BizPoland Magazine - December 2011

December 2011 vol. 3 no. 10(24)

Poland’s Insatiable Consumer Retail sales growth surprised with another month exceeding 11%, as the rest of Europe retreats.

What’s driving this phenomenon – and what could stop it?

Retail:

Politics:

News:

Events:

CEDC: The Morning After

The New Polish Government

FDI Investment News

CEE Green Building Awards

(p. 11)

(p. 10)

(p. 12)

(p. 21)

Real Estate Awards Regional CEE Retail Regional

FE EBRU UARY 9, 2012 IN NTE ERCONTIINE ENTA AL WARS SAW W

Retail Rea al Est tat te Networ rking g Event of the Yea ar A black tie gala awards and forum recognizing the leaders in retail real estate throughout Central & Eastern Europe in 2011

Sponsors 2010: Premier Partners:

Associate Partner:

Award Sponsor “Retailer of the Year”:

Exclusive Software Partner:

Auditor:

Recruitment Sponsor:

Wine Partner:

Coffee break – networking sponsor:

Venue Partner:

Cocktail Sponsor:

Car Rental Partner:

Media Partners:

For more information please contact:

Craig Smith: craig@europaproperty.com, +48 604 144 769 Anna Kaliszewska: anna@europaproperty.com, +48 601 382 667

Retail Guide 2011

15

Table of Contents

December 2011 Published by: BiznesPolska Media sp.z o.o. ul. Długa 44/50, bud. D, lok 704, 00-241 Warszawa tel.: 022 831 7062 General Manager and Editor: Thom Barnhardt (tb@bizpoland.pl) Publisher: Craig Smith (cs@bizpoland.pl) Editorial staff and writers: Leon Paczyński, Monika Tutak Research team coordinator: Magda Adamczyk

4

Retail 4–6 Poland’s Insatiable Consumer 7–8 News from MAPIC retail expo

10

Politics 10 The New Polish Government

Advertising Sales: tel.: 022 831 7062 mobile 508-143-963

11

Company Profile

11–12 The Morning After

12

Graphic Design: Sławek Parfianowicz sparfianowicz.wordpress.com

FDI Investor News

12–15 FDI Investor News

Subscribe to BizPoland Magazine Annual subscribers to BizPoland Magazine receive our monthly magazine, as well as five business directories for free: Outsourcing in Poland, CityInvestPoland, Top Offices, Top Shopping Centres, and Wind Power in Poland. 500pln for one year.

16

Events 16 Pawiński wins E&Y Entrepreneur of the Year award 17 Korea’s promotion office 18 Business Calendar 19 Private equity fund awards investments 20 Premiere of YES 2012 Calendar 21 CEE Green Building Awards distinguish leaders 22 Diplomats and execs celebrate UAE’s Independence Day

Distribution Top business hotels:

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

Retail

www.bizpoland.pl

Poland’s Insatiable Consumer Retail sales growth surprised with another month exceeding 11%, as the rest of Europe retreats. What’s driving this phenomenon – and what could stop it?

slight hiccup lower than the 4.3% growth of the previous quarter. Full-year growth may exceed 4 percent, Kurtek said, proving the economy is “doing relatively well”. Indeed, while most European economies are downgrading their growth expectations, the OECD increased its projections for Poland, to 4.2% for the full year, from the earlier projection of 3.9%.

While most economists repeat the conventional wisdom that a major slowdown in the Poland’s retail sales increased at a faster-than- economies of Poland’s major trading partners, expected pace in October of 11.2%, following such as Germany, will eventually infect Poland, strong numbers for September of 11.4%. Eco- the economy remains surprisingly resilient. nomists had been expecting 10.5% annual “The figures show the economy isn’t really slogrowth. While staples such as food, beverages wing,” central bank Governor Marek Belka said and tobacco products climbed a modest 3.3%, on TVN CNBC. “They show Poland is in decent clothing and footwear sales surged ahead shape, even tremendous shape when compared 15.1%, while the only significant decline was in with the rest of Europe.” sales of motor vehicles, which stumbled 3%.

Surprisingly, given the doom-and-gloom ac- Buy, buy, buy ross the Eurozone, the monthly increase for For attendees at the recent MAPIC retail expo October was 4.1%, up significantly from Sep- in Cannes, which was attended by more than 400 Polish retailers, bankers, and shopping centember’s 1.3% rise.

“The sales data, especially when the external tre developers, the retail numbers confirm their environment is taken into account, has to be bullishness about Poland and the potential for seen as very high,” said Monika Kurtek, the expanding retail sales. “We think Poland has chief economist at Bank Pocztowy in Warsaw. great potential, and we’re optimistic about the “It indicates that consumption will remain a pil- positive changes coming in the next 2-3 years”, said Paul Heller of Blackstone’s real estate lar of Polish economic growth.”

With the Eurozone set to move into reces- group. Blackstone has been the most active sion in Q4 or Q1, according to economists’ con- buyer of retail properties in Poland in 2011, sensus forecasts, Poland’s economy seems to with acquisitions of Galeria Twierdza in not notice the troubles brewing on its borders. Kłodzko, Galeria Twierdza in Zamość, MagnoThird quarter GDP growth was 4.2%, only a lia Park in Wrocław, and its recently-announced

purchase of Galeria Pestka in Poznan. The investment group has raised an investment fund specifically targeting the Polish retail sector, and has already invested $300 million just in its first year of operation 2011.

Poland remains below the EU average for modern shopping centre space per capita. And while smaller cities have seen an explosion of shopping centre development in the last few years, often led by local Polish operators like Rank Progress, the larger cities like Warsaw still have opportunities for further growth, including more niche and specialist-retail concepts.

The city of Warsaw also has “retail holes” that are underdeveloped and have potential for development. Globe Trade Center, which developed the highly-successful Galeria Mokotow at a time when the area was relatively undeveloped, recently announced plans to build a new 60,000 square metre shopping centre in Warsaw’s Białołęka district.

“Beware!”

But others caution that all that glitters is not gold. “Poland is over-priced; beware”, said a leading international investor at the recent GRI real estate forum. “It’s currently the investors’ darling, and that’s exactly why we don’t like it”, he said, adding that his fund is pursuing opportunities in Hungary, where sentiment is “terrible, but prices are more attractive than in Poland”.

From a combination of conversations at the MAPIC retail fair, the recent GRI New Europe

Top 15 Shopping Centre/Retail sales in 2011 – Poland

4

Shopping Centre:

City:

1 2 3

Galeria Mokotow Magnolia Promenada-1

Warsaw Wrocław Warsaw

4

Wars/Sawa/Junior

5 6 7 8 9 10 11 12 13 14 15

Twierdza Zamosc Blue Knight portfolio Twierdza Klodzko Osowa Galeria Echo Echo Belchatow Leclerc hyper markets (2) Biedronka Biedronka Galeria Narew Galeria Pestka

Seller

Buyer

GTC Unibail-Rodamco NFI Octava; Manchester Securities Blackstone Carpathian AM Atrium ING Real Estate IM Warsaw Centrum Development&Investment (now CBRE Investors) Zamość Rank Progress Blackstone Łódź/Toruń/Sosnowiec Carpathian AM Pradera Kłodzko Rank Progress Blackstone Gdańsk Carpathian AM Pradera Pabianice Echo Investment PH-3 Bełchatów Echo Investment Zousoka Ltd. Toruń, Gorzów Wielkopolski Rewe Polska Leclerc Katowice TUP Property Portico Słupsk Carpathian AM private Irish investors Łomża IGI (Irish Investment Group) Scala IRP Poznań private German investor Blackstone

Price

Notes:

237.5 million euro 222.5 million euro 171 million euro

50% stake sold

76 million euro

50% stake sold

44 million euro 43.2 million euro 39.3 million euro 34.5 million euro 24 million euro PH-3 is SPV of private investors 11 million euro Zousoka is SPV of private investors 6.5 million euro 1.73 million euro approx. 1 million euro not disclosed not disclosed

Footnote: The names of the buyers and sellers represent the final owner; direct ownership is usually via SPV Sources: Jones Lang Lasalle, Agata Sekula, Head of Retail Investment, CEE; Savills: Michal Cwiklinski, Director, Head of Investment Department; BiznesPolska.pl research department

December 2011

Retail

www.bizpoland.pl Commercial real estate forum, and interviews with analysts and economists, the following are conclusions and issues to consider as the year comes to a close and as we usher in the new year 2012:

3 factors driving long-term growth: Exchange rates: The Polish currency lost 11.2 percent against the euro and 20.4 percent against the U.S. dollar in the third quarter, making Polish goods more attractive to foreign buyers.

