in terms of the average value of 7 different capitals – right after Wrocław and Kraków (not including the capital city of Warsaw), and ahead of Poznań and Gdańsk.

Another advantage of Katowice is its location at the crossing of major European transport routes. The city has a convenient road connection with the international Katowice Airport and also Krakow Airport, not to mention the airport in Ostrava. In addition, Katowice has a smaller airport situated near the city centre, mainly used for business.

The third of its greatest strengths is Katowice’s MICE potential created by facilities of the International Congress Centre which, along with the indoor Spodek arena, enables the organisation of congresses, conferences, seminars, as well as fairs and exhibitions of domestic and international importance. Additionally, numerous hotels have also conference areas. Not surprisingly, Katowice already holds significant conferences such as the European Economic Congress and the European SME Congress. n

May–June 2016

Real Estate

Katowice & Śląsk

Automotive and SSC/BPO drive demand for offices and industrial property in Silesia Silesia is attracting automotive and BPO/SSC companies and is a strong location for commercial real estate projects.

The investment attractiveness of the region stems from an extensive HR pool, well established transport infrastructure, an active special economic zone as well as a strong consumer market.

The Silesian voivodeship is one of the leading regions in Poland in terms of economic and demographic potential, according to a recent report by advisory firm JLL. With 2.1 million inhabitants in 22 cities, the Silesia agglomeration is the administrative and economic centre of the Silesian voivodeship.

Przemysław Ciupek, Senior Research Analyst at JLL, says: “Associated in the past mainly with the mining industry, the Silesia region has undergone a significant metamorphosis to become a major automotive cluster and business services hub, as well as a well-established location for commercial real estate. Such assets as a pool of highly-skilled employees, strategic location, well-developed transport infrastructure, including road, rail and air connections, a proactive special economic zone and strong consumer market has helped to attract new inves-

Rockwell Automation has leased 7,400 sqm of office space in the third stage of the A4 Business Park office complex, which is being developed on ul. Francuska in Katowice by Echo Investment. “We are very glad that we have succeeded in finalising the agreement for the lease of space in A4 Business Park with Echo Investment. The welldeveloped public transport network, excellent commuting opportunities given by the A4 motorway nearby, as well as the best construction and architectural methods used are among the other advantages which we took into consideration when choosing the location,” says Wojciech Krygowski, a member of management board of Rockwell Automation.

tors to the region. The region is developing rapidly but we believe its potential is still untapped”.

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From mining to automotive and business services hub The Silesia agglomeration has experienced significant changes since the beginning of Poland’s economic transformation in the early 1990s. “The most significant economic stimulus was created by the General Motors’ investment in Gliwice in 1998. This along

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with investments made by Fiat in Tychy and BielskoBiala and new automotive projects in the northern Czech Republic and Slovakia, attracted several subcontractors to the region. This strong inflow of investments allowed Silesia to relatively quickly transform into an important automotive cluster in Central Europe.”

“The second significant economic stimulus began in 2004, when Poland joined the EU and the first investments by the business services sector were made in the country. Currently, the Silesia agglom-

eration ranks sixth in Poland in terms of employment in the BPO/SSC centres with foreign capital.

However, taking into account its demographic potential, the region can quickly expand in the next few years. This can be seen in the growing number of office projects being implemented for the business services sector”, adds Przemysław Ciupek.

These changes would have not been possible without the significant inflow of funds from the European Union and support from the Katowice Special Economic Zone (the KSSE).

“The Katowice Special Economic Zone was established in 1996. During this period, the KSSE has expanded from 800 hectares to almost 2,400 hectares, and has attracted more than 260 Polish and foreign investors, who have invested approximately PLN22 billion and employed more than 55,000 workers”, says Piotr Wojaczek, CEO of the KSSE. Labour market The dynamics of the regional labour market have changed considerably over recent years. The BPO/SSC sector and the manufacturing industry (especially automotive) are significantly expanding. Moreover, the large population creates a strong internal demand for shop assistants and retail specialists.

“The Silesia agglomeration offers a strong academic infrastructure, with both public and private

May–June 2016

Real Estate

“The growing business services sector generate developer activity and a healthy 58,200 sq m is under construction.” needs can easily be satisfied by the large number of graduates in branch-related disciplines such as business and administration, HR, IT, philology, banking and finance, who know foreign languages.

Katowice is also a strong scientific and research hub which can also attract advanced knowledge-based

business services investments, says Agnieszka Kolenda, Regional Manager at Hays Poland.

Office market – BPO/SSC companies a key driver for development The modern office market in the Silesia agglomeration is mainly focused on Katowice. The city offers approximately 381,800 sq m of modern office space. Taking into account Silesia’s economic and demographic potential, its sixth position in the office sector is certainly well below where it can and may be should be. However, the quality of office stock is on the rise and schemes in Katowice are well-prepared to meet the needs of new companies starting their operations, and to provide expansion possibilities for enterprises already operating in the city.

The growing business services sector generate developer activity and a healthy 58,200 sq m is under construction.

The vacancy rate in Katowice totals 14.5%, while monthly prime headline rents amount to €12,5 – €13,75 per sq m.

Katowice & Śląsk

universities covering all major educational profiles.

Business services centres located in the region, both Polish and foreign, are generating a growing demand for specialists with a knowledge of various foreign languages. These recruitment

Śląsk – Retail Retail market 2nd largest in Poland The Silesia agglomeration is the second largest market in Poland in terms of retail stock (1.3 million sq m) after Warsaw. The reasonably high purchasing power of €6,991 per capita per year - 13% higher than the national average, the relatively low shopping centre density and moderate vacancy rate of 3.0% allow the Silesian market to be characterized as relatively healthy with development potential for the future.

Rents in prime shopping centres in Silesia range between €45 and €55 / sq m / month and are in-line with comparable schemes in Wrocław, Łódź and Szczecin.

In May 2016, shopping centre stock in Silesia Agglomeration amounted to 961,200 m2 GLA, which translated into a shopping centre density ratio of 445 m2 per 1,000 inhabitants. This is one of the lowest ranks among the eight major agglomerations in

2016 May–June

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Katowice & Śląsk

Real Estate Poland (surpassing only Szczecin). Average annual purchasing power per capita for Silesia inhabitants is €7,450, 16% higher than the national average of €6,437.

Today, the agglomeration of Katowice is served by 39 shopping centres. The variety of shopping centres is widely diversified in terms of format and size. Large dominant shopping and leisure centres are present on the market (such as Silesia City Centre, Galeria Katowicka), large schemes of regional power (e.g. Forum Gliwice, M1 Czeladź, Pogoria, Atrium Plejada in Bytom and Europa Centralna), as well as smaller hypermarketdriven projects and convenience-based centres.

Under construction and planned retail projects Currently, two retail projects are under construction in the Katowice Agglomeration: 1 In Tychy, Gemini Holdings has started construction of a Gemini Park Tychy shopping and leisure centre on a site located next to the existing Tesco, Obi and Saturn stores, by the crossroad of Beskidzka and Towarowa streets. The project can be as large as 36,000 m2. Completion is scheduled for H2 2017.

2 In Mysłowice, REAL2B and Retail Parks Fund have started the construction of Quick Park shopping centre. The project of 13,000 m² of GLA is to be located at the crossroads of Katowicka and Obrzeżna streets. The opening is scheduled for Q4 2016.

A few other projects are at advanced planning stage.

These include: Galeria Libero in Katowice, Centrum Zakupów in Tarnowskie Góry, extension of Centrum Skałka in Tychy, or Ikea shopping centre in Zabrze.

Retail formats As of May 2016, modern retail stock in the agglomeration of Katowice totalled 1,377,900 m2 and was distributed over the following retail formats: Retail formats

GLA (m2) % of floorspace No. of schemes

Shopping centres Retail parks Retail warehousing Outlet centres Total

961,200 70% 239,400 17% 160,400 12% 16,900 1% 1,377,900 100%

39 16 18 1 74 Source: JLL, May 2016

Retail Parks The retail park sector is not particularly well developed in the Katowice Agglomeration. In May 2016, retail provision of this segment accounted for 239,400 m2. The major retail park schemes include: Rawa Park Handlowy, Trzy Stawy, and Europa Centralna retail park component.

Factory outlet segment Currently only one factory outlet scheme operates in the Katowice Agglomeration, namely Fashion House located in south-eastern outskirts of Sosnowiec, along Orląt Lwowskich Street. The scheme comprises of 16,900 m2 GLA with 110 units.

Prime rents Prime rent in Silesia, defined as rent for a 100 m2 unit for a fashion and accessories sector tenant noted in shopping centres in Q1 2016 was €50- €55 m2 / month. It is to be noted, however, that such high prime rent refers to best performing shopping centres in Katowice.

Consequently, achievable rents in other cities are much lower. •

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May–June 2016

Katowice & Śląsk

Real Estate

Śląsk – Industrial Industrial market With 1.65 million sq m of modern warehouse stock, and a further 133,500 sq m under construction, Silesia is the second market in Poland, after Warsaw, and is one of the most significant industrial warehousing hubs in Poland and the CEE region. The size of the population and proximity to consumer markets in the Czech Republic and Slovakia, a skilled labour pool and extensive transport infrastructure act as magnets for automotive, retail and logistic companies. As of Q3 2015, the vacancy rate in the warehouse market in Upper Silesia stood at 6.7%, while headline rents amounted to €2.8 to €3.5 / sq m / month, with effective rents ranging from €1.9 to 3.1 / sq m / month. n

2016 May–June

Four agreements at Prologis Park Chorzow Prologis, the developer of Prologis Park Chorzow, signed four leases for 32.7 thousand. sqm. warehouse space. The two largest contract is extended. More than 16.7 thousand. sqm. in the building 4 deal will continue ArchiDoc company dedicated to business services in the area of document ​​ management and back-office support. In this transaction brokered agents Colliers International. In the same building will also remain firm Latex tires occupying nearly 11.6 thousand. sqm. To enter the building 4 also has Ideus, who signed with the means of JLL, the lease agreement for 3 thousand. sqm. The new tenant distribution center was also the company Euro-Net - the owner of a nationwide retail network of RTV Euro AGD. In the emerging building type Small Business Unit will occupy nearly 1.4 thousand. sqm. In this transaction brokered by Cushman & Wakefield. ProLogis Park Chorzow has a total surface of 235 thousand. sqm. It is situated on the western edge of Katowice, in the vicinity of the A4 motorway, 15 km from the Node-Gliwice Sośnica. •

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Katowice & Śląsk

Silesia Business News

Polish military mobilized for World Youth Day’s 2 million people in July Security is expected to be extremely tight in Krakow, the WYD host city, as authorities in both countries work to prevent any incident that would threaten visitors, said Paul Jarzembowski, World Youth Day USA co-ordinator and assistant director of youth and young adult ministries for the US Conference of Catholic Bishops.

He told Catholic News Service that current information indicates no threat to the celebration, scheduled for July 26-31. “The pilgrims’ families can be assured that we’re in regular communication with the State Department, the organisers in Krakow and the Polish Embassy in the United States,” Jarzembowski said.

“Pilgrims can rest assured if they are vigilant and aware and up to date on the security situation, that the US and, most especially Poland, are doing everything they can to assure their safety,” he added.

About two million people, including 30,000 Americans, are expected for the 14th international gathering of young people to celebrate their Catholic faith. As the host country, Poland

is taking the lead on security arrangements, and local law enforcement authorities have joined with the Polish military in planning for the influx of visitors for months, Jarzembowski said.

