Polish Market No.9 / 229/2015 by Polish Market

PU B LISHED SIncE 199 6 No. 9 (229) /2015 :: www.polishmarket.com.pl

EnErgy Defence sector

Investment

CARBOAUTOMATYKA ¡ DAMEL ¡ MIFAMA OPA CARBO

GRUPÊ CARBOAUTOMATYKA tworz¹ intensywnie rozwijaj¹ce siê firmy, z których ka¿da zajmuje czo³owe pozycje rynkowe w swoich bran¿ach. Wynik ten osi¹gnê³y dziêki wykorzystaniu nowoczesnych technologii, wykwalifikowanej kadrze oraz wysokiej jakoœci oferowanych produktów i us³ug.

• Przedsiêbiorstwo Kompletacji i Monta¿u Systemów Automatyki CARBOAUTOMATYKA SA • D¹browska Fabryka Maszyn Elektrycznych DAMEL SA • Mifama Opa Carbo Sp. z o.o.

Grupa Carboautomatyka to sprawdzony wykonawca przedsiêwziêæ w górnictwie wêgla kamiennego i brunatnego, inwestycji w zakresie infrastruktury drogowej, tuneli komunikacyjnych i obiektów u¿ytecznoœci publicznej. Wykonuje roboty od projektu poprzez produkcjê, dostawê i monta¿ urz¹dzeñ a tak¿e ca³ych systemów technologicznych oraz zapewnia kompleksowy serwis.

43-100 Tychy; ul. Budowlanych 168 tel.: (32) 323 43 00; fax: (32) 323 43 23

Przedsiêbiorstwo Kompletacji i Monta¿u Systemów Automatyki CARBOAUTOMATYKA SA

e-mail: carboautomatyka@carbo.com.pl http://www.carbo.com.pl

From The Government Information Centre

10 12

Zygmunt Berdychowski, Chairman of the Programme Council of the Economic Forum in Krynica; Our goal is to build a good platform for discussion

Tadeusz Rybak, President of the Management Board of Mostostal Puławy SA; Dynamic development Jerzy Bojanowicz; Polish defence industry in a good condition Ryszard Kardasz, President of PIT-Radwar SA, and President and Director General of PCO SA; We participate in all programmes that correspond with our competence

Janusz Steinhoff, Deputy Prime Minister and Minister of the Economy in the Jerzy Buzek government; A matter of European concern “Polish Policy on Raw Materials”: a paper on what does not exist but is badly needed

Professor Leszek Rafalski, Director of the Road and Bridge Research Institute; TRA2016 Important conference and great exhibition

Development is of key importance for KGHM ZANAM

Infrastructure

Andrzej Mochoń, President of Targi Kielce, an organizer of trade fairs; MSPO 2015 – a big qualitative leap

Henryk Stabla, President of Carboautomatyka and President Chairman of the Supervisory Board of Polska Technika Górnicza SA; Mining machinery the fastest growing industry

Henryk Kaliś, President of the Forum of Electricity and Gas Consumers (FOEEiG), FORUMCO2, Chamber of Industrial Energetics and Energy Consumers (IEPiOE); Plenipotentiary of the Board for Electricity Management, ZGH Bolesław; The energy industry bears responsibility for the country’s economic development and the future of citizens

48 50

Central Mining Institute (GIG ) many years of development and challenges Stefan Dzienniak, President of the Polish Steel Association (HIPH); Innovation as a chance for the development of the steel sector in Poland

30 32

36 38

Grzegorz Nowaczewski, CEO of the Virtual Power Plant; Poland’s first virtual power plant is about to be launched - a recipe for savings and blackouts

43 44

35 Defence sector

Janusz Piechociński, Deputy Prime Minister, Minister of Economy; Special Economic Zones – drivers of regional development and competitiveness Iwona Wendel, deputy Minister of Infrastructure and Development; Knowledge- based economy

16 18

From The President’s Press Office

52 55 56 58 60 62 64

Investment

Energy

Our Guest

CONTENTS 6 7 8

Henryk Majchrzak, President of the PSE S.A. Management Board; Managing secure system operation in emergency conditions Ireneusz Łazor, CEO of Polish Power Exchange (TGE); TGE will participate in creation of a regional gas hub Prof. Andrzej G. Chmielewski, Director of the Institute of Nuclear Chemistry and Technology; One gram of uranium is equivalent to 1.5-2 tonnes of coal

The defence industry. Home to technologies of the 21st century

Prof. Janusz Dyduch, President of the Polish Association of Transport Engineers and Technicians; The International Railway Fair TRAKO Prof. Antoni Świątek, Director and President of the Board, Automotive Research and Development Institute BOSMAL Sp. z o.o.; Modern laboratories and well-prepared staff Patryk Mirecki; Towards the development of regions and the whole country Warmia-Mazury Special Economic Zone the highest level of public aid in Poland A zone of success Marek Sowa, Marshal of the Małopolska Region; Małopolska. Enjoy! Jacek Majchrowski, Mayor of the City of Krakow; Regeneration of Krakow Smart city. A city like a living organism Pruszków on the podium

72 73 76 78 79 80 81 82 85

Radosław Kuczyński, President of EFL; Poland’s economy Prof. Małgorzata Zaleska, Director of the Institute of Banking, Warsaw School of Economics (SGH), and VicePresident of the Committee on Financial Sciences, Polish Academy of Sciences (PAN ); Bank tax Video marketing as a new business trend Adam Półgrabia, President of Coachsulting Group and Triassic Avi; Coachsulting is born while thinking... Cultural Monitor Maciej Proliński; A Brief History of a Divided World Moniuszko, Wagner, Mozart, Strauss. The upcoming season in Warsaw’s opera promises many att ractions! Maciej Proliński; Passions of the heart and soul Building correct relationships POLAGRA FOOD, a comprehensive and innovative food fair Economic Monitor

Photos on issue: www.shutterstock.com

9/2015

CONTENTS

Finance Culture Food Industry

66 68 70

Paweł Bisek, President of Benefia Towarzystwo Ubezpieczeń SA Vienna Insurance Group; New space on the insurance market

DTP: Godai Studio www.godai.pl

President: Krystyna Woźniak-Trzosek

Writers/Editors: Maciej Proliński, Jan Sosna, Sylwia Wesołowska- Betkier, Grażyna Śleszyńska, Janusz Korzeń, Jerzy Bojanowicz, Janusz Turakiewicz,

Vice - Presidents: Błażej Grabowski, Grażyna Jaskuła

Contributors: Agnieszka Turakiewicz

Circulation: 8,000

Address: ul. Elektoralna 13, 00-137 Warszawa, Poland Phone (+48 22) 620 31 42, 652 95 77 Fax (+48 22) 620 31 37 E-mail: info@polishmarket.com.pl

Graphic design: Godai Studio Agnieszka Andrzejczak -Charuba, Joanna Wiktoria Grabowska

Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o. Nr KRS 0000080385, Sąd Rejonowy dla m.st. Warszawy XII Wydział Gospodarczy Kapitał zakładowy 80.000,- zł. REGON 011915685, NIP 526-11-62-572

Publisher: Oficyna Wydawnicza RYNEK POLSKI Sp. z o.o. (RYNEK POLSKI Publishers Co. Ltd.)

Editor-in-Chief: Krystyna Woźniak-Trzosek Deputy Editor-in-Chief: Ewelina Janczylik-Foryś redakcja@polishmarket.com.pl Marcin Haber m.haber@polishmarket.com.pl

Sales: Phone (+48 22) 620 38 34, 654 95 77 Marketing Manager: Marianna Dąbkowska marianna.dabkowska@polishmarket.com.pl

Printing: Zakłady Graficzne TAURUS – Roszkowscy Sp. z o. o., www.drukarniataurus.pl

Published articles represent the authors’ personal views only. The Editor and Publisher disclaim any responsibility or liability for their contents. Unso-licited material will not be returned. The editors reserve the right to edit the material for length and content. The editors accept no responsibility what-soever for the content of advertising material. Reproduction of any material from this magazine requires prior written permission from the Publisher.

Editorial

The injection of new technologies combined with Polish design resulted in Poland becoming Europe’s leader

o use a biblical phrase, we should enjoy and rejoice, because “seven lean years will be followed by seven fat years.” Well, perhaps not an exact quotation, as the order was originally reverse. But it does not make any difference, given that the worst - seven years of the biggest global financial crisis in 80 years - seems to be over. In addition, Poland’s economy emerged from that crisis relatively unscathed. During the “seven lean years”, not even once did macroeconomic indicators fall below zero. This means that Poland’s production and consumption steadily increased from year to year, a luxury that any other European nation did not experience. By boosting our GDP by one-fifth during these “lean years”, we managed to catch up a bit with the so-called “old” EU. Without trying to compare to the European tigers, suffice it to say that starting, after the World War II, from a level close to that of Spain, following 50 years of the communist rule, we achieved a mere half of the per capita income of an average Spaniard (calculated by the purchasing power parity), while under the market economy conditions we were able to reduce the gap by half. How did it happen? Probably the whole generations of historians will fail to agree on how much of the credit goes to politicians and economic policy, and how much to a particular historical moment in which we were confronted with the crisis. This particularity is a baby boom, leading to intensified competition on the labour market and allowing to pay less and produce cheaply. By keeping our national currency, we could easily compete on freshly open EU markets and maintain our production levels. But let us be honest, making exports one of the main drivers of the economic growth was not an easy task. Many do not notice - or refuse to notice - that our pre-crisis exports were hardly competitive. True, the first impulse came right after the accession to the EU, but shortly after words we were obliged to compete on quality and technology, and these were not our strengths. Starting from the position of a food rationing country, we have grown into a leading food exporter, with sales worth EUR 25 billion a year, but it is no longer the same food and its production looks different, too. A large part of the Polish food and agriculture offering at this year’s EXPO in Milan is said to represent the “world-class standards”, and it is far from being a PR catchword. The injection of new technologies combined with Polish design resulted in Poland becoming Europe’s leader in furniture, home furnishings and building materials production. In the shadow of tabloid and populist laments over the destruction of the Polish steel mills and shipyards, a completely new, Europe’s second largest shipbuilding industry emerged, producing everything state of the art - from photovoltaic-powered boats, to off-shore platforms, with a portfolio of orders for the years ahead. Transport, our largest industry, turned out to be a particular phenomenon. Here again, the public is flooded with predictions of the collapse of individual brands, while actually a strong industry of vehicle components and accessories is growing in the background: from Toyota gearboxes to Ferrari seats. This industry is much more resistant to market fluctuations and fashions, and

is moreover able to rely on the resources of new generation of Polish manufacturers of rail vehicles or ecological buses. Currently, our domestic industry accounts for a quarter of Polish GDP and the call for the reindustrialisation of Europe, so loud these days, does not have to be of much concern to us. It is also worth noting how much the Polish logistics sector has evolved. Without even touching upon the subject of the transport infrastructure now thoroughly modernised, it is impossible to overlook the emergence of a new Polish specialty - transport and logistics services. Poland is among European leaders especially in road transport and perhaps the most curious example of our resourcefulness is the leading position of the Polish inland waterway fleet, although we lost 90% of our domestic navigable routes. In the service sector, we bank on modernity, with e-commerce and BPO firms systematically recording a double-digit growth rate. Especially the latter are becoming the source of completely new trends. Starting with the provision of simple administrative services, e.g. accounting a few years ago, they have grown into R&D centres of large global companies, and this means a totally new quality. According to a recent forecast by Oxford Economics, the growth rate of Polish exports in the coming years will reach 5-6% per year, while the value of exported goods and services will double by 2030. But this rate was already achieved twice in a row, and the latest report by UNCTAD suggests we are returning to the FDI level from before the crisis. It is an expression of international confidence in the safety of investing in Poland – with nearly USD 14 billion worth of FDI in 2015 (mainly in the ICT, automotive and electronics sector) we are in the world’s top 20. So are we going to live “seven fat years”? Yes, if we can make use of a cash injection – probably the last as opulent – from the European Union. Yes, if we can stop false whimpering on labour emigration and turn a demographic decline affecting the labour market into a significant improvement of working conditions and wages. Yes, if we can meet the challenge of modernisation of road and railway infrastructure. Yes, if we are able to break particularism in the modernisation of energy infrastructure and become part of the European energy market rather than a “black hole.” Yes, if we manage to protect the stability of our, after all modest, public finances. Yes, if we honestly learn a lesson from the economic geography of Europe, if we take note of the differences of potentials and if, instead of banging our head against a brick wall, we come together with the whole of Europe. It is our – thus also Polish – continent. Most of the ratings of Poland, so positive in recent years, point to political stability as one of its underlying assets. It is also a factor when talking about “fat years.” Krystyna Woźniak-Trzosek Editor-in-Chief President of Rynek Polski Publishers Co. Ltd.

9/2015 polish market

President

Prime Minister

Andrzej Duda sworn-in as President of the Republic of Poland

Polish-Spanish intergovernmental consultations

n 6 August Andrzej Duda was sworn in as Poland’s President before the National Assembly. He also received the orders of the White Eagle and of Polonia Restituta and took over as Commander-in-Chief of the Armed Forces. In the presence of the National Assembly members and his wife Agata, he took the oath: “Assuming, by the will of the Nation, the office of President of the Republic of Poland, I do solemnly swear to be faithful to the provisions of the Constitution; I pledge that I shall steadfastly safeguard the dignity of the Nation, the independence and security of the State, and also that the good of the Homeland and the prosperity of its citizens shall forever remain my supreme obligation. So help me God.” Then, he addressed the National Assembly: “(…) Standing in this very place I wish to tell you one thing: thank you for electing me, thank you for your presence. I wish to assure you that I will spare no effort not to fail these expectations. I will keep the promises which I have made even if today many people doubt it. But I am an unfailing man and a man of faith. I do believe this is attainable, I believe I will manage to attain it. First and foremost, the most important ones: the pledge to draft and submit a bill raising the tax free threshold in order to alleviate the poorest. The pledge to submit a bill on the lowering of pensionable age. I do recall it. I have not forgotten having already been elected to the office of the president. I am not forgetting my promises, and

I will pursue the others together with the National Development Council. (…) I am standing here today before you as President of the Republic of Poland and indeed, much can be attained if we act together and in concord! Much is possible to be attained if we show understanding, if we are kind to one another!”

Andrzej Duda takes over as Commander-in-Chief of the Armed Forces

“

We must have a strong army ready to defend Poland at any time,” said President Andrzej Duda when assuming the title of the Commander-in-Chief of the Armed Forces. He vowed to cooperate with the Ministry of Defence in the modernisation of the armed forces. Defence Minister Tomasz Siemoniak declared his readiness for cooperation with President Duda in matters of security and national defence and asked the President to support the further modernisation and improvement of military service conditions for soldiers. In his address to soldiers, Andrzej Duda said that it was the duty of state authorities to modernise the army and supply it with the best possible weapons. “So that you are able to fight more efficiently, but also that you are safer. It is a big task for the coming years, because we must have the Polish army, our strong army, which will at all times be able to stand in defence of our fatherland,” said the new Commander-in-Chief of the Armed Forces.

President Duda’s programme of foreign visits announced

oland’s President Andrzej Duda will pay his first foreign visit to Tallinn, Estonia, on 23 August, the anniversary of the signing of the Ribbentrop-Molotov Pact. “The date of the visit to Tallinn is not accidental as it will be paid on the European Day of Remembrance for Victims of Stalinism and Nazism,” said Krzysztof Szczerski, Secretary of State at the President’s Chancellery. According to the presidential aide, talks are also under way on the President’s visits to Paris and Brussels as well as a meeting with Ukrainian President Petro Poroshenko either in Warsaw or in Kiev. During his first 100 days in office President Duda will have regional, European and international meetings. “These visits are designed to increase Poland’s security and promote its economic interests,” Szczerski stressed.

6 polish market

olish-Spanish intergovernmental consultations were held in Madrid on 16 July. Prime Ministers Ewa Kopacz and Mariano Rajoy discussed, among others, the situation in Greece, migration, security, and preparations for the NATO summit in Warsaw. At the press conference in Madrid, Prime Minister Ewa Kopacz stressed that Poland and Spain shared the view that the situation in Greece was very serious and required immediate action, which would allow strengthening Greece, the euro zone and, consequently, the entire European Union. According to the head of the Polish government, effective solution to this crisis requires efforts from both sides, and first and foremost - serious, systemic, and socio-economic reforms to be implemented in Greece. It is also necessary to further implement the mechanisms aimed at avoiding a similar scenario in the future in any of the EU countries. The debate on the future of the Economic and Monetary Union also plays an important role here. Poland and Spain agree that this process should involve all EU countries, both members of the euro zone, and countries that shall join it in the future.

The Polish-Spanish talks also focused on the migration issue. Prime Minister Ewa Kopacz stressed that in previous years Spain had been effectively confronting this problem. “We share the opinion that the European Union, while confronting illegal migration, must decide on a broad spectrum of activities to address first and foremost the sources of this problem, and not just its outcomes,” the Prime Minister said in Madrid. She also insisted that for Poland and Spain the priority remains to protect the free movement of persons within the EU as one of the pillars of European integration. “We shall defend this principle with Spain at the EU forum,” the head of government declared. “We have agreed that given the current threats to our common security, the EU must focus on the parallel development of the southern and eastern dimension of the European Neighbourhood Policy,” said the head of government after meeting with the Spanish Prime Minister. In her view, it is necessary to keep EU univocal, as regards both the Ukrainian and Russian crisis and the terrorism threat.

Prime Minister Kopacz at the swearing-in ceremony of the President of the Republic of Poland

Prime Minister Kopacz at the celebrations of the 71st anniversary of the outbreak of the Warsaw Uprising

he head of government participated in the session of the National Assembly during which Andrzej Duda was sworn in as the President of the Republic of Poland. The session of the National Assembly was presided over by the Sejm’s Speaker, Małgorzata Kidawa-Błońska. Then, the head of the government took part in the ceremony during which the President of the Republic of Poland was handed over the Order of the White Eagle and Grand Cross of the Polonia Restituta Order at the Royal Castle. The Prime Minister also attended the ceremony during which the President of the Republic of Poland took command of the Armed Forces.

The Polish History Museum will be created in Warsaw by 2018

“ The schedule of the President’s foreign visits and meetings in • 23 August – Visit of the President of Poland to Estonia (Tallinn) • 28 August – Visit of the President of the Republic and the First Lady to Germany (Berlin) • 15 September – Visit of the President of Poland to the UK (London) • 21-22 September – Participation of the President of Poland, accompanied by the First Lady, in the meeting of the Presidents of the Arraiolos Group: Presidents of Austria, Bulgaria, Estonia, Finland, Germany, Italy, Latvia, Portugal, Slovenia and Poland (Germany, Erfurt and Wartburg) • 26-29 September – Participation of the President of Poland in the United Nations General Assembly and the Millennium Summit in New York • 8-9 October - Participation of the President of Poland in the meeting of the Presidents of the Visegrad Group (Hungary - Balaton) • 3-4 November – Regional Meeting of the Presidents of Estonia, Latvia, Lithuania, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Poland before the NATO summit (Romania - Bucharest). Presidents of Romania and Poland will be co-hosts. • second half of November – China-CEE Summit (Beijing) 16 + 1: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Albania and Macedonia

The museum’s building will be erected on the premises of the Warsaw Citadel, near the new seat of the Polish Army Museum. I’m convinced that as a result a new place will be created in Warsaw, dedicated to the Polish history and culture: Citadel of Museums,” the head of government said. The Polish History Museum will be one of the most modern, most important and best recognised cultural institutions in Poland with the annual number of visitors exceeding 500 thousand. It should join other modern museum facilities which enjoy big reputation in Poland and abroad: Warsaw Rising Museum, Museum of the History of Polish Jews and the European Solidarity Centre. The building’s floor area will be approximately 24,000 m2. The museum exhibitions will be accessible to the disabled: the blind and those with impaired sense of sight, as well as persons with intellectual and movement dysfunctions. Prime Minister Ewa Kopacz said that the government would earmark PLN 310 million for the construction of the museum from the state budget. The first tranche in 2016 will amount to PLN 11.6 million. The letter of intent on the construction of the permanent seat of the Polish History Museum was signed by: • Tomasz Siemoniak, Deputy Prime Minister, Minister of Defence, • Prof. Małgorzata Omilanowska, Minister of Culture and National Heritage, • Prof. Zbigniew Wawer, Director of the Polish Army Museum, • Robert Kostro, Director of the Polish History Museum.