Net exports added 1 percentage point to GDP growth in the third quarter. If the zloty continues to weaken – or stay at current levels – then one can expect exports – including exports of services such as BPO outsourcing services – to benefit. Key sectors of Poland’s economy are oriented towards export, including manufacturing, food exports and outsourcing. A relative weak currency makes it easier to invest in Poland and more compelling as a base to supply western Europe with products and services. It’s also positive for Asian firms, especially Korean, Japanese and Chinese who view Poland as a cheaper way to access western European markets. As another example, KGHM Polska Miedz more than tripled its third- quarter profit as the copper producer, which sells two thirds of its output abroad, benefited from higher prices for the metal and the weaker zloty.

Euro 2012 and infrastructure: Infrastructure investment is continuing at a torrid pace, as preparations for the Euro 2012 football championships come to a head. Roads, bridges, railroads, rail stations – and of course the actual stadiums – are getting built at a faster pace due to Euro 2012. Hotel operators are delivering strong operating results for 2011, and expect even better results in 2012. The events are also giving a needed boost to Poland’s tourism sector. The knock-on effects are also significant, as events operators have said they will have more options and choices, allowing them to host larger events like major concerts, and also attracting more European exhibitions and expos.

City officials are also competing to retain and attract human resources, and improved qualityof-life offerings such as stadiums and major events are additional attractions for a city.

European Union Funds: The year 2012 is a critical year, as the European Union must finalize its investment plans for the next 7-year period (2014-2020). Poland was allocated Euro 64 billion during the 2007-2013 period, as part of the EU’s push to modernize the economies of the “new” member states, mostly in eastern Europe. Battle lines have been drawn for the next negotiations, which are expected to be finalized by summer 2012. Britain has successfully curtailed the growth of the EU’s overall budget. Consequently, pessimists believe that the new-member states will receive 5-15% less

December 2011

Retailer Profiles Starbucks, Michael Hudspeth Brand President | Starbucks Coffee CEE Company-owned stores, or franchises?

At this time we rent all the spaces from their owners. We choose our landlord partners very carefully and the ownership structure is partnered with AmRest in the Polish market.

AmRest also operates KFC, Pizza Hut, and Burger King in Poland. The AmRest and Starbucks partnership is quite unique and collaborative and we have no plans to offer this unique possibility to others in the future.

Your “in-mall” location strategy?

We want to be in malls on the ground floor as close as possible to the main entrance or main traffic generators. The size of the store should be between 120 sqm and 200 sqm, with patio.

City sizes and target markets ?

In Poland our target markets are Warsaw, Wroclaw, Krakow, Tricity, Poznan, and Szczecin. We need to be in cities of 350k plus population, where we find a reasonably affluent demographic and strong workforce. The footfall that we count on inside a mall is 6 million visitors per year as a minimum. Key factors that drive the success of the location are the visibility and availability of good patio.

We have been very fortunate in Poland in our site selection and are very pleased with all of our stores overall. Our experienced real estate team has helped us enter into each city with a strong branding location which is generally in the city centers. A couple of our proudest locations include Nowy Swiat, Warsaw; Marriott, Warsaw; and

in the next budget period. Optimists believe the amounts will be at least the same, and perhaps increasing by as much as 10%. In most any scenario (barring a complete meltdown of the Euro zone), Poland looks set to receive another Euro 50-75 billion from the European Union through 2020. The bulk of funds will be used to fund more infrastructure development, including logistics and transportation and development of Poland’s IT infrastructure.

… and 3 risk factors that could curtail the growth Exchange rates: The weakness of the zloty has a double-edge, and is cutting away at discretionary incomes, as imports become more expensive, travel costs to the Eurozone increase, and mortgage loans – if denominated in Euro or Swiss franc – become more expensive to pay.

Importers suffer, as do firms with offices or retail locations with rents denominated in Euro.

Anecdotal evidence shows that many indivi-

Kaskada Mall in Szczecin. These few mentioned stores are in prime high street or premium mall locations and have the most ideal site on the street to elevate the brand.

Do you care who owns the shopping centre, or who manages it? Does it affect you if the shopping centre is sold?

Not really. The commercial lease terms, traffic in the mall, and typical customer profile are most important. We prefer landlords that operate fair business practice, with a diligent approach to service charge management. Investment sale of the shopping centre has not affected us to date and this is unlikely to ever be an issue.

duals with Swiss franc-denominated mortgages are cutting back on expenses. Approximately 21% of Polish mortgages are denominated in Swiss francs; however, the loan-to-value ratio of these loans is relatively conservative, meaning that the risks of large-scale write-offs by banks is minimal.

Recession and retreat among Poland’s major trading partners. Poland isn’t immune to slower growth among its main trading partners and its economy will clearly weaken into 2012, according to London-based HSBC economist Agata Urbanska. As the Eurozone’s political leaders impose austerity measures and grapple with the fate of the Euro, western European economies will go into recession, according to economists’ consensus estimates. The extent of retreat of the Germany economy, however, is the most important question facing Poland, since Germany accounts for about 30% continued on page 6

5

Retail Poland’s Insatiable Consumer continued from page 5

of Polish exports. If Germany holds up well, so will Poland. A November report from Poland’s statistical office said that industrial output (measured by value, not volume) grew 6 % in the third quarter.

Major capital withdrawals from Poland.

“We are clearly facing a second credit crunch”, said a German banker at last week’s GRI real estate forum. “We are at a very tender stage in terms of capital flows”, he said, adding that the first quarter of 2012 will be “mostly closed” to new real estate financing.

Another banker, from a large Austrian bank, said that “development financing will dry out” and that “we are not lending out any new money”. Last month’s proscription

Retailer Profiles GAP Stefan Laban – Vice President of Strategic Alliances, GAP GAP opened its first store in Poland in Warsaw’s Arkadia shopping centre in October 2011. Stefan Laban travels the world looking for new locations and finding the right strategic partners for GAP. In Poland, development will be led by GAP’s partner EMF, which is essentially the master franchisee.

www.bizpoland.pl from the Austrian government that Austrian banks may not lend any new money to CEE (unless provided by local sources of funding, meaning only for banks with a local banking presence and deposit-taking capacity) will take a toll on the commercial real estate sector. While Poland is the best-positioned of all the CEE countries, the banking sector will be more restrictive in its lending policies in 2012, said bankers at the forum, placing the blame squarely on western European banks who have been told to shrink their balance sheets. The Warsaw Stock Exchange, with 45% of its volume coming from foreign investors, has felt the pinch of the euro crisis. Down 20% from early summer, IPOs are still getting done, selectively, but major IPOs have been canceled or postponed, including the recent plans of PGE’s Renewable Energies division (PGE EO) to raise

“We’ve been looking at this market for three years, analysing who else is here”, said Laban.

“The partner search usually takes time. In this case, EMF approached us.”

Laban said that GAP typically looks to expand in new countries that have a robust economy and fashion-conscious consumers. He said that the recent opening of the first GAP in Santiago, Chile was “stellar”. Large capital cities with international ties, especially with the US and UK, are a favorite of GAP. “Provincial cities are tough.”

fresh capital to invest in wind farm development and other capital-intensive green energy initiatives. Brokers and stock underwriters are filling the squeeze and have begun cutting back on staff and expenses.

Looking forward to 2012 The government has scaled down its forecast for economic growth next year to a maximum 3.2 % in the most optimistic of three scenarios because of the crisis in the eurozone, which buys 55 % of Polish exports. The “medium” scenario envisions 2012 growth of 2.5 %, while a “recession” option forecasts a 1 % contraction.

While Poland will undoubtedly take a hit next year as the eurozone contracts, the country will likely earn “bragging rights”, as it is wellpositioned to outperform nearly all European n economies in the coming two years.

“Poland is a good market. We want to start in Warsaw and roll-out to other cities. This market is all about malls!, said Laban. The firm does not yet have stores in Hungary or the Czech Republic, but has 20 stores in Moscow and St. Petersburg.

GAP is careful about selecting store location.

“We look for stores of 600 sqm to 1,000 sqm, and we’re very anal about location in the shopping mall”, said Laban, adding that they like locations close to Zara and H&M. GAP also likes big spaces, which can accommodate GAP’s popular “combo stores”, which cater to women, men, and kids.

6

December 2011

Retail

www.bizpoland.pl

News from MAPIC retail expo Young-girls fashion label to open 100 new shops Maja Gawronska, expansion manager at Tally Weijl AG: “Tally Weijl plans to open 100 new shops in Europe in the short-term, as well as plans to expand into a new (undisclosed) market in spring 2012.”