About two million people are expected for the 14th international gathering of young people “We don’t want to let fear dictate what we do with World Youth Day,” he said. He cited the calls for prayers for peace from St John Paul II at previous World Youth Day events in the 1980s and 1990s when attacks by extremists posed similar concerns. “We continue to meet and we continue to pray for peace and we continue to be bold by stepping out and doing that,” Jarzembowski said. n

Tramwaje Śląskie plans investment Tramwaje Śląskie has announced its modernisation plan for the 2014-20 EU budget period. The estimated cost is 885m złoty, with EU funds expected to cover at least 63% of this.

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The plan envisages the purchase of 44 trams and some maintenance vehicles, as well as the modernisation of 100 track-km. In addition, the authority plans to build three new sections of line.

The longest of these would be a 5 km double track extension of Route 15 in Sosnowiec from the current terminus of Zagórze east along ul Białostocka, south along ul Paderewskiego and west along ul Rydza Śmigłego and ul 11 Listopada, before joining Route 27.

Nearly as long would be a 4·5 km extension from the Brynów turning loop south towards Piotrowice district in Katowice. Katowice is also in line for a 600 m link that is to be built along ul Grundmana.

A further 4 km route from Politechnika Śląska to Miechowice district in Bytom is not in the plan, but TŚ has said that it would like to build it if Bytom city authority can be persuaded to approve the plan.

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During the 2007-13 EU budget period TŚ undertook an extensive modernisation programme, which initially envisaged the upgrade of 48 track-km, the purchase of 30 Pesa Twist trams and the refurbishment of 75 Type 105N trams. However, the availability of extra EU funds meant that the project was expanded to cover an additional 15 track-km and 12 Modertrans Moderus Beta trams. Eventually the combined value was 627m złoty, with EU funds covering 490m złoty. n

May–June 2016

China-Europe Economic Forum boosts trade Experts from Poland and China discussed Poland’s role within the Belt and Road initiative during the Europe-China Economy Cooperation Forum in Katowice.

The forum consisted of two parts, first of which was especially aimed at “Belt and Road” projects and analyzed the initiative’s influence on transport, logistics and trade exchange of the countries along the route.

The other part analyzed the practice of bilateral economy cooperation and looked for means to make some improvements.

Slawomir Majman, President of the Polish Information and Foreign Investment Agency, underlined the recent frequent high-level visits to China, including Polish President Andrzej Duda, who’s been to Beijing within the first 100 days since taking up the post.

Beata Stoczynska, Deputy Director of Asian and Pacific Department of the Polish Foreign Affairs Ministry, enumerated four pillars on which Poland hopes to stabilize relations with China, including: • bilateral relations • cooperation between regions and local authorities • cooperation within the “16+1” China-Central and Eastern Europe formula • cooperation within China-EU cooperation The experts discussed whether Poland, due to its geographical location and potential, could play the role of “gateway to Europe” for China and how such a goal could be reached.

Jacek Bartosiak, an expert of the Centre for Analysis of the Jagiellonian Club, called the Belt and Road initiative a huge geostrategic project of a global change which can help both countries to become a core instead of playing a peripheral role. Poland has already been an active participant of the initiative, a good example of which is the first direct cargo train from Poland’s city of Lodz to China’s Chengdu.

Recent plans to create a multimodal terminal reflect Poland’s aspiration to not only be a place where cargo is reloaded, but also to export more Polish products to China, to ensure the cargo train is not going back empty. Cieslak informed that a new proposal of creating an industrial-technological park is aimed at bringing more Chinese investments into the region.

The second part of Forum gathered theoretical and practical experts of ChinesePolish economy cooperation.

Chinese experts, such as Professor Long Li from the Social Academy of Science, Chongqing,

2016 May–June

expressed their satisfaction with active participation and interest of the Polish entrepreneurs in implementation of the initiative, as it is a chance to stimulate both countries’ economics.

Li Yongping, President of Zhejiang Maylink Culture Development Company and Edward Zhu, vicePresident of Polish Chinese Business Council, both underlined necessity to create a Polish brand and increase the country’s level of recognition in China.

Li Yongping said that his company in Ningbo witnessed many Polish economic missions.

However, he said, the B2B formula and participation in various fairs used by the Polish side, though good, are not the only measure to stipulate economy cooperation nowadays. The huge role of internet was underlined, as well as cooperation with local governments.

In the Chinese experts’ point of view, Polish fruit, vegetables and other agricultural products and local specialties might enjoy a huge interest on the Chinese market once they’re acknowledged.

Katowice & Śląsk

Silesia Business News

Polish fruit, vegetables and other agricultural products and local specialties might enjoy a huge interest on the Chinese market

The best proof is the recent SIAL Fairs in Shanghai, which observed a large group of Polish food industry manufacturers. However, lack of acknowledged Polish brand and the discrepancies between Poland’s enterprises (majority of which are small and medium enterprises) in comparison to the Chinese market potential is another challenge to be faced.

Adam Brozek, Director of the International Cooperation Department, Ministry of Development, said the authorities are currently working out new coordination mechanisms to ensure maximum efficiency.

The EU-China Civil Society Round Table 14th meeting was hosted by the European Economic and Social Committee (EESC), and was joined by its Chinese counterpart, the China Economic and Social Council (CESC). n

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Katowice & Śląsk

Silesia Business News

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Polish doctors lead Eximo success in trial of blocked artery treatment Israel-based Eximo Medical, a medical device company that is developing a laser system and unique catheters for the treatment of peripheral artery disease (PAD), has successfully completed a multicenter clinical trial for the purpose of obtaining CE approval for marketing in Europe.

The company says that the results of the trial indicate that use of the Eximo system provides a safe, precise and highly efficacious solution in cases of partial blockage, complete blockage and severe atherosclerosis. The trial, which was led by two physicians from Poland, included 20 patients, some of whom required bypass surgery or leg amputation and are no longer at risk of amputation following the treatment.

Eximo was founded by Accelmed, a medical device investment fund, in 2012. In July 2015, Eximo completed its round A investment, led by Accelmed. Following the success of the trial, the company is now pursuing CE Mark and will be looking to receive US regulatory approval in 2017.

The Eximo system is based on a solid-state ultraviolet laser with a wavelength of 355 nm. The system is connected to a hybrid catheter, which combines tissue ablation by means of the laser and resection with a blunt mechanical blade. Eximo is the first company in the world to have succeeded in actively combining a 355 nm laser with a mechanical blade in a way that enables a high level of accuracy in cutting through vascular blockages. Eximo’s proprietary hybrid laser – mechanical blade design removes blockages irrespective of the type of blockage or the size of the blood vessel, and increases the efficacy and safety of performance while reducing the risk of puncturing the blood vessel, compared to competing technologies.

Vascular blockage of the lower extremities is the main cause of 66% of limb amputations in the United States (approximately 120,000 amputations per year),

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with an estimated total cost of $8.3 billion to the US health system. Eximo says that treatment with the system it has developed will enable the blockage to be efficiently and safely eliminated, saving many patients from limb amputations. Today, there are over 12 million PAD patients in the United States and the market size is estimated to be in excess of $1 billion.

Dr. Waclaw Kuczmik, Senior surgeon at the Medical

University of Silesia in Katowice stated: “We are proud to be the first medical center in the world to have treated patients with the Eximo system. The treatment of all 13 patients by us was highly successful, without any complications. All of the patients have experienced significant pain relief in the treated limb and significant improvement in quality of life.”

Eximo CEO Yoel Zabar said, “We are pleased to announce the successful completion of a first-in-human study with a PAD application, which constitutes a significant milestone that will enable the receipt of CE marketing approval in Europe. We are proud that thanks to the unique technology developed by our company, we were able to alleviate patients’ suffering and prevent complicated, unnecessary surgeries, which could, in extreme cases, even have led to amputation of the leg. The completion of the trial represents an additional significant step toward a multi-participant FDA trial in the United States – a potential market of billions of dollars.”

Eximo’s future products include solutions for the removal of pacemaker electrodes (LE – Lead Extraction) in cases of damage to the electrode or infection, and, at a later stage, catheters for procedures in the digestive tract. n

May–June 2016

Silesia Business News

The £80million acquisition, which also includes Delta’s production plant in Poland – European Packaging Solutions - it’s hoped will strengthen Huhtamaki’s position within the foodservice packaging market across the continent.

It will also allow the Finnish-headquartered company to expand its offering to customers which include the likes of KFC, Kellogg’s and McDonald’s.

The existing management team, which will remain unchanged, will report to Rosemary Mason, managing director Huhtamaki Foodservice Western Europe and UK. She said: “To date, our product offering has focused on food-to-go packaging such as cups, lids, plates, bowls and cutlery for some of the leading food and foodservice brands in the world.

“The acquisition of Delta, which manufactures board products complementary to our own such as burger clam boxes, fry cartons and flat cartons for many different retail products, will allow Huhtamaki to enter the fastgrowing folding carton business in Europe and strengthen our global customer partnerships.”

Huhtamaki already employs more than 200 people in Northern Ireland.

The Lurgan plant, which manufactures cup carriers, egg cartons and egg trays, was acquired

by Huhtamaki in 1999 and has recently benefitted from Group investment of £4.9m.

“Moving forward as Huhtamaki Foodservice Delta Limited, we will work hard to ensure a smooth transition ensuring business as usual and providing our customers with a high level of service,” added Mrs Mason.

“Together, we believe we can accelerate sales growth through mutual customers in coffee, quick service restaurants and consumer goods, thus expanding our footprint in the folded carton packaging market within Europe, and even further afield.”

Delta’s head office is in Belfast with production facilities in Gliwice.

Delta founder Terry Cross OBE, who will remain as a senior advisor assisting Huhtamaki build its folding carton packaging business further, said: “I am delighted that Delta has become part of the Huhtamaki organisation which is a leading, global specialist in food and drink packaging. Thirty five years on from our first transaction, now is the time for the company to take the next step in what has been, and what will continue to be, a very exciting journey for the company, our employees and our customers.

“It is the innovation, dedication and hard work of our staff here in Belfast, and at our sister site in Poland, that has captured the attention of a global company such as Huhtamaki which is fantastic for a Northern Ireland company.” n

Katowice & Śląsk

Food and drink packaging specialists Huhtamaki has acquired the Belfast-based Delta Print and Packaging

2016 Buick Cascada Production in Gliwice Top-down luxury returns in the Buick lineup with the all-new Cascada. By all-new we’re referring to the Buick badges, because the Cascada is, in essence, an Opel convertible that has been available in Europe since 2013. Still, manufacturing of the US-spec model has started recently at a facility located in Gliwice.

At the GM-Opel production plant in Gliwice, workers are assembling the first examples of the 2016 Buick Cascada. The compact soft-top convertible is built on the same production line as the Astra and it’s the first Gliwice-made model to be exported to the US. During 2016, the General Motors plant in Gliwice will operate at about 90 percent of its maximum capacity, turning over a little more than 200,000 vehicles per year. As expected, many anticipate the arrival of the Buick Cascada, though the 2+2 convertible fills a niche market. With more than 5,000 orders from dealerships and months to go until its launch in the spring, the Buick Cascada is off to a confident start.

Priced at $34,000 in the US, the 2016 Buick Cascada comes as standard with a 200 horsepower 1.6-liter turbocharged engine, front-wheel-drive, and a six-speed automatic transmission. 17 seconds at speeds of up to 31 mph is all it takes to lower the electro-hydraulic roof. n

2016 May–June

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Silesia Business News

Katowice Special Economic Zone (KSSE) welcomes three new companies Katowice & Śląsk

The three firms, from the automotive and construction industries, have since started investment projects in Dąbrowa Górnicza, Żory and Zabrze.