“

We meet at the Tomb of the Unknown Soldier to commemorate the heroism of the i nsu rgents, their martyrdom and sacrifice, and to prevent those events from fad i ng i nto oblivion,” said Prime Minister Ewa Kopacz on the 71st anniversary of the outbreak of the Warsaw Uprising.

Warsaw Uprising

he Uprising started on 1 August 1944, and lasted 63 days. After the first successes, the insurgents had to give in to the German forces occupying the capital city. The fight continued until the night of 2 to 3 October 1944, when at the SS headquarters in Ożarów the Act of Capitulation of the Warsaw Uprising was signed. The war in the capital city took a toll of nearly 200 thousand people, both soldiers and civilian residents of the city.

9/2015 polish market

Our Guest

Special Economic Zones – drivers of regional development and competitiveness Janusz Piechociński, Deputy Prime Minister , Minister of the Economy

ince their inception, the Special Economic Zones (SEZs),have been one of the most effective instruments attracting foreign investment and an important factor of employment growth in the regions where they are located, as evidenced by the continued interest of entrepreneurs, both foreign and Polish. Let me remind you that, for several years, Polish entrepreneurs have been leaders in terms of the capital invested in the Special Economic Zones. In 2014 the figure was 19%, or nearly PLN 19.4 billion. Słupsk, Suwałki and Starachowice had the greatest shares in it, each representing more than half of their respective total investment volumes. Polish entrepreneurs also came first by the country of origin of capital: Kraków (38.6%). Mielec (34.2%) and Łódź (29.3%). At the same time, Polish entrepreneurs invested most money in Łódź – more than PLN 3.6 billion in 2014. Foreign companies that have decided to set up in Poland modern production plants and develop their services contribute to enhancing our competitiveness as compared to foreign markets. Moreover, entrepreneurs investing in the SEZs bring to Poland innovative technologies and their own management systems, which helps raise the qualifications of our employees and increase the number of people employed in the high technology sector. The role of the SEZs for the Polish economy is evidenced by their results. As of the end of 2014 nearly 296 thousand jobs were created and as much as PLN 102 million were invested in the SEZs. It is worth noting that managers of the SEZs do much more than just issuing permits. Their activity covers a number of areas that focus on regional development and enhancing the competitiveness of the Polish economy. The SEZs are conducting intensive promotional activities by organising or participating in trade missions, fairs, and conferences. They also work with local governments and utility operators, financing or co-financing in infrastructure projects. They support cultural facilities and events in the regions. But above all they provide assistance to entrepreneurs, both at the stage of investment and during the whole time of their business presence in the SEZ. A new activity of the SEZs is supporting vocational education. Pursuant to the amendment to the Act on Special Economic Zones of 28 November 2014, the responsibilities of the managers of the SEZs now also include efforts towards the formation of clusters and cooperation with vocational schools in training workforce as needed by the labour market. Matching the skills of workers to the rapidly changing production processes is a major concern for entrepreneurs. This requires systemic solutions and harmonious cooperation of all stakeholders. Already today dozens of entrepreneurs operating in Special Economic Zones declared the availability of several thousand internships for young people who will choose to continue education in vocational schools. Under the Operational Programme Smart Growth, Priority Axis 3, the Ministry of the Economy is implementing the project “Promotion of the economy based on Polish product brands.” Its aim is to increase the attractiveness of the Polish economy by, among others, increasing the recognition of product brands on foreign

When promoting Poland internationally, we want to further support exports, which contribute to enhancing the competitiveness of Polish companies and their products on foreign markets.

markets. By the end of September 2015 we are planning to target 10 industries on selected markets. Building the international image of Poland will involve the long-term and comprehensive promotion of industries corresponding with the areas of National Smart Specialisation (KIS). The activities pursued by the Ministry of Economy are designed specifically for small and mediumsized enterprises. The key element of the above-mentioned “Promotion of the economy based on Polish brand products” will be the implementation of sectoral and general promotion programmes. We will present the product and service potential of Polish entrepreneurs selected in the National Smart Specialisation framework. An important activity is the cooperation with local economic and industrial communities aimed to build the concept of promotion of individual sectors covered by the programmes. A supplementary element will be the promotion of the Polish economy as a brand both at home and abroad. Supporting the development and internationalisation of Polish enterprises is one of the priorities of the economic policy pursued by the Ministry of the Economy. When promoting Poland internationally, we want to further support exports, which contribute to enhancing the competitiveness of Polish companies and their products on foreign markets. I also hope that the years to come will see new investments that will make Poland’s economy ever stronger. •

9/2015 polish market

Our Guest

S Iwona Wendel, deputy Minister of Infrastructure and Development

Knowledgebased economy

mart growth - or a knowledge-based economy, which creates modern technologies rather than imitate them – is the key objective of the development policy of our country and the whole European Union. European Funds are among the more important tools in supporting innovation in Poland. Poland’s position in innovation league tables has been improving steadily. But spending on innovation is still insufficient, although in recent years business expenditure on research and development has increased significantly – in 2013 it was more than two times higher than in 2007 – and Poland is among the EU countries which have recorded the fastest increase in R&D spending in the past five years. We have also seen growth in the contribution of high-tech products to Polish exports and the share of innovative businesses. More and more patents are granted to Polish businesses by the national, European and US patent offices. Research indicates that projects partially funded by the European Union are behind many of the positive changes in the Polish economy. The Operational Programme Innovative Economy enabled Polish firms to launch around 4,800 new products and services on the market and develop more than 3,100 innovative solutions. In turn, support provided in 2007-2013 under regional operational programmes enabled businesses to apply over 2,300 new technologies and set up or modernize around 630 research labs. Of course, there are disparities among individual provinces and between cities and the surrounding areas in terms of innovation. The Mazowieckie province is the innovation leader. This is largely due to the role of Warsaw as the centre of economic life in Poland. Businesses based in the Podkarpackie, Dolnośląskie and Pomorskie provinces spend more on scientific research and development than firms elsewhere in Poland. The Pomorskie, Wielkopolskie and Podkarpackie provinces top the league table in terms of revenue generated by businesses from the sale of new or significantly improved products. The performance of the Warmińsko-Mazurskie, Zachodniopomorskie and Lubuskie provinces is poorer in this respect. In the EU regional innovation rankings, the southeastern province of Podkarpackie belongs to the same category as Mazowieckie and Dolnośląskie. This proves that the traditional division of Poland into a more innovative western and central part, called Poland A, and eastern regions, called Poland B, is no longer justified. Money available under the Programme for the Development of Eastern Poland is of no small importance for Poland’s five eastern provinces. The funding has gone to projects involving the expanding of teaching facilities for higher educational institutions, building technology transfer centres, modernizing laboratory infrastructure, providing sites for development with utilities, setting up clusters and improving access to loans and guarantees for businesses. Spending on research and development in this macro-region increased by 402% between 2006 and 2013. The growth rate was higher than the national average of 245%. And the Podlaskie province has moved up eight places in the EU Regional Competitiveness Index. This is proof of positive changes taking place in the five provinces and their growing potential, which enables them to compete with other Polish and European regions. The European funding allocated to Poland for 2014-2020 will be an important, though not the only, source of money for projects designed to strengthen the innovation potential

We will be supporting the establishment and development of innovative start-ups and projects associated with preparing sites for development. and competitiveness of our economy, and enhance the quality of Polish science. We have earmarked a considerable part of the money for this purpose. The money will be available under the national programmes Smart Growth and Eastern Poland, and under regional operational programmes. It is expected to encourage businesses to increase R&D spending. It would be satisfactory under existing conditions if one half of the total R&D expenditure came from private sources and the other half from public sources. Competitiveness is key to innovation in an economy. On the other hand, innovation is designed to support competitiveness. We have to do with a strong positive feedback here. This is why we attach such a great importance in the new financial period to smart specialization. There are 19 areas of smart specialization at national level, divided into five sections. Additionally, each region has chosen its own fields of specialization. Importantly, the choice is not done once and for all. It is an open and continuous process because new spheres worth investing in may emerge in the future. As regards research and development, funding will be provided for projects carried out by businesses and scientific units to develop new products, services and technologies, and to develop and expand R&D infrastructure, and pro-innovative business services. Money will be available for applying the results of R&D work in the activity of small and medium businesses. EU subsidies will also go to projects supporting the operation of firms on the international market. We will be supporting the establishment and development of innovative start-ups and projects associated with preparing sites for development. Preferential treatment will be given to investment projects conducted in areas requiring revitalization and located close to important transport routes. More EU money will be used on a refundable basis. This will contribute to increased investment efficiency and will make it possible to support a larger number of firms than is the case with the subsidies. The support will involve financing business R&D activity, and investment in innovative firms through venture capital funds and business angels. Removing development disparities among regions is a process requiring a wise allocation of resources and labour. It is already visible that the disparities are diminishing. I believe that our plan for utilizing the new allocation of money from EU funds will contribute to enhancing economic competitiveness and innovation in each province of our country. • 9/2015 polish market

Our Guest

Our goal is to build a good platform for discussion

The How to use the money, which is always scarce, is one of the key problems for every government in the world.

Zygmunt Berdychowski, Chairman of the Programme Council of the Economic Forum in Krynica This year, the annual Economic Forum in Krynica in southern Poland will be held for the 25th time. The event is not losing in popularity or importance. What is the secret behind the Forum maintaining its high standards and prestige for such a long time? I am surprised myself that we are still in existence. Organizing an event which has become a fixture in an economic and political calendar is a truly uncommon thing considering the realities of Central Europe, a region which has seen numerous fundamental political changes over the past 25 years. Two years ago, there was an unusual situation: a head of government visited us one day and the leader of the country’s largest opposition party came on the next day. By Central European standards, this situation was extraordinary. We have several assets, which we have gained over the past 25 years. I think, however, they are not the main factors behind our popularity. Firstly, and most importantly, we do not work alone. We have a very large team responsible for preparing the event. The department I work in – the programme department – is composed now of more than 20 people. This is our asset: the people who work directly to prepare this event and give it an international dimension. The second important thing is our openness. Over these 25 pm

12 polish market

years, we never wanted the Forum to be closed – in a more or less artificial way - to someone only because of their political views. I have believed since the beginning that all those who have influence on public life in their countries should take part in discussion about international politics and business. It is for this reason that we had a situation where we hosted at the Forum the president of Ukraine one day and the head of the country’s largest opposition party at that time, Yulia Tymoshenko, on the next day. This was really extraordinary. What matters is openness to various political arguments, not only those which dominate, but also those which, to a smaller or greater extent, are in opposition to the official authorities. Another asset is the venue of the Forum – the spa town of Krynica Zdrój. It is located far from business and political centres - in the back of beyond, as some say – but this is an advantage because conferences of this kind create a unique atmosphere when they are held in a special place. The congress town we prepare for our guests also has a very special atmosphere. And there are certainly other reasons behind the popularity of the Forum. If I were an accountant I would also mention that the conference is not directly dependent on the central or local government. It is financed mainly by commercial guests, which is extremely important because this enables

us to invite guests from different sides of political dispute as we are politically independent. There is no other such event in Central Europe – organized for 25 years without a break and always attended by real business, political, social and cultural leaders. During last year’s conference, the situation in Ukraine was the main topic of panel discussions and unofficial talks. Will the situation be similar this year, with Greece being the dominant topic? The Ukrainian problem will for sure continue to be a leading topic this year. The first reason is that there is still war there. Secondly, what takes place in Ukraine has a significant impact on the course of European affairs – the imposition of sanctions, restriction of economic contacts with Russia and a thorough change to the European policy on Russia over the past year. If you organize an important international platform for dialogue about Central Europe Ukraine has to be one of the starting points, whether you like it or not. And in connection with the situation in Ukraine, most our guests will certainly understand that the initiative to have discussions about security as part of the Forum is well justified. The challenges which have emerged after the outbreak of the conflict in Ukraine and

those emerging in the background of the conflict, like for example hybrid war, control over resources and so on, are problems we should talk about. Of course, we will also be talking about Greece and the money we spend on healthcare. How to use the money, which is always scarce, is one of the key problems for every government in the world.

Over the 25 years, has there been a situation at the Economic Forum in Krynica you are especially proud of – any political agreements or business relations established? I think there were many such situations. Among those which made history is Prime Minister Donald Tusk’s declaration that Poland would be adopting the euro and the declaration of cooperation in building an innovative economy in the 2007-2014 financial period signed by the prime ministers of the Visegrad Group countries. It is also worth mentioning talks held by the Azerbaijanis and Armenians, and talks about Chechnya between Russian government officials and the opposition. There were surely many more such situations, but I am happy that we do not have to keep track of what participants in the Forum achieve while in Krynica. Our goal is just to build a good platform • for talks and agreements. pm

9/2015 polish market

Our Guest

A matter of European concern Janusz Steinhoff, Deputy Prime Minister and Minister of the Economy in the Jerzy Buzek government (1997-2001), talks to Ewelina Janczylik-Foryś. Poland has large deposits of coal that can satisfy most of its energy needs and ensure the country’s energy security. But mining is economically inefficient. Why is it so? Low prices of coal, lack of innovations, taxes or privileges of trade unions? The situation in the mining industry is mainly due to a significant drop in coal prices and deteriorating mining and geological conditions in Polish mines. There are risks related to methane and rock burst; coal is mined at large depths, and this in turn pushes up costs. For these reasons, some durably unprofitable mines with depleting resources need to be shut down. New mines must be planned ecologically and economically. A couple of such investments are in the making. As is known, Europe is shifting away from coal mining. Poland is still its biggest producer, Germany has little mining volumes (German mines are scheduled to be extinguished in 2017), mines are also about to disappear in Britain. The climate and energy package, that is charges for CO2 emissions, will be consequential in terms of impact on coal prices. With the emission allowances being excessively high, lignite and coal - which are heavily emissive - will be uncompetitive relative to other energy sources. pm

The mining sector continues to show losses. It is a good argument for the proponents of renewable energy sources (RES), who emphasise the need of diversification in the energy sector. RES, of which I am by the way an enthusiast, have been uncompetitive so far. In other pm

14 polish market

would be a violation of the conditions of competition. The first thing to do is to restructure the mines to reduce operating costs. Secondly, those that have no chances of surviving have to be shut down to make space for new profitable projects. There are already three new projects in the pipeline: by a German investor, by an Australian one and by Kopex Group. These are private investors and Poland is open to such investment projects provided that they are based on rational economic calculation. Another private investor is a Czech company, EPH, the owner of the Silesia mine, which successfully continues mining. But privatisation is still shunned by decisionmaking. I do not share this view. I am a supporter of the private economy, in which the state is a regulator rather than an owner. Certainly, there are areas that must not be privatised, such as transmission infrastructure or transport infrastructure, because the state is responsible for providing access to that infrastructure to operators competing on equal terms. In contrast, nothing prevents the privatisation of mines if there are potential investors, as in the case of the Silesia mine. The Silesia mine has been given a cash injection of pm

approx. PLN 1 billion. Moreover, the investor has reached an agreement with the social partners, changed the work organisation system and thus significantly reduced costs. However, we need to be aware that in the face of the oversupply of coal and the consequent drop in prices this mine, too, suffers economic problems. Production levels and costs have to be continuously adjusted to the market situation. Is the restructuring of state-owned enterprises not socially acceptable? I did not say that. The Cabinet of Jerzy Buzek, in which I served as the Minister of the Economy took pains to restructure the mining industry. 23 mines were shut down, resulting in the reduction of the workforce by more than 100 thousand people. Mining stood on its feet and generated profits for many years. It is a matter of the government’s responsibility. Being in power, you must not make decisions for the sake of popularity. The government cannot possibly distance itself from the necessary decisions. pm

Would a common European policy be a way out? First of all, Europe should think not only about the Climate and Energy Package, but pm

strengthen its energy policy. I am very glad about the introduction of the Third Energy Package, intended to be a tool for achieving the objectives of the European energy policy, including primarily the completion of the process of building a common, competitive market for electricity and gas throughout the European Union. The implementation of the package is set to encourage the liberalisation and further development of competition on the markets for electricity and gas, as well as to improve the standard of service and security of supply. Energy security should be a matter of concern at European level, not just at a level of individual countries. Building a common energy policy and a competitive market for electricity and gas should have preceded the climate and energy package, as the resulting synergies would have enabled financing the extremely expensive provisions of the climate and energy package. Poland has a specific situation when it comes to climate and energy package. We are almost entirely dependent on solid fuels, namely coal and lignite, for power generation, which results in heavy CO2 emissions. The only way to reduce these emissions is to modernise our generation units, that is to improve their efficiency. This operation is • lengthy and expensive. ADVERTISEMENT

words, RES-based power generation is significantly more expensive than conventional generation. Pursuant to the Climate and Energy Package, 15% of energy output should be produced from renewable sources by 2020. Poland is consistently introducing these provisions and is complying with the obligations incurred under the package. Additional costs of energy from renewable sources are covered by consumers. But we must remember that energy prices largely determine the competitiveness of the economy and municipal consumers’ living standards.

You said that a remedy to the ailing mining industry could be closing of unprofitable mines. What about subsidising those that hold promise? There is no question of subsidising the production, as it would be contrary to EU law. Any aid given to any entity, regardless of its scope of activity, must be approved by the European Commission. And the Commission will not accept financial support unless it is intended for restructuring,that is a durable improvement in the plant’s profitability. Public aid cannot be used to subsidise production because it pm

Infrastructure

“Polish Policy on Raw Materials”: a paper on what does not exist but is badly needed

Poland has no policy on raw materials. A discussion over such a policy is only beginning now. The issue is almost totally unnoticed in strategic documents. Concrete decisions concerning resources of strategic importance for the country are often made at a municipal level. Such serious conclusions can be read in the report “Polish Policy on Raw Materials: a paper on what does not exist but is badly needed.” The report was compiled by a group of scientists and experts, including former ministers - Janusz Steinhoff and Jerzy Hausner.

he policy on raw materials should be a long-range public policy pursued at the national level enabling industry to access raw materials at affordable prices. At the same time, it should protect our natural and social environment at each phase of the raw material treatment, and to ensure the current and longterm economic security of the country. The starting point for formulating policy guidelines with respect to raw materials is realising that it is about the management of mineral resources which are mostly not man-made but natural. In addition, these resources are non-renewable, which means that even if they are still produced by nature, it is usually far beyond the lifetime horizon of present day generations. Therefore, it is essential in designing a raw material policy to state that raw materials are considered as a common good, which can of course be handed over to private use, but under certain conditions. The primary reference for the economy and raw materials policy is the manufacturing base of the national economy. Therefore, in the economic aspect the raw materials policy should be linked with the industrial policy and stimulating economic competitiveness. The key role of the market and the private sector in the raw materials economy should be stressed. Another economically important factor is the development of

16 polish market

innovation-oriented policy and research facilities. The raw materials policy must not be reduced to the security of supplies, even if it is an important aspect of it. The raw materials security should be considered as a component of the economic security in the broad sense, covering energy security but also the security of business transactions. In turn, the economic security is one of the dimensions of the national security. In designing the Polish policy on raw materials we cannot simply copy some model solution. We need to work it out gradually, dialoguing with all stakeholders and analysing our own and foreign experience. Mineral resources belong to the natural environment, but are usually not treated on an equal basis with its other components. The existing legislation concerning environmental protection at large clearly give preference to the protection of living nature, while raw materials - as a component of the environment - are marginalised. The state does not have to be an immediate, or dominant owner and investor to pursue a policy on raw materials. At the turn of the century, within several years, there was a tremendous increase in the demand for raw materials and their prices soared 3-4 times. This was primarily due the fact that highly populated economies, previously classified as underdeveloped, entered the path of accelerated growth.