New retail brokerage established, as staff jump from King Sturge/JLL merger Tatiana Spencer has launched ASPENN, a new brokerage focused exclusively on the retail segment, from October. “The firm has already received assignments from these shopping centres: Galeria S Siedlce, Galeria Jurowiecka Białystok, Galeria Zawiercie.”

2012, through a combination of franchises and own-store openings. “At MAPIC, we made two deals (concerning two locations) and moved forward on four other negotiations”, he said.

New retail deals getting done in Gliwice

Bartosz Miszkurka, partner, Deloitte Legal Law Office: “In addition to refreshing a few contacts with our potential clients, we also managed to get some work on new projects in the retail sector.” He said that they plan to “build up highly specialized internal practices” in the legal division of Deloitte.

New brokerage plans to expand from logistics into retail

Int’l broker to launch new line of services targeting shopping centre owners

Marta Radomska Leasing Manager Forum Gliwice: “We’ve already prolonged the lease DTZ has decided to launch a new service of Cubus - one of our largest units in “Redevelopment & Refurbishment” in PoForum Gliwice. We will sign a new prolon- land, Germany and the UK, targeting shopgation of our lease with Douglas, and are ping centre owners, according to Grzegorz just waiting now for final signatures from Dudziak, Strategic Head of Property Manaour owner DEKA. We are also negotiating gement CEE, DTZ Management Polska – with a very well-known coffee shop con- on the sidelines at MAPIC. He said that cept, and a new clothing retailer. And we DTZ is also actively developing its Progot a green light from LPP to set up a MO- perty Management portfolio across CEE. Dudziak also voiced concerns that he is HITO retail shop.” hearing from his clients that “everybody is Retailer plans to open 40 stores in afraid of the second stage of the crisis”.

2012, via franchise and “ownHe also said that “there are still not enostores” ugh retail projects on the market, and seveAccording to CEO Rafał Fabisiak, the retailer ral important investors were not present at diva plans to expand by 40 new stores in MAPIC this year.”

December 2011

Deloitte Legal in specialist push

Tomasz Tymiński, Head of Retail in AxiImmo Group: “My impressions of MAPIC were very positive. There were not as many participants as in previous editions, stands were not as “rich” as in previous years; however, both tenants and investors had rather positive feelings about the future.” AxiImmo is a new brokerage, with an already-established practice in the logistics market, and with plans to develop its retail brokerage unit, (established in March 2011), which is led by Tyminski. The firm has two projects as the exclusive agent: Centrum Kowale in Tri-City and Park Handlowy Bogatynia (developer is Gant), with two additional projects under negotiation.

New Expo centre near Lodz to compete with Poznan and Warsaw Expos Centrum Targowe PTAK was established in 1993, and is the largest wholesale and retail centre in Europe, located on the outskirts of Lodz, and comprising more than 2500 domestic and foreign companies in an area of continued on page 8

7

Retail News from MAPIC retail expo continued from page 7

120,000 sqm. According to Karolina Walczak at PTAK, the firm’s newest project is PTAK Expo, which will provide a meeting place for producers from all over the world in a single location, and will have 8 zones of activity: Expo Zone, Congress and Hotel Centre with Entertainment Zone, Permanent Exhibition and Trade Zone, Car Center with a test track, Outlet, Retail Park, Residential Zone, and a Logistics and Production Zone. The firm has started the construction if the first stage of PTAK Expo - PTAK Outlet, with plans to become the biggest fashion outlet in Poland, and the subsequent project will be the Retail Park.

Architects see positive environment Grzegorz Czaus, Architect-partner, Ozone: There was a positive attitude at MAPIC and we saw a number of new projects. We made new contacts and refreshed some existing contacts. Ozone expects to complete one residential estate in 2012, as well as start work on one office development project.

„Fit-out” specialist says decisionmaking speed slowing down

www.bizpoland.pl Yves Rocher explains its transformation to “Atelier”

November, we open two new stores – in KLIF shopping centre in Gdynia and Galeria Jakub Kuspit, General Director, Yves Rocher Leszno.

Polska Sp z o.o.: Our plans for 2012 include further deve“Although the organizers reported a 9% in- lopment of our retail network, growing our crease in number of visitors, I found it less „like-for-like” sales by a few percent and devivid than the previous year. There was no fending our current profit margin – via furnew inauguration of interesting projects for ther development and training of our the Polish shopping center market - but personnel and management team, as well as there are some hopes for Railway and Bus investments in our IT systems.

Station projects for future years.

YES also recently launched its annual YES In 2011 Yves Rocher opened 12 new con- calendar, with top models and personalities cept stores in Poland to reach 94 shops. The – all designed to attract media attention new concept of Yves Rocher shops is called ahead of the key holiday gift-buying season.

Atelier Kosmetyki Roslinnej (Atelier of Botanical Beauty), and it was launched in 2009 Big life insurer backs refinancing of in France. By the end of 2011 60% of our Po- huge retail project lish shops were transformed into this new Peter Evans, Leasing Director, Helical Pomodel. In the coming year we will continue land: “Very positive about Poland generally, the transformation of existing shops to the good interest from retailers and investors “Atelier” concept, and we will expand by alike. At MAPIC, we closed three deals with about 5-6 shops annually in 2012, 2013 and retailers and found two new opportunities 2014.” E-Commerce and impact on retailers: that we are taking forward, as well as impro“This year was the first discussion at MAPIC ved our contacts and relationships with exisabout the impact of e-commerce on off-line ting clients and our investors.” Helical shops and shopping centres. And it’s a key recently refinanced its Gliwice project - Euissue for retailers to focus on, since consu- ropa Centralna - with Standard Life. Conmer behaviors are changing quickly. It’s a struction on the project is underway with n question of how to best combine offline and opening planned for October 2012. on-line and to create efficient multichannel tactics. At Yves Rocher, we are focused on our e-commerce platform in order to keep up with the fast-growing trend of beauty products sales via internet. We want to create more cross channel marketing actions from on-line to offline and vice-versa.”

Jewelery retailer opens 100th store, plans two more before Christmas

8

Tomasz Spalik of firm Neo Świat sp.j. Rajmund Węgrzynek, Paweł Brodzik: „During my time at MAPIC, I felt a certain amount of anxiety among those who make decisions.

It seems that decisions are taking more time than in previous years concerning further development. I suspect this is caused by the word „crisis”. On a positive note, Poland is perceived as a country with a lot of further potential, and at many stands interest in Poland was clearly noticeable. As a firm specializing in “fit-out” of retail space in Poland, MAPIC was very fruitful of us, where we met several new clients that will likely lead to specific contracts. Also, the European market still has lots of space for new brands from all over the world. It’s particularly remarkable that there are still so many American brands not yet present on the European market.”

Pawel Korobacz; Director of expansion and retail network manager; YES BIZUTERIA Sp. z o.o. „Everywhere at MAPIC we felt a thick atmosphere dominated by concerns about the current Euro crisis and its implications for 2012. YES has just opened its 100th store – at CHR Toruń PLAZA, and we are celebrating our 30th year anniversary of the firm In

December 2011

Real Estate

www.bizpoland.pl

Hill International celebrates 20 years in Poland Hill International celebrated its 20th year in Poland, with a reception in late November for its clients, partners and international management.

The firm – a leading project and costmanagement firm worldwide – has recently moved into new offices at the New City building on ul.

Marynarska, in Warsaw’s Mokotow business district.

T

op high-profile projects in Warsaw that are clients of Hill include Rondo 1, the Metropolitan Building and Zlota 44. Lilium Tower, with plans to reach 71 floors, is also a client of Hill, which has carved out a niche in project and cost-management for some of the tallest skyscrapers in the world, including Sky Tower in Abu Dhabi.

The firm is also adviser to Bouygues Immobilier, which is developing the 5-building office headquarters complex of TP SA, due to open in 2013. (During the first days of December, Bouygues announced the sale of the building to Qatar Holding LLC, for an

undisclosed sum. The project’s construction value is put at 400 million pln.)

Zlota 44, soon to reach 194 metres high, has a project value of 728 million pln.

Hill got its start in Poland in 1991, when a small company named Euromost Polska was founded, since growing to about 70 employees. In 2008 the firm became a part of Hill International, allowing the Polish professional staff to tap into an international network of specialist skills drawn from 3100 professionals from over 100 offices in Europe, Asia, USA and Africa.

December 2011

The Warsaw 20th-year celebration was hosted by the directors of Hill’s Poland operations: Jacek Żurawski, MRICS - Vice-President/Managing Director, Kevin Oven Ellis, MBA FRICS - Vice-President/Managing Director, Grzegorz Wiśniewski, MRICS - Project Director, and Robert Karczewski Business Development Director.

Top clients in attendance included leading commercial developers, as well as architectural and law firms and general contractors.