In Dąbrowa Górnicza, Brembo is to invest PLN 16 mln, thus creating 35 new jobs, with the project to be completed in 2019. The value of projects implemented so far by the automotive parts company in Dąbrowa Górnicza comes to more than PLN 700 mln, and it the currently employs more than 1,100 people in the zone.

From the same sector, Korean firm Shelf31 is to invest PLN 25 mln in Żory. The car seat manufacturer’s investment will generate at least 300 new jobs. The company plans to open its new production facility by the end of next year.

PGB Poland, a Belgian-owned producer of nylon fasteners used for the insulation of the buildings,

is to buy a 2.6 ha plot in Zabrze for a PLN 10 mln project that will create five new jobs. The investor expects operations to start in 2019 at the latest.

“The permissions granted confirm that our ambitious plans, adopted for our twentieth anniversary, are being successfully implemented.

I am convinced that our figures for the first six months of the year will confirm that we are heading in the right direction towards achieving the targets adopted at the beginning of the year,” claims Piotr Wojaczek, the president of the management board of the Katowice Special Economic Zone.

In the first four months of 2016, the KSSE secured projects worth more than PLN 320 mln, which will create full-time employment for 400 people. This year the plan involves obtaining projects worth at least PLN 1 mln and the creation of as many as 1,500 new jobs.

New factory of NGK Ceramics in Dąbrowa Górnicza 300 people will work at the new factory of NGK Ceramics, which is being built in Dabrowa Gornicza in the Katowice Special Economic Zone. From the middle of 2017 they will produce car particulate filters by this top Japanese company, which is investing about 300 million pln in the project.

Recruitment has begun for the new factory, including operators of the production line, warehouse, as well as specialists in the areas of automation, computer or control material. The target place of employment will bet Tucznawa, Dabrowa Mining district. First, however, each new employee will need to undergo semi-annual training in Gliwice plant. The company guarantees trainee access from selected cities across the region.

“In connection with the new investment we are looking for several hundred candidates, mainly to support the production process”, said Magdalena Kopczyńska of the Gliwice branch of the employment agency Manpower. She said that

future employees can count on bonuses, benefits sports memberships and private health care.

The new plant will be built on a plot of almost 15 hectares in Sosnowiec-Dąbrowa Subzone KSSE - approx. 50 km east of the current plant in Gliwice. The factory will produce automotive diesel particulate filters made of silicon carbide - an experimental technology. The planned new production process is characterized by a high degree of automation and technological advancement requiring workers with high technical skills.

NGK Ceramics Poland has been operating for several years in the Gliwice Subzone of the Katowice Special Economic Zone, and has invested approximately 800 million pln. The firm employs more than 3,000 people, and is one of the world’s largest automotive manufacturers of ceramic filters. In Gliwice, they produce the so-called particulate filters for diesel engines for most European producers of passenger cars. n

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May–June 2016

SSC/BPO News

DNV GL announces new Global Shared Services Centre in Gdynia

DNV GL will build up a centre in Gdynia for global support services within finance, operational accounting, HR, procurement and real estate management. Competent employees at all levels, from fresh graduates, seasoned professionals to senior managers are needed to build up the centre, which will hire 200 people in the first stage.

DNV Gl, a classification, certification and technical advisory company with about 15,000 employees in 100 countries, operates in the maritime, oil and gas, renewable energy and power grid sectors.

Headquarter in Oslo, Norway, DNV has around 400 Polish employees.

“DNV GL has had a strong presence in Gdynia since 1972, mainly supporting the maritime industry.

Since then we have added software

and IT services which today successfully support our international organisation. Joining forces with our existing Global Shared Services IT unit in Gdynia, we will now build our first centre of this type here with finance, operational accounting, HR, procurement and real estate management services.

Drawing on good universities in the region, I know Gdynia is a location where we can recruit skilled employees. By the end of next year we expect to be 150-200 people,” says Thormod Fjell, who leads DNV GL’s Global Shared Services unit.

“The company is an outstanding employer and due to the complexity of high-end processes supported gives our city’s economy great value added. We are confident that the new global centre shall prove another success story”- comments Katarzyna Gruszecka-Spychała, the Deputy Mayor of Gdynia.

“Making our global support processes more digital, agile and efficient is exciting from a professional perspective, and also very important for DNV GL. Obviously, there will be a steep learning curve for all involved,” expresses Thormod Fjell.

Aleksandra Czerwińska from Poland will be leading the Gdynia centre. She is returning to Poland for this job after eight years as regional manager for

DNV GL’s for Finance and administrative services in China.

“To be a part of building our new centre and working within an international organization with a highly recognized brand is an exciting opportunity. DNV GL is a great place to develop competence, and through my 16 years in the company, I have built an extensive international network and gained invaluable experience within how international businesses are run,” she says.

“We are now looking for dedicated employees with strong skill sets, a professional and service oriented attitude, and of course a strong team spirit.

We can offer interesting and challenging tasks, and most importantly, competence development and career opportunities in a company with a strong, value-based culture,” explains Aleksandra Czerwińska.

“It’s very important to see such a well-established investor take another huge step based on the quality of local talent pool”- says Mieczysław Struk, Marshall of Pomerania. “This serves as yet another confirmation that professionals in Tri City have proven skilled, experienced and talented enough to secure proper staffing to the new operations in DNV GL.” n

Credit Suisse to open new office in Warsaw with nearly 2,000 new employees Back in October 2015, citing the need to reduce its fixed cost base to a lower “break even point”, Credit Suisse announced 1,800 of its 4,200 support jobs will cut in the City of London. That’s 43% of the total. That’s a lot.

If other banks do the same, jobs in London’s finance industry could be in for a battering.

Nearly 65% of Credit Suisse’s

2016 May–June

London staff work in support roles. The CityUK said there were 143,600 people working across banking in London in the first half of 2015. If all banks employ support staff in the same ratio as Credit Suisse and they choose to follow Credit Suisse’s strategy for lowering their ‘break even points’, the implication is that 40,000 jobs could go.

Klaus Woeste, a partner at EY who specializes in helping banks manage changes stemming from regulatory and structural pressures, predicts that rival banks will be doing the same as Credit Suisse, and soon. “I would expect similar announcements to come from other banks in the course of the next year,” says Woeste.

“There’s a lot of pressure to cut

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SSC/BPO News costs and upgrade systems in order to improve margins.”

Further cost cutting will hit operations staff who are already demoralized and exhausted. One recruiter, who works with banking operations and support staff in London, says it’s not uncommon to find people in operations who’ve been analysts for an entire decade. “There are people sitting in operations jobs in London who haven’t had a pay rise for three years and whose bonuses have been cut to £1k,” he says. After five years in an operations job, he claims it’s common to earn £55k.

In the front office, analysts earn 40% more than that in year one.

“It’s an ongoing theme in operations – you’re expected to work longer and longer hours with fewer and fewer resources and the chance of a bonus at the

end of year is minimal,” says one managing director in an operations role. “We keep getting the short end of the straw.”

If so, then Warsaw keeps getting the long end of the straw.

Although precise plans are murky as of May, insiders say that Credit Suisse – already with substantial operations in Wroclaw – plans to hire as many as 2,000 people in Poland’s capital. n

Dentons axes 50 UK roles in business services move to Warsaw Dentons has joined the growing number of firms opening lowcost shared services centres outside the UK with the announcement of a new business services office in Warsaw.

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The office, dubbed Dentons Business Services EMEA (DBSE), is a joint initiative between the UK Middle East and Africa (UKMEA) and Europe regions of the firm.

Dentons will start transitioning work to Warsaw during the course of 2016/17. The firm is to carry out a consultation process with affected staff in the UK with around 50 roles impacted.

The firm said some of the 50 roles were currently fixed-term contracts or vacant and it would try to mitigate redundancies. “We will be providing support to those affected during this period of uncertainty,” the firm added in a statement.

The firm added that by the end of 2016 it would have around

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90 to 100 staff in the DBSE. As well as the UK roles, some functions will move to Warsaw from the rest of Europe.

Dentons has already begun shifting business services jobs to Poland, locating new hires in Warsaw in recent months as vacancies have occurred elsewhere in Europe.

The firm has hired Piotr Macieja to head up the initiative from professional services provider TMF, where he headed the service delivery coordination centre.

DBSE will supply business services such as finance, business development and marketing, human resources and IT. Global chair Joe Andrew said the move was a “logical step” after the firm’s recent expansion and that it would enable Dentons to “leverage our scale and resources more effectively”.

Europe CEO Tomasz Dąbrowski added: “Closer integration is one of our key strategic objectives as a firm and this is a vehicle for

the UKMEA and Europe regions to achieve this and ultimately improve the way we do things.

We are operating in a very competitive environment and our clients expect us to deliver services consistently and in the most cost effective way possible.”

The DBSE team will add to Dentons’ existing headcount in Poland. The firm is the largest in the Polish legal market with over 300 staff, including around 180 lawyers. However the firm is expected to take new space to accommodate the DBSE team.

Dentons is the third firm in a week to announce it is making UK redundancies as a result of opening a shared services centre overseas. Earlier today (19 May) Norton Rose Fulbright said it was moving 170 jobs to the Philippines, while DLA Piper said in mid-May that it was making 200 UK support staff redundant as it moved its back office function to Warsaw.

Linklaters also opened a shared services centre in Warsaw last year. n

May–June 2016

SSC/BPO News

DLA Piper cuts 200 UK jobs after support staff review, in favour of Warsaw hub DLA Piper is slashing 200 business support jobs in the UK in a move that will see the firm make one of the largest law firm redundancies since the aftermath of the financial crisis.

Nearly a fifth of business support roles in the UK will be axed, with IT, finance, human resources, marketing, business development and secretary staff badly impacted by the cull. The move will see DLA Piper, which is targeting 5% profit growth each year, automate huge swathes of jobs and shift roles to low-wage economy Poland.

The changes follow a two-year review of the firm’s operations, run by chief operating officer Andrew Darwin, and a pilot of a global shared services centre in Warsaw. The firm has promised to consult with staff over the redundancies, with employees told that jobs will not be axed until October at the earliest.

Darwin told Legal Business: ‘Until the consultation is completed, we will not be making any

final decisions, and we will be actively supporting our people during this process. The approach [to redundancy packages] is to be generous. We’ve benchmarked against what’s happened elsewhere and we’re trying to be respectful and compassionate.’

In a shift away from the firm’s roots in Yorkshire, where DLA Piper can trace its history back to 1764 when the firm Barnard & Bolland was established in Leeds, around 80 jobs are set to be axed in its Sheffield and Leeds offices. All of the firm’s UK offices will be affected, with around 55 roles also made redundant in London. DLA also has offices in Birmingham, Liverpool, Edinburgh and Manchester.

Darwin added: ‘The UK has always been our service centre for the international business.

Because of our history, having grown up through mergers, we want to standardise things and get them done in a central location. We did a study and

Poland came out very strongly.

Poland is a recognised European centre for shared services.’

‘Let’s move on from the history to the future and adopt a DLA Piper way of doing things.

Some of this is overdue for an overhaul and, quite frankly, for automation. Rather than doing the same thing in multiple ways, we’re going to do things in one way and where a process can be automated, we’ll be automating it.’

The move comes three years after DLA’s last UK redundancy round, when around 250 staff were laid-off in a move that also saw the firm close its Glasgow office.

The consultation will begin on 31 May 2016 and will be completed by the end of July. The move is arguably another sign of a slowdown in the legal market, with King & Wood Mallesons axing 45 business services staff in London in March and Reed Smith cutting 45 lawyer roles across the US, UK and Middle East in January. n

BNP Paribas shifts jobs to Warsaw; cuts in UK BNP Paribas has told staff that it plans to cut 233 jobs in its UK corporate and investment banking unit and shift many of them to Poland to save money as part of a wider restructuring plan.