Now the world has found itself again in the phase of low commodity prices. Identifying its causes, including in particular the all of a sudden oil sell-off in the second half of 2014, is not an easy task. Arguably, mounting state intervention in the mining industry makes it operate according to economic cycles other than it is the case of strongly market-oriented industries. There can be talk about specific supercycles that are visibly longer, also due to an extremely long investment cycle and very high capital requirements. Additionally, such commodity cycles are interfered with political risks. However, at some point every cycle breaks down and starts over. That is something public policy makers should not forget. Poland slept through several years of raw materials boom, with moderate and highly uneven gains. Polish metal ore (especially copper ore) miners did benefit from it, but its global expansion - receiving no support from public policies - was largely limited. Many bankruptcies in the coal mining industry were happily avoided at the turn of the century owing to an extensive restructuring process carried out in 1998-2002 which led to the extinguishment of lastingly unprofitable mining capacities (approx. 25 million tonnes per year). Consequently, 23 mines were partially or totally shut down, resulting in approx. 100,000 layoffs. Fat years (high coal prices in 2004-2012) were not used to carry out the necessary modernisation and structural transformation. In this context, the evaluation of owner supervision should be negative, as the largest mining companies are now threatened by bankruptcy. Given the previous phase of the global commodity cycle coming to an end, an essential step, though delayed by nearly a decade, is to develop the national action programme concerning the acquisition and utilisation of mineral resources. It is important to consider the examples of good practices in this respect from other EU countries, like. the Finnish strategy on raw materials. Investment in extraction of minerals and fossil fuels is very capital-intensive and stretched in time. This involves high spatial, ecological, and social costs. Heavy investment in mining generates a long business cycle which may interrupt the market cycle. Economic policy must skillfully address these factors. Therefore, the involvement of public authorities should always be associated with long-term structural objectives, not temporary political and business aims. The policy on raw materials may be successful only if it takes a comprehensive approach which includes many different aspects of raw materials management. Such an approach requires expert knowledge and adequate instruments, e.g. the right formulas for macro- and microeconomic accounts. These accounts must include the costs of phasing down extraction. Raw materials management must be covered by specific and stable regimes of concessions and taxes. Traditional fiscalism strangles this policy while instability puts off serious and genuine investors. The Minister of the Environment, acting in the area of raw materials management and mineral resources protection, helped by the Chief National Geologist, must be assisted by a professional state geological service. One of the important tasks of this service is technical support for all geological units in promoting knowledge of the country’s geological structure, monitoring dynamic geological processes and prospecting for strategic mineral deposits. The supervision is crucial, though, as practice shows, absent,

over the works carried out by various geological stakeholders. The geological service has a particular responsibility as far as the collection and protection of geological information is concerned. The Minister of the Environment should create proper conditions for information on mineral resources to be acquired, used and updated, a well as for deposits and prospective areas of exploration to be protected. It is necessary to educate the public about the role and significance of minerals in everyday life. It is furthermore necessary to communicate the importance of raw materials for the development of an innovative and competitive economy. What is needed is reliable information on the impact of mining on the environment (mining areas occupy only 32,238.2 hectares, an equivalent of 0.1% of Poland’s territory), and on its positive role in regional development (215,000 jobs). In order to change the image of the mining industry and to restore an understanding of its significance, it is necessary for mining companies to implement corporate social responsibility (CSR) programmes and use good practices in terms of post-mining land use. From the viewpoint of economic needs and requirements of environmental protection, a significant development of the recycling of used minerals is highly necessary. The modern economy has to abandon the linear approach to the exploitation of natural resources, which is based on the following scheme: take - make use - throw away. In Europe, an average of 16 tonnes of various types of materials is used per person every year, of which 6 tonnes are landfilled. Representatives of the mining industry and academic circles expect their knowledge to be applied in practice and their proposals to be carefully listened to by Government agencies when they make their strategic plans. What deserves criticism is that Poland, a country rich in valuable mineral raw materials, has no strategy for their management and, in particular, no effective protection of documented but not exploited resources. For about 20 years geological and mining communities have called for relevant measures to be taken. A number of raw materials important for the country’s economy are depleting, and many other are imported despite the existence of documented domestic resources. Their future use is constrained by the existing or prospective zoning, supra-local investment projects taking no account of the existence of mineral deposits and excluding future mining, and excessive environmental norms. It is a matter of pressing concern for the government to draft and adopt “Polish Policy on Raw Materials”. This multiannual programme should carry decisions on budgetary financing of the recognition and protection of the most valuable mineral deposits and a list of critical minerals which are vital for the competitiveness and innovativeness of the Polish economy. Every year, the Minister of the Environment should report to the government on its implementation. This programme should furthermore take into account ways of obtaining and using raw materials from domestic and foreign sources, both primary and secondary (anthropogenic deposits, recycling), including their possible substitution. It is also important to identify and establish a national list of critical raw materials that make for greater competitiveness and innovativeness of the Polish • economy.

9/2015 polish market

Energy

Development is of key importance for KGHM ZANAM Innovation at KGHM ZANAM Under the present market conditions, when the economic situation does not always allow companies to deliver a good financial performance, managers are looking for solutions enabling their companies to retain a high position on the market. The same is the case with KGHM ZANAM SA, a manufacturer of mining machinery and equipment. The company also carries out investment projects associated with smelting and ore enrichment. For several years now KGHM ZANAM has consistently moved forward with investing in research and development across all fields of its activity. As a result, its value has been growing steadily and the customers perceive it as a credible partner. Having experience of nearly 50 years and well-qualified staff, KGHM ZANAM has successively launched on the market innovative prototypes of machines and equipment. The company’s activity in the area of innovative solutions has been appreciated by the juries of many competitions. The company

The UKG-1 cabin and its workers have on many occasions received awards from various organizations closely connected with innovative solutions in the construction of mining machines and equipment. At the end of last year, the jury of the FSNT-NOT Stanisław Staszic Innovation Laurel competition granted awards to companies which had put into practice the best ideas, solutions and inventions. KGHM

ZANAM again won the Laurels for innovative solutions developed by its engineers. At the official award ceremony, Leszek Stojke, President of KGHM ZANAM, proudly collected two Silver Innovation Laurel statuettes for two projects. The first one is the UKG-1 cabin of the Safety-Capsule type, which provides a safe place to take shelter, have a rest and get first aid. The ability to situate it in the area of underground work is especially important if there is the risk of rock falls, rock bursts and similar events. The other statuette was for the project involving the organization of services to mechanize the charging of emulsion explosives. The mechanization increases the safety of explosives transport, and charging safety and efficiency. Additionally, it eliminates the need to use dynamite and minimizes the number of miners in the immediate danger area. President Leszek Stojke says development is of key importance for KGHM ZANAM: “We place special emphasis on adjusting the products and services we offer to the needs of the

Energy customer. Our engineers of the Research, Development and Investment Department constantly seek to achieve a state desirable in business, which means being able to offer a fully functional product whose purchase would be a real benefit for the customer. They also expand the line of our products, which already allow us to successfully compete with global mining sector players.” Listening to the “voice of the customer” is a very important aspect in the company’s development because it provides it with specific information about the changes and improvements expected by the customer. And analysing the increasingly competitive market is no less important. Here, the company works in two ways: it tries to remove gaps in its product range and to exploit the market niches which emerge. Among the recently unveiled products is a loader with a modern system to monitor its work and a vehicle able to comfortably transport 14 people in a mine. One of the many products designed to meet the needs of a specific customer in a specific environment is the LKP-0701 loader with a payload capacity of 5.1 tonnes and a bucket of 3.5 cubic metres. The loader is intended for narrow galleries where it enables smooth work. Its replaceable parts, including a shovel and pallet fork, mean the loader has versatile applications as the equipment can be used in many ways. The ability to unload the excavated material at a height of 1700 mm means that the process of moving it away from the working face or loading onto haul trucks is smooth. The articulated wheeled loaders manufactured by KGHM ZANAM are designed for loading and hauling excavated material from working faces in underground metal ore and mineral mines.

KGHM ZANAM has recently unveiled its latest self-propelled transport vehicle, SWT ZANAM-14 Robust B. Based on the Toyota Land Cruiser HZJ79 design, the 4x4 vehicle can safely transport 14 people. If needed, it may also be used to transport explosives and other materials. The Robust has the features of a typical off-road vehicle. It has a ground clearance of 220 mm and a wading depth of 700 mm. The vehicle’s 128hp naturally aspirated diesel engine, broad front wheel track and spring suspension guarantee its reliability in extreme underground conditions. Success should not be taken for granted. Members of the company’s management board are perfectly aware that it is necessary to keep your finger on the pulse because the only way for you to keep a high position on the market is to constantly develop, expand the product line and offer the customer the most efficient solutions. “Judging by the company’s results and the business prospects which are within our reach, and considering the commitment of our staff, I can confidently say today that we are a company whose activities are certainly noticed in the mining sector and that we are perceived as a major competitor,” adds Leszek Stojke.

Kazakhstan – a new direction in KGHM ZANAM’s expansion Macroeconomic conditions encourage many companies today to seek opportunities for business expansion on foreign markets. This is why several years ago KGHM ZANAM took firm measures and made expansion onto foreign markets, especially in Central Asia, part of its growth strategy. Why Kazakhstan? President Leszek Stojke says: “For at least several

Self-propelled transport vehicle, SWT Zanam-14 Robust B years the Republic of Kazakhstan has been an attractive business partner whose potential for development has been noticed at governmental level. And many Polish firms are successfully developing their operations there. Additionally, Kazakhstan abounds in rich copper, zinc, lead, uranium, silver and gold deposits, and mining companies which conduct activity there are among the largest in the world. We see in Kazakhstan a chance for our products, which excellently meet the needs of mining companies operating on the underground hard rock mining market.” The task of the KGHM ZANAM Board is to continue and intensify activities started a few years ago by Jacek Kardela, who is now VicePresident of KGHM Polska Miedź SA. They involve mainly active meetings, talks and participation in non-governmental organizations supporting business activity in Central Asia. KGHM ZANAM has recently intensified its activities with a view to beginning operations on the Kazakh market. It is worth mentioning participation in the Mining World Central Asia fair, talks in Karaganda about conditions for starting operations in the Sary Arka Special Economic Zone, and participation in a trade mission, during which ways of prospective cooperation have become crystallized. On July 15 this year, an agreement on cooperation in the area of underground hard rock mining operations in Kazakhstan was signed at the KGHM ZANAM head office in the presence of Kazakh Ambassador to Poland Yerik Utembayev, Vice-President of KGHM Polska Miedź SA Jacek Kardela and representatives of the following companies: KGHM ZANAM SA, PeBeKa SA, KGHM Cuprum Sp. z o.o., Bipromet SA, Nitroerg SA, Stomil-Poznań SA, Innovator Sp. z o.o., Ponar Engineering SA, PZL Sędziszów SA, and the Institute of Non-Ferrous Metals. The signatories declared their readiness to work together, exchange knowledge and experience,

LKP-1601B loader

18 polish market

9/2015 polish market

Energy and carry out joint projects in Kazakhstan. The agreement proves excellently that activities aimed at building Polish-Kazakh partnership have been intensified. “And neither do we stay passive when it comes to maintaining good relations with the Republic of Kazakhstan in Poland. Thanks to numerous meetings with Kazakh Ambassador Yerik Utembayev and cooperation with the Minis-

Energy a facility for the pyrometallurgical removal of coal from iron ore concentrates in a roasting process. The facility is to be installed on the premises of the Głogów copper smelter. It will be working with the flash furnace built recently as part of the programme to modernize pyrometallurgical processes (PMP). Under agreement with KGHM Polska Miedź/Huta Miedzi Głogów, KGHM ZANAM is responsi-

The department for services for the metallurgical industry does servicing and repair work for power engineering facilities and equipment, metallurgical facilities, furnaces, and other machines and equipment used in the metallurgical process in the Głogów and Legnica smelters and other parts of the KGHM Polska Miedź group. It also carries out investment projects. Additionally, the department

KGHM ZANAM gets recognition for services to the Polish economy In recognition of services contributing to the development of the Polish economy, KGHM ZANAM has received a Badge of Honour of the Minister of the Economy from Minister Janusz Piechociński. A personal distinction was granted to Leszek Stojke, President of KGHM ZANAM. The Badge of Honour is an honourable distinction and is awarded in recognition of services rendered to support

the Polish economy through professional work, and R&D, organizational and promotional activity. The Badge was given to KGHM ZANAM for its concrete contribution to the development of the economy, including the favourable economic results achieved in implementing new innovative technologies and management methods contributing to economic growth. On behalf of the minister, the Badge was presented by Ilona AntoniszynKlik, Deputy Minister of the Economy. •

LKP 0701 LOADER

Signing an agreement on cooperation in the area of underground hard rock mining operations in Kazakhstan at the KGHM ZANAM head office in the presence of Kazakh Ambassador to Poland Yerik Utembayev, President of KGHM ZANAM, Leszek Stojke and Vice-President of KGHM Polska Miedź SA Jacek Kardela. try of the Economy, we are on the right track to translating exemplary relations at governmental level into business cooperation,” adds President Leszek Stojke. “It will be a good business because each company in this cluster not only has a long history and achievements but first of all a specific business, which is recognizable and marketable, and has a high quality not only in Poland but also abroad. The presence of these 10 organizations means that each firm separately and all of them together, including KGHM, have a chance for a really good business,” says Jacek Kardela, Vice-President of KGHM Polska Miedź SA.

KGHM ZANAM’s services for the metallurgical industry Although associated mainly with the manufacture of mining machinery and equipment, KGHM ZANAM has expanded very rapidly in recent years in the sector of services for the metallurgical industry. Quite recently, a consortium of KGHM ZANAM and AMK Kraków SA has won a contract for the delivery of

20 polish market

ble for the construction of the flash furnace. Piotr Wodziczko, director of the department for services for the metallurgical industry at KGHM ZANAM, comments on this major success of the company: “The winning of the tender is another step in the development of services for the metallurgical industry at KGHM ZANAM. The prepared complete offer, composed of many technical aspects and based on results of negotiations with many foreign partners, is yet another proof of KGHM ZANAM’s competence. The broad range of strategic process lines built as part of PMP will not only reinforce the position of our company on the market for these services at KGHM Polska Miedź, but will also enable us to build such facilities across the world.” Jacek Kardela does not hide his satisfaction either: “KGHM ZANAM has proven again that it is able to meet high requirements as to quality and the deadlines set to prospective contractors. Considering the integrity of the KGHM Polska Miedź group, I am glad that it is our company that wins on the market of suppliers of such services.”

KGHM ZANAM is the largest company in the KGHM Polska Miedź group. It produces mining machines and equipment, and provides services for mines, copper smelters and ore enrichment plants. At present, KGHM ZANAM employs more than 2,500 people, of which almost 500 work for the department for services for the metallurgical industry.

The flash furnace

has the ability to manufacture a wide range of products: from small replacement parts to complete subassemblies necessary to carry out projects in the mining and metallurgical industry. The department’s workers are also involved in the prefabrication and assembly of steel structures, gas pipelines and pipelines for the transmission of other materials, as well as repair of transport and hoisting equipment. Having appropriate experience and capabilities, the department for services for the metallurgical industry conducts, supervises and coordinates any kind of investment projects in the area of industrial building. The numerous qualifications held by KGHM ZANAM specialists, long experience and wide range of modern machinery help the company meet deadlines and provide services of very high quality. “For several years KGHM ZANAM has been involved in the operation of the Głogów copper smelter. Thanks to our well-qualified staff and specialists having expertise sought after when conducting projects in the metallurgical industry, we are able to successfully submit offers to carry out even the most complex tasks,” Leszek Stojke says.

KGHM Zanam, has received a Badge of Honour of the Minister of the Economy from Minister Janusz Piechociński. A personal distinction was granted to Leszek Stojke, President of KGHM ZANAM.

Products: • Self-Propelled Mining Machines /LHDs, haul trucks, blasting rigs, drilling rigs, bolting rigs, transportation trucks and auxiliary trucks/ • Crushers /surface, underground, stationary and mobile/ • Belt conveyors systems • Mining bolts /resin, expansion shell, expansion sleeve/ • Castings /cast-steel and cast- iron/

Services: • Machines and equipment servicing • Investments • Repairs, overhauls and maintenance • Transport and forwarding

The Badge of Honour of the Minister of the Economy to Leszek Stojke, president of KGHM ZANAM was presented by Ilona Antoniszyn-Klik, Deputy Minister of the Economy. 9/2015 polish market

Energy

Mining machinery

the fastest growing industry

In the past, mining was not associated with advanced technologies. Today, it is quite the contrary. Katowice’s International Fair of Mining, Power Industry and Metallurgy is intended to promote innovative solutions. How do you assess technological advances taking place in the industry? As the President of the Supervisory Board of Polska Technika Górnicza SA - the organiser of the fair you mentioned - I can clearly state that each edition confirms technological and price competitiveness of Polish manufacturers and exporters of mining machinery and equipment. Due to its versatility: from designing to fitting out the entire mining complexes, the products and services presented in Katowice define and the development directions in mining favour raising productivity and security regardless of the existing economic situation in the mining industry. Immediately after the fair, many of the machines displayed go directly to the mines. In a broader perspective, I am sorry to repeat the common saying: “You do not even know what you have.” The fact is that the current problems of the mining sector obscure a number of positive changes that have taken pm

place in the production of machinery and mining equipment. It is now one of the most modern sectors of the Polish economy. The credit for this goes mainly to private investors, closely cooperating with Polish scientists. Mining machinery and equipment is also one of the fastest growing industries. Modern and intelligent systems of longwall mining and haulage, transport of people and occupational safety monitoring have reached global standards. It is fair to say that the only barrier to further development is not knowledge, but investment capital. I think that the biggest asset of the Polish mining industry that can help it get out of trouble is mining techniques, technologies and services (of course as long as decision-makers have enough imagination to introduce these technologies on a wider scale in mines). This is an investment, not aid measures for the industry. pm

All indications are that the International Fair of Mining, Power Industry and Metallurgy Katowice 2015 will be the largest in its history. What makes so many exhibitors want to attend? What measurable results can it bring them?

Indeed, this year’s jubilee International Fair of Mining, Power Industry and Metallurgy Katowice 2015, which takes place both in the Spodek arena and in the new exhibition hall of the International Congress Centre, is the biggest in its 30-year history. Participants represent more than 450 companies from 20 countries, including Germany, the Czech Republic, Slovakia, Great Britain, China, France, Belgium, Netherlands, Greece, Ukraine, Slovenia, Russia, Austria, South Africa, India, Belarus, Serbia, Indonesia and Australia. The fair shows no sign of crisis, on the contrary, excessive abundance. I do not remember the last time when so many companies were moved on a waiting list. “Katowice 2015” has become not only the largest, but also the most prestigious show of mining techniques and technologies in Europe. The exhibition in Katowice is the essence international and Polish of mining thought, which sets and shapes the development directions for the mining industry and favours productivity and safety progress. The fair is attended by global companies, for which it is a long-term investment. •

Henryk Stabla, President of Carboautomatyka and President of the Supervisory Board of Polska Technika Górnicza SA, talks to “Polish Market”.