Separately, Hill International recently announced impressive revenue results for the first nine months of 2011 of $379 million, an increase of 17% from 2010. At September 30th, the company has a total backlog of projects of a record $2.3 billion.

Hill’s Project Management Group provides program management, project management, construction management, project management oversight, troubled project turnaround, staff augmentation, estimating and cost management, project labor agreement consulting and management consulting services. The firm also operates a Construction Claims Group, providing claims preparation, analysis and review, litigation support, lender advisory, cost/damages assessment, delay/disruption analysis, contract review and assessment, risk assessment, adjudication and expert witness n testimony services.

9

Politics

www.bizpoland.pl

The New Polish Government

By Marek Matraszek

Almost six weeks after the October 9th parliamentary elections, the new government of Prime Minister Donald Tusk was sworn in on Friday November 18th, and easily won a vote of confidence in the parliament on Saturday November 19th. With these formalities complete, Tusk is under pressure to work to meet the challenges of the external and internal economic and structural reforms needed if Poland is to successfully ride the second wave of crisis sweeping across Europe.

The key feature of the new government is the total domination of Donald Tusk over his ministers, party and coalition partners – much more so than in his first government of 2007-2011. In making his ministerial choices, he consulted with only a very few close and trusted advisers, excluding from the process both President Bronislaw Komorowski, as well as key party rival and his former close ally and Speaker of Parliament, Grzegorz Schetyna. In undercutting the influence of any potential party rivals (such as Schetyna, who has been banished to the hinterland of the parliamentary Foreign Affairs Committee), he has given himself a completely free hand in policy and personnel decisions for the next four years.

In the government itself, Tusk has neutralised his one remaining potential public critic, the conservative MP from Krakow Jaroslaw Gowin, who although not a lawyer, has been handed the potentially thorny Ministry of Justice. Other nominations are

Marek Matraszek, Founder of CEC Government Relations

of authority on the government is further underlined by the failure to sign a new coalition agreement with the junior PSL (Polish Peasant Party), thus opening the door for Tusk to create ad-hoc coalitions in parliament to push through bills that might be opposed by the PSL – such as on welfare or agricultural reform. This will weaken the position in the government of PSL leader Waldemar Pawlak, who nonetheless retains his position as Deputy Prime Minister and Minister of Economy. The other two PSL ministries are those of Agriculture (Marek Sawicki), and Labour

“

The key focus of Tusk over the next four years will be to steer Poland through the storms of external and internal crisis, as reflected by his decision to continue to entrust the Ministry of Finance and Ministry of Foreign Affairs to Jacek Rostowski and Radoslaw Sikorski respectively

10

nods to political correctness – for example nominating Joanna Mucha MP as Minister of Sport. Tusk has also made concessions to the left of his party by appointing the former SLD (Democratic Left Alliance) MP Bartosz Arlukowicz as Minister of Health, and the feminist Agnieszka Kozlowska-Rajewicz as Plenipotentiary for Equal Status.

Tusk himself made clear in his remarks announcing the new ministers how little support they can expect from him if mistakes are made, by stating that that all of them are “expendable and can be replaced”. The determination of Tusk to impose his personal stamp

”

and Social Policy (the young newcomer Wladyslaw Kosiniak-Kamysz).

The key focus of Tusk over the next four years will be to steer Poland through the storms of external and internal crisis, as reflected by his decision to continue to entrust the Ministry of Finance and Ministry of Foreign Affairs to Jacek Rostowski and Radoslaw Sikorski respectively – both of whom have cemented their position as those ministers that Tusk trusts the most. In his parliamentary speech laying out his government’s policies, it is significant that Tusk focussed almost entirely on the economy, with little mention of in-

ternal or foreign policy. In a clear signal to the markets that Poland was determined to reduce both its short term and long term budget deficit, Tusk laid out his plans to raise taxes in 2012 and beyond, as well as to address the painful issue of raising the pension age for Poles in the years to come.

Although there was no mention of his immediate response to the Euro crisis, this job was left to Foreign Minister Sikorski, who in a controversial November speech in Berlin argued vigorously for an acceleration of European federalisation with Poland at its core, calling for more powers to the European Commission and Brussels control over member nation budgets. More details on Poland’s foreign policy response to the crisis will emerge in Sikorski’s upcoming parliamentary foreign policy expose on December 15th.

As well as the challenges of economic and foreign policy, Tusk has also entrusted the longterm task of digitalising the Polish economy and administration to Michal Boni, his former close adviser, who finally obtains a ministerial post as the new Minister of Administration and Digitalisation. In a sign of his determination to resist EU pressure on Poland over environmental and CO2 regulations, Tusk has appointed the technocratic former deputy minister of economy Marcin Korolec as Minster of Environment, stating that he will “be immune to the Greenpeace lobby”. The move of Boni to the new ministry has cemented even further the position of former Prime Minister Jan Krzysztof Bielecki in the government, who retains his role as head of the Economic Council reporting direct to PM Tusk, but additionally absorbing many of the former functions of the Advisory Team to Tusk hitherto headed

by Boni. Bielecki will be the real power behind the throne of the Prime Minister, with Boni, Rostowski and Sikorski becoming the key ministerial triumvirate guiding the Polish ship of state through the upcoming crisis.

In eliminating party rivals, weakening the blocking power of his coalition partner, appointing technocrats to key governmental positions, and combined with his determination to exert central control, Tusk has set the stage for facing the challenges ahead.

With an opposition that is divided in parliament, a President from the same party, and not needing to face any elections until 2014, PM Tusk and his team have no reason not to move ahead with the key reforms that will be needed to stave off economic problems for Poland. Whether Tusk’s new government seizes this unique opportunity will become n clear in the weeks and months ahead.

December 2011

Company Profile

www.bizpoland.pl

The Morning After CEDC’s debt binge has finally caught up with the company, which is likely to be taken over by Russian investors or a global spirits firm in the next six months

Careful readers of this magazine’s May 2010 article entitled “CEDC drinks down the debt” would have avoiding buying shares in the firm, at that time priced at USD 38 per share. We said at the time: “The company’s financial positioning is not without risks. Not only does the company have more than $1.3 billion of bank and bond debt, but the company is positioned with substantial un-hedged exposure through its bonds denominated in dollars and euros - and substantial moves in currencies would cause big gains or losses on the foreign exchange exposure.”

A series of events have eviscerated Central European Distribution Corp’s stock price, which sank to a low of USD 3 in November 2011. An explosive cocktail of poor operating results in Russia and Poland, wrongly-positioned currency exposures, and its enormous debt-load have taken its toll on the company’s financials. For the third quarter 2011, the company reported a loss of $839 million.

A November analyst report from Nomura raised the issue of the firm’s ability to repay its debt load: “ We see continued volatile trading conditions in Russia and Poland, a likely further miss with Q4 results in March 2012 and evidence of a structurally lower margin base. Although we believe the company can meet its near-term interest and debt, given the structurally lower margin base and lack of top-line visibility, we believe it unlikely that the company will be able to successfully refinance USD 300m debt repayable in 2013.” Another analyst, from Renaissance Capital, said in a report in October that their operations are in “dire straits, especially in Russia”, adding that it could be ripe for a takeover or breakup.

Earning your way out of trouble But all’s not lost. While the firm is clearly “beat up and bloody”, it is also the largest vodka producer in the world, with a leading position in Poland and Russia. Its Russia position was built up through three main acquisitions using mostly cash raised from two large bond issues.

While a $300 million bond issue must be refinanced in 2013, the two largest issues have maturities in 2016, plenty of time to maneuver.

December 2011

The company appears to be covering its interest expense payments – not insignificant at $29 million just in the third quarter – easily from operating earnings. And sales for Q3 were $228 million, up from $157 million in Q3 2010.

Gross profit for the quarter was nearly $100 million, and the firm is making good progress reducing its fixed costs as a percentage of overall sales. The company reported that it had $111 million in cash as of September 30th, and it is now well into its Christmas holiday season, which should generate lots of cash from seasonal sales of vodkas and wines.

While the reported loss of $839 million for the third quarter certainly attracts head-

euros – which have strengthened substantially versus the Polish zloty and Russian rouble - have moved strongly against CEDC, and are a strong indictment of the firm’s financial strategy. That being said, the majority of bonds are dated 2016, so the charges could be reversed if the currencies reverse in the coming years. But time is running out.

The Bear Trap – Napoleon, Hitler, and … CEDC ?