The French group is the latest big investment bank to announce plans to axe jobs in London, following similar moves by Credit Suisse, Barclays and Deutsche Bank, after a steep slide in revenues.

The cuts in London mirror a wider trend of big banks shifting staff to lower cost locations.

New York and London have lost an estimated 42,000 jobs – or 6 per cent of the sector – in the past five years as firms have moved activities to cheaper locations, according to figures prepared by consultancy Boyd for the FT. Yann Gérardin, the equity derivatives specialist who took

2016 May–June

over as BNP’s head of the corporate and investment bank last year, has told colleagues that the digitisation of banking will allow the French bank to cut costs by moving both IT staff and investment bankers to cheaper locations.

BNP plans to offset part of the cuts in London, where it has a large office near Marylebone, by hiring 60 more employees in the UK and by adding an extra 179 people to its Polish operations.

Overall its British workforce will fall from 3,278 last year to 3,105. It is also cutting jobs in Italy, and increasing them in Spain, Portugal and Ireland in a move first reported by Reuters. BNP declined to comment.

The cuts are part of a wider restructuring that BNP announced earlier this year for its corporate and investment banking division. This includes plans to shed about €20bn of the unit’s €180bn of risk-weighted assets and to shed about 675 jobs in France while cutting €1bn of costs. n

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SSC/BPO News

Ryanair to open IT Centre in Wrocław in August Ryanair is opening a IT Centre in Poland that will be provided by Travel Labs Poland owned by the Irish company. “More than half a year of intensive collaboration between PAIiIZ and Ryanair, as well as the strong position of Wrocław on the European IT services map - those were the key arguments to choose Poland, said PAIiIZ deputy president Michał Dąbrowski announcing the decision of Ryanair during the conference on 10 May in Wrocław.

Ryanair’s state-of-the-art digital and IT innovation hub in Wrocław will be open in August.

Currently, the company is recruiting 90 programmers.

“This decision is joyful, however not surprising. Providing top class IT service by well-educated programmers is Poland’s national

specialty. Therefore, those who want to “fly high”, know that there is no better place like Poland.

Today, employing over 150,000 of IT experts, Poland has one of the most

mature business services sectors (BSS) in the world, while the BSS is considered as the fastest growing segment of Polish economy, Dąbrowski commented. n

ASPIRE inspires with top speakers at annual conference in Kraków

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“We have many reasons to be proud.

The numbers are impressive, but more importantly, is the story behind them. The history of the industry shows that it continues to create well-paid and more demanding jobs.

The industry is helping build a new, young middle class with higher incomes that help the local economy”, said Andrew Hallam, founder and Secretary General of ASPIRE. He said that wages in the sector are 70 percent higher than the national average wage. With 55,000 employed in the SSC/outsourcing sector in Krakow, the rapid development of the industry and its future was hotly debated in Krakow by wide range of industry experts and global leaders.

Hallam said that employment could reach 61,000 by December 2016. “That’s 27 new jobs every day. As research shows, nearly 22 percent of people aged 25-34 in

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Krakow are working in this industry”, said Hallam. This sixth conference was appropriately named “Waking the Dragon”.

The 2-day conference was held at Krakow’s ICE Congress Centre, and attracted more than 1400 people. According to research firm PwC, every job established in Krakow outsourcing is worth approx 150,000 pln. Revenue to the local economy each year are estimated at 9 billion pln. Wages are on average 2800pln more than in other local private companies.

All indications are that it will continue to grow, says Hallam, whose correctness continues to confound the sceptics. Krakow increasingly specialized: simple accounting processes conducted are transferred to lower-cost locations, while demand increases in Krakow for jobs that are more specialised. “This sector develops new skill sets, new forms of

work, and continues to make Krakow a desired location for business.

Krakow is a place that continues to grow, attracting more new residents.

This industry, which transforms the city, transforms businesses, I can say that it even transforms lives.

Moreover, other regions want to follow Krakow’s example”, said Hallam.

Currently, the city has 132 shared service centers, but still more are coming. This year there are 20 new ones.

“During the last three years, Krakow has become the best place in Europe for investment in the business services secor, and ninth in the world.

No wonder then, that at the moment this sector provides services to 40 countries throughout the world in 34 languages. It’s all happening here”, said Marshal Jacek Krupa, adding that the best chance for development of Malopolska is further development of the SSC/BPO sector. n

May–June 2016

Anniversary

CFE celebrates 20 years in Poland Interview with Bruno Lambrecht, CEO, CFE Polska

It is not about the numbers but about the people between the numbers. What we are proud of today is that our people are able to realize every type of contract in Poland, no matter its complexity. The people of CFE are experts in their given professions, which translates into a really high level of productivity.

Tell us a few stories of some of the “tough times” that CFE encountered over the years as you have built up this company.

What’s “good” about the “tough times” is that they eliminate weak companies while the stronger ones survive, and luckily CFE Polska is a strong company.

Tell us some stories about the “early days” 20 years ago and how CFE’s management made the decision to open in Poland in 1996.

In Poland, CFE began its activity as a general contractor in 1996 with the foundation works of the Opel production plant in Gliwice. The CFE Group, as the biggest construction group in Belgium with a perfect reputation and a professional team, together with Opel - one of its good clients in Belgium, decided to work together on the Polish market. It is important to remember that 20 years ago the Polish construction market was completely different from what we see today in Poland. It was much easier to launch a new company on the market with specialized experience. There was less competition. I remember that salaries used to be paid in cash. Today this seems to be unbelievable! In those early years about 30%-40% of the employees in CFE Polska were Belgians – today, 99% are great local professionals.

And what are some of CFE’s greatest successes and “turning points” over the last 10 years ?

One of the most memorable was our long-lasting partnership with E. Leclerc, which started in 1997. Then, in 2007 we entered the residential market with Bouygues Immobilier project. In 2008 we completed the second float line for the Saint Gobain glass factory in Dąbrowa Górnicza. And finally, a very important moment for the whole CFE group was in 2009, when our sister company, BPI Polska, entered the Polish market. In that year we started real estate development activities together with BPI. n

Tell us about growth in employee numbers, projects, and clients

2016 May–June

Anniversary

Give us a profile of what your company looks like today.

We are focused on executing contracts in partnership with our clients. I am convinced that success in the construction industry lies in cooperation between all parties – our clients and subcontractors. Professionalism and team spirit of the people of CFE Polska is also key, obviously.

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Energy News

Energy – CEEP in Washington Central Europe ready for gas partnership with U.S.

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The United States can support Europe, especially Central Europe, by influencing its energy security policy. When it comes to the EU-11’s gas dependency on one supplier, the trade role that the US can play will be an integral part of a better and fairer world. This was argued

by Marcin Bodio, the CEO of CEEP, at the 3rd Transatlantic Energy Conference, that took place on 4 April, 2016, in Washington, D.C. This conference edition focused on the theme: ‘American gas for Europe’. In his well-received speech, Mr. Bodio broadly covered the topic of LNG, as well as touching upon such areas as the EU’s proposed Energy Union, the TTIP, and the crucial North–South Corridor. He also looked at how gas markets are developing globally, including Gazprom’s response to the ongoing changes.

The EU-11’s gas dependency on one supplier was also highlighted, whilst all of these topics were underpinned by the subject of energy security.

“This is something of a European fixation, but a vitally important one.

As energy is the universal cornerstone of our civilisation, Europe is, and will remain in the foreseeable future, a net importer of energy, one of the biggest in the world. Europe has always been concerned with energy and energy security policy, and has constantly been in search of new sources of energy, to fuel the growth and well-being of its societies. So, as the US has a lot to offer Europe, in that respect, it comes as no surprise that energy and the security of energy supply have been subjects of the transatlantic debate for a long time,” Mr. Bodio proclaimed.

It is worth remembering that CEEP’s involvement in promoting political and commercial relations between European and American partners, was initiated during the two editions of the LNG Europe–US Roundtables, which were both held in 2015, the first in May in Brussels, and the second in November, in Washington D.C. By bringing together European and American

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senior political officials, as well as business executives representing LNG, CEEP managed to discuss the current trends within their respective energy sectors. The talks also placed an emphasis on the security of supply of energy to Europe, and resulted in drafting progressive, practical solutions based upon potential LNG trading, and LNG investment co-operation between Europe and the US. According to Mr. Bodio, “current exchanges and debates continue to be important for enhancing Europe’s security of supply, through reinforcing the partnership with the US, in the context of LNG imports, especially as the global security landscape and Russia’s uneasy relationship with the West are issues growing in complexity. The crisis in Ukraine, and the repeated attempts to use energy exports as tools, with which to exert political pressure and influence, by Europe’s major gas supplier, have highlighted the need for solidarity and collaboration

within Europe, and with partners beyond its frontiers. The United States can support Europe, especially Central Europe, by influencing its energy security policy.”

The CEO of CEEP further argued, to his largely American audience, that exporting gas to Europe is deemed to be in the US national interest. The US shale gas boom will also have a great impact on the competitiveness of the European gas market and its energy security. “We are all aware that the first shipment of LNG departed from the LNG Sabine Pass hub in Louisiana. We believe that there will be increasingly more shipments directed towards Europe this year, as some of the long-term contracts have already been negotiated, and it means that their economic conditions are competitive enough, when compared with the Russian pipeline offer,” Mr. Bodio underlined.

Although CEEP thinks that the European Union needs fair partnerships, a recent study (‘Energy

May–June 2016

Energy News

Energix Renewable Energies secures financing for major wind project Israeli company Energix Renewable Energies Ltd has secured over PLN 250 million of financing for the 56-MW Phase II of its up-to-192MW Banie wind project in northwestern Poland.

The European Bank for Reconstruction and Development (EBRD) said in mid-May that it will extend a PLN 162 million loan for the second phase of the project, whilst Alior Bank will lend an additional PLN 90 million.

The funds will refinance a portion of the construction costs for Phase II, which is expected to enter service by the end of June 2016.

The 50-MW first phase of the project is already operational. It was financed with a PLN 150 million loan from EBRD and a further PLN 120 million from Alior and BOS Bank.

Union Choices – A Perspective on Infrastructure and Energy Security in the Transition’) shows that under normal market conditions, Europe does not need any new import capacities. The analysis proves that the current gas infrastructure is sufficient to ensure security of supply to 2030, even within a high demand scenario. Therefore, CEEP agrees with the opinion of the study’s authors, that there is no need for new import capacity, from Russia to Germany, as in the case of the proposed Nord Stream 2, but we should think further about diversification. In this context, Mr. Bodio mentioned the Baltic Pipe, which is on the PCI list, between Denmark and Poland. When completed, it will transport natural gas from Norway to Poland, via Denmark.

As for a specific Central European perspective, the CEO of CEEP stressed that the EU-11 is, overall, significantly more dependent on Russia as a supplier of energy than the EU-15. This is particularly applicable in the case of natural gas.

“Whilst the EU-15 imports about 21% of their gas supplies from Russia, the EU-11’s share is 60% (as of 2013).

As a comparison, the entire EU-28’s average is about 27%. However, the dependency on Russian gas supplies within the EU-11 is relatively

2016 May–June

“Part of the refinanced equity will allow Energix to invest and develop new renewable energy projects in the future,” Energix CEO Asa Levinger said.

The new financing package is being provided under a framework

uneven: Croatia does not import any Russian gas, and Romania relies on Russia for only about 15% of their supplies. As of 2013, the Baltic States, on other hand, were 100% dependent on Russian supplies, whilst Bulgaria’s share stood at 97%.