Is Carboautomatyka, a producer of mining solutions, impacted by anxiety prevailing in the sector? Is it felt in your business? As a person professionally associated with the mining industry for over 40 years, I am certainly concerned about its future and the future of the company. However, as a manager, I have to take things rationally, not emotionally. What is happening in the Polish mining industry cannot be seen in isolation from the global economic processes. It is a system of communicating vessels. The underlying cause of the current problems of the industry is certainly a significant drop in coal prices worldwide. The other causes are reduced coal sales due to overproduction and limited economic growth in China and most of the countries of East Asia, Indonesia and Australia. However, not everything can be explained by objective problems. Problems of the Polish mining industry have been accruing for years. From after year, it was losing its competitiveness, mainly because of the inefficient use of machinery and equipment, high labour costs, low productivity and exploitation of ineffective longwall goafs. pm

22 polish market

In order to save the situation, production and expenditure on machinery and equipment was drastically reduced. However, these are ad hoc measures able to improve the situation in the industry for several months, but obviously impinging on the condition and the future of mining equipment companies, including Carboautomatyka. In addition to solutions for the mining industry, Carboautomatyka works in other industries as well. Could you tell us a bit more about what you offer? In Carboautomatyka, we did not sit idly by waiting for what the future holds. We realised early enough that the problems of mining equipment companies have their source not only in the current situation of the industry, but also in the fact that the market was getting too small compared to the potential enjoyed by manufacturers of machinery and equipment. Carboautomatyka has been operating for over 40 years and its products - relating to control, automation and monitoring - are used in all Polish mines. Thanks to restructuring and intensive development we were able to engage pm

in new projects, enabling us to venture into new, non-mining markets. We are active in power and heat generation, water and sewage management, the coke sector, as well as public buildings, like for example congress centres. We successfully operate control, monitoring and safety systems in road tunnels. Like other mining equipment companies, we strive to locate at least 30% of our production on foreign markets. We supply services and products, among others, to Russia, Argentina, Bosnia and Herzegovina. We are working to secure contacts in China, Romania and Nigeria. The jewel in the crown of our export expansion is Vietnam. We are leading the country’s market for methane removal and methane-metric systems, with an approx. 90% of the market. At the same time, we are expanding to include products of other companies belonging to Carboautomatyka’s group, among others, engine manufacturing plants Damel and Mifamy. Expansion into foreign markets is indeed a costly and lengthy process, but it is the only prospect for revenue diversification for mining equipment companies.

UL.ELEKTORALNA 13 000137 WARSZAWA TEL.(22) 620038834, (22) 620031142 EEMAIL: INFO@POLISHMARKET.COM.PL WWW.POLISHMARKET.COM.PL

9/2015 polish market 23 POLISH MARKET YOUR BUSSINESS COMPASS.

Energy

Innovation

Central Mining Institute (GIG)

many years of development and challenges

his year marks 90 years of activity of the Central Mining Institute. Its origins date back to the creation in 1925 of the Experimental Mine “Barbara”, which has been since 1945 a major organisational unit of the Institute. “From the very beginning, the Institute’s basic and most important area of activity has been occupational safety in industry, especially in coal mines,” stresses Prof. Józef Dubiński, General Director of GIG. Currently the test-bed KD “Barbara” is the only one in Europe, where you can conduct gas and dust explosion testing in the natural scale and test machinery and equipment designed for use in explosive atmospheres in real conditions, including for the needs of underground mining. Currently, the basic area of interdisciplinary research conducted by specialised departments of the Institute is sustainable development of mining, with attention given to production and its efficiency, as well as to the safety of mining crews and to the environment in mining areas. Only such mining stands the chances of further functioning in the modern world and social acceptance. GIG is one of the leading and few research institutes in Europe able to comprehensively solve complex problems in this regard. It has the necessary know-how backed by years of experience and highly-skilled research and engineering teams, as well as modern laboratories and test-beds. The undeniable successes of the Institute in this area include solutions in the field of combating natural and technical hazards occurring in coal mines, forecasting the various impacts of mining on surface and its infrastructure, including their minimisation, as well as technical and organisational solutions lowering production costs. The Clean Coal Technologies Centre set up in 2013 conducts research aimed to make coal more environmentally friendly as a fuel and thus to allow better use of Poland’s vast coal resources. “Technical and technological experience acquired in the field of mining can be successfully transferred to other spheres of the economy. Therefore, the Institute provides services to companies from virtually all industries,” says Prof. Dubiński. The newly established

24 polish market

40 LAT DOŚWIADCZENIA W BRANŻY MATERIAŁÓW OGNIOTRWAŁYCH

Environmental Engineering Centre conducts comprehensive R&D and renders services in the field of environmental engineering (waste, water, air protection) and the green economy, thus the GIG’s customers and partners are offered a full range of environmental services. New technologies, products and solutions are developed here, limiting the ecological footprint, and facilitating the conservation of resources and their use in accordance with the principles of sustainable development. The research conducted by GIG covers virtually all of the factors affecting the quality of the environment: from a detailed analysis of the components of the environment, to testing of air, soil, water, wastewater and sludge, from monitoring of degraded brownfield sites, to testing of agricultural products and foodstuffs. A major achievement in recent years was the opening in 2012 of the Maria Goeppert Mayer Silesian Centre for Environmental Radiometry, the most modern laboratory of its kind in Poland. It conducts research into natural radioactivity and radioactive contamination in the workplace, residential areas and natural environment. Since 2004, the GIG’s Certification Unit has been an EU notified body, which means it is authorised to carry out the conformity assessment procedure, or the CE marking, based on standards defined by three important Directives: 94/9/EC (ATEX), 98/37/EC (machines),

93/15/EC (explosives for civilian use). Another success achieved by the Institute in recent years was obtaining the IECEx accreditation (International Electrotechnical Commission System for Certification to Standards Relating to Equipment for Use in Explosive Atmospheres). As a result, certificates issued by GIG according to the IECEx scheme are accepted in many countries around the world, without the need for additional assessment, including - surprisingly - even by the United States Coast Guard. Thanks to the above-mentioned powers awarded to GIG, Polish producers will find it easier to export their products to the United States and other countries of the world, which is especially important for explosionproof equipment. Every year GIG’s research teams perform an average of more than 100 statutory tasks, about 70 research projects of various types, as well as nearly 5,000 research activities and services commissioned by Polish and foreign customers. Moreover, the Institute implements every year about 30 research and cooperation projects co-financed under the EU Framework Programmes and the Research Fund for Coal and Steel. New, innovative research problems that emerge and are tackled as part of these projects are a response to the challenges of today’s Polish and Europe• an economy.

9/2015 polish market

Energy

Energy efficiency

Innovation as a chance for the development of the steel sector in Poland

Stefan Dzienniak, President of the Polish Steel Association (HIPH)

he restructuring of the Polish steel industry began in the 1990s and was aimed at adjusting it to the requirements of the European Union market. At the start of the transition period in Poland, the sector faced the need to restructure 26 steel production plants that were in operation at the time. They had a combined annual production capacity of around 20 million tonnes of crude steel, an amount significantly exceeding the needs of the domestic market. As the governments and remedial programmes were changing, the owner’s supervision was poor and there was an investment chaos, the steel industry entered the 21st century with a huge debt, a lack of financial liquidity and the direct threat that the whole sector will be liquidated. At its last meeting in the 1997-2001 term, the Polish parliament adopted a law on the consolidation and privatization of the Polish steel industry. This marked a turning point for the sector. Many obsolete and inefficient facilities and technologies, like SiemensMartin open-hearth furnaces, and the classical process of steel casting and slab and billet rolling, were closed down and abandoned.

ownership structure At present, Polish steelworks have an annual production capacity of 12.6 million tonnes. Steel is produced using the

26 polish market

integrated BOF (basic oxygen furnace) process and the EAF (electric arc furnace) process. Around 8.5 million tonnes of steel – 59% in the BOF process and 41% in the EAF process - were produced in Poland in 2014.

Investment To be able to catch up with the best European and world standards, the Polish steel industry had to invest in new technologies and modernization projects. In 2004-2014, around PLN11 billion was spent in Poland on modernizing the industry. The biggest investment projects carried out in that decade included the launch of a strip rolling mill in Kraków, an organic sheet coating line in Świętochłowice, a continuous slab casting line in Dąbrowa Górnicza, a line for the production of long rails (120 m) in Dąbrowa Górnicza, a bar rolling plant in Warszawa, two coke ovens in Zdzieszowice, rolling mills for hollow sections at Huta Łabędy and Huta Pokój, an electric arc furnace for the production of liquid steel at Celsa Huta Ostrowiec, and the modernization of the wire rod rolling mill in Sosnowiec and the liquid steel production line at CMC Zawiercie. A modern distribution chain for steel products was also developed.

The restructuring process and investment in the Polish steel industry greatly contributed to an improvement in energy efficiency. The consumption indicator of energy products, including coal, coke, natural gas, coke-oven gas and blastfurnace gas, decreased from 0,33 tonnes of oil equivalent per tonnes of crude steel (toe/t) in 2000 to 0,21 toe/t or by 36%. Compared to the EU average of 0.30 toe/t, our performance is much better. The same is the case with the percentage drop in consumption – the EU average for this period is 14%. The rise in efficiency was partly due to changes in the steel production structure, with the share of the secondary process in electric arc furnaces growing in the first decade of the 21st century by 15% to around 50% of Poland’s total output of steel. The consumption of energy per tonne of crude steel was reduced for each of the steelmaking processes – the primary process in a blast furnace and the secondary process. The first one consumes several times more energy.

Carbon

dioxide emission performance After completing the restructuring process, all steel production plants received all the required environmental permits. In connection with Poland’s entry to the European Union and stricter climate change regulations and stringent emission limits, the Polish steel sector had to adjust to the new requirements. This involved huge investment outlays. The Polish steel sector is one of the industries considered to be exposed to the risk of carbon leakage. This means it is eligible for a higher share of emission allowances, which are allocated on the basis of product-specific benchmarks. A benchmark is set as the average greenhouse gas emission performance of the 10% best performing installations in the EU producing the product. The Polish steel industry should receive for free 100% of the allowances it needs. Steelmaking is an energy-intensive industry and, consequently, is responsible for a large amount of carbon dioxide emissions. At present, the Polish steel sector emits over 8 million tonnes of carbon dioxide a year. However, carbon dioxide emissions per tonne of crude steel produced are relatively low in Poland – around 1 tonne of carbon dioxide per tonne of steel. The index for the global steel industry is as much as 50% higher. The gentle increase in carbon dioxide emissions in the past two years was due to a slight rise in the output of converter steel, which is more energy intensive, and low capacity utilization.

Feasibility

study for the Innostal sectoral programme By the end of 2007, the Polish steel sector completed the restructuring process, which resulted in closing down obsolete and inefficient plants and production processes

harmful to the natural environment. Despite the huge costs connected with the technological modernization and reorganization, with the number of jobs cut from 150,000 in 1990 to 23,000 in 2014, we feel a great threat to the functioning of the sector from the regulatory framework of the environment in which we function. It is necessary to undertake measures to enhance the competitiveness of the Polish steel sector and its innovation performance so as to ensure that the sector is really able to compete with more innovative countries (Western European countries, like for example Germany) or countries with significantly lower labour costs and much less stringent environmental requirements (Asian and Eastern European countries). To this end, it is necessary to ensure adequate support for research and development activity in the sector, including the development of new products, technologies, and solutions in the area of environmental protection, energy efficiency and recycling. The activities planned have been aggregated in six research areas. The R&D projects, carried out thanks to support available under the Innostal sectoral programme, will contribute to significantly enhancing the innovation performance and competitiveness of the Polish steel sector by 2025. We also hope that the activity will strengthen good practices in collaboration between business and the scientific research communities. •

9/2015 polish market

Energy

The energy industry bears responsibility for the country’s economic development and the future of citizens Henryk Kaliś, President of the Forum of Electricity and Gas Consumers (FOEEiG), FORUMCO2, Chamber of Industrial Energetics and Energy Consumers (IEPiOE); Plenipotentiary of the Board for Electricity Management, ZGH Bolesław SA, talks to “Polish Market”. Do you think the transition from fossil fuels to renewable energy sources will be rapid? Apart from biomass, there are no renewables that would be the source of unsubsidised energy in Poland yet. And I think the problem is not only the lack of a renewable technology capable of commercial competing with the traditional ways of power generation, but also renewables themselves, namely their unpredictability and the fact that there is no one to take responsibility for their intermittency. It is probably fair to say that billions of zlotys spent so far on renewable energy in Poland have not yielded concrete benefits either to individual customers or to production plants. The huge costs of renewable energy sources, the huge money transferred out of the industrial sector often at the expense of its development, losses suffered by the traditional generation sector have not created a viable alternative to the traditional sources or led to an increase in budget revenues justifying the devastating impact on the Polish industry. It should be said that the cost of renewable energy is more than subsidies in the form of “green” certificates. It is also generously subsidised past investments, balancing costs, and the rising costs of operation of the National Power System. Fortunately, the Act on renewable energy sources has interrupted a period of carefree, unconditional ideological spree. But the costs have already been incurred, and it is high time to set operational frames for renewables. Preferential treatment has to mean responsibility for the power system, economic development and the future of Polish citizens who have the right to stable employment and a dignified life. If there is no technological breakthrough in energy storage in the near future, we will need to seek balance between what is the only advantage of renewables, that is primary fuels savings, the requirements of the national power system and the need to keep energy costs low to encourage industrial production. This means that the predictable traditional sources will be pm

28 polish market

the basis of power generation and energy security for many years to come. In December, Paris will host the United Nations Climate Change Conference known as COP 21, whose major task is to negotiate a new agreement tackling negative effects of climate change to replace the ineffective Kyoto Protocol. Is any consensus to be expected? The Kyoto Protocol was not inefficient, it perfectly fulfilled its role. The problem is that it never received universal acceptance, and countries in different parts of the world had their own idea of climate protection, according to their specific conditions and opportunities. For example, the United States showed that climate protection and the resulting development of renewable energy sources do not have to follow a global scenario. Big conferences, global agreements and the media uproar they cause serve politicians rather than the climate. The issue of climate protection has become in recent years more an ideology than a vision of economic development based on reasonable grounds and scientific assumptions, which is why it is hard to reach a global agreement and there are so many problems with the implementation of its provisions by individual countries commitments. Regardless of the outcomes of the COP 21 in Paris, we will continue to protect the climate at the level of national economies and industries, which have much more real power here than political circles. We just need to find a way to replace environmental protection decrees with pragmatic mechanisms. pm

The aim of FORUMCO2 and the Forum of Electricity and Gas Consumers (FOEEiG) is to maintain the competitiveness of Polish industry and work out the rules for the electricity, gas and heat markets. How do you assess such initiatives as E-Kumulator, a programme of the National Fund for

Environmental Protection and Water Management (NFOŚiGW), which aims to help businesses towards a low-carbon and resource-efficient economy? Is it a “drop in the ocean” or a good omen for the future? E-Kumulator, which stands for “Ecological Accumulator for Industry”, is the third part of the priority programme of NFOŚiGW “Supporting entrepreneurs in the area of low-carbon and resource-efficient economy.” Its goals are praiseworthy, and generally there are no doubts as to whether it makes sense to finance them: reducing consumption of primary resources per unit of production, modernisation of equipment and industrial installations, reducing emissions of pollutants and waste-toenergy generation. These are useful and reasonable actions. In practice, reducing the use of raw materials as described in the application for funding will be difficult to achieve in technologically advanced and optimised processes where real losses are minimal, while it will be possible for simple technologies and operations, especially where technologies used are far from optimal. As it is well known, Polish industry has undergone a thorough restructuring since 1990, and such simple technology resources are now few. When it comes to the reduction of harmful emissions into the atmosphere, a weak point of the programme is that only low-capacity combustion sources qualify for the programme. As regards waste-to-energy, in addition to investment support, it often requires also operational support. Moreover, 10% of eligible costs is allowed at the stage of implementation, which is not much taking into account technological issues – the eligible costs of each innovative action are likely to account for up to 30-40% of the implementation costs. In the opinion of our customers, the finance conditions are market standard. Of course, the great advantage of the programme is a possi• bility to redeem 15% of the loan.

Managing secure system operation in emergency conditions

SE, the Polish Transmission System Operator (TSO), continuously monitor the state of the Polish power system. Simultaneously the security strategies are being developed, matched to the system conditions and available resources. There are several levels of security assurance mechanisms, which are activated depending on the situation and severity of emergency. In August 2015, due to the long-lasting heatwave and unfavorable hydrological situation in Poland, the available reserves of generation capacity were reduced below the minimum required level, what endangered security of power supply. The main reasons were limitations in generation capacities due to long lasting and extreme weather conditions causing difficulties in cooling process of power plants with an open cooling circuit, partial capacity losses of units in run as well as beyond average unplanned outages of generation units. It should be stressed that this was an emergency situation, threatening the security of the whole power system. Lack of actions from the side of TSO would have resulted in a major power failure and in a consequence – in a blackout of part or whole of the country. The consequences would be disastrous for the entire Polish economy. For the above reasons, it was decided to implement plan of limitations of power supply for industrial consumers by announcing degrees of limitations in accordance with the applicable legal regulations1. Limitations of power supply applies to large industrial consumers with contracted capacity above 300 kW (if not legally excluded from limitations). The restrictions did not affect the vulnerable/sensitive customers (e.g. hospitals, schools, strategic facilities) and households. TSO, before implementation of limitations of power supply, had conducted thorough analysis and had used all measures available at its hand, including among others: • repairs and modernizations of the transmission network were suspended, • all available generating units (directly dispatched by TSO) were activated 1 In accordance with the plan of limitations of power supply for industrial consumers, developed by the TSO and agreed with the President of the Energy Regulatory Office.

Energy

Henryk Majchrzak, President of the PSE S.A. Management Board

• all trials and measurements on generating units, likely to result in power losses, were suspended • issuing permissions for outages of generation units to current repairs were suspended • Demand Side Response (DSR) was activated In addition, in cooperation with transmission system operators from the neighbouring countries, PSE ordered, to maximum possible extent, the supply of emergency power from neighboring TSOs. Due to significant overload of the Polish-German interconnection caused by unscheduled power flows (loop flows and transit flows) resulting from transactions concluded outside of Poland, delivery of supportive power was only possible from Czech Republic and Slovakia, although in the limited amount of approx. 400 MW that was insufficient to cover the projected generation shortage. Import from the German power system was not possible, as simultaneously with taking the abovementioned power balance counter measures, large scale multilateral redispatching was implemented between Germany, Austria and Switzerland in order to keep the power flows on German – Polish border at secure level. The steps taken by PSE enabled to manage the power system conditions and secure its secure operation. Thus, drastic emergency load interruptions were avoided and continuity of electricity supply was maintained for households, small firms and strategic facilities. PSE has been working actively for years to ensure demand cover in Polish power system. However this is not the only entity having the impact on long-term assurance of energy security of the country. PSE has no direct influence on decisions concerning building new generation capacities. Decision on strategic reserves mechanism has to be made also at the national level, taking into account the EU regulations. Despite this, the PSE is constantly working on increasing available reserves by optimizing their efficiency and reliability, as well as costs reflected in tariff for customers. The actions taken by PSE to improve the security of the Polish power system operation, including to provide the required surplus of generating capacity available to the TSO, can be divided into:

• basic measures, • current operational measures, • additional activities of an innovative character, • activities for increasing transmission capacity of cross-border interconnectors. Among the basic measures - the acquisition by the TSO of 830 MW in the cold intervention reserve service for a period of two years starting from 2016 and with possibility to prolong for another two years, should be pointed out. The service (through derogation mechanism) is based on utilization of potential of generating units that were planned to be withdrawn from service before 2016, due to their inability to meet strict emission standards. While performing the analyses PSE estimates, among others, the reasonability of the purchase and the volume of services, including mentioned cold intervention reserve, necessary to ensure stable operation of the Polish power system. If the results of these analyses show in the future the need and the possibility to purchase an additional volume of services - we will undertake appropriate actions. Moreover, in order to acquire the access to the fast intervention reserve, PSE has implemented the Demand Side Response (DSR) i.e. load reduction at the request of the TSO. As a result of concluded agreements, at PSE disposal is ca. 200 MW of reduction potential. PSE is planning to continue acquisition of additional power volumes under the DSR service. Another also important tool for improving security of supply was the implementation of the modified rules of estimation and accounting of operational power reserve within ancillary services market. Furthermore, PSE is intensively developing cross-border interconnectors. By the end of this year, it is planned to commission the interconnector with Lithuania enabling to import 500 MW, and the installation of phase shifting transformers in substation Mikułowa. Development of the transmission network within the country is also under way, which will result, among others, in increasing transmission capacity between Poland and Germany. These investments will give the possibility to increase transmission capacity at synchronous profile of the Polish power system and to achieve approx. 2000 MW in import and 3000 MW in export. • 9/2015 polish market

Energy

TGE will PARTICIPATE IN CREATION OF A REGIONAL gas hub Ireneusz Łazor, CEO of Polish Power Exchange (TGE) talks to “Polish Market”

The Polish Power Exchange (TGE) is changing and evolving, not only in business terms - from 1 September it will unveil itself in new colours and under the WSE banner. Is this a preview of even greater changes? TGE’s colours have been replaced with black and green to reflect conventional and renewable energy sources, combining tradition and modernity. The logo change is part of the integration strategy of the WSE Group companies, intended as a visual sign of the common objectives of the Group. New colours, in combination with a highly recognised WSE brand, represent the community of interests of TGE and WSE market players. 2015 is a special year for TGE - we are celebrating our 15th anniversary. A change in visual identification at this very point symbolises starting of a new stage of development. We would like to get across a consistent message to our customers and business partners saying who we are and what we offer. pm

30 polish market

New challenges lie ahead, such as launching, in a few weeks, the Financial Instruments Market, integrating the Polish power market into the European structures and acting as the NEMO (Nominated Electricity Market Operator) in Europe. A major project for TGE is to participate in creation of a regional gas hub. We are also testing the ground for other projects. The upcoming challenges open up possibilities of even greater growth, but we do realise that we are there to serve the market and it is thanks to close cooperation with the power exchange players that we can contribute to building value for the whole economy. Effects of this interaction can be seen both on the power market and on the gas market. It is a proof for us that we have chosen the right direction. pm

In a few weeks, you will launch the Financial Instruments Market. What is the importance of this segment of your activity?