CEDC bought its way into Russia, with a series of major acquisitions during 2008-2010, fueled by debt financing and aided by CEDC share issues. Specifically, the firm bought Parliament (vodka producer) for nearly $300 million, followed by Whitehall (importer of spirits to Russia) for nearly $250 million, and Russian Alcohol (vodka producer) for approximately $500 mil-

Mark Kaufman

Roustam Tariko, Russian Standard Vodka

lines, an analysis of the details shows that nearly all of the losses are non-cash, and as a result of two key accounting charges: impairment of the value of the vodka brands as sales slowly decline, and losses on the foreign-exchange value of their huge debt load exceeding $1.2 billion.

While the company’s top management has surely been aware of the risks of mismatching its liabilities with its revenue sources, the bond issues denominated in US dollars and

lion. (Caveat: these numbers are not precise, given that several adjustments to purchase prices were made, and that share issuance was also part of the consideration. But the numbers do shed light on the scale of the acquisitions made in Russia.)

One of the sellers in Russia at that time was Mark Kaufman, who banked approximately $200 million from the sale of his firm to continued on page 12

11

www.bizpoland.pl

FDI Investor News Polish yachts on the Hamburg International Boat Show The annual Hamburg fair, which took place during the first week of November, was attended by 12 companies from Eastern Poland which are active in the yacht industry.

The Hanseboot fair is one of the world’s biggest exhibition fairs presenting yachts and sailing boats. The Polish yacht industry presented products from Poland on two different stands: one measuring 400 square metres which presented sailing yachts and the second one of 200 square metres showcasing motor boats. With funds provided by the European Union, PAIZ is heavily promoting Eastern Poland’s various industries, with the intention of increasing trade, employment and investment in the region.

Minister Wan Jifei, Head of the China Council for the Promotion of International Trade (CCPIT)

Chinese investors visit Poland In early November, the Polish Investment Promotion Agency (PAIZ) hosted the most important Chinese delegation in the whole of 2011. Minister Wan Jifei, Head of the China Council for the Promotion of International Trade (CCPIT), and 35 companies came to visit Europe and stopped only in Au-

The Morning After continued from page 11

12

CEDC. Kaufman, sensing opportunity as CEDC’s fortunes sank in 2010 and 2011, bought just less than 10% of CEDC in August, prompting CEDC’s Board to put in a place a shareholders rights plan. More commonly referred to as a “poison pill”, the legal maneuver ups the ante for a would-be acquirer by making the acquisition substantially more expensive, and forcing direct negotiations with CEDC’s Board.

During the first days of December, a Russian billionaire bought just under 10%. The 7.2 million shares bought by Russian Standard Vodka, owned by Roustam Tariko, were bought as a “strategic investment”, an oft-used euphemism in the corporate finance world that suggests the buyer’s appetite is not yet quenched. Tariko has a fortune estimated at $1.9 billion, and also founded Russian Standard bank, which is a leading consumer lender. He also owns the beauty pageant Miss Russia.

stria, Lithuania and Poland. PAIZ presented Poland’s investment potential and organised a match-making session for Chinese and Polish companies. The meeting - which was organised on the eve of the December visit of the President of Poland Bronisław Komorowski to China - was devoted to the presentation of the economic potential of Poland.

Since just late November, CEDC’s share price has soared 66% from $3 to $5, as investors weigh the likelihood of CEDC being bought out entirely.

Elsewhere in the global drinks sector, French spirits group Remy Cointreau said it was actively looking for acquisitions as it beat forecasts for first-half profit.

Strategic options limited While CEDC’s management is surely mulling over its options, it appears clear that those options are limited.

Given its low stock price, the firm is probably unable to issue new shares to solve its problems. And any major debt issuance also looks nearly impossible. The firm’s management is also dogged by a recently-announced class-action lawsuit alleging insider selling of shares by CEO William Carey, who denies the allegations.

Carey owns about 3 million shares, and his seen his stake in the firm decline from more than $120 million in

spring 2010 to its current value of about $15 million.

Cash flow from earnings are perhaps the last major leg to stand on for CEDC. If its Russian and Polish operations have good 4th and 1st quarters, the share price will likely recover. But the risks and the stakes are high, given that vultures seem to be circling and waiting for another mis-step.

With the 2013 bond refinancing on the near horizon, and given the firm’s poison pill provisions which essentially require a buyer to negotiate directly with the board, our bet is that CEDC’s board will negotiate a sale of the firm to a global drinks and spirits giant – or a Russian conglomerate - before its springtime shareholders meeting. With its world-class vodka brands and dominant positions in Russia and Poland, CEDC would be a crown-jewel in an acquirer’s drinks portfolio. And at a price substantially lower than just n 18 months ago.

December 2011

FDI Investor News

www.bizpoland.pl The food sector from Eastern Poland in Korea

Twelve companies from eastern Poland presented at the fair: Sedna Yachts and Raptor from Białystok, Balt-Yacht K.A, B.Kozłowscy and Józef Wiśniewski Mazurskie Przedsiębiorstwo ProdukcyjnoBudowlane ŚLEPSK from Augustów, Przedsiębiorstwo Handlowo Gastronomiczno Turystyczne “Pod Omegą” Stanisław Kasprzak, Yacht Hornet Rajmund Mech and Haber Yachts from Iława, “Surf ” Zakład from Mikołajki, Ahoj Czarter S.C Sylwia Stępniak Krzysztof Stępniak and Northman Krzysztof Stępniak from Węgorzewo, Nautiner Yachts from Giżyck and Przedsiębiorstwo Produkcyjno-Usługowe “MACUR” Eksport-Import from Olsztyn.

Food entrepreneurs from five voivodships of Eastern Poland presented their offers in Seoul during the economic mission organized by aPAIZ during the first week of November. The mission included the participation in Korea Food Expo 2011 and bilateral meetings with Korean companies.

Local confectionery products of Allnet Cukiernia Zaniewicz were a crowd-favorite at the Poland stand.

meeting organized by KOIMA – the Korean Importers Association. After the session the participants of the mission met the Polish Ambassador in Seoul.

Broadband network in Eastern Poland Poland’s first broadband network project received the green light from the European Commission. This is the largest ICT investment in Europe funded by the European Union. Its value is more than 1.4 billion PLN.

Investor at the Kraków Technology Park increases employment Ericpol Telecom a company already active in the Krakow Technology Park is launching a new recruitment process and plans to hire 250 people over the next few months.

So far in 2011, the company has hired over 200 engineers but the demand for Polish specialists has been growing. By the end of 2012 the company will hire experienced programmers, analysts, testers and graduates of IT and electronic faculties.

Due to the fact that future Ericpol Telecom employees will have to cooperate with international teams, the employees have to know English.

Ericpol is the biggest Polish IT exporter and provider of outsourcing and consulting services. The company has production centres in Belarus, Ukraine and Sweden. At the moment Ericpol employs 1200 people.

December 2011

“Sękacz” – a favourit cookie of many

Korea Food Expo is one of the biggest food industry events in South Korea. The fairs are the occasion for the presentation of food & beverage products, machinery and kitchen utensils used in food preparing, processing and packaging. The fair’s programme included seminars and conferences devoted to the food sector, one-on-one match-making sessions and kitchen shows. Companies form Eastern Poland presented their products at the stand of the Trade and Investment Promotion Section of the Embassy of Poland in Seoul.

Eastern Poland Broadband Network consists of five projects and the first such comprehensive ICT project which will cover the whole range of Eastern Poland macroregion - Lubelskie, Podkarpackie, Podlaskie, Swietokrzyskie and Warmia & Mazury.

These projects are implemented under the Priority II Development of Information Society Infrastructure Eastern Poland Programme of the European Union. The project intends to develop fiber optic infrastructure, allowing the development of telecommunications services, including next-generation services – NGA.

PAIZ supports investments worth EUR 6.87 billion PAIZ has currently been running 156 development projects jointly worth EUR 6877 million, which may generate 46279 new jobs. Americans top the ranking with 39 new projects. The projects from the United States are jointly worth EUR 1.17 billion and are expected to generate 10,135 new jobs. From among the projects currently negotiated by Polish companies also presented their offers to Korean entrepreneurs during the

continued on page 14

13

FDI Investor News

www.bizpoland.pl

PAIZ, 17 come from the UK (worth EUR 376 million and potential 6,252 jobs), 15 from Germany (EUR 490 million and 4,522 jobs), followed by Asian investors, including 11 new projects from South Korea and Japan, and 10 from China.

The most popular sector is the automotive sector (32 projects), then BPO (28 projects), machine sector (11 projects), electronics industry (9 projects), ICT (7), chemicals and aviation (6 projects).

In 2011 PAIZ held talks and successfully finished negotiations with 49 investors who decided to invest in Poland with a total of EUR 1.07 billion. Projects implemented by the companies will create 9,366 jobs.

drów Łódzki, invested a cumulative PLN 150 million and created 222 new jobs.