This picture has changed, recently, particularly in the case of Lithuania, with dependency on Russian imports dropping to below 50%, as the LNG terminal in Klaipeda was put into commercial operation, and it started receiving LNG exports from Norway,” Mr. Bodio noted.

The EU-11’s vulnerability, due to its high dependence on a single supplier of gas, means that the region is in fundamental need of a backbone gas transmission network along the North-South Gas Corridor. In CEEP’s opinion, such a core connection could lead from Poland, via the Czech Republic, Slovakia, and Hungary, and across the Western Balkans to Croatia.

“We believe that the comprehensive development of such a Corridor would enable Central Europe to gain access to additional suppliers, and effectively distribute gas resources across the entire region.

Soon, Poland will launch commercial operations in its newly-constructed LNG terminal in Świnoujście. An additional LNG import facility has

that aims to support private investments in renewables and thus help Poland reduce its dependence on fossil fuels. Currently, more than 80% of the country’s energy comes from coal- and lignite-fired power plants. n

been proposed for the Croatian Krk island – a floating offshore terminal. Implementation of these LNG projects, together with complementary investments in gas infrastructure (cross-border and internal pipelines), would allow the EU-11 to gain direct or indirect access to LNG imports, both via the Baltic and Adriatic Seas,” CEEP’s CEO said.

In this context, many respected US energy experts have been backing the idea of LNG exports to the EU. “Thanks to the development of LNG technology, the construction of gas facilities in the US and Europe, the expansion of domestic networks, as well as interconnections between the EU Member States, we find ourselves in a situation, where we are no longer bound to purchase gas from one source only. The European Union, and especially the Central European region, require further attention, and could well be a focal point of the US in the context of energy supplies.

In order to obtain that, we should deepen our relations to create the appropriate conditions for ensuring the security and continuity of supply, as well as our mutual business development. Let us remember that the gas industry is not about the short-term; we are thinking about the energy needs of the world from 2030 to 2050,” Mr. Bodio firmly concluded. n

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Energy News

Baltic Pipe: Poland, Denmark plan new gas pipeline to diversify energy Poland’s prime minister says a new gas pipeline with Denmark will help diversify the nation’s energy sources and curb their prices.

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Beata Szydlo said after talks with Danish Prime Minister Lars Loekke Rasmussen that involved energy, European security and foreign policy. Both leaders pledged support for efforts to end the conflict in Ukraine.

Szydlo said a planned Baltic Pipe with Denmark would link Poland to gas from Norway and increase the security of its energy supplies, which are now dependent on imports from Russia.

Dwindling Danish gas production could revive a pipeline scheme to connect the Polish market with Scandinavian production centres, it emerged after a summit between the Polish and Danish prime ministers in Warsaw in early May. “The Baltic Pipe - a strategic investment which we want to implement - is of crucial importance to us. Thanks to that investment, Poland’s energy security will improve significantly,” Polish Prime Minister Beata Szydlo said at the post-talks press conference alongside the prime minister of Denmark, Lars Løkke Rasmussen.

The summit came just days after Danish energy company AP Moller Maersk said it would be forced to close Tyra – Denmark’s largest gas field – in October 2018 if it could not find an economical way to upgrade the site.

Tyra provides around two-thirds of Denmark’s gas output, and its potential loss has forced Danish transmission system operator Energinet.dk to review alternatives, including Baltic Pipe.

“We are investigating whether there is a need for alternatives.

This is what we are working on,

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and there are several opportunities for expanding the gas transmission network, for example toward Norway or a Baltic Pipe solution to Poland,” said Torben Brabo, vice president for the gas market at Energinet.dk.

The situation in Denmark could turn a Polish case for new infrastructure into a regional one, although the Danish government is said to be considering offering incentives to companies developing projects like Tyra, which could

for Eastern Studies in Warsaw, told Interfax Natural Gas Daily.

keep output flowing beyond 2018.

“What’s important is that there is a visible demand for a new route and the source of that is not only in Poland, but also Denmark. Plus, Baltic Pipe has been on the EU’s PCI [project of common interest] list since 2015 which could ease issues related to project financing,” Agata Loskot-Strachota, senior fellow at thinktank the Centre

“The first scenario implies that Denmark will use Norwegian gas temporarily and will get back to self-sustainability after the lifting of any Tyra suspension. The second scenario implies that Denmark will stay import-dependent and will have a high interest in Norway and Poland connections,” Wojciech Jakóbik, an energy expert at

Delayed pipeline A 1990s development plan saw preliminary supply contracts signed between Poland’s PGNiG, Norway’s Statoil and Denmark’s DONG Energy under the stewardship of Polish Prime Minister Jerzy Buzek.

His centre-right government was keen to ease dependence on Russia, but later administrations put the project on ice.

May–June 2016

Energy News Poland’s Jagiellonian Institute, told Interfax Natural Gas Daily.

Under the second scenario, any Baltic Pipe design could resemble the earlier plans to provide a full link between the Norwegian system, operated by Gassled, and Poland via Denmark. Polish media have suggested that production assets in Norway owned by Polish companies could contribute around 3 billion cubic metres per year towards any new capacity, Loskot-Strachota noted.

Poland has already opened a new LNG terminal at the port of Swinoujscie. A contract with Qatargas caters for the

annual delivery of 1.5 bcm/y.

But annual Polish consumption is heading beyond 16 bcm, and Gazprom supply constitutes around two-thirds of that.

“For Poland, a link with Norway is about creating genuine competition in the market by ensuring three independent sources of gas supply – as called for by EU Commissioner for Energy Union Maroš Šefcovic last year,” Loskot-Strachota said.

“It is also worth remembering that the project – if built – would start operating probably when the current contract with Gazprom expires. So it would

be able to improve the terms of supply and diminish the share of Russian gas,” she said.

However, major obstacles remain. A feasibility study on the project design is still to be completed by the end of this year, and funding could be an issue. Buzek told Interfax Natural Gas Daily recently that an “idea that had practically no flaws 15 years ago does not have to be that excellent anymore.”

The former prime minister saw greater value in investing in new LNG import capacity, but LoskotStrachota noted pipeline supplies could provide greater stability for Poland if the LNG market tightens and spot prices begin to rise.

“The important thing is to coordinate future work on new interconnectors with the LNG terminal in Swinoujscie,” Jakóbik said. “They can supplement each other and there is a possibility that, some day, LNG from Swinoujscie will be imported by Denmark using Baltic Pipe. More connections mean more security.”

If its domestic production is called into question, Denmark will need to review how it can switch from autarky to the EU norm of import dependence. “In future, Danish consumers will be buying more gas abroad. This is the current scenario for most of the other EU countries,” Brabo accepted. n

CEE CLEAN ENERGY AWARDS

The 3rd annual CEE Clean Energy Awards recognizes companies and individuals in the Central (and Eastern) European clean energy industry: wind | solar | biogas | natural gas/LNG | CHP | investment funds | energy traders | service providers |

19 Awards Categories

9 June, 2016, Intercontinental Hotel, Warsaw

ceeEnergyAwards.com 2016 May–June

BiznesPolska.pl/EN

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Equities News

Polish stocks count $50 billion cost one year after Duda win Twelve months on from Andrzej Duda’s surprise initial victory in Poland’s presidential elections, stock investors are fleeing the country. And there’s little sign they will come back any time soon.

The benchmark WIG20 Index has suffered the worst losses worldwide in Q1 among 93 gauges tracked by Bloomberg in dollar terms, exacerbating a rout that’s wiped $50 billion off Poland’s market capitalization since Duda triumphed in the first round of voting on May 10 last year. NN Investment Partners and Blackfriars Asset Management Ltd. say the declines will continue unless the Law & Justice government changes course.

“Poland is a clear short,” said Nathan Griffiths, a senior emerging-market equities manager who helps oversee $1.1 billion at NN Investment in The Hague and has held fewer Polish stocks than benchmarks suggest for at least

Bank Tax The average short interest for companies on the WIG20 rose to

“The benchmark WIG20 Index has suffered the worst losses worldwide this quarter”

“the plan to force banks to convert Swiss franc mortgages into the zloty would cost banks 44 billion zloty, or about four years of profit”

28

a year. “The reality is that the WIG20 is worth a lot less today than a year ago simply because of the Law & Justice party.”

The slide in stock values is testament to the deterioration of confidence in a market once regarded as a haven among developing economies. The Law & Justice party from which Duda hails took over the government in October, giving it free rein to impose a bank tax that’s set to erode industry profits, while also adopting measures to encroach on institutions like the country’s top court, prompting Poland’s firstever credit downgrade in January.

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1.2 percent on 11 May 2016 from 1.1 percent in December, according to Markit Ltd. data. That compares with 3 percent or more for the Stoxx Europe 600 Index and S&P 500 Index.

Banking shares have borne the brunt of investor bearishness as the government saddled lenders with a annual levy of 0.44 percent of assets from February 1, the highest in the European Union, according to Oxford Economics. Analysts slashed their earnings projections for Polish stocks by 14 percent from last year’s peak in August on speculation Law & Justice would replace the Civic Platform after October elections and boost social spending at the expense of banks.

The 15-member WIG Banking Index fell 11 percent in Q1 2016, three times the pace of declines in the MSCI Emerging Markets Financials Index and compared with a drop of 9 percent for the Polish benchmark.

“It’s hard to see the situation improving much from here as all this is the result of Law & Justice policies,” said Anastasia Levashova, a money manager at Blackfriars, which holds Polish stocks in several funds.

The caveat, she said, would be if the state takes a “more constructive stance towards banks,” to allow them to resume lending and thereby make it less likely that Moody’s Investors Service and Fitch Ratings would follow S&P Global Ratings with credit downgrades.

S&P shocked markets in January by cutting the sovereign one level to

BBB+, its third-lowest investment grade, with a negative outlook.

“That would mean that main risks didn’t materialize, and with decent growth Poland looks good within the European Union,” she said. Economists surveyed

by Bloomberg project Poland’s economy will expand 3.6 percent this year, the highest after Ireland and Romania in the 28-nation bloc.

Whether the president proceeds with a plan to force banks to convert Swiss franc household mortgages into the zloty will be crucial to determining the country’s ratings outlook, Citigroup Inc. economists Piotr Kalisz and Cezary Chrapek said. Moody’s left Poland at A2 at its recent review in mid-May, while lowering the outlook to negative.

There were some signs this month that Duda may consider abandoning the plan, which the central bank estimated in February would cost banks 44 billion zloty, or about four years of profit. Aside from political risks, Polish stocks have also been under pressure since a pension overhaul in 2014 reduced the presence of state funds in the nation’s equities.

For Griffiths of NN Investment, there are too many risks to justify boosting holdings in Polish stocks, which are still more expensive than emerging-market peers even after the rout in the past 12 months.

Lenders in the country trade at 12.8 times projected 12-month earnings, compared with 8.1 times for peers on the MSCI Emerging Markets Index. The multiple for Polish shoemaker CCC SA, whose shares are up 5.7 percent this quarter, is 23.

“I struggle to find any stocks that offer value as the market was always expensive,” Griffiths said.

“With the banks no longer meriting a premium valuation, investors have crowded into a few consumer names which now trade at very unappealing valuation.” n Source: Bloomberg, 12 May 2016

May–June 2016

Defence

Missile Defense systems go live amid Russian criticism NATO’s European missile defense system went live in early May when a base in Romania became operational. Days later, Poland broke ground on its NATO missiledefense base.

The decision by the United States and its allies in Central Europe to proceed with ballistic missile defense in the face of increasingly loud Russian criticism is an important stage in the alliance’s new stance toward Moscow.

Those deployments will be coupled this spring with major military exercises in Poland and the Baltics, with significant American participation, and a beefed-up rapid reaction force of up to 5,000 troops.