The launch of the Financial Instruments Market is part of a development strategy, not only that of TGE, but of the whole of the WSE Group. So we are going to put in place a business strategy that we expect to produce certain profits. The financial market project is not a one-stage run, but quite a long tour. The success of this market will depend on our effectiveness, but also on the scale of interest from financial institutions and the quality of the market maker. I am confident that we can meet these challenges. Our ambition is to have sales on the financial market exceeding 60% of the domestic demand, i.e. around 80 TWh by 2020. It should be made clear at this point that the financial market will naturally take over some sales from the commodities forward market. Futures are simply easier and more flexible to manage - traders can hedge the purchase price or selling price without taking on rigid volumes. Interestingly, after the launch of the financial market, total sales in the commodity

and financial markets will be greater than sales achievable on the commodity market without launching FIM. Additionally, these instruments, by interacting with the spot market (DAM and IDM), will also have a positive impact on its liquidity. The Financial Instruments Market, as well as instruments we are developing, are intended to serve the market and thus to promote the development of independent power traders. In general, it can be concluded that they will indirectly influence the level of safety on energy markets by sending relevant price signals. The financial market is a response to the volatility of energy prices, so in fact to changes in the energy mix. Futures enable traders to get the expected prices when they want. A futures contract secures a purchasing price or a selling price in the future. Following consultations with 80 stakeholders, we decided that the underlying instrument for futures will be the newly created index - TGe24. It is defined as the arithmetic average of the prices of transactions concluded during the first fixing at particular hours throughout the day for the same delivery date, i.e. the price of hourly products in the single price system during the first fixing held on the Day-Ahead Market (DAM). Financial instruments based on fuel prices are the tools whose liquidity depends primarily on the activity of the so-called hedgers the existing traders who have already secured energy prices through forward contracts with physical delivery. We must, therefore, first build liquidity in collaboration with our members. As a result of consultation with them, a set of products was defined that will be marketed shortly after launching the market - we will offer two-year or shorter contract listings that will of course be extended in the future. Does Poland have a chance to become a European gas trade hub? In Europe there is room for several gas trade hubs. One of them can be Poland, given its geographical location and investment projects already under way: the construction of NorthSouth corridor, or the construction of the LNG terminal in Świnoujście. With the new infrastructure, Poland will be for other CEE countries a potential source of large gas volumes from many directions. An significant role in ensuring the EU energy security can be played by regional gas hubs, which will allow affordable and safe gas trading, with the possibility of balancing and storage, as well as flexible cooperation between gas markets in Central Europe and the dynamically developing global LNG market. Poland, being one of the trade hubs, would benefit on multiples levels. Undoubtedly, our pm

economy would feel most of the the economic benefits consisting in reducing the wholesale gas price, as a result of the integration of the CEE markets and the Baltic States markets. The development of the gas market in Poland means also increasing its importance in Europe thanks to its integration with the neighbouring markets, i.e. Germany, the Czech Republic, Slovakia, and ultimately with the Baltic States and Ukraine. What can be the role of the exchange market in the process of building Poland’s gas position? We have a unique opportunity to create a fuel hub, which will play an important role in the country, while also integrating the CEE region. A part of - it a kind of a tool - will the exchange market. This is also a consequence of the directions set by the EU. The role of exchanges as organised markets is growing, and their importance stems directly from EU regulations. The Markets in Financial Instruments Directive (MiFID II), whose provisions are to be implemented in EU member states by July 2016, promotes trading on organised platforms, as safer and more transparent. The advantage of the exchange market over other forms of trading is that it guarantees equal and transparent access to information on transactions, something that OTC contracts fail to provide. In terms of the REMIT regulation, OTC contracts are purely bilateral transactions concluded beyond any platform. You could say that the structure of the Polish gas market and the liberalisation direction taken are consistent with EU requirements. Of course, with such products as gas, that have to be available 24/7, it is important to use trading platforms, especially for short-term contracts and balancing. You need to have a good understanding of this market and enable its participants flexible functioning. We do not lag and that is why we want to complement our gas offer on the platform run by a company that belongs to InfoEngine – a company owned by TGE. Its guiding principles have been developed by the members of the Gas Market Committee under the Management Board of TGE. To sum up - given the idea of building the energy union, dynamic changes on the LNG market and plans to expand the energy infrastructure, Poland can only gain by continuing the projects already under way. pm

You mentioned the common European energy market. Are there going to be changes here, too? A few weeks ago TGE acquired the status of a member of the Multi-Regional Coupling. MRC is a pan-European project of integration of European spot power markets covering pm

the area where the demand for electricity is approx. 2,800 TWh, i.e. 85% of Europe’s demand. Daily sales are approx. 4 TWh worth approx. EUR 150 million. Participation in the PCR project affords TGE an opportunity to fully and actively contribute to regional projects and implement EU electricity market mechanisms in cooperation with PSE and exchange markets in Western Europe. After the entry into force of the so-called Network Code - the CACM regulation - on 14 August, we operate on a competitive basis with other exchange markets. Our goal is to be established by the Energy Regulatory Office (ERO) as a national Nominee Electricity Market Operator NEMO. In addition, TGE, together with PSE, LitGrid and Nord Pool Spot are working on launching Day-Ahead Market on the power link with Lithuania, which is scheduled to be operational in January 2016. We are also involved in the construction of the market based on the PCR model in Central and Eastern Europe, expected to be launched in late 2017 or early 2018. You can get the impression that TGE is made of several exchanges. Is such a strategy justifiable? We offer the market players many trading opportunities exploiting synergies within the WSE Group that is what distinguishes us and thus strengthens our position in the region. • pm

About TGE • The institution of public trust, ensuring transparent procedures for transactions and shaping commodity prices • The only licenced commodity exchange in Poland • The source of transparent and timely information on the energy market • The most dynamically developing commodity exchange in the CEE region - a member of EUROPEX, APEx and AFM • It has a strong and stable owner - Warsaw Stock Exchange • The only institution in Poland to aggregate the entire energy market offer (electricity, natural gas, certificates of origin, guarantees of origin, CO2 emission allowances) • The company of the WSE Capital Group responsible for the implementation of the Financial Instruments Market • Member of the European Multi-Regional Coupling (MRC) • Listed on ACER’s ranking of platforms reporting transaction data in accordance with the requirements of the REMIT regulation

9/2015 polish market

Energy

One gram of uranium is equivalent to 1.5-2 tonnes of coal Prof. Andrzej G. Chmielewski, Director of the Institute of Nuclear Chemistry and Technology, talks to Marcin Haber about the activities of the Institute, nuclear energy development and problems inherent in coal-based generation.

This year marks the 60th anniversary of Polish nuclear science. Given that the field has been known for many decades, is there anything new to come up with here? There are two aspects to consider: the general condition of nuclear science and technology on the one hand, and Poland’s condition as far as nuclear science and technology is concerned on the other. Nuclear energy has seen enormous scientific and technological progress worldwide. Chernobyl (1986) and Fukushima (2011) meant that certain issues, previously not thoroughly looked into, were brought to light. It is like with a car. When it was invented, it had four wheels and could ride. Today we have airbags, GPS and various safety systems. The same progress is being made in nuclear energy, especially in view of the two accidents mentioned above. Today’s nuclear power plants are assumed to be so safe that, if a disaster happens similar to the aforementioned, the evacuation perimetre - in the worst-case scenario - need be no more than 800 metres. Lessons learned at Three Mile Island, USA, (1979) proved it possible. Man sometimes fails but physics never does. Therefore, passive safety systems are designed to work even in case of power outage or pm

32 polish market

interruption in cooling water supply to the reactor core. In case of emergency, the reactor is flooded with cooling water flowing by gravity from storage tanks... …core catchers. Precisely. Such safety systems are used, and in the event of an accident, contamination will not spread beyond the area controlled and evacuation will not be required beyond 800 meters from the reactor. Another issue is the supply of fuel used to produce energy in nuclear power plants. It is possible to develop fuel for nuclear reactors based on thorium, instead the most commonly used element, uranium. The Indians have already developed a thorium-fuelled reactor – while absorbing neutrons, thorium converts (breeds) into uranium 233; further reactions are like in a standard uranium-fuelled reactor. So there we have another, additional energy resource. It is especially important that fossil fuels are depleting. The greatest hopes are placed on reactors known as generation IV or “breeder reactors”, which are driven by uranium 235 or plutonium. The product of the fuel cycle is uranium 238 pm

- which is not fissile - and can be bred into plutonium and reused. In this process more fuel is produced than consumed. One year of operating a 1,000 MW nuclear reactor requires 20-25 tonnes of fuel, that is uranium enriched by approx. 4% with uranium 235, while a coal-fired power plant with the same capacity consumes 3 million tonnes of coal annually. You are talking about solutions used in the world. What about those you are working on in the Institute of Nuclear Chemistry and Technology? Issues concerning element separation techniques and that is something we are good at. The first international workshop as part of the SACSESS (Safety of ACtinide Separation ProceSSes) European cooperation project took place in Poland, which was possible thanks to our strong involvement. The event was attended by nearly 120 participants from 15 countries and 45 research institutes, making it one of the largest international conferences devoted to the processes of isolation and separation of actinides. I believe that is the right thing to do in all fields of the economy, to draw upon cooperation with other countries, because it is a very efficient way, driving domestic technological progress. We also deal with waste processing. The Radioactive Waste Management Department in Świerk operates a plant concentrating liquid radioactive waste, which is built based on our own patent in the 1990s. We were among the pioneers of this technique. Today, there is virtually no installation processing liquid radioactive waste which would not use the membrane techniques we have developed. As regards the new generation IV, which includes the said breeder reactors, we are working on the application of the sol-gel method for solidification of radioactive waste, allowing its safe storage. It is used for obtaining ceramic materials by methods other than high temperature sintering. The process involves the conversion of a solution into gel until the formation of solid, which is then annealed but at a much lower temperatures than with conventional technologies. Lower temperatures allow to eliminate evaporation of harmful isotopes into the atmosphere. The experience gained in radiochemistry is used in the synthesis of radiopharmaceuticals, which modern medicine cannot do without. These include preparations used in the treatment of brain cancer, liver cancer, or in the diagnosis of diabetic foot. pm

It is said that coal resources are still enough to be our primary energy fuel. But what about CO2 emissions?

This is not exclusively about CO2. I do not want to be seen as an opponent of coal. I know that until 2050 coal will be - in Poland and in the world - the most important source of energy. But acid rain is a fact and CO2 emissions could adversely affect the climate. There are also issues that necessitate immediate action. As a result of the emission of PM 2.5 (particles smaller than 2.5 micrometers in diameter) more people are dying in Poland than are killed in car accidents. The dust penetrates into the lungs, these particles are even smaller than bacteria, and thereby gets to physiological fluids. The most vulnerable are children and the elderly. These are data of the European Environment Agency (EEA), so certainly not the nuclear lobby, but a respected EU agency. When I was asked, together with Prof. Strupczewski, by the former President to attend the meeting of the National Security Council after the meltdown in Fukushima, I showed maps published by the EEA, featuring black spots on the territory of Poland. I said that if we introduced the norms and standards applied in the region of Fukushima (in many cases unnecessarily), then these areas of our country should also be evacuated. The President was very surprised. Another problem, in addition to the said PM 2.5 dust, is that of mercury, which is emitted into the atmosphere as a result of coal firing. Mercury transforms into methyl-mercury - organic mercury - which accumulates in human food chain, mainly with fish. The problem is so serious because mercury does not degrade over time (it does not decay as radioactive isotopes), but remains in the environment forever. How much truth is there in the statement that one gram of uranium can produce as much energy as 1.5-2 tonnes of coal? Accurate, one gram of uranium, that is as much as a few grains of sugar, is equivalent to 1.5-2 tonnes of coal. pm

And what is the situation in terms of waste? The nuclear generation (1,000 MWe) produces approx. 1 tonne of radioactive waste per year, while the byproduct of coal combustion (in the same size unit) is approx. 150-200 thousand tonnes of solid waste and more than 6 million tonnes of emitted gases, including harmful dusts. pm

So what are the greatest advantages of nuclear energy? First, the environment: emissions of SO2, NOx, PM 2.5 and CO2. Second, energy independence: the storage of nuclear fuel is very easy due to its tiny consumption - compared to coal or gas - by power plants. Third, the economic aspect: coal deposits are increasingly deep and costly to mine. Coal combustion requires flue gas purification and - rather not achievable on a technical scale - CO2 sequestration. This summer, the water temperature in the Vistula River is 29°C and only 19°C in the Baltic Sea. The nuclear power plant is to be located at the seaside, because the sea will never dry. Is it worth carrying 3 million tonnes of coal per year from Silesia to the seaside and then bother wondering how to get rid of waste? Or maybe it is better to bring there one single truck with uranium fuel? pm

During the celebrations of the 60th anniversary of Polish nuclear science, you were awarded the Officer’s Cross of the Polonia Restituta Order. Do you feel appreciated as a scientist? I have received many awards in my life, not just Polish. In 2005, when Muhammad el-Baradei, the then Director General of the International Atomic Energy Agency (IAEA), won the Nobel Peace Prize, half of it was awarded to him and the other half to IAEA employees I was among them. So I have a Nobel Peace Prize diploma with my name spelled out on it. Of course, the decoration conferred by the President is very important to me. I owe it mostly to Hanna Trojanowska who was Government Commissioner for Nuclear Energy and who put me forward for this decoration. I regard it as a reward for many years of work at the Institute and the Atomic Energy Council and some other functions I used to hold. Many years ago, when I worked at a university in the US, my professor offered me a higher salary so I could bring my family and stay there for good. I said: “Thank you, but I want to develop my career in my country, Poland.” • pm

FUEL UNIT COST FOR DIFFERENT POWER PLANTS Coal: PLN 0.11-0.14/kWhe Nuclear Fuel: PLN 0.03/kWhe

You told us about the radioactive waste recycling and what happens to the coal combustion waste? Part of the dust is categorised as a component of cement and other building materials; you just need to check if there is not too much of radioactive radium. The rest goes to landfills and is stored. pm

AMOUNT OF FUEL NEEDED FOR 1 YEAR OF OPERATION OF A 1,000 MW POWER PLANT Coal-Fired Power Plant: 3 million tonnes Nuclear Power Plant: 20-25 tonnes

9/2015 polish market

Energy

Infrastructure

Poland’s first virtual power plant is about to be launched - a recipe for savings and blackouts Grzegorz Nowaczewski, CEO of the Virtual Power Plant talks to “Polish Market” How did you come up with the idea of a virtual power plant? From the beginning of my career, I have been fascinated by innovative projects. When I set up my first company in 1992, the word “innovation” was not yet popular. Before I went for the idea of a virtual power plant, I had dealt with safe wireless communication, remote control, industrial automation and multimedia technologies. A few years ago, I decided to focus on the energy sector, seeking business challenges that would offer satisfaction from creating new digital products or services. The digitalisation of the economy sharpened competition between suppliers in various sectors. Yet, I found it strange and I still cannot really accept that energy customers are discriminated compared to traditional, strong energy companies. That is how the idea was born of implementing Poland’s first concept of a virtual power plant producing negawatts. This led me straight to the establishment of the Virtual Power Plant, a modern start-up, employing experienced professionals, which is designing smart energy management systems in facilities such as swimming pools, sports halls, office buildings, shopping malls. It is important for me, besides making money, to prevent threats such as blackouts and help save the planet. The idea for virtual power plant is highly innovative, therefore we have managed to gather major partners for this initiative, “such as GIZA Polish Ventures, Startup Hub Poland and DSR forerunner-Michael Zammit. Additionally, we are already beneficiaries of the National Research and Development Centre’s (NCBiR) Alfa Bridge programme.

development

The Virtual Power Plant offers a unique service. What does this uniqueness consist in? We are working on specific technologies, which will increase the country’s energy security based on the DSR (Demand Side Response) programme. The VPPlant is developing smart tools adjusting the consumption of electricity and heat in buildings to the variable demand, while maintaining comfort for users. We are optimising the energy consumption in buildings, in particular of the HVAC devices (heating, ventilation, air conditioning). We can steer the energy consumption from peak hours when deficiencies are likely to occur in the national power system to off-peak hours pm

34 polish market

Dynamic

Tadeusz Rybak, President of the Management Board of Mostostal Puławy SA

when energy rates are the lowest. We treat customers as partners, helping them reduce energy costs by up to 25%. In the future, our partners will actually be able to earn revenue from being part the DSR scheme, since they will be rewarded for reducing their energy needs during daily demand peaks. What costs does the owner have to incur to be able to use your service? The VPPlant’s business model provides for the development and installation of the technology at our expense. Then, we share savings obtained with the administrator of the building. A typical win-win scenario. The technology offered by the VPPlant is implemented in buildings of large-scale facilities with forced ventilation. One example of the implementation of our technology is Azoty Arena in Szczecin, a multifunctional sports and entertainment facility commissioned in August 2014. pm

You are now working on an innovation that will enhance the safety of people using swimming pools. Solutions used in other large-scale buildings are not enough to improve the energy efficiency of swimming pools. It is sufficient to ventilate shops and offices to the point to maintain the comfort of those inside them in terms of temperature, humidity, CO2 concentration. Many publications on energy efficiency in pm

swimming pools focus on ensuring the proper air circulation, temperature and humidity. However, before you end up optimising power consumption in swimming pools, you should start with checking how the purity of water and air is maintained. Sodium hypochlorite, a preparation commonly used for disinfection of swimming pool water, enters into chemical reactions with the organic impurities and forms toxic chlorinated methanes, which are called trihalomethanes (THMs). I took interest in the problem of THMs when studying publications devoted to energy optimization in sports facilities. THMs are dangerous to humans, yet traditional methods for detection of trihalomethanes are expensive and carried out on an irregular basis, even though it seems logical to perform such measurements regularly for safety reasons at the swimming pools. We have taken up the challenge of creating an innovative product, but I cannot reveal the details yet. Our goal is to develop and implement a technology for optimising the energy consumption in swimming pools, combined with the measurement of THM levels in water and air as often as it is economically reasonable, and removal of these compounds from water and from the swimming pool premises. We hope to get support from the National Research and Development Centre (NCBiR) under the Fast Track programme. •

ostostal Puławy SA is a company with a 50-year tradition. Since its inception, it has been engaged in industrial and infrastructural construction, with such significant projects as Zakłady Azotowe Puławy SA, Zakłady Azotowe Anwil SA Włocławek, ZTS Pronit - Pionki, most of the bridges on the Vistula and the Bug rivers and sports facilities. The last 20 years were also marked by growing exports to Western Europe. Needless to say, it is a very demanding market,

where good quality and timely delivery of services is essential. We are convinced that a well done job is the best marketing. I have led the company for 25 years, a time of its dynamic development. I think it met with recognition from the Ministry of the Economy and hence the reward in the form of the Badge of Honour for Merit for the Economic Development of the Republic of Poland. Certainly, it is nice to be praised, receive rewards or prizes, but business is primarily about developing the company, something that can be achieved

Storage spheres in Synthos S.A. Chemical Plant in Oświęcim

through capital, which in turn depends on profitability. One of the greatest challenges for today’s managers is to get their people motivated. I am convinced that the rewards help increase this parametre. As I mentioned, Mostostal Puławy SA operates throughout Europe, and sometimes even beyond. Through our successful investments we ensure that Poland is represented correctly, contributing to building the image of a solid Pole. We are ambassadors of the Polish economy and we have such a distinction in our collection. We can therefore say without false modesty that Mostostal Puławy is a “brand” of its own. Those bear the palm who constantly seek new solutions, streamline and improve their business. These days, it is commonly referred to as innovation and means substantial subsidies. Mostostal Puławy has long been cooperating with scientific research institutions, as well as technology universities. Continuous improvement of construction processes is our priority. The company is currently carrying out a number of very important projects, like for example the construction of a biomass boiler in Świecie, rubber factory in Oświęcim, desulfurisation installation in Police and a plant for the production of a new type of fertiliser in the form of pellets in Zakłady Azotowe Puławy SA. Abroad, we are building large power plants and waste incinerators in Britain and Finland. •

9/2015 polish market

Defence Sector

Polish defence industry in a good condition

“We were able to obtain a lot in the area of security and defence: not only strengthening of NATO’s eastern flank in the face of danger coming from the East, but also acceleration of technological modernisation of the Polish army. Increasing military expenditure to a level of 2% of GDP is supposed to serve this purpose, because it is still important to further strengthen our security in a dangerous world, in an unstable region,” Bronisław Komorowski, the outgoing President of Poland and Supreme Commander of the Armed Forces, said in his farewell address to the nation. Two days later, Andrzej Duda, the newly sworn-in President of Poland, in his address to the National Assembly, stressed the importance of security, especially military security: “What is most important in this regard is building a strong, well-equipped Polish armed forces. This is a task of paramount importance for the nearest years to come since this is the most fundamental guarantee of our independence, sovereignty and security of citizens.”