Serioplast Poland, in the Kutno sub-zone, will construct a facility manufacturing plastic packaging for the pharmaceuticals, chemicals, cosmetics, and detergents and food industry. It will be the 17th plant of the Serioplast Group. The company will invest over PLN 36 million and hire at least 66 people.

In the Radomsko sub-zone Eko-Kartex will build a production hall and install production lines for manufacturing cardboard packaging. The investment is worth PLN 4 million, and the company has said it will hire at least 10 people.

In 2011 the Łódź Special Economic Zone had new projects worth PLN 687 million creating 825 new jobs.

Four investors in Łódź SEZ

Polish companies invest abroad

Indesit, ABB, Serioplast and Eko-Kartex these four companies have received business activity permissions for the Łódź Special Economic Zone. They will invest jointly over PLN 200 million, creating 379 new jobs.

Indesit will build two new plants - producing kitchen hoods and plastic components.

The company plans to create 250 jobs and invest over PLN 100 million. Indesit already employs 3500 people and has invested about PLN 1 billion what makes it the biggest foreign employer in the region and one of the biggest in Poland.

The new investment of ABB, worth PLN 52.5 million, will create 35 new jobs. ABB will develop its electric engines factory in Aleksandrów Łódzki. The investor will manufacture modern engines for a higher power-efficiency class. Within the last four years ABB has built two factories in Aleksan-

In the last few years the scale of Polish investments abroad has significantly increased.

Poland has become a leader among the new EU members in terms of the value of capital invested abroad. According to the National Bank of Poland data, Polish companies invested abroad more than 27 742 million US dollars, 27 times more than 9 years ago and over four times more than in 2005. The main direction of expansion of Polish companies were the European countries - where 93% of Polish investments were located.

Switzerland, Luxembourg and Netherlands were the main destinations. Czech Republic, Great Britain and Lithuania were among those countries which interested Polish investors.

The main directions of the future international expansion are mainly the EU-12 and the rest of the Central Eastern Europe count-

continued from page 13

Collection of a Polish designer Michał Starost on shown in Barcelona

ries, especially Romania, Bulgaria, Ukraine and Russia.

“PAIZ has begun a pilot programme intended to support the development of Polish companies abroad”, said the President of PAIZ, Sławomir Majman during a recent conference. “We will start with the three closest markets: Russia, the Czech Republic and Ukraine. In the future we plan to expand our programme to East Asia, including China, which has seen more Polish investment there than Chinese investment in Poland”.

The report “Investment activity of Polish entrepreneurs abroad in the form of direct investments” is a result of research conducted by the Faculty of Economics and Management at the Nicolaus Copernicus University in Toruń on more than 100 Polish entrepreneurs which started up their business outside Poland.

PAIZ starts cooperation with Łapy

14

Indesit will build two new plants in Łódź SEZ

In mid-November, the Polish Information and Foreign Investment Agency signed a cooperation agreement with the city of Łapy.

December 2011

FDI Investor News

www.bizpoland.pl The main aim of the agreement is to promote Łapy and help the city attract more investment projects from abroad. The parties committed themselves to undertake activities which will help the city actively seek investors and provide them with professional services. PAIZ will provide help in the process of investment offer preparation, in gathering and providing data concerning economic conditions of the region, in creation of data concerning the city’s economic environment and in data management.

To date PAIZ has signed similar agreements with the cities of Radomsko, Kielce, Lublin, Rzeszów, Białystok, Olsztyn, Bydgoszcz, Koszalin, Krosno, Częstochowa, Zamość, Szczecinek Piła and Piotrków Trybunalski.

Moldavian delegation in Poland PAIiIZ organized a visit of representatives of the Moldova Ministry of Economy and Moldovan Investment and Export Promotion Organization to Poland. During the study tour which took place from November 13th to 18th, PAIZ explained their strategies used to attract foreign investment to Poland and with programs, schemes and structures which help develop business initiatives in the country. The participants also had the opportunity to attend meetings with representatives of the institutions supporting country promotion and the implementation of foreign investment projects in Poland. Moreover, the delegation visited the Łódź Special Economic Zone.

Promotion of Polish products and modern industrial design in Spain Modern industrial design and applied products designed by Polish artists will be presented during the exhibition “Designed in Poland” between the 1st of November 2011 and the 29th of January 2012 in Barcelona.

The exhibition aims to draw attention to the uniqueness of Polish industrial design and to invite Spanish consumers to buy Polish products. The guests will receive an illustrated catalogue with the information on all the presented products along with their photos. Prizes are funded by PAIZ and the company Nalewki Staropolskie Karol Majewski i Wspólnicy.

The grand opening of the exhibition was held on the 1st of December, during which a fashion show with the collection of a Polish designer Michał Starost together with a presentation of jewelry took place. The sponsor of the grand opening ceremony was PESA Bydgoszcz SA. The exhibition is open for visitors up to January 29th 2012 at the seat of the Supreme Board of Cultural Heritage in Barcelona.

December 2011

Bydgoszcz Industrial and Technological Park after modernization he infrastructure development of the Bydgoszcz Industrial and Technological Park (BPPT), worth PLN 44 million, has been completed.

The development of the technical infrastructure of the Bydgoszcz Industrial and Technological Park included the construction of new roads with lightings, pavements and bike routes, as well as water supply, heating, sewer system and telecommunication network. The Park has also a direct connection with the beltway of Bydgoszcz.

BPPT has prepared investment areas where new enterprises and new jobs can be created.

This is the biggest project in the history of the Park. The development of the BPPT was possible thanks to the Regional Development Fund of Kujawsko-Pomorskie Voivodeship 2007-2013, Measure 5.6 (European Union fund) and public funds from the city.

New investor in Tricity – more than 100 new jobs to be created OIE Support will enroll students in programmes offered by the University of Liverpool and Walden University. OIE Support intends to start operations in January and plans to employ more than 100 student enrollment advisors by the end of 2012.

OIE Support will offer a portfolio of more than 250 specialised online Bachelor’s, Master’s and Doctorate programmes.

All of them are delivered in interactive online classrooms by international faculty using relevant curricula with dedicated support for working professionals around the world.

“We are grateful for the support that Invest in Pomerania and InvestGDA provided in helping us establish our presence in the Tricity”, said Norman Bloomberg, Chief Operating Officer, Laureate Online Interactive Education.

“Our operations in Poland will help us to continue to offer our students an educational experience that enhances their career potential and expands their professional network by building on the distinct international perspectives gained in their online classroom.”

New Chinese investor in Małopolska

Haoneng Packing Co. Ltd, a Chinese manufacturer of beer and beverage packaging, has decided to open operations in Krakow. The name of the Krakow entity is Illochroma Haoneng Poland. The company signed a lease agreement with Małopolska Regional Development Agency (MARR) for production and office space at MARR Business Park.

Soon the new printing machines will be put in and the production will start in early 2012. The company plans to hire 60 employees in 2012 and produce 60 million m2 per year with annual turnover of 8 million EUR. Haoneng Packing Co. Ltd is a Chinese solution provider in brewing and beverage decon ration industry.

15

Events

www.bizpoland.pl

Pawiński wins E&Y Entrepreneur of the Year award Krzysztof Pawiński, President of Maspex Wadowice Group, has won the annual Entrepreneur of the Year 2011 awards, in a competition organized by Ernst & Young.

Maspex is in the food business, and owner of brands such as Tymbark, Lubella, Kubuś, Caprio, Puchatek, Plusssz, and La Festa.

Pawiński was also the winner in the category of “Production”. The jury awarded him for “building a firm with a leading position among food producers in Central Europe, for their commitment, consistency, resistance to the crisis, and masterful teamwork.”

Pawiński will now go on to represent Poland in the international finals of the contest - Ernst & Young World Entrepreneur of the Year - in Monte Carlo in June 2012. He will face an impressive line-up of world-class competitors from over 50 countries.

Awards and prizes The jury also handed out distinctions to other entrepreneurs.

Andrzej Przybyło won in the category of “Services”. He has built up the Warsaw Stock Exchange-listed firm AB S.A., which is a distributor of IT services , including computer hardware, computer games, software, consumer electronics and home appliances.

Marcin Misztal, the creator of Tro Media, which is listed on the New Connect market, was the winner in the category of “New Business”. His company specializes in full service advertising campaigns in the electronic media and investment in innovative Internet projects.

Honorable mention went to the wellknown actor Emilian Kaminski, who is the creator and director of Warsaw’s Teatr Kamienica. The award was granted “for courage in combining business and art.”