Altogether, said Derek Chollet, a former United States assistant secretary of defense for international security affairs, “There will be a quite robust display of military power in Europe and allied resolve, and hopefully Moscow will see it for what it is, an alliance improving its capabilities.”

At the biannual NATO summit meeting in Warsaw in early July, the main issues are expected to be east-west and north-south — how to deal with threats to members like Turkey and Greece from the chaos of Syria, Iraq, Libya and the Islamic State.

There is confusion about what useful purpose NATO can serve in the south. But there is more clarity on Russia, after its annexation of Crimea and armed involvement in eastern Ukraine, its hardly-veiled threats to the Baltic region and intervention in Syria.

Talk of “strategic partnership” is gone; instead, there are calls to abandon the NATO-Russia Founding Act of 1997, which spoke of shared values and a

2016 May–June

commitment to peace. There is less emphasis on finding “common ground” with Russia than on setting clear limits.

The intention in Warsaw is to move from “reassurance” of eastern NATO allies to “deterrence” of Russia. That means more troops and equipment, longer deployments, bigger exercises and a “persistent” presence of NATO and American troops in countries like Poland and the Baltics.

At the 2014 NATO summit meeting in Wales, the alliance decided to rotate small numbers of troops through the Baltic region; now NATO is planning to deploy

four combat battalions of roughly 1,000 troops each in Poland and the three Baltic States: Estonia, Latvia and Lithuania. Two of them are likely to be American, one German and one British.

And Washington will add a third combat brigade in Europe.

There will be discussion of how to recreate the infrastructure, dismantled after the Cold War, to move tanks quickly to Poland, which now takes at least a day. The new deployments are a more serious tripwire to deter

a war that NATO leaders must now at least contemplate.

How will Russia react? President Vladimir V. Putin views NATO as encircling Russia to limit its influence. Moscow argues that the only possible target of NATO’s missile defenses is Russia, now that Iran has agreed to limit its nuclear program.

Russia has already said it will create three new divisions along its western border and has threatened to put nuclear warheads on its new Iskander missiles and base them in Kaliningrad — territory bordering Poland and Lithuania that Moscow annexed after World War II. Some NATO country officials, including in Poland, believe that Moscow already has nuclear weapons in Kaliningrad, and will wait to announce that deployment in response to an operational missile defense, or as Moscow’s riposte to the NATO meeting.

Russia has been developing a ground-launched cruisemissile version of the Iskander that the departing NATO commander, Gen. Philip M. Breedlove, has said violates the 1987 Intermediate-range Nuclear Forces Treaty with Washington.

Moscow, for its part, argues that NATO’s own missile defenses violate the I.N.F. treaty because they could be used offensively.

So the newly robust NATO moves may give Moscow the excuse to say that it is pulling out of the treaty altogether. And Mr. Putin, who has domestic problems and has discussed using nuclear weapons in a conflict with NATO, may decide to announce the deployment of nuclear weapons in Kaliningrad, or even Crimea.

“Putin has given us plenty of reasons to be concerned,” said Mark Leonard, director of the European Council on Foreign Relations. “He uses his unpredictability as leverage over the West, so we can’t trust our assumptions.” n

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20 October 2016

FDI Poland Investor Awards

“Distinguishing top foreign investors in Poland – and top Polish companies expanding globally”

in association with

For this 4th year of the FDI Poland Investor Awards Gala, we are expanding the concept to recognise the rapidlygrowing expansion of Polish firms on a global scale. In addition to our 10 categories for major foreign investors in Poland, we have 10 new categories for Polish companies/entrepreneurs who are successfully expanding internationally.

With more than 250 international guests - top executives in charge of investment decisions related to Poland, and top management and entrepreneurs from Poland’s leading international companies – the FDI Poland Investor Awards continues to strengthen its position as the main Awards event recognising cross-border deals involving Poland.

The awards gala is preceded by a half-day of discussion panels covering key success factors and practical experiences for Polish companies expanding abroad.

20 Awards Categories

Top Foreign Investors in Poland

Top North American Investor Top UK/Irish Investor Top French Investor Top Iberian Investor Top Benelux Investor Top Scandinavian Investor Top DACH Investor (Germany/Austria/Switzerland) Top Chinese Investor Top East Asia Investor (Japan, Korea) Top Indian Investor of the Year

NEW Top Polish companies going Global Top Polish Investor in North America Top Polish Investor in UK/Ireland Top Polish Investor in France Top Polish Investor in Spain/Portugal Top Polish Investor in Benelux Top Polish Investor in Scandinavia Top Polish Investor in DACH Top Polish Investor in China (or Taiwan) Top Polish Investor in Japan or Korea Top Polish Investor in India

WWW.FDIPOLANDAWARDS.PL

20 October 2016

FDI Poland Investor Awards

“Distinguishing top foreign investors in Poland – and top Polish companies expanding globally”

FDI Poland Investor Awards 2015 Winners Top CEE (Central East Europe) Investor

Top Scandinavian Investor

Top DACH Investor (Germany, Austria, Switzerland)

Top Benelux Investor

Top French Investor

Top Iberian Investor

Top UK Investor

Top Indian Investor

Top Taiwanese Investor

Top Japanese Investor

Top Korean Investor

Top Chinese Investor

Top Canadian Investor of the Year

Top U.S. Investor of the Year

Top Special Economic Zone

Top Polish FDI Investor

In Association with: Supporting Partner:

Supporting Partner:

Auditor:

FineWines by:

Organizer

Organizer

WWW.FDIPOLANDAWARDS.PL

FDI Investment News –Incoming

Daimler to open 500 m euro engine factory in Poland Daimler said it plans to invest about 500 million euros in a new engine factory in Poland to broaden its production footprint outside its German home market.

The factory will be in Jawor, about 430km southwest of Warsaw, and will be Mercedes’s first plant in Poland and second engine facility outside Germany after Beijing.

The plant will produce four-cylinder gasoline and diesel engines for Mercedes-Benz passenger cars starting in 2019 and will create several hundred jobs. The implementation of the project is dependent on various investment conditions, including the granting of state aid, Daimler said.

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The 500 million euros is planned for the first stage of its planned investment, the company said.

Daimler has not commented on German media reports that it plans a car production factory in Poland instead of in Russia where the auto industry is in a prolonged slump. Daimler’s investments in central and eastern Europe include

BiznesPolska.pl/EN

a car factory in Hungary and a transmissions factory in Romania.

Quicker reaction The Jawor plant will allow Mercedes to react more quickly to changes in demand across several

production sites, said Frank Deiss, head of Mercedes’s powertrain production.

Automakers are pushing to improve profitability by shaving costs off production processes, fine-tuning delivery of car parts and developing strategies including use of the same parts in different model lines. One area

of focus is being able to switch products from one factory to another, depending on demand.

Luxury-vehicle manufacturers are increasingly equipping cars with smaller, more fuel-efficient fourcylinder engines as governments mandate cleaner-running models.

Mercedes is producing more cars in its bid to wrest back the global lead in luxury-auto sales from BMW’s namesake brand as early as this year.

Daimler AG appears bent on expanding its presence in Central and Eastern Europe. The German luxury vehicle manufacturer recently established a transmissions facility in Romania along with an assembly plant in Hungary.

The product of the Polish plant will be four-cylinder turbo gas and diesel engines designed for passenger cars.

Mercedes-Benz Cars, Production and Supply Chain Management Divisional board member Markus Schafer said setting up the new engine factory in Poland is a component of the international growth strategy of the company.

Expanding the capacity in Eastern Europe demonstrates the increasing international orientation of the powertrain production compound of the company, which will result to increased efficiency and flexibility in the international production network of the company, Schafer added. n

May–June 2016

FDI Investment News –Incoming

Rush hours in Beijing – governmental visit in China Polish Minister of Foreign Affairs Witold Waszczykowski visted China in late April., taking in both Chengdu and official meetings in Beijing.

Great Wall. Polish officials also attend a meeting in the biggest analytic hub in the country - the China Academy of Social Science.

On the second day, the delegation met with vice president of the People’s Republic of China, Li Yuanchao and Chinese minister of

foreign affairs Wang Li. The talks focused on bilateral economic and political cooperation including common development of One Belt One Road project as well as project focused on collaboration between 16 CEEC with China called 16+1. n

The governmental delegation included deputy minister of economy Radosław Domagalski, PAIiIZ president Sławomir Majman, representatives of Ministry of Treasury, experts regarding infrastructure as well as members of PLL LOT aviation company.

The delegation paid a visit to the biggest Chinese players in the financial sectors. The meeting were accompanied by representatives of the Silk Road Fund, Huawei, China Investment Corporation, Exim Bank, ICBC, COSCO and China

Investor in the Płock Industrial and Technological Park The “Spawex” company is to build, at the Płock Industrial and Technological Park (PPPT), a production hall of steel structures and components for pressure equipment as well as examination centre for welders. The company

is to build its facility at the Zone 3 of the Płock Industrial and Technological Park. The start of the production is planned for Q4 2017. Spawex is to invest about PLN 2.5 million and to hire at least 10 people.

“Spawex” - Zdzisław Cielicki is a local company with a decade of experience in the market, specialising in the construction works, prefabrication and assembly of steel structures and pipelines. n

New investors in the Słupsk SEZ Słupsk Special Economic Zone has new investors. Three companies received business permits to operate in the “Lębork” sub-zone, while another began the production in “Czarne” subzone.

These are the first investors in the relatively new subzone of Lebork. “For three years, the investments area in Lębork was under so-called “the patronage of the Zone”. After the construction of the technical infrastructure,

2016 May–June

it was included in the borders of the Słupsk Special Economic Zone. Within one year, the plot gained the interest of investors”, said Mirosław Kamiński, president of the Pomeranian Regional Development Agency, which supervises the Słupsk SEZ. The new investors are: PPH AMG Ltd, GROUP SPORTEX (metal industry) and AJ FOOD Ltd (logistics). Companies declared to employ almost 230 people. The

total value of these investments is PLN 35 million. In turn, in the “Czarne” sub-zone, the production of upholstered furniture by the Meble Negro company has just started. The investor, on a plot of 7.9 ha has built a production hall and warehouse equipped with modern machinery. The investment will create at least 150 new jobs, and the value of the investment will amount to over PLN 30 million. n

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FDI Investment News –Incoming

SeaChange pays $8 million for Warsaw-based DCC Labs SeaChange International has bought DCC Labs, a Warsaw-based set-top and multiscreen device software developer and integrator, to advance SeaChange’s set-top, multiscreen subscriber device and application strategies.

The transaction closed on May 6, and SeaChange paid approximately $8 million in cash and SeaChange stock for DCC Labs. The company said DCC Labs is expected to contribute an additional several million dollars of revenue annually to SeaChange. The transaction is expected to be accretive in fiscal 2017, as well as provide an anticipated one-year payback through synergies and cost savings that SeaChange will begin to realize immediately. The transaction includes a lock-up provision for the SeaChange stock that unwinds over a three-year period.

DCC Labs was owned in part by 7bulls.com Sp. z o.o., a private group of software development and integration companies focused on delivering advanced technologies and IT solutions for large enterprises throughout the Americas, Asia and Europe across a range of industries including finance, automotive, retail and media.

DCC Labs, with more than 70 engineers, has commercially deployed projects supporting millions of settops, mobile devices and smart TVs, that span the television service provider industry’s Reference Design Kit (RDK), as well as Android and Linux operating systems.

In 2015, SeaChange engaged DCC Labs to support a major set-top development project for a large European cable operator, resulting in deployment of a user

interface and an RDK 2.1-based home video gateway for field trial tests within four months of engagement. Subsequently, SeaChange engaged DCC Labs to assist with improving quality and providing enhancements for another European cable operator’s deployed home video gateway.