Jerzy Bojanowicz

ur security is taken care of by NATO’s Spearhead Force, which was deployed for the first time last June, as the “Noble Jump” exercise, to train 2,000 troops from 9 countries on a range in Żagań. This was part of the “Allied Shield” series of exercises NATO held in Europe in June, including also “Saber Strike-15” (Poland, Lithuania, Latvia and Estonia) and “Baltops” (southern Baltic, in Poland, Germany and Sweden). The “Noble Jump” exercise in Żagań was attended by Jens Stoltenberg, NATO Secretary General, and Tomasz Siemoniak, Polish Deputy Prime Minister and Defence Minister, who stated that Poland was ready for the deployment of US military equipment. And what can the Polish armed forces count on?

Horizon 2022 “Technological modernization of the armed forces is a complex process spread over many years. The ‘Armed Forces Technical Modernisation Plan for the years 2013-2022’ (PMT) now under way provides for an estimated spending of over PLN 90 billion on purchases and over PLN 40 billion on modernization. From the point of view the ministry, an important role in the fulfillment of this plan will be played by the Polish defence industry. There are many examples showing that individual companies are able to effectively contribute to it,” says Tomasz Siemoniak.

36 polish market

The biggest contribution will be made by the companies which are Polska Grupa Zbrojeniowa (PGZ), a group of arms companies members of inaugurated during last year’s International Defence Industry Exhibition (MSPO) in Kielce. “Its creation was dictated by the previously dispersed structure of the industry. Individual companies were often unable to cooperate, and sometimes they even competed with each other for orders from the Defence Ministry. This rivalry is detrimental both to the industry and the armed forces. The newly created entity not only cares about the interests and cooperation of the entire industry, but can also compete for very large contracts that were previously beyond the reach of single market players,” explains Wojciech Dąbrowski, President of the PGZ Management Board. “We expect that our revenues from the 14 operational programmes carried out in the framework of the PMT plan will average PLN 4-5 billion per year. The Group’s priority is maximum participation in the programme ‘Air Defence System.’ According to our estimates, we can contribute a share of even more than PLN 17 billion. In fact, the Group intends to be the integrator and provider for the shortrange anti-missile systems ‘Narew’ following the acquisition, under licences, of the necessary components from foreign suppliers. It is an ambitious yet achievable plan. No less important are the programmes ‘Combating Threats at Sea’ and ‘Imaging and Satellite Reconnaissance.’” The PMT will also help create innovative export products. Most of

Defence Sector them are likely to emerge as a result of the implementation of the programmes “Modernisation of Armoured and Mechanised Forces”, “Air Defence System”, “Modernization of Missile and Artillery Forces”, “Combating Threats at Sea” and “Rosomak.”

World class The PGZ group has, directly or indirectly, stakes in 105 companies, of which as many as 38 are of strategic importance. These are plants manufacturing world-class equipment. Among them is PCO SA, a producer of optoelectronic, PITRadwar (radars), Fabryka Broni “Łucznik” - Radom, Zakady Mechaniczne Tarnów (grenade launchers, mortars, artillery and artillery and missile air defence systems), Mesko (ammunition and missiles: PPK SPIKE - world-leading solutions in terms of effectiveness and precision; PPZR GROM - one of the world’s top three solutions of its kind; NLPR-70 mm - designed to be used in NATO military helicopters and as a weapon in F-16 fighters). Stalowa Wola Steelworks can boast good artillery systems and the Military Aviation Plant No. 2 in Bydgoszcz has the ambition to become an important manufacturer of unmanned aircraft systems. A strong point in the Group’s product range is the Rosomak, an armoured personnel carrier (APC) manufactured since 2003 in Siemianowice Śląskie, under a license from Finland’s Patria Vehicles Oy. In July 2013, the license was extended for the next 10 years. Today, with more than 200 patents of Polish engineers, the Rosomak is one of the world’s best wheeled armoured carriers. It can be further improved in terms of design and manufactured in many versions and configurations. An example of such a modification is the Rosomak APC chassis fitted with the Slovakian unmanned EVPU TURRA 30 turret – APC Scipio.On 3rd of July, Prime Ministers of Poland - Ewa Kopacz and Slovakia - Robert Fico signed a letter of intent for industrial cooperation between the two countries, including supplying 30 Rosomak chassis to Slovakia over the next three years. The Group has also delivered GROM systems to Lithuania and Beryl rifles to Nigeria. “It is the farthest-reaching modernisation of the Kalashnikov-type rifle,” says Edward Migal, President of the Board of “Łucznik” – Radom. In December 2014, after more than a year of negotiations with the leadership of the Nigerian Army Land Forces, a contract was signed in Radom for the supply of 1,000, and prospectively another 5,000, Beryl rifles. “Łucznik” has also developed MSBR, a worldwide unique modular firearm system, PR-15 Ragun pistol and MSBR 5.56 mm Radon rifle. PCO SA, the manufacturer of one of the world’s lightest night vision devices - night vision monocular MU-3M Koliber, provider of video periscopes for Vietnam army’s tanks, is leading a 13-strong consortium implementing the Integrated Individual Fighting System “Tytan” - many armies cannot afford - and the Polish “soldier of the future.” This advanced, individual, comprehensive equipment system consists of six subsystems, which will also be able to work separately. PIT-Radwar SA, the manufacturer of the mobile artillery reconnaissance radar “Liwiec” identifying the trajectory of an artillery projectile, which caused a sensation among our allies in Afghanistan, proposed a solution for modernisation of the Polish air defence - a three-layer

system able to meet the challenges of the modern battlefield and providing security in the following ranges: very short (VSHORAD), short (SHORAD) and medium (MRAD). This is the “Polish Shield” whose elements are sets of mediumrange sets “Wisła.” In April, the government announced it would buy US “Patriots.” They are manufactured by Raytheon, a company that cooperates with PIT-Radwar SA on a “friend or foe” technology. The company manufactures the short-range air defence system “Poprad”, two items of which were bought by Indonesia a long time ago, and in June talks will start with the Polish armed forces about the delivery of more than 70 such systems. The implementation of the short-range missile defence system “Narew” (up to 20 km) will be entrusted in whole to Polish industry.

International cooperation “Polska Grupa Zbrojeniowa and Germany’s Rheinmetall have recently agreed to jointly design a new, floating, wheeled armoured vehicle in 6x6 configuration. It is anticipated that by 2020 exports will have a significant share in the revenues of the Group,” predicts Wojciech Dąbrowski. In January, “Łucznik” took part again in the exhibition Shot Show in Las Vegas and, for the first time, in the Industry Day. “This year rifle MSBS, prepared especially for the American market in the civil version as a rifle and a pistol, had its premiere. We also presented the new versions of products, which will be sent for export and sold in the United States. We made use of our participation in Shot Show 2015 to promote FB Radom US, a company established in 2014, whose business is slowly growing,” says Edward Migal. As is known, France’s Caracal won Poland’s tender for a multi-role helicopter, but Polish plants, including PCO SA, will be involved in construction works, too. “After PZL Świdnik had modernised ‘Sokół’ to become a battle helicopter, we supplied it with optoelectronic heads, together with the Israeli company Raphael. Given that Raphael provides the French with optoelectronic heads, I do not rule out that we will join forces and the contract will get polonised. Perhaps we will acquire their technology and we will start to deliver optoelectronics for helicopters in the future,” wondered Ryszard Kardasz, President of the Board of PCO SA and President of PIT-Radwar SA, in an interview with “Polish Market” last May. “One of the advantages of the PMT is permanent funding. Last year, PLN 8.27 billion were spend on defence. This year the figure is similar, with PLN 5.5 billion invested in the Polish defence industry (nearly 70% of total expenditures),” says Tomasz Siemoniak. “The International Defence Industry Exhibition is an opportunity for the military industry to observe the latest trends in armaments, including those offered by Polish manufacturers. Specific solutions and structures presented there in the past years are now used successfully by our armed forces. This applies both to large and heavy equipment and weaponry, and items of personal armour, flak jackets, helmets and personal weapons.” It is worth noting that contracts concluded and negotiated with foreign entities contain the clause providing for the transfer of technology to Polish companies. In this way, they can become partners of international consortia. • 9 /2015 polish market

Defence Sector

We participate in all programmes that correspond with our competence Ryszard Kardasz, President of PIT-RADWAR SA, and President and Director General of PCO SA, talks to Marcin Haber. You said that you feel responsible for the implementation of innovations in Poland. Why such a feeling? I hold a PhD in engineering, I used to be a designer. Twenty three years ago, I became a CEO. With my extensive experience, I know perfectly what innovations and cutting edge technologies are, and how much they are important for the country’s economic development. Innovations are a stabilising factor in pm

38 polish market

the Polish economy. Having an innovative industry guarantees independence from foreign subcontractors, as many core technologies are implemented domestically. Take, for example, semiconductor transistors. If they are provided by a foreign subcontractor who also uses them in ready solutions - similar to those that we produce - then we will not be competitive in terms of price. The subcontractor may impose such a price of its product that will result in

making your final product significantly more expensive. If I am dependent on this sub contractor, as I do not produce my own transistors, I have to agree to his price because I do not have an alternative. Why do I feel responsible for the implementation of innovations in Poland? For many years, I have been managing different companies - once Huta Stalowa Wola SA, today PCO SA and PIT-RADWAR SA, and I think with all my experience, I have things

to say. Not only as a CEO but also as an engineer. I think that our politicians - I mean especially the Ministry of the Economy - should be aware that it is necessary to create mechanisms financing research, development and implementation, even though these may be venture capital funds. There is no other way. The most important thing is to act, to plan! I have appointed the Scientific Council, which consists of professors from the Military University of Technology, Warsaw University of Technology and Wrocław University of Technology. We meet quarterly and discuss various projects. Professors also voice their opinions on our solutions. They tell me that universities spend a lot of money on research and development. There are no mechanisms that would give scientists a sense that implementation of the solutions developed at universities brings benefits. Unfortunately, according to the criteria of the Ministry of Science and Higher Education, researchers are evaluated by the number of publications, and not by what I believe is the basic task - industrial implementations. I do notice some improvement, but its pace is far beyond satisfying. It is also the opinion of many economists. I have recently read articles of Prof. Witold Orłowski, who warns that the Polish economy may collapse in a few years. He fears that if nothing changes, big corporations will move their factories to countries where labour is cheaper. So, if we do not have our own technologies, we may face an economic failure. I do not think it is that bad. After all, there are several companies in the PGZ group of Polish aamaments companies, which are involved in the development and production of innovative solutions. I talked about the economy in general. When it comes to the defence sector, we are above the average. PIT-RADWAR SA, whose origins date back to Telecommunications Research Institute, was founded over eighty years ago. Before the World War II, the Institute succeeded in launching TV for the first time - we were among the pioneers in Europe. There was already even talk of radiolocation! These experiences are cumulative. Today, the company employs nearly 500 engineers and collaborates with many outstanding professors. So I think we are the best company in the innovation category. I do not know any other that would have such an intellectual potential. The production of radars is a demanding process, because it is a very complex device, but we go even further. We are versatile. We also produce IFF devices designed to identify the enemy on the battlefield. These are “secret” pm

technologies received by counterintelligence service. As one of the few companies in the PGZ group we have a cryptography lab. We also develop battlefield management systems, and we can even boast a number of implementations in this field. So we are certainly one of the innovation leaders. As for PCO SA, it provides the Polish armed forces with advanced optoelectronic systems. Thermal imaging systems developed by the company are very complex solutions, which require vast knowledge and experience. But this is not all. There is now much talk about missile defence. Of the 14 projects related to the modernisation of the armed forces, the Ministry of Defence gave priority precisely to the missile defence system. It covers three defence programmes - very short range (up to 5 km), short range (up to 20 km) and medium range (up to 100 km). In my opinion, PIT-RADWAR SA should play the leading role in these programmes. In the field of radiolocation, our product line fits each system. Currently, we are implementing medium-range (for “Wisła”) and short-range (for “Narew”) radar solutions. We also have radars that use all the signals in space to identify the target. A product ready for use in a very short range is a defense system based on “Poprad” and the reloadable radar station Soła. The system identifies targets at a distance of up to 60 km and destroys them at up to 5 km. The system has elements that can also be used in “Wisła”. It is a good device, equipped with a command and control system, an effector in the form of the “Grom” missile supplied by Mesko, as well as a very efficient optoelectronic head. You mentioned the modernisation programmes announced by the Ministry of Defence. How many of them can be carried out by Polish companies and based on Polish solutions? Much depends on our activity, on the willingness of politicians and the military. In my opinion, we should look at these programmes from several points of view. Firstly, the Minister of Defence should pay attention to the combat ability of the equipment produced in Poland. This does not have to be the best equipment in the world, it should be comparable with the best ones. Secondly, it needs to be considered from the point of view of the economy. Therefore, we should, of course not at any price, try to choose Polish solutions. Thirdly, the choice of Polish solutions is an important factor of the country’s strategic security. pm

You talked about the programmes “Narew” and “Wisła”. What about the others?

Our policy is to participate in all programmes that correspond with our competence. An important role is played by the Advanced Individual Combat System Tytan, or an individual soldier equipment programme. PCO SA is the leader of the consortium. It manufactures optoelectronic devices, for example, thermal vision sights, night vision goggles and displays. PIT-RADWAR SA has its share in it, too, as far as it supplies the system with a modern battery powering all the components used by the soldier. It must be effective and possibly light, so it will be a high-tech battery. We are also working on a system monitoring the soldier’s health and life and an IFF (Identification Friend or Foe) system that every soldier should have. We also want our solutions to find application in other programmes, for example, in combat helicopters. We are holding talks with the providers of components for the EC-725 Caracal, a helicopter that won the tender of the Ministry of Defence. We would like to supply it with radars and optoelectronic heads. We are participating in the programmes related to armoured or artillery systems. But that is not all. We are cooperating towards the development of IT battlefield management systems, and we have lots of experience here. We will participate in every programme, where we will see an opportunity to use our experience and competence. We are not afraid of challenges! How do you assess the activity of the PGZ Group after less than two years of its operation? It is said that PCO SA, PIT-RADWAR SA and several other plants are a locomotive that pulls the entire group. The headquarters should first of all establish strategic development plans for the whole group and support its functioning politically. It is known that the headquarters has more frequent contacts with politicians than members of the group. The arms industry is a business that requires close cooperation with politicians. It is them who define the defence strategy, while companies should deal with the substance and implementation of projects. Everyone should do what they do best. The construction of a radar or an optoelectronic device is not about sitting in front of a desk or a computer. You have to experiment, carry out lab tests, arrange appropriate production and research facilities. We have it all - excellent professionals and great facilities. That is why, we are the absolute leader in the field of optoelectronics and radiolo• cation. pm

9 /2015 polish market

Defence Sector

intercept by electronic warfare and increase survivability of the system.

PIT-RADWAR TRS-15 3D Mobile Medium Range Surveillance Radar

The TRS-15 S-Band 3D Mobile Medium Range Surveillance Radar is a source of radar information for Air Defense command and control systems. With additional sea channel functionality, the radar can play the role of the sensor for coastal missile units. The air targets are located in three dimensions using the stacked-beam monopulse technique in elevation estimation and mechanical scanning in azimuth. The radar can also provide digital output of plots, tracks and IFF data. The effective operation of the radar in the presence of jamming and clutter is achieved by using advanced, adaptive signal processing techniques, including an adaptive clutter map, automated monitoring jamming, selection of less jammed frequency, staggered frequency repetition. The TRS-15 radar system consists of an antenna vehicle and display vehicle fitted with standard ISO 6 m locks and two power generator trailers. The antenna array can be deployed within 20 minutes by a crew of three

40 polish market

using the antenna mast hydraulic system. The radar is fitted with an antenna levelling system and GPS-based positioning system.

GROM missiles, IFF, two-axis drive. The system uses a fire guiding computer and a navigation and orientation system.

POPRAD Anti-Aircraft Missile System

WLR-100 Weapon Locating Radar LIWIEC

The POPRAD self-propelled anti-aircraft missile system is intended for fighting low and medium altitude air targets with using homing guidance missiles. It is suited for interoperation in an automated air defense command and control system, from which the data of targets to be engaged are acquired via digital links. The high dynamic performance of the tracking head makes it possible to engage fast and manoeuvring targets. An infrared (FLIR) camera has been employed for target acquisition and tracking, enabling effective use of the system in day and night conditions. The basic functions of POPRAD are accomplished by a tracking-aiming head, which contains a set of electrooptical sensors (thermal camera and laser range-finder), four launchers of

The mobile LIWIEC Weapon Locating Radar is designed to co-operate with integrated artillery command and control systems as well as directly with batteries and individual guns. It can be used to protect military bases and important facilities. High mobility of WLR-100 has been obtained by installing the whole system on a single cross-country vehicle and by assuring short deployment and march order times. With the high robustness to environmental conditions, jamming and clutter, and thanks to its redundant power supply, an effective use of the radar in the battlefield can be achieved. The design of the radar, its working schedule and tactical use concept guarantee low probability of

The LIWIEC radar supports the counterbattery warfare by: – automatic detection and tracking of multiple mortar, gun and rocket artillery projectiles of different types in flight (RAM); – automatic classification of projectiles and respective firing posts; – extrapolating individual gun emplacements and classification of the fire unit; – plotting individual projectile impact coordinates; – feeding data into automated fire control systems. An electronically steered narrow microwave beam in C-band (NATO-G) seeks the horizon line in a 90° sector for each antenna position, with data refreshment time 0.5 s. The mechanical setting of the antenna angle within 180° sector combined with 90° electronic steering, result in full coverage of 270° in azimuth. The RAM-type target after being detected is tracked with data refreshment rate of 0.1 to 0.5 s. In the ascending part of the projectile trajectory, its parameters are calculated, thus the points of launching and impact. Besides the RAM targets, also air vehicles can be tracked, as aircrafts, helicopters, missiles, and UAVs as well as weather phenomena and land vehicles. The radar is capable of detecting and tracking 23 mm artillery shells. The LIWIEC applies digital maps (WGS-84, UTM) and enables archiving recognition, history of cooperation with superior systems and the operator’s activity. The radar uses two BITE subsystems. The radar is powered by a diesel generator mounted on a standard shelter, which is backed-up by an auxilliary engine driven generator.