In 50 countries

16

Ernst & Young Entrepreneur of the Year is an international initiative promoting the best entrepreneurs in the world. The competition has been organized since 1986, and includes entrepreneurs from more than 50 countries. The Jury is independent of Ernst

& Young, and decides on the best entrepreneur based on criteria such as entrepreneurship, strategy, international business, innovation and relationships with employees and the environment. The Polish jury consisted of: Jan Krzysztof Bielecki, Leszek Czarnecki, Andrzej Debowski, Maciej Duda, Ryszard Florek, Michael Kicinski, Jerzy Koz-

minski, Piotr Mikrut, Dariusz Miłek, and Jacek Siwicki.

Current and past winners of the Polish edition of the contest were: Krzysztof Pawlowski, Zbigniew Sosnowski, Tadeusz Winkowski, Matthew Duda, Dariusz Miłek, Michael Kicinski, Marcin Iwinski, Piotr Min krut and Ryszard Florek.

December 2011

www.bizpoland.pl

Events

Korea promotes Free Trade deal Korea’s KOTRA Trade and Investment Promotion Agency, led by new director BongSeok Park, hosted a business conference on 1st December to highlight the advantages to Poland and Polish businesses of the new Korea-EU Free Trade Agreement, which came into effect in July 2011. Korean businesses are increasingly looking at investing in Poland, as a low-cost manufacturing base for expansion and trade with western Europe.

And Polish firms are beginning to see the advantages of the tariff-free trade with Korea.

Polish meat exports to Korea have increased 18% during the first 9 months of 2011.

Agnieszka Rozanska, Director of International Projects at UPEMI (Association of Polish Meat Producers) said that they have been working on expansion into Korea for the last four years. In 2009, UPEMI launched an advertising campaign in Korea, promoting the traditional tastes of Polish meat. A next campaign was launched in March 2011, headlined “Tradition, quality, and European taste”, and the campaigns are yielding results.

UPEMI works with the Korean Veterinary Inspectors Office to overcome and sort out quality-inspection issues for Polish exporters to Korea. During the first six months of 2011, Poland had exported 172,000 tons of meat to Korea. Korean consumers are large consumers of pork meat, of which 2628% is imported.

Another Polish firm active in trade with Korea is NanoTech Diamond. Trade Director Karol Sadowski said his firm is the leader on the Polish market for industrial diamonds, which are used for drilling and cutting, particulary for industrial tools. The n firm actively imports from Korea.

17

December 2011

Events

www.bizpoland.pl

December 2011_ 14 December 2012 BPCC Business Breakfast: The euro zone crisis and its impact on Poland – economic prospects for 2012 British Embassy Warszawa www.bpcc.org.pl

15 December 2012 Przyjęcie Świąteczne Polsko – Hiszpańskiej Izby Gospodarczej / SpanishPoland Chamber of Commerce Christmas celebration Warszawa www.phig.pl

19 December 2012 Spotkanie Świąteczne AHK Polska / German-Poland Chamber of Commerce Christmas celebration Wieczór rozpoczniemy w Sali Dębowej budynku filharmonii, gdzie przy drobnym poczęstunku oraz lampce wina chcielibyśmy podziękować Państwu za mijający rok współpracy. Następnie zaplanowaliśmy dla Państwa koncert - Harlem Gospel Choir.

Filharmonia, Sopot www.ahk.pl

13–15 January 2012

Polish Corporates & Sovereigns Seminar Intercontinental, Warszawa standardandpoors@en25.com

16 January 2012 AmCham Annual General Meeting & Christmas Reception Warszawa amcham.com.pl

19 January 2012

January 2012_ 10–11 January 2012 Targi Sadownictwa i Warzywnictwa TSW 2012 / Orchard and Fruit-Growers Fair Expo XXI, Warszawa www.tsw.agro.pl

11 January 2012 AmCham monthly meeting Intercontinental Warszawa amcham.com.pl

14 January 2012

Wystawa Golebi Rasowych I Drobiu Ozdobnego / Exhibition of Pigeon and Poultry Breeders Expo XXI, Warszawa www.expoxxi.pl

28–29 January 2012 ITM - Miedzynarodowe Targi Turystczyne / ITM - Travel and Tourism Fair Expo XXI, Warszawa www.expoxxi.pl

Shale Gas Awards and Gala Intercontinental, Warszawa shalegasawards.com

24–27 January 2012 BUDMA - Buidling and Construction Expo / Międzynarodowe Targi Budownictwa MTP-Poznan, Poznan www.mtp.pl CBS - Budownictwo Sportowe, Rekreacyjne, Wellness i Spa / CBS- Wellness and Spa Expo Międzynarodowe Targi Budownictwa MTP-Poznan, Poznan www.mtp.pl GLASS - Targi Branży Szklarskiej / GLASS Expo Międzynarodowe Targi Budownictwa MTP-Poznan, Poznan www.mtp.pl

February 2012_ 1–3 February 2012

18

REMA Days - Europejskim Dniem Upominków Reklamowych / REMA Days - Promotional products expo Expo XXI Warszawa www.remadays.com

December 2011

www.bizpoland.pl

Events

Private equity fund awards investments On 24 November 2011, in the Primate’s Palace in Warsaw the grand Gala of Everesty 2011 took place. As always, the Gala was an occasion to summarize the year both for private equity/fund manager MCI Management SA, and their chosen portfolio companies.

The hosts who opened the Gala and welcomed guests were Magdalena Pasecka, Member of the Board and CFO of MCI, and Michał Chyczewski, Investment Partner.

Top business builder Leszek Czarnecki shared his reflections on the current economic situation; its changes and their direction. Czarnecki is one of Poland’s wealthiest men, having built up several banking and leasing businesses – as well as a major developer LC Corp.

The agenda then featured presenting awards to portfolio companies of MCI, which during the year have distinguished themselves among other investments of the fund. Two companies were awarded during this year’s Gala. The “Global Champion Candidate” award was presented to Geewa company, while Mall.cz received the “Excellence in e-Commerce” award. Presidents of the companies, Jens Hilgers (Geewa) and Ondrej Fryc (Mall.cz) claimed the awards and also gave short presentations of their companies.

The official part was concluded with the appearance of the second special guest of the evening, President of Alior Bank, Wojciech Sobieraj, who gave a presentation on “Building a big banking start-up during the credit crunch” sharing with the guests of the Gala his experience in building one of the n best banks in Poland.

19

December 2011

Events

www.bizpoland.pl

Premiere of YES 2012 Calendar Jewelry retailer YES celebrated the launch of its new calendar, and invited a VIP list of celebrities who were fawned over by a voracious crowd of paparazzi photographers.

Held at the historic Reduta Polish Bank building, the event featured a concert by BRODKI, and highlighted up-and-coming young jewelry designers.

Designers for YES include Krystof Strozyna, Blessus, Bizuu, Mariusz Przybylski, Zuo Corp, and Łukasz Jemioł. The cover of the calendar was designed by Dawid Tomaszewski The YES Calendar 2012 is meant to exemplify the “modern woman” and all photography was done by Aldona Karczmarczyk who has completed projects for some of the largest cosmetics and clothing brands. The “new face” of the calendar is Ewa Witkowska, who was also the first Polish woman on the cover of French Vogue. Photographs from the calendar were sold at a charity auction and the proceeds will be donated in full to n the Foundation Rak’n’roll.

20

December 2011

Events

www.bizpoland.pl

CEE Green Building Awards distinguish leaders Nearly 200 real estate professionals attended EuropaProperty‘s inaugural CEE Green Building Awards and Gala at Warsaw’s Marriott Hotel. The awards venue was packed with real estate executives from across the CEE region to applaud the 40 finalists in ten categories The awards ceremony attracted more than 40 submissions from developers and agents, who were keen to get on the record for pursuing a “green” agenda. The event was preceded by the Occupier & Investment Forum, which included discussion panels led by industry leaders involved in the CEE commercial real estate market.

The Green Building Awards presentation featured past, present and future projects, which have been recognized as sustainable developments. The awards, in response to the growing significance of green development in the CEE region from both a development and investment perspective, were designed to highlight and provide recognition to all the projects that have achieved a rating in all forms of green development.