“Through our successful collaboration in the field, SeaChange determined that DCC Labs’ experience and strengths are exceptionally well-aligned with our strategy to operate more efficiently and rapidly roll out high-value, front-end product innovations,” said Ed Terino, CEO, SeaChange. “SeaChange is now better positioned to serve the

global RDK licensee community, as well as fulfilling service providers’ growing desire to focus on a select set of vendors to support their video infrastructure from the back-end all the way through to set-tops, mobile devices and the subscriber experience.”

SeaChange said the acquisition of DCC Labs will allow it to optimize the operations of its In Home business, developer of deployed software solutions including the SeaChange Nucleus home video gateway. In conjunction with the acquisition of DCC Labs, SeaChange commenced a workforce reduction within its In Home engineering and services organization, which is anticipated to achieve $8 million in annualized cost savings. DCC Labs CEO Marek Kielczewski, who has led that company through a period of growth since 2009, has transitioned to the role of SVP of consumer premises equipment software and will lead SeaChange In Home.

In addition to enhancing SeaChange’s capabilities for software development and integration through project management to testing, the DCC Labs acquisition brings market-ready products, including an optimized television software stack for Europe’s DVB (digital video broadcasting) community and an HTML5 framework for building future-proof user interfaces for CPE devices. n

Zielona Góra exempts from property tax

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From the end of April, Lubuski Industrial and Technological Park Zielona Góra exempts investors from taxes. Companies that decide to invest in the Park can count on exemptions for even a decade. The offer of the Lubuski Industrial and Technological Park is addressed to each investor, regardless of country of origin, provided that the production plant will be built and

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the criteria of new jobs created will be met. Enterprises employing at least 30 employees will be exempt from property taxes for three years. For those with employment exceeding 50 people the exemption is 5 years. Companies with more than 200 employees can count on exemption from property tax for 10 years. Already 3 companies invested in the Park and 4 new

projects are in progress. Total employment reaches 500 people.

The total area of the park is nearly 168 hectares, while the industrial park, entirely under the status of a special economic zone, occupies 123 ha. As a result, investors would be entitled to an income tax holiday. The remaining part is Science and Technology Park of the University of Zielona Góra. n

May–June 2016

FDI Investment News –Incoming

Grupo Antolin set to buy out Polish JV Silesia Plastic Leading global auto interiors supplier Grupo Antolin is continuing to consolidate its international operations following the group’s successful acquisition of the Magna International Inc. interiors business last year.

The Burgos, Spain-based group has taken steps to take full control of Silesia Plastic, the plastics injection molding business in southwest Poland that it owns jointly with another Spanish company, Industrias Alegre.

Silesia Plastic opened in 2006 as a 50-50 joint venture between the two Spanish firms to set up a molding base close to customers in the region. Production at the

Silesia plant in Strzelin began on molded plastic components for the Ford B299 Fiesta project two years later. Since then, it has manufactured parts for a series of car assembly projects for Peugeot Citroën, Volvo, Renault and Hyundai, as well as for Ford.

The 7,800-square-meter plant operates 31 injection mulding machines with clamping forces ranging from 100 to 1,200 metric tonnes. The firm employs a 280-strong workforce.

A merger plan for Antolin to acquire the 50 percent stake in Silesia Plastic held by family-owned Valencia-based Industrias Alegre was approved in early spring. n

Finnish tools manufacturing factory moves to Poland Employee consultations at Fiskars’ Billnäs site in Finland have concluded. The employee consultations started in March 2016 relating to the reorganization of the manufacturing operations at the Billnäs site. As a result of the negotiations, the factory in Billnäs will in the future concentrate on the manufacturing of axes, scissors, and snow tools. Manufacturing of garden cutting tools will be centralized

to Fiskars’ manufacturing site in Poland.

The consultations concerned 286 employees at the Billnäs site.

The total effect on employees is a maximum of 107 reductions which will take place in phases during the years 2016 and 2017. Part of the reductions will take place through retirement arrangements.

As a result of the codetermination negotiations, the total reduction of employees in the first phase

will be 61. As per the employee consultations, the remaining reductions are estimated to take place in the second half of 2017.

Fiskars is committed to supporting the re-employment of affected employees by providing them with training courses. These changes are a part of the Supply Chain 2017 restructuring program with a target to improve competitiveness of Fiskars manufacturing operations and distribution network. n

Frosta to spend €40 million on its fish plants in Poland and Germany The company is expanding its fish processing in Bydgosczcz, with €7m being spent on a ready meal line in its factory in Bremerhaven, Germany.

This new line will be able to produce ready meal fish products, Felix Ahlers, CEO of Frosta told Undercurrent News.

The €40m is up from a spend of €25m on plants in 2015, he said.

“The biggest amount will obviously be spent in Bremerhaven and Bydgosczcz,” said Ahlers.

2016 May–June

“Investment in Poland is ongoing, but nothing new to report for now,” he said.

Ahlers declined to comment on specifics on the fish expansion plan in Poland, however.

Last year, he told Undercurrent of the plans. Investment will also go into Frosta’s two non-fish plants, in Rheintal and Elbtal.

Frosta was being linked to an acquisitive processing expansion, with the Pickenpack Holding Germany insolvency process putting two plants in play, one in Luneburg and another in Riepe. n

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FDI Investment News –Incoming

IMF Staff concludes Poland Mission Poland continued its convergence with the EU, growing well above most of its peers.

However, the IMF concluded that increased external risks and recent policy initiatives have weakened investor sentiment. Long-term structural challenges remain, which if not addressed could slow down growth and convergence.

Sound institutions, growth-friendly policies, and structural reforms are critical to Poland’s continued progress.

Here are key conclusions from the IMF’s May report on Poland:

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• Poland is enjoying a rapid economic expansion, but external factors continue to weigh on inflation. Growth reached 3.6 percent in 2015 driven by robust domestic demand, supported by healthy wage and credit expansion. Unemployment has come down rapidly, and the economy is operating at close to full capacity. Yet, low imported inflation has kept headline inflation significantly below the target.

Growth is projected to remain strong in 2016 and accelerate to close to 4 percent in 2017, on the back of strong private consumption, opening a positive output gap. This should help gradually nudge inflation toward the lower bound of the target band (1.5 to 3.5 percent) by end-2017.

• Downside risks to the outlook have intensified. External risks include a marked slowdown in emerging markets, accompanied by financial market volatility, and a protracted growth slowdown in the euro area, which could spill over to Poland through trade and financial linkages.

Domestically, a weakening of some institutions and policies or fiscal slippages could worsen investor sentiment and hinder economic expansion. Over the longer term, a rapidly aging population poses important challenges to potential growth and fiscal sustainability. At the same time, enduring income disparities between Poland’s prosperous west and the lagging east could undermine the quality of growth.

• Strong policies and institutions are essential to mitigate these risks and to support sustainable and balanced growth. With a closed output gap but

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continued low inflation, the nearterm policy mix should be carefully calibrated to maintain an accommodative monetary policy stance, while continuing gradual fiscal consolidation.

Safeguarding financial sector stability and strong institutions, underpinned by market-friendly policies, is a prerequisite for continued stable growth.

Structural reforms will be key to securing healthy potential growth and income convergence, while reducing regional disparities. International reserves are broadly adequate.

• The current accommodative monetary policy stance is appropriate.

The key policy interest rate has been kept at a historically low level since March last year. Further interest rate cuts could be needed in the event of a sharp growth slowdown or if inflation expectations were to disappoint.

• The fiscal stance has become procyclical. In 2016, implementation of election promises is expected to increase the deficit to about 2.8 percent of GDP. The new child benefit scheme introduced in April 2016 will be partly financed by one-off revenues and a sectoral tax on financial institutions.

Plans to partially reverse the 2013 retirement age increases and to hike the personal income tax-free allowance are under discussion. Depending on the final design and implementation, and in the absence of new offsetting measures, this could push the deficit significantly above 3 percent of GDP already in 2017—at a time when output is above potential—breaching the Excessive Deficit Procedure threshold, and undermining investor confidence. While the authorities plan to start reducing the deficit from 2018 at a pace of about ¾ percent of GDP a year, this would still imply a continued procyclical fiscal stance this year and next.

• Fiscal policy should take advantage of strong growth to resume consolidation already in 2017. The deficit reduction should be underpinned by credible growth-friendly measures and anchored in reaching the government’s medium-term objective of 1 percent of GDP structural deficit by 2020. This would help support market confidence and maintain

budget financing on favorable terms.

The distortionary tax on financial institutions could reduce credit supply and increase financial vulnerabilities, and should be replaced with a more growth-friendly tax on profits and remuneration. Moreover, in the near term, consideration should be given to maintaining the current VAT rate beyond 2017 and rationalizing discretionary government consumption, drawing on the ongoing expenditure review. Over the medium term, measures could include unification of multiple VAT rates and phasing out of preferential pension regimes for farmers and miners. The mission welcomes the authorities’ efforts to strengthen tax administration, though any revenue gains from these reforms should be budgeted conservatively, since they take time to bear fruit.

• The intended partial reversal of the 2013 retirement age increases could undermine public finances and labor force participation, and should be reconsidered. With a rapidly aging population, preventing the retirement age from increasing gradually as currently envisaged would be a step in the wrong direction. Such a step would reduce the pension replacement rate, increasing the risk of old-age poverty and associated higher reliance on social benefits, with adverse implications for the budget.

Moreover, it would reduce labor force participation at a time when potential growth is already threatened by unfavorable demographic trends.

• Maintaining financial sector stability is essential. The banking sector remains well-capitalized but profitability has declined owing to a prolonged period of low interest rates and higher regulatory costs. A search for yield in a low-interest-rate environment risks shifting lending activity to the less regulated non-bank sector. In this context, recent regulation on non-banks, which limited the non-interest cost of loans and constrained the practice of rolling over credit, is welcome as it should help prevent the buildup of new vulnerabilities. Proposals for blanket conversion of Swiss franc mortgages into zloty, if implemented, risk undermining financial stability,

May–June 2016

FDI Investment News –Incoming

North Ireland-Poland Investment Summit set for 2 June Extending trade connections and encouraging joint-ventures and distribution partnerships between Poland and Northern Ireland will be the focus of a major day-long conference in Titanic Belfast in early June.

Poland’s ambassador to the UK Witold Sobków will join senior Stormont government officials at the first-ever NI-Poland summit on June 2, which aims to further improve bilateral business links already worth more than £200 million a year.

More than a dozen Northern Ireland companies, including the likes of Kainos and Delta Print & Packaging, already have strong footholds in Poland.

The free-to-attend conference organised by Trade & Investment Section of the Polish Embassy in London and Jerome Mullen (Honorary Consul of Poland in Northern Ireland) in partnership with the Polish National Tourist Of?ce in London - will explore how links can improve further.

Earlier this year Poland’s government accepted a resolution concerning a long-term economic development plan for the country, proposed by its development minister Mateusz Morawiecki.

The so-called “Morawiecki plan” has identified five challenges that Poland faces, notably the middle-income trap, lack of balance between Polish and foreign capital, the lack of innovative products, the demographic trap, and the weak institutions trap.

In order to overcome them, the government has singled out strategic sectors of the economy which will be supported by the state, where spending on R&D, for example is set to reach two per cent of GDP, compared to just 0.8 per cent at present.

Under the plan, a staggering one trillion zloty, roughly £170

with adverse implications for credit and growth. Instead, the focus should be on supporting distressed mortgage holders on a case-by-case basis.

• Structural reforms should focus on addressing demographic challenges and reducing regional disparities.