SOŁA Relocatable Radar

The dual band ZDPSR SOŁA radar is an upto-day multifunction three-dimensional (3D) radar, which has been designed to detect and indicate the airborne targets as well as the mortar rounds in the short (SHORAD) and very short range (VSHORAD) antiaircraft systems, with the use of the S-band channel. The C-band channel is employed to detect hovering helicopters, which can be applied to provide protection of military bases or troops in move. With its small dimensions and light weight, the radar has the exceptional capability of quick relocation with any kind of transport means including air transport. The design on the vehicle platform enables high manoeuvrability and a short deployment time after arrival at the site. The time to reach full combat readiness is shorter than 5 minutes by a crew of 2. The radar outputs the digital radar data with the use of a radio or wire link to accomplish easy integration with other components of the anti-aircraft system. The S-band SOŁA radar scans the space with the use of an electronically scanned beam in the vertical (elevation) plane combined with mechanical rotation and in the horizontal (azimuth) plane. The radar features several ECCM techniques, such as a low level of sidelobes, jammer strobe capability, automatic selection of the least jammed frequency, adaptive MTD and CFAR. Initiation of tracking and association of the plots with IFF responses are performed automatically. Due to the need of working within automated anti-aircraft systems, the radar is characterised by very short time of information refreshment (1 sec). The radar is controlled from local consoles and from an operator remote terminal located at distance up to 100 m.

MARK XIIA System IFF Devices:

They operate in the 1, 2, 3/A, C and S modes, and 4 and/or 5 modes, when the appropriate encryption computer is included. The interrogators are suited to receive the antenna position angle data (North pulses / azimuth clock pulses), as well to co-operate with antennas featuring three radiation patterns in azimuth plane: sigma, delta and omega. The interrogators are suited to co-operate with a GPS receiver. b) TRL-50 and TRN-50 Transponders

The TRL-50 is a remote controlled IFF MARK XIIA system transponder, which operates in mode 1, 2, 3/A, C and S and, when the cryptographic computer is plugged, also in mode 4 and/or 5, featuring the diversity functionality. The transponder is designed to be installed on airborne and sea platforms. When used in the Reverse IFF (RIFF) system, dedicated to air-to-ground identification, the TRL-50 transponder performs the function of an interrogator. In the RIFF mode of operation, an appropriate cryptographic computer is necessary.The TRN-50 is a remote controlled RIFF system transponder designed to be installed on land and sea platforms. An appropriate cryptographic computer is necessary for its operation.

SDP-20 SAMOC Air Defense Command Post

a) IDZ-50 and ISZ-50 Interrogators The MARK XIIA System interrogators IDZ50 and ISZ-50 are designed to co-operate with long and medium range radars, respectively.

9 /2015 polish market

Defence Sector

The SAMOC System is a mobile air defence brigade-level command and control post which provides both the capability to command and control legacy post-Soviet SAM launchers (2K11 Krug/SA-4 Ganef, or S-125 Neva/SA-3 Goa etc.) and interoperability with NATO systems. SAMOC allows estimation of the ongoing air situation and minimizing the reaction times. Basic functions of the SAMOC include: – planning of air defence cluster and SAM units deployment; – subordinated units RAP-based fire control; – threat evaluation and recommendations for optimal weapon assignment; – real-time monitoring of the combat units status.

Defence Sector

SZAFRAN Command and Control Information System

The SZAFRAN Command and Control System is designed to support the command process at Corps, Division, Brigade and Batallion level and to provide assistance to the staff using

automated command activities and processes. The SZAFRAN solution provides monitoring of the battlefield situation and supports the command processes of the complete command cycle including the position setting, planning, tasking and control. SZAFRAN allows increasing the volume of information used in the command process, accelerating the planning process, reducing the time and effort needed to create and distribute the staff documents, creating and distribution of the Recognized Ground Picture (RGP), increasing the information flow within the CP where system is deployed and the whole cooperating units cluster resulting in cuttingdown of the reaction time. •

PCO SA NPL-1T AGAT Thermal binoculars

the eye-spacing adjustment. The binoculars allow in addition on-screen presentations of geographical coordinates and time from an external GPS receiver.

PNL-2AD/M SZPAK miniature night vision goggles

The NPL-1T thermal binoculars are a lightweight device designed for terrain observation in poor visibility and at night conditions at greater distances. The binoculars use a bolometric detector with a resolution of 640x480 pixels. The developed electronics uses only 1.4 W of energy, which ensures continuous operation for over a dozen hours. The binoculars allow registering many pictures in the internal memory. For image presentation there were 2 OLED displays applied, while the use of aspherical lenses in eyepieces with wide pupils output enables comfortable observation of both OLED-s without the need to change

42 polish market

The PNL-2AD/M miniature night vision goggles are light night vision instrument designed for performing tasks at night. PNL2AD/M is a noctovisor with two independent optical channels. The goggles enable to observe binocularly and allow keeping natural shapes and sizes of the observed scenery. Night vision goggles are compatible with

a majority of currently used helmets. The battery box is a separate element fixed in the back side of the helmet, that is why the weight is evenly distributed keeping at the same time low weight of the structure. The goggles have a built-in IR illuminator.

KLW-1 ASTERIA thermal camera

Cooled thermal camera KLW-1 operating in 8-12 μm – MCT detector of the third generation, screen resolution 640x512 pixels. The camera can be used in systems controlling on-board armament firing and in surveillance and recognition systems. •

MSPO 2015 – a big qualitative leap Andrzej Mochoń, President of Targi Kielce, an organizer of trade fairs, talks to “Polish Market”. When did you start organizing the International Defence Industry Exhibition (MSPO)? Kielce is a very natural place to host such an event mainly due to its geographical location. It is the area of the former Central Industrial District (COP), the name that perhaps does not tell much today, but it is Kielce that was the heart of the COP. The area extended from the town of Dęblin to Krosno and from Tarnów to Kraśnik. It is an area where most of the military industry was established. As reagrds other plants, it is worth mentioning several companies in Warsaw and the Naval Shipyard. It was a few single sites, because the defence industry is mostly concentrated in southern Poland. As we first started the fair in 1993, there were many more exhibitors, but they were hit by the crisis due to the fact that the main client of the Polish military industry was the Red Army rather than the Polish Army. Star Starachowice, at the peak of its development, produced 22-23 thousand vehicles a year, most of which were military vehicles for the Red Army. After the political system changed in 1989, these companies lost their market. Therefore, the underlying objective of the MSPO Fair, from the beginning of its existence, was to find buyers for the civilian products made by these manufacturers because most of them also produce civilian stuff. Olkusz, outside grenades, produced pots; Mesko, outside missiles and ammunition, produced mowers and small household appliances. Later on, it turned out - something we did not expect - that the fair would have its military aspect sustained. This would be a trade fair dedicated to the restructuring of the defence industry, aimed at identifying civilian customers, but de facto an armaments trade show. pm

But MSPO hosts not only Polish companies. Certainly not. Already during the first edition, we had exhibitors from 7 or 8 countries: Sweden, France, Israel, and -interestingly, pm

I remember that there were 5 companies from South Africa led by Denel. This year, for the first time, Polish companies will officially come under the banner of Polska Grupa Zbrojeniowa, a Polish group of arms manufacturers. Will the group have a special exhibition stand? Polish companies had their debut as the Polish armaments group already last year, but then the group was only at the stage of creation. In September 2014, not all companies were incorporated yet. You have to remember that the group brings together the companies that used to be part of the Polish Defence Holding, as well as military establishments that were subject to the Ministry of Defence. I think it is an opportunity to create one strong entity. This consolidation can be considered as a continuation of the process that started with the incorporation of some companies into Bumar. pm

Are Polish military products popular on the market? Until recently, Polish companies tried to compete producing military equipment under post-Soviet licenses. There is no denying that this could be done only on distant Asian markets. We competed with manufacturers from the Czech Republic, Ukraine and Russia. It was not the most modern armament, it were not sophisticated solutions. Today, it is different. The role of the MSPO fair is also to allow officers to get familiar with what Polish armament companies offer. I mean, where else if not here the officers can see the stuff? At the world fair? To cut costs, only delegations composed of the minister and a few generals are sent there. An average Polish officer, not to mention an ordinary soldier, cannot even dream of it. He can draw knowledge of modern solutions offered to the army at most from the specialised press. MSPO is actually the only place for the Polish Armed Forces to see its dreams, but also the pm

only place where the Polish armaments industry is shown to the world as a specific product offering. Of course, Polish companies do show themselves at trade fairs abroad but, due to logistics cost, more in the form of leaflets. Can you see technological progress with Polish manufacturers? Recently, there has been a lot of talk about PCO, Łucznik or Rosomak. Of course. The Rosomak vehicle stood up to its baptism of fire very well in foreign missions abroad. Luckily, we managed to extend the licence after tough negotiations with the Finns. I regret - but it is still possible to fix it - that we did not try to get along with the armies from our part of Europe, for example the Visegrad Group countries, and offer them our equipment, while taking from them in return their best technological solutions. pm

We have recently agreed with Slovaks on the production of a new type of Rosomak. That is true, but we have produced Rosomak for 10 years. This could have been done earlier, as it is always easier to sell equipment when we say that it is used by the Polish armed forces, but also the armies of several other countries. The purchase of weapons is a difficult process, and countries usually prefer equipment produced domestically. If we can show that our product has met the requirements of several other armies, it will be easier to sell. pm

Is another record expected to be beaten when it comes to the size of MSPO? For sure. Last year the fair occupied an area of 25,000 m2 and this year it will be more than 26,000 m2. In 2014, there were approx. 480 exhibitors and in 2015 MSPO stands a good chance of exceeding the number of 500. There is no denying that this is due to the situation beyond our eastern border. But it is not only a quanti• tative leap; it is a big qualitative leap. pm

9 /2015 polish market

Innovation

The defence industry

WSK "PZL- KALISZ" WSK "PZL- KALISZ" S.A.

has been a plant of the Polish Aviation Industry since 1952 and has been producing radial piston engines ASz-62IR of 1000 HP for aircrafts AN-2 and M-18 “Dromader”, Y5B and “Otter”.

Home to technologies of st the 21 century

he defence industry and the equipment it produces is most often associated with the heavy tanks and armoured battlefield vehicles we all know from black-and-white films. However, today’s army uses the most modern communications technologies, advanced unmanned systems and computers managing the battlefield. Poland’s leader of innovative military technologies is the WB Group led by WB Electronics. It is hard to imagine today’s army without modern electronics, which is used for fire control, battlefield management or identification. Such state-of-the-art systems can also be found in the Polish Armed Forces. They were introduced in the 21st century by a private company from Ożarów Mazowiecki - WB Electronics, the leader of the WB Group, uniting five entities and employing 800 people, including more than 400 engineers. WB Electronics is responsible for introducing into the Polish armed forces the battlefield management system TOPAZ, which allows precise targets by artillery. It is worth mentioning the FONET vehicular communication system, which is part of the equipment of the Polish Rosomak vehicle and used by several armies around the world, including the United States.

44 polish market

Currently, the WB Group is focused on communications technologies, battlefield management and unmanned platforms. The company plays a major role in modernisation programmes of the Polish armed forces. It is responsible, i.a. for the Future Soldier programme as an integrator of all its elements and provider of a radio station PERAD 4010, which will determine the exact position of the soldier, send a video image, and even check vital functions. WB Electronics is also a member of the consortium that plans to build a battlefield management system for the Rosomak. Over the years, WB Electronics has developed unmanned technologies, building competencies that allow the company to provide all components for unmanned aircraft - from the airframe to the engine to the most advanced electronics. Its competencies in the construction of unmanned aerial vehicles (UAV), commonly known as drones, have found confirmation in practice. For several years, the Polish Armed Forces have used several sets of shortrange UAV FlyEye that passed the battlefield test in Afghanistan. But this is not the only drone offered by WB Electronics. The company has also developed two other platforms: Virtus and middle-range, vertical take-off and landing (VTOL) Manta. WB Electronics also has the capacity to build tactical drones

carrying armed missiles, as confirmed by the contract it has recently signed with Thales. The agreement provides for cooperation in the construction of a Polish tactical UAV based on the British Watchkeeper. Innovative ideas, standing out against the background of the competition, did not pass unnoticed abroad. The WB Group sells its products to several countries around the world: the US, India, Malaysia, South America, North Africa and many others. Exports, which account for 80% of the Group’s revenue, are steadily growing. Most of export earnings are generated by the FONET communications systems and numerous radio stations. Unmanned systems, which WB Electronics is now implementing in several countries, are becoming increasingly popular as well. The success of the WB Group and WB Electronics shows that today’s defence industry represents cutting-edge technologies as are often known from science fiction cimema. And what determines superiority on the battlefield is no longer the amount of tanks, but precision-guided weapons, appropriate identification and full control of the situation. It means that whoever offers and detains technologies of the 21st century, and continues research and development, is destined to achive business success. •

An ASz-62IR piston engine holds a number of international certificates (including certificates issued by aviation authorities of USA, Canada, Brazil, Russia and PRC). The company also performs overhauls and repairs of these engines. At this time we have completed upgrading process of this engine by implementation of the electronic controlled fuel injection system and by enabling car fuel E95 application along with automotive fuel drive. Simultaneously we are conducting development works on a new type piston engine production of 280 HP. As a result of our company’s restructuring process we have expanded our commercial offer with gears and gear transmissions that we now manufacture for world aviation industry leaders. Within our production scope of interest are also parts for high pressure engines, oil pumps and crankcases. These components require top precision machining accuracy classes, which we accomplish when meeting the requirements of our Customers’ special orders. Our continuous goal and ambition is to meet our Customer’s engineering challenges and expectations as part of our technical qualifications and production capacities. We can offer a world class sophisticated machining capabilities, highly skilled, qualified and experienced engineering personnel and operators. We keep on looking for new markets and business partners, especially in manufacturing of high precision and processing complexity aviation parts. We are prepared to initiate a business relationship with any partner representing a similar production portfolio.

WSK "PZL- KALISZ" S.A.

holds the following certiﬁcates: AS 9100, AQAP-2110, PART 21G-M and PART 145.

TRA2016 IMPORTANT CONFeRENCE AND GREAT EXHIBITION Events

Professor Leszek Rafalski, Director of the Road and Bridge Research Institute, talks to “Polish Market”. Professor Rafalski, I have heard that Transport Research Arena 2016 will be held in Warsaw. Is this true? I am pleased that this information has spread around the world. The National Stadium in Warsaw will host several thousand participants, exhibitors, visitors of the TRA exhibition, and guests of accompanying events, like workshops, TRA Marketplace. I will be immodest and say that it was my Institute, thanks to its international activities that took on the organization of this important event in cooperation with the Ministry of Infrastructure and Development of Poland. But of course it is not only our - Poles – work. Three international committees have been constituted. pm

Who are these partners and committee members you mentioned? The initiator of TRA2016 is the European Commission in cooperation with the Conference of European Directors of Roads (CEDR) and the European Technological Platforms: ERRAC, ERTRAC, WATERBORNE and ALICE. pm

This is really a high profile event! It is true. Transport Research Arena 2016 is the most important transport research event in Europe, gathering every 2 years the key stakeholders: researchers, experts, operators, industry and policy-makers. I must add that TRA has attracted attention from all around the world. During the scientific abstracts submission process TRA organisers have received over 900 proposals from 52 countries! Most of them will be presented during Technical and Scientific Sessions. pm

Is the submission still open? It is still possible to submit a contribution till September 30 but only to TRA Marketplace pm

Poster Sessions, not to Scientific or Technical Sessions. TRA Marketplace is a special event which includes Poster Sessions, Results Forum and Outreach Sessions. For more information please visit Programme webtab on www.traconference.eu. Besides, we constantly invite to take part in the exhibition and sponsorship, which is very beneficial. So in addition to the undoubted importance for research and transport policy, I suppose the TRA affects the development of business oriented towards transport and its infrastructure… Yes, TRA2016 is a great opportunity for all European researchers and scientists as well as the entrepreneurs: producers, contractors etc. to present their practical applications of the transport related, innovative projects’ results, which may have a huge impact of each and every one of us in our everyday life. pm

How about conditions to present, these R&D products? Will there be a big enough space for such an exhibition? I mean if a company intends to exhibit a car, bus or railway wagon? One of the biggest events accompanying the conference will be the TRA2016 exhibition. Ouite a huge space-almost 4,000 m2 inside and 2,000 m2 outside of the Stadium-will be available. The exhibition will be attended by the European Commission, the CEDR and industrial companies - the members of the European Technological Platforms of surface freight transport from all over Europe. We expect approximately 2,000 participants of the TRA conference and additional numerous visitors at the exhibition. We expect exhibitors will present their companies’ achievements before the most representative group of people engaged in the creation of modern, ecological pm

and efficient transport – the mobility of tomorrow. The mobility of tomorrow – is this the motto of TRA2016? Where can you read about it? One can find this slogan on all publications and on the TRA2016 official website: www.traconference.eu. All information about the conference: programme, registration, exhibition are also available there. From the website you may download the brochure “Invitation for Exhibitors” together with the Application Form. To book a stand please contact Trade Fairs Kielce (Agata Boroń, e-mail: boron.agata@targikielce.pl). It is also possible to enter TRA2016 sponsorship programmes. Among different sponsorship opportunities you can choose between Platinum, Gold, Silver or Bronze Sponsor Package. There are also many other ways to promote your company/organisation and take an active part as a sponsor in the TRA2016. More information is available on www.traconference.eu under the sub-tab Sponsorship & Exhibition. pm

WE SPECIALISE IN: • paving work – pavements of natural stone, graniteand basalt setts, concrete slabs and setts; • trafﬁc engineering – trafﬁc system organisation design, road signs and markings; • green areas development – the development of greenery in parks and lawns; • playground construction – safety surfacing, playground equipment.

Please invite the readers of “Polish Market” to TRA2016, Professor. TRA2016 you can say literally and figuratively, is a part of the Polish market. So, on behalf of TRA2016 organisers, I am honoured to invite you to the 6th Transport Research Arena conference and accompanying events, which will be held from April 18 to 21, 2016 in the Conference Centre at the National Stadium in Warsaw. Should you require further information, please contact the TRA2016 office (office@tra2016.eu). I look forward to welcoming you to TRA2016 in Warsaw. pm

Good luck in preparing and conducting of this great and complex event!

ZAKŁAD USŁUG BRUKARSKICH „ADROG” SP.J. ADAM DYBCIO, EUGENIA DYBCIO Registered ofﬁce: 00-388 Warsaw, ul. Dobra 6 m. 14 Business ofﬁce: 03-289 Warsaw, ul. Ostródzka 213

46 polish market

Tel. 0-22 510 70 60 Fax 0-22 510 70 70 biuro@adrog.com

Infrastructure

Innovation

The International Railway Fair

TRAKO

Prof. Janusz Dyduch, President of the Polish Association of Transport Engineers and Technicians

he International Railway Fair - TRAKO is a meeting of the rail industry, organised this year for the eleventh time by the MTG company in Gdańsk. TRAKO, Poland’s largest transportation trade fair, fits into the landscape of change, modernisation and promotion of Polish railways. This year’s meeting stimulates reflection on the achievements made so far, as well as on the future of the industry. It is over 10 years since Poland’s accession to the European Union. For railway people, it was a period of intense efforts towards the adaptation of the Polish railways to technical and legal requirements of the European Union. The National Railway Programme until 2023 is being defined. The main challenge for the coming years is the development and modernisation of railway infrastructure, renovation of the traction system and rolling stock, as well as improvement of the organisation and management systems, including safety systems. This can be achieved through the effective use of all funds, especially those from the EU, intended for investments, modernisation and maintenance of the railway network. Travel comfort will not improve unless the modernisation is carried out of infrastructure and rolling stock. In recent years, Polish train stations were upgraded to meet EU standards in terms of aesthetics, safety and the needs of people with disabilities.

48 polish market

It is over 10 years since Poland’s accession to the European Union. For railway people, it was a period of intense efforts towards the adaptation of the Polish railways to technical and legal requirements of the European Union.

The programme of high-speed rail technologies is under way. This is something that inspires great optimism, but is also an important challenge for my colleagues from the Polish Association of Transport Engineers and Technicians and for the entire railway community in Poland. The biannual International Railway Fair – TRAKO does no doubt play a crucial role in building the awareness of these investments, namely by stimulating both public interest and intellectual debate among railway policy-makers. It also has a positive effect on the development of the • subcontractors market.

9/2015 polish market

Energy

Modern

laboratories and well-prepared staff

Prof. Eng. Antoni Świątek, Director and President of the Board, Automotive Research and Development Institute BOSMAL Sp. z o.o., talks to Marcin Haber about the company, its history and the future of the automotive market.

Could you tell us more about BOSMAL’s activities? BOSMAL was established in 1972 as a National Research and Development Centre to provide automotive expertise for the FSM factory (Small Car Factory) in Bielsko Biała. Over the years, as the company grew, we built labs to be able to carry out research and started cooperation in Europe and around the world. In 2010, BOSMAL was privatised and renamed Automotive Research and Development Institute BOSMAL Sp. z o.o. Our headquarters in BielskoBiała has a headcount of around 350 people, including nearly 220 highly skilled engineers and scientists. In addition, the company’s Italian subsidiary - BOSMAL Italia - employs approx. 35 people. The automotive sector is the company’s main focus, accounting for about 90% of our overall business, which covers testing of cars, automotive components and assemblies, chassis components, and braking systems. The Institute also operates modern labs: Material Research Unit conducts research for the automotive but also other industries; the Engine Research Unit tests internal combustion engines of up to 500 kW propulsion power for the automotive and shipbuilding, as well as power generation engines for wide use. We also have construction and production labs as well as a prototyping unit. Adding to the wide range of BOSMAL’s activities is the recently acquired type approval license allowing BOSMAL to perform full load testing of tractors, cars, trucks and buses. It is also worth mentioning that the Institute has more than 1,000 modern devices and test stands. pm

50 polish market

And what does your subsidiary - BOSMAL Italia, you mentioned above, deal with? Our Italian company also provides research services. It mainly performs road tests under direct supervision of customers and designers. pm

Let us talk about innovations. They are now the driving force of many industries, including the automotive. Do you apply innovative solutions? Of course. The vast majority of orders and tenders, or approx. 70% of our overall business, are precisely related to research and development. These activities naturally involve some innovative solutions I must not speak about, however, due to confidentiality agreements. The remaining part of our business is all kinds of research and technical services, as well as niche production of control and measurement instruments. In conclusion, I can say that innovative implementations are at the core of BOSMAL’s business. pm

You mentioned that the Institute went private in 2010. Did it change its mode of activity? Is it possible to can draw a clear line between what was before and what is now? No, definitely no such distinct boundary can be determined. From the very beginning, working under FIAT’s license, we were part of the European industry. After the 1989 transformation, resulting in FSM in Bielsko-Biała being sold to Italy’s FIAT, BOSMAL sailed into the waters of international cooperation. Therefore, we cannot draw a clear line marking the end of one period and the beginning of the other. However, some aspects of our business pm

changed significantly. I mean the management model and the concept of further development. How do you think the future of the automotive industry will unfold? There is much talk of electric cars. Is this the right direction in your opinion? First of all, it should be emphasised that motorisation gave people freedom, allowing them to move freely. Abandoning individual motorisation would be inconceivable today. Of course, cars will get various modifications, new shapes and new materials. The changes will be dictated not only by designers, but also by technological advancements and increasing customer demands. The most important question we should ask ourselves and which remains unanswered is: what will be the alternative power source? In my opinion, mass motorisation will continue to use internal combustion engines in the next decades. This is because vehicles with such internal combustion engines are able to drive long distances as opposed to electric cars whose range remains limited and which represent a good alternative for urban public transport only. Perhaps we will live to see the era of individual mass motorisation using electric drive. Until then, however, technological revolutions have to occur in at least three fields: electricity generation, on-board energy sources (batteries) and supply infrastructure (charging stations). Passenger electric vehicles can be used as second or third cars for short distances within urban areas. They can also be used e.g. in spa resorts. As far as individual mass motorisation is concerned, hybrids, or vehicles with diesel-electric drive, stand much greater chances of success. • pm

PLGBC GREEN BUILDING SYMPOSIUM 06.10.2015 WARSAW CENTRUM NAUKI KOPERNIK

HEALTH WELLBEING PRODUCTIVITY AS KEY ECONOMIC BENEFITS OF GREEN BUILDING

• Newest information on global trends • Top rank international experts • Best Polish green buildings awarded in PLGBC Green Building Awards 2015 World class sound and communication expert – Julian Treasure, ﬁve time TED speaker with more than 18 mln views, reveals how we can improve wellbeing, productivity and social behaviour by designing appropriate and eﬀective soundscapes in our buildings.

More information at www.konferencja.plgbc.org.pl

Honorary patrons:

Media partners:

Discussion panels: New workspace: why do leaders choose green oﬃces? Global trends and perspectives for green, healthy and comfortable buildings of various types. Providing optimum conditions of buildings use and employees’ wellbeing vs energy eﬃciency. More than 200 participants: • Investors, developers, real estate agents, tenants, property managers, architects, designers and HR managers • Top management: chairmen, CEO, COO and other management.

Towards the development of regions and the whole country

Investment

Patryk Mirecki

52 polish market

nvestments totaling more than PLN 100 billion, almost 300 thousand new jobs and a major economic boost in hundreds of locations throughout the country – these are the fruits borne by the special economic zones (SEZs). Contrary to popular beliefs, investors are not only foreign companies. What is more, in terms of investments made in SEZs Polish businesses come first. The zones will exist for another 11 years, so it will be an opportunity for Poland’s eastern regions, so far relatively neglected, to catch up with the rest of the country. “Poland is an attractive and stable economic partner. We are creating good conditions for entrepreneurship development, which leads to an increase in exports and foreign investment,” Janusz Piechocinski, Deputy Prime Minister and Minister of the Economy, recently said. In his opinion, there are three major drivers of economic growth: stimulation of domestic consumption, steady growth in exports and development of investment capacity. As far as stimulating investment is concerned, special economic zones have a key role to play. They constitute an important and effective mechanism attracting investors and influencing the economic development of individual regions. “They fulfill their tasks perfectly. New operation permits keep being issued, new factories are being launched

and employment is boosting. And - something I am particularly glad about - Polish companies have finally come to believe in the potential of SEZs. I hope, actually I am confident, that it is going to be a good time for investments,” adds Piechociński.

Income tax exemption “The Report on the Implementation of the Act on Special Economic Zones” (as at 31 December 2014), published by the Ministry of the Economy, states that “a special economic zone is an administratively separate part of the Polish territory, where entrepreneurs carrying out new investment projects can benefit from regional aid in the form of income tax exemption on income derived from business specified in the permit.” For entrepreneurs, it is precisely the income tax exemption that serves as a magnet, attracting them to make new investments in the zones. According to the information released by the Ministry of Finance, by the end of 2013 the tax exemptions to which entrepreneurs and companies managing the SEZs were entitled totalled nearly PLN 14,633.59 million. Given that tax

NATURALLYDEVELOP YOUR BU$INESS HERE

70%

Tax exemptions and reducions reaching of incurred investment costs.

Perfect location!

North-east part of Poland. SSSE is located in the immediate neighbourhood of Lithuania, Russia and Belarus which gives businesses direct access to attractive eastern markets.

QR CODE Wygenerowano na www.qr-online.pl

Suwalki Special Economic Zone j.s.c., Noniewicza Street 49, 16-400 Suwałki, tel.: +48 87 565 22 17, ssse@ssse.com.pl

www.ssse.com.pl

Investment

Investment exemptions granted to the companies managing the SEZs from their inception up to the end of 2013 amounted to PLN 214.62 million, the total volume of public aid offered to entrepreneurs operating in the SEZs was PLN 14,418.97 million. This amount represents 15.48% of the companies’ investment expenditures up to the end of 2013. Industrial and innovative projects prevail in the SEZs, but there are also activities aimed at the development of vocational education and clustering. This is especially important as, after years of massive investing in services, stock and financial instruments, we are witnessing, around the world and in Poland, the process of reindustrialisation.

Fiat or Sitech. The leader in terms of the country of origin of the capital is the Netherlands (with a share of 29.5%) and Japan (20.4%). Dominating are investments located in Lower Silesia and Silesia – they account for nearly 66.9% of the funds invested by the said companies. The total investment volume of the 15 largest investors as at the end of 2014 amounted to nearly PLN 24.3 billion, which represented 23.8% of all investments made in the zones (0.9% less than in 2013).

Western, southern and central Polish regions are most attractive

According to data from the Ministry of the Economy, Polish entrepreneurs have already for several years ranked first in terms of the capital invested in SEZs. Their investments in the zones at the end of 2014 amounted to nearly PLN 19.4 billion, accounting for approx. 19% of the total capital invested in SEZs from the beginning of their existence. Polish entrepreneurs are responsible for the largest proportion (over a half) of the capital invested in the zones: of Słupsk, Suwałki and Starachowice. The largest investors in Słupsk were Paula Fish and Nordglass, in Suwałki - Porta KMI Poland and Aquel, and in Starachowice – Grupa Azoty Zakłady Azotowe Puławy, Valdi Ceramika and Cerrad. Polish entrepreneurs invested slightly less, although more than others, in Kraków, Mielec and Łódź. At the same time, the largest amount of the Polish capital was invested in Łódź, reaching there more than PLN 3.6 billion in 2014.

There are 14 SEZs in Poland: Kamienna Góra, Katowice, Kostrzyn-Słubice, Kraków, Legnica, Łódź, Mielec, Pomerania, Słupsk, Starachowice, Suwałki, Tarnobrzeg, Wałbrzych and Warmia-Mazury. They are spread throughout all 16 provinces. However, operation permits have different effects in individual SEZ. It depends, among others, on the level of development in these regions. As pointed out in the above-mentioned document of the Ministry of the Economy, “when assessing the economic effects of individual zones, it should be borne in mind that they are determined to a large extent by the geographical location of these areas, their social and economic infrastructure, as well as the availability of qualified staff. The leading zones in terms of the number of permits granted, the value of investments and the number of jobs are those located in western, southern and central Poland, that is in the regions that are much more investment attractive than the northern and eastern parts of the country.” Under the Act on Special Economic Zones, as applicable in 2014, a total area of the zones must not exceed 20 thousand ha. At the end of 2014, the area of all the zones amounted to more than 18.1 thousand ha, covering sites in 162 cities and 232 communes. Meanwhile, the parliament on 22 January increased the limit of the total area of the zones in Poland to 25 thousand ha and introduced the principle that the land owned by the sole shareholder companies of the Treasury shall be considered as public land. SEZs will continue to operate until the end of 2026.

Automotive industry prevails In terms of investments, the most represented sector is the automotive industry, with a share of 61.9% since the inception of the SEZs. The second one is the chemical industry. As far as the amount of the capital invested is concerned, most of the 15 largest investors are carmakers, such as General Motors, Toyota, Volkswagen, Michelin, Bridgestone,

54 polish market

Polish capital prevails

sites for Investment along expressways and in Local Industrial Parks According to data from the Ministry of the Economy, the SEZs are planning to issue in 2015 as many as 217 investment permits, with a total value estimated at approx. PLN 7.7 billion and resulting in the creation of approx. 11 thousand new jobs. A new concept of creating areas of investment activity along the expressways is set to be implemented this year in close cooperation with local governments. The managements of several zones are already working on this. The Legnica SEZ is building its concept along the S3 expressway section Lubawka - Jelenia Góra - Jawor Legnica - Lubin - Polkowice - Głogów. Pomerania, Słupsk and Kostrzyn-Słubice are working together on the “S6 Seaside Investment Route” linking the investment attractive areas of northern Poland, close to the seaports. The Katowice SEZ is developing “4 S”, a project that involves economic stimulation of the areas located along 4 expressways - the S69, S1, A1 and DTŚ. To accommodate the needs of SMEs, Local Industrial Parks will be established in cooperation with local governments. They will house incubators and buildings for rent. •

Warmia-Mazury Special Economic Zone the highest level of public aid in Poland

he Warmia-Mazury Special Economic Zone SA (W-M SSE) is located in Warmia and Mazury (Warmińsko-Mazurskie province) and in the northern part of Mazovia. It covers an area of 1,057 ha of land designated for investments. It has been established to accelerate the economic development of the region. All potential investors have access to professionally developed sites for investment, tax reliefs, good road infrastructure, as well as airports. The zone has resources that can be used to increase the rate of growth of industries such as the agri-food sector (54.9% of the area is farmland, there are relevant scientific and research facilities and Poland’s largest percentage of over 20 ha farms), furniture sector (suitable raw material base - forests cover 30% of the area), tourism, as well as yacht and motor boats manufacturing. Rich wood resources and a long tradition of wood processing have made the region an undisputed furniture basin of the country. There are a number of companies of domestic origin operating in the zone that successfully export their products worldwide. 42.5% of the Polish production of rubber comes from Olsztyn, a home to a tyre factory. The majority of the subzones operate rail transfer stations. The airport in Modlin, the airport in Szymany, which is now being built, as well as the seaport of Elbląg are some of the zone’s many assets raising its investment attractiveness. “Our zone offers not only infrastructural facilities. Firms planning to start a business can count here on substantive assistance throughout the investment process, like facilitating contacts with local authorities or central administration regarding the purchase of sites for investment. We cooperate with the University of Warmia and Mazury in creating conditions for the development of a modern economy, improving the quality of human capital to drive innovation, and strengthening cooperation between business and the scientific community,” says Marek Karólewski, President of W-M SSE. The dynamic development of modern technologies and rapidly changing operating conditions make it necessary

for students to gain skills demanded by future employers. For these reasons, the W-M SSE takes action to support and develop vocational education by, for example, promoting cooperation between schools and employers, organising internships in companies, or creating vocational training classes. The zone is made of 30 subzones located in the following towns and municipalities: Barczewo, Bartoszyce, Biskupiec, Ciechanów, Dobre Miasto, Elbląg, Iława, Iłowo, Kętrzyn, Kurzętnik, Lidzbark Warmiński, Mława, Morąg, Mrągowo, Nidzica, Nowe Miasto Lubawskie, Olecko, Olsztyn, Olsztynek, Orzysz, Ostrołęka, Ostróda, Pasłęk, Pisz, Piecki, Płońsk, Pomiechówek, Szczytno, Wielbark, Zakroczym and - the youngest one – in Pomiechówek in a close vicinity of the Warsaw-Modlin airport. Entrepreneurs starting business in the Warmia-Mazury Special Economic Zone for Medium Business are entitled to public aid in the form of tax exemptions either on account of investment spending or job creation. Each entrepreneur is free to choose between the two. Under the existing regulations, Warmia and Mazury is an area where entrepreneurs can obtain the highest aid in the country, reaching up to 70%. We enjoy trust of our entrepreneurs, as evidenced by the constantly emerging new plants of such reputable companies as Michelin Polska S.A., Ikea Industry Poland Sp. z o.o., Polmlek Sp. z o.o., Wipasz S.A., SM Mlekpol, Philips Lighting Poland S.A. Branch in Kętrzyn, Wójcik Fabryka Mebli Sp. z o.o., Fabryka Mebli Szynaka Sp. z o.o. and • LG Electronics Mława sp. z o.o.

See what we offer to investors www.wmsse.com.pl

9 /2015 polish market

Investment

A zone of

success

The attractiveness of the Wałbrzych Special Economic Zone “INVEST-PARK” results not only from the tax exemptions granted to investors functioning in any of its 48 subzones, but also from the professional care provided to the entrepreneurs. This has been appreciated by the fDi magazine of the Financial Times group, which recognized the WSEZ as the most investor-friendly zone.

he friendly attitude of the Wałbrzych Special Economic Zone has contributed to the fact that 180 firms are operating here. They have invested more than PLN 19 billion (EUR4.5 billion) and created almost 41,000 jobs. Among those who have trusted us are the largest global corporations: Toyota, 3M, Mondelez, Mahle, General Electric, Bosch, and Volkswagen. Volkswagen’s plant in Września, Wielkopolskie Province, has been the largest investment project in the zone in the last decade. Constructing and equipping the plant, where 3,000 people will ultimately work, will cost almost PLN3.5 billion (EUR0.8 billion). Each year, 85,000 VW Crafters will roll off the production line. The Września Economic Activity Zone (WEAZ) has been established in the proximity of the factory, where 100 ha of land is still available to investors. “The WEAZ is one of the most attractive destinations for investors in Europe. Selling the land is a priority for the Wałbrzych zone. We are aware that new jobs in Września will generate new jobs across Poland,” says Barbara Kaśnikowska, President of WSEZ “INVEST-PARK”. However, the Wałbrzych zone attracts not only global corporations. Almost 44% of the firms operating here are micro, small and medium-sized enterprises. With them in mind, the Wałbrzych zone introduced a pioneering programme of building production floors. Four such facilities were built last year, and all of them have already been sold or leased out. For this reason, the construction of another two has begun – in Dzierżoniów

56 polish market

Iwona Krawczyk “The Wałbrzych Special Economic Zone offers almost 1,300 ha of investment-ready land in prime locations in south-western Poland. We do our best to expand the zone and include areas that will attract new, regionally significant investments,” says Barbara Kaśnikowska, President of WSEZ “INVEST-PARK”.

(with a floor area of 5,000 m 2) and Września (10,000 m2), complete with parking lots and vehicle manoeuver areas. Each of the facilities will use modern technological and environmentally-friendly solutions. Apart from the production floors, almost 1,300 ha of land is available to investors in four provinces: Dolnośląskie, Wielkopolskie, Opolskie, and Lubuskie. The plots are situated near the main transport routes (motorways, expressways, airports), in the proximity of the Czech Republic and Germany. The strategic situation of the Wałbrzych Special Economic Zone “INVEST-PARK” offers easy access to markets in the west and east alike, with almost one billion potential customers. Entrepreneurs who locate their investment projects in these production halls, as well as within any other area covered by the Wałbrzych zone, are eligible for tax exemptions. In Dolnośląskie and W ie l kop ol sk ie provinces, they amount to between 25% and 45% of the capital expenditure or labour costs in the first two years (25% in the case of large enterprises, 35% medium-sized ones, and 45% small and micro

companies) whereas in Opolskie and Lubuskie – between 35% and 55% (35% for large companies, 45% for medium-sized ones, and 55% for small and micro firms). • More information: www.invest-park.com

Chairman of the Board of the Kamienna Góra Special Economic Zone Ladies and Gentlemen,

we are a good example of a team that supports important investments and ooers comprehensive handling of investment processes. Economic challenges and new trends are reeected in the individual approach to every project. Over the last 15 years, we have managed to attract investors that carried out