Award Winners LEED Application In-Process (Commendation) • Ana Tower (Shell & Core) - GTC Bucharest • Arena Corner (Existing Buildings: Operations and Maintenance) - Orco - Budapest • City Gate (Existing Buildings: Operations and Maintenance) - GTC Bucharest • Galleria Burgas (Shell & Core) GTC/EBRD - Burgas • K&H Headquarters (Existing Buildings: Operations and Maintenance) - TriGranit - Budapest • Zebra Tower (Shell & Core) - S+B Gruppe - Warsaw LEED Pre-certificate • Shell & Core Bureau am Belvedere (Gold) - Immofinanz - Vienna • Eurocentrum Office Complex (Gold) – Capital Park - Warsaw • Green Horizon (Gold) - Skanska Property Poland - Lodz • Poleczki Business Park – Buildings B1, C1 (Gold) - Warsaw- UBM CA Immo • Green Corner (Platinum) - Skanska Property Poland - Warsaw • Green Towers (Platinum) - Skanska Property Poland - Wroclaw,

December 2011

T. Kolaja, T. Barnhardt, and F. Appeyroux

B.Robinson, S.Robinson

J. Chmielecka, D.Knittel

M.Gawronska, Ł.Ochman

R. Grossmayer, UBM

Wojciech Gepner and Echo Investment team

The award winners were developers and property owners with properties and projects that have achieved a rating from BREEAM, LEED or an equivalent - or are in the design pre-approved stages.

• LEED for Shell & Core • Infopark Building E (Silver) - IVG - Budapest LEED for Existing Buildings: Operations and Maintenance • Rondo 1 (Gold) - MGPA - Warsaw EU GREENBUILDING Programme • ALLCON@park 3 - Allcon Investment Gdansk • Park Postepu – Buildings A, B, C - Echo Development - Warsaw BREEAM Application In-Process (Commendation) • Emonika - TriGranit - Ljubljana • Enterprise Park - Avestus - Krakow • GPP Business Park - GPP - Katowice • Konstruktorska Business Center - HB Reavis - Warsaw • Mokotow Nova - Ghelamco Poland Warsaw • Mokotowska Square - Yareal - Warsaw • Pointpark Poznan - PointPark Properties - Poznan • Prologis Park Jirny DC7 - Prologis Jirny • Prologis Park Wroclaw V DC11 - Prologis - Wroclaw • Wola Park extension - AEW Europe Warsaw BREEAM Pre-certified Development • Olivia Gate (Very Good) - TPS - Gdansk

• Plac Unii (Very Good) - Liebrecht & Wood - Warsaw • Mazowiecka 2/4 (Excellent) - Hochtief Polska - Warsaw BREEAM Design-Phase Certificate • Miasteczko Orange (Very Good) Bouygues Immobilier Polska - Warsaw • Officium Building (Excellent) Akadémia Park Ltd - Budapest • Crystal Tower (Excellent) - Plaza Development -Bucharest, Romania BREEAM-In-Use Certificate • 3 Stawy Shopping Center (Good) Union Investment - Katowice • Manufaktura (Very Good) - Apsys Polska - Lodz BREEAM Post-Construction Assessment • Crown Square (Very Good) - Ghelamco Poland -Warsaw • Euro Tower (Very Good) - Cascade Park Plaza - Bucharest • Katowice Business Point (Very Good) Ghelamco Poland - Katowice • Swan Office & Technology Park – Buildings A, B, C (Very Good) - Chayton Capital - Bucharest • The Lakeview (Very Good) - AIG/Lincoln - Bucharest • Trinity Park III (Very Good) - Ghelamco n Poland -Warsaw

21

Events

www.bizpoland.pl

Diplomats and execs celebrate UAE’s Independence Day On 2 December, 1971, seven emirates joined to form the Gulf state of the United Arab Emirates.

22

And on 2 December, 2011, Warsaw’s diplomatic community and leading business executives gathered at the Sheraton hotel to celebrate the occasion. UAE has become the second largest economy in the Arab world, and the country’s business connections with Poland are growing consistently.

UAE’s Ambasssador to Poland Mr. Asim Mirza Al Rahmah welcomed guests, in a solemn ceremony marked by the music of the country’s national anthem, and then feted guests with traditional foods of lamb and sweets.

Private Polish companies see potential in the region, not the least of which is Jan Kulczyk, Poland’s richest man, whose beautifully- timed sale of his Gulf real estate interests in 2007/2008 ahead of the crisis further cemented his status as a brilliant tactician. Other Polish companies with investment and interests in the region include Krakow-based Can-Pack Group, which has invested nearly $150 million in a production facilities, which products are then sold on to markets in the Middle East, India and south Asia. It has also taken over the management of Arab Can Co, in Sharjah, UAE. Polish energy firms such as PGNiG are also keen on the region. IT firm Comarch operates in UAE, and Asseco is looking at expansion there.

A high-level delegation from the Ministry of Foreign Affairs visited Dubai and Qatar in November, to further cement ties with the Gulf region. UAE is also interested to attract direct investment, including investment and trade from Poland.

In his official address to the UAE nation marking the 40th anniversary, President His Highness Sheikh Khalifa bin Zayed Al Nayan said the UAE has made remarkable achievements that have catapulted it into the ranks of advanced nations. The UAE has the Middle East’s largest shopping mall, Dubai Mall, and the 828-meter Burj Khalifa is the world’s tallest tower.

According to one attendee at the celebration, “we enjoy good education and the government in Abu Dhabi has managed to provide jobs to everybody in all kinds of in-

dustries. There is no shortage of housing like some other Arab countries,” he said.

And to mark the occasion, the UAE President in early December ordered to increase the salaries of all federal government employees by up to 45 percent with effect from January 2012. He also decided to establish a fund of 2.7 billion U.S. dollars to help pay the loans of low-income citizens.

The UAE, which has achieved fast development thanks to its ownership of 8 percent of the world’s oil reserves, is now in a drive to diversify its economy, especially in the fields of trade, finance and tourism.

Attracting tourists is a key for Dubai’s economic success, said Sami Al Qamzi, Director General of the Department of Economic Development of the government of Dubai.

Only 3 percent of the sheikhdom’s GDP is generated from oil exports, because 90% of the UAE’s carbon energy reserves are located in the neighboring emirate Abu Dhabi.

“All sectors in Dubai go well, except construction and real estate,” Al Qamzi said.

“The UAE’s GDP is expected to grow by 3.5 percent in 2012, while Dubai’s growth will be a bit lower with 2.2 percent.”

Nevertheless, Al Qamzi said Dubai has overcome the fallout of the global financial crisis. “A growing number of foreign companies choose Dubai as their Middle East headquarters.”

For 2012, Al-Qamzi is optimistic for the UAE economy and even he sees some form of stabilization in the Dubai real estate secn tor.

December 2011

Subscribe to BizPoland Magazine

marriot_light_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆΔ˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±"'»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '"€ marriot_light_italic_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆΔ˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriott_med_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆΔ˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±"'»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriott_med_italic_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆΔ˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±"'»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriott_bold_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? åç´ƒ©˙ˆ˚¬μ˜øœ®ß†¨¥`¡™£¢§¶•ªº–“‘«…æ÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜،‰Íˇ¨„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±"'»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriott_bold_italic_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? åç´ƒ©˙ˆ˚¬μ˜øœ®ß†¨¥`¡™£¢§¶•ªº–“‘«…æ÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜،‰Íˇ¨„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±"'»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriot_condensed_light_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆΔ˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriot_condensed_medium_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆΔ˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" € marriot_condensed_bold_abcdefghijklmnopqrstuvwxyz`1234567890-=[]\;’,./ ABCDEFGHIJKLMNOPQRSTUVWXYZ~!@#$%^&*()_+{}|:”<>? å∫ç∂´ƒ©˙ˆ∆˚¬μ˜øπœ®ß†¨√∑≈¥Ω`¡™£¢∞§¶•ªº–≠“‘«…æ≤≥÷ ÅıÇÎ´Ï˝ÓˆÔÒ˜Ø∏Œ‰Íˇ¨◊„˛Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿ Á¸`⁄‹›fifl‡°·‚—±”’»ÚƯ˘¿|áéíóúâêîôûàèìòùäëïöüÿãñõÁÉÍÓÚÀÈÌÒÙÄËÏÖÜŸÑÃÕÂÊÎÔÛ ”“’‘ '" €

''EVENTS BY MARRIOTT''.

Make the most out of your meetings when you meet at the Warsaw Marriott Hotel. From large rooms to small rooms, we’ve got fully functional spaces to fit your group and your budget. Not to mention all the technology to fit your needs and help your people perform.

THE SPECIAL OFFER IS WAITING FOR YOU: Book your group of 10 people or more and get a welcome cocktail for everyone.

CODE: BizPoland

To make a reservation contact us: Phone: +48 22 630 7888; Fax: +48 22 630 7332 E-mail: wawpl.events@marriotthotels.com

WARSAW MARRIOTT HOTEL Al. Jerozolimskie 65/79, 00-697 Warsaw Marriott.com/WAWPL or WarsawMarriott.pl

*Promotion is subject to availability for new groups of 10 or more rooms per night. *Offer is for up to 100 pax and it's valid until 30th April, 2012. *This promotion cannot be combined with any other special offer.