Aging-related pressures can be tackled by increasing labor force participation, particularly of women and

2016 May–June

billion, will be spent on investments within the coming decade. The money will come from European funds, Polish companies’ savings and state-owned companies and the programme will be carried out in coopera-

Part of the conference will be dedicated to the “Discover Powerful Connections”, which promotes the most attractive Polish investment regions and presents benefits of the special economic zones policy in Poland.

tion with international institutions such as the World Bank.

Mr Mullen said: “Our conference will bring together eminent experts in the fields of politics, economics and business. Delegates will engage in a lively debate to discover and discuss the inestimable investment opportunities of contemporary Poland, but most importantly to develop international connections. Our distinguished guests will include MPs and MLAs, market experts, entrepreneurs, major enterprises, business leaders, regional chambers of commerce, significant business organisations and key decision makers from both Northern Ireland and Poland.”

It will also showcase latest successful Northern Irish-Polish business ventures including Delta’s £40m investment in a packaging plant in a 100,000 sq ft production facility in Gliwice, and Kainos opening an office (SSC) in Gdansk in March employing 500 people.

There are currently 30,000 Poles living in Northern Ireland, many now second generation, and it makes up the largest migrant group settled here from within the EU. The conference (9am-5.30pm) is free to attend and registration is at www.polishconsulateni.org/event/ business-conference-belfast-2016/ or by emailing jeromemullen@ polishconsulateni.org n

seniors, and boosting productivity. In this respect, the mission welcomes the authorities’ intention to move up the value-added chain by increasing access to vocational training and promoting innovation. Redirecting family cash benefits toward childcare and preschool education would help boost female labor force participation. Maintaining the retirement

age increase envisaged by the 2013 pension reforms would encourage participation of seniors. Reducing regional disparities would promote more inclusive growth and speed up convergence. This would require improving educational attainment in the east, reducing skill mismatches, and investing in infrastructure to attract FDI to poorer regions. n

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FDI Investment News – Outgoing

Colian buys UK confectioner Elizabeth Shaw Polish food group Colian Holdings has entered into an agreement to acquire upmarket UK chocolate group Elizabeth Shaw for GBP 2.3 million.

Colian will take 100% ownership of the luxury chocolate brand from Norwegian investment fund Imagine Capital. The transaction is broken down into an up-front payment of GBP 1.75m with the remainder to be held in escrow for 18 months.

The deal includes the Elizabeth Shaw brand, which is on sale in UK retail multiples including Tesco, Asda, Sainsbury’s Morrisons and Waitrose, as well as a foodservice business.

Colian will also take control of Elizabeth Shaw subsidiary Famous Names, which produces chocolate under its namesake brand.

In a statement to Polish regulators, Colian said the acquisition was in line with its “development strategy”, which aims to “develop overseas markets”.

With the organisational support of Colian, the company said it expects to support dynamic growth of the Elizabeth Shaw brands.

Colian operates within three business divisions: sweets,

beverages and culinary, which includes condiments, dried nuts and fruits. Its portfolio contains brands such as Jutrzenka, Goplana and Solidarnosc. n

Synthos buys Ineos’ EPS business Ineos Enterprises has agreed to sell its expanded polystyrene business to Synthos SA, the Poland-based chemical company, for 80 million euros.

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Operating from three sites, two in France —in Wingles and Ribécourt — and one in Breda, the Netherlands, Ineos Styrenics produces EPS for the construction and packaging sectors. It is Europe’s largest manufacturer of the material. Breda also has a research and development office.

A total of 250 people work for the business and will transfer over to the new owners as part of the deal, which is expected to be complete in the second half of 2016, once regulatory approvals

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have been received, according to a news release from Ineos.

Ashley Reed, Ineos Enterprises’ chief executive, said: “The combination of Ineos Styrenics with Synthos will accelerate growth and deliver additional benefits to customers of both companies, giving them access to expanded technologies and an enhanced product portfolio. It will also offer new opportunities for employees who will be part of a company that is focused on, and strategically committed to the long term future of the expanded polystyrene market.”

Synthos is the third largest maker of EPS in Europe, and one of the largest producers of synthetic rubber, Ineos noted.

Speaking about the deal, Tomasz Kalwat, Synthos’ chief

executive, said: “The aim of the acquisition will be to provide the highest quality EPS to ensure that EPS products remain the insulation material of choice for our customers.”

The transaction, valued at €80 million, is expected to be finalized during the second half of 2016, following relevant approvals from the competition authorities. It includes the indirect acquisition of shares in the INEOS Styrenics subsidiaries in France, the Netherlands and Turkey, as well as the assets of Switzerland-based INEOS Styrenics International SA. The White & Case team which advised on the transaction was led by local partner Andrzej Sutkowski (Warsaw) and partner David Crook (London). n

May–June 2016

FDI Investment News – Outgoing

Japanese success of Velis IT Operating in advanced information technology, Velis IT has signed a contract with the Japanese company G.I.Tec Japan.

From this moment, Polish IT solutions will be exported to one of the most technologically advanced countries in the world. Velis IT is a company supported by PAIZ. The official ceremony of signing the agreement between the partners took place on 21 April at the Polish Embassy in Tokyo.

Establishing cooperation with Japanese partner is the culmination moment of several months of efforts of Velis IT, supported

by PAIZ. In February 2015, Velis IT took part in a PAIZ business mission to Japan headed by the president of Poland.

“We are accustomed to the fact that innovative systems and technologies are coming to Poland from foreign markets. It’s time to reverse the trend. This time, those are Polish solutions which will support the Japanese real estate sector, which is one of the largest in the world”, said Katarzyna Michalik of Velis IT. For Velis IT, the entry into the Japanese market is the first step to the expansion to the Far East. n

Kotrak - a year after debut in UK Polish IT company Kotrak is summing up its first year of presence as a foreign investor in Great Britain. Kotrak’s debut in UK has been supported by PAIZ. Exactly a year ago, in May 2015, Katowice-based IT company Kotrak (which was established in 1991) opened its overseas office in London. The company decided to do it as a result of numerous orders implementation of IT systems for customers in the UK. The company was supported by PAIZ experts throughout the process of creating

a new unit. The Agency provided Kotrak with information on the legal environment in the UK, advised regarding employment process and regarding selection of a suitable location for the office.

PAIZ also supported investor in the development of a trading strategy for the British market and consulted Kortrak’s participation in trade fairs and business event.

“The opening of a branch in London gives us many more opportunities to interact with foreign customers in comparison

to what we can achieve from Katowice. With the experience from the UK, it will be easier for us to expand into other markets”, says Jakub Imosa, Member of the Board of Kotrak Group.

Kotrak employs 190 people, including 90 developers in seven offices. The company works for customers in Europe, South America, South Africa and Asia. In the UK, it currently leads a large implementation of software for construction companies. It is also preparing software for the retail trade. n

Troton of Poland looks to grow its car painting material business in India Poland-based car painting material manufacturer Troton is eyeing new business opportunities in India. Katarzyna Najda-Bartczak, Coordinator of Foreign Markets Development of Troton, said, “The company is already distributing its products in India through our distributors.”

Troton, which was among the European companies which participated in the Auto Expo Component Show 2016 in New Delhi, sells its polyester putty and other paint materials in India.

Its product range includes polyster putties, acryl primers, acryl

2016 May–June

clear coats and acryl thinners.

The company also offers polishing paste and products like acryl spray, sealants and masking tapes.

Katarzyna Najda-Bartczak said the company views India as a price-sensitive market but believes that the demand for its high- quality product will rise in the future as the Indian automotive aftermarket has started preferring quality products.

Currently, Troton exports around 440 containers of car painting material to India. Each container contains 50,000 euros worth of materials.

Currently revenue from India for

Troton, whose annual global turnover stands at 18 million euros, is very small. However, the company views India as one of the main emerging markets for its products. n

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FDI Investment News – Outgoing

Poland Nonprofit working on 3D-Printed Smart Glasses for Visually Impaired In a world of smartphones, smart TVs and smart headphones, there are now smart glasses on the horizon.

Poland-based Parsee, a nonprofit organization dedicated to helping the blind and visually impaired, have made plans to give away free smart glasses. As Reuters initially reported on May 13, the goal is to help the visually impaired identify everything from shapes to colors, all through an app and wearable device.

Users who are wearing the glasses can press a button on the frame to take a picture of the object in front of them. From there, the glasses’ app identifies the object and sends details back to the frame, which has an earphone for audio. Parsee Project Manager Bartosz Trzcinski told the news source that it could help with everything from reading newspapers to drinking juice.

Although the glasses are still in the early development stage, the nonprofit is eventually eyeing mass production and free distribution. The glasses themselves are battery-powered and have a 3D-printed frame. At the moment,

the cost of producing one pair is $300. However, Parsee is looking to reduce this amount over time.

Of course, there are already a number of smart glasses on the market for those who specifically need advanced tech, as opposed to enhanced visual capabilities.

The Vuzix M100 Smart Glasses,

to professionals in telemedicine, remote assistance, warehousing and manufacturing. The glasses can pair with Android devices via Bluetooth and provide everything from GPS data to cellular radio. The Vuzix M100 Smart Glasses retail for $1000.

In 2015, the number of shipments of smart glasses were fore-

for example, are being advertised as the “world’s first commercially available smart glasses.” This particular product is being marketed

casted to reach approximately 10.6 million units. The global wearables market is expected to reach a value of $19 billion by 2018. n

FDI Poland Investor Awards “Distinguishing top foreign investors in Poland – and top Polish companies expanding globally”

New This Edition: Top Polish companies going Global 20 October 2016, Warsaw

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May–June 2016

Events

ASPIRE inspires with top speakers at annual conference in Krakow “We have many reasons to be proud. The numbers are impressive, but more importantly, is the story behind them. The history of the industry shows that it continues to create well-paid and more demanding jobs. The industry is helping build a new, young middle class with higher in- comes that help the local economy”, said Andrew Hallam, founder of ASPIRE. He said that wages in the sector are 70 percent higher than the national average wage, and that employment could reach 61,000 by December 2016.

“That’s 27 new jobs every day”, said Hallam. This sixth conference was appropriately named “Waking the Dragon”. The 2-day conference was held at Krakow’s ICE Congress Centre, and attracted more than 1400 people. n

41 2016 May–June

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Events

Baltic Sea Business Mixer highlights the economic potential of Pomerania BizPoland Magazine hosted its first annual Baltic Sea Business Mixer, in the heart of Pomerania at the Olivia Business Centre.

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Speakers and panelists spoke of the growing potential of the region, especially in the sectors of Shared Services/Outsoucing, manufacturing, and Maritime Ports and trade.

Adam Żołnowski, a member of the board of DCT Gdańsk,stressed the dynamic development of transport infrastructure, whether road, air and railway, which in turn translates into the development of seaports, as well as the tourism sector.

“People with high qualifications, familiar with foreign languages, a large academic center, the strategic location at the crossroads of important European transport routes and high quality of life and relatively low maintenance costs, are the main factors that attract investors to the Tri-City”, said Alan Aleksandrowicz of InvestGDA. Ireneusz Zalewski, Managing Director of Lufthansa Systems Poland and Alexander Ticehurst, who is managing the new State Street offices in Gdansk, drew attention to the fact that Tri-City has become a strong center for business services outsourcing.

In addition to the panel discussions, participants learned the secrets of processing diamonds.

The culmination was a tasting of wines from New Zealand, organized by ThreeOceans and a banquet combined with live jazz music. At the end, visitors had the opportunity to arrange a test drive of the new luxury BMW 7 Series, courtesy of BMW Bavaria Motors in Gdansk. n

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May–June 2016

Events

43 2016 May–June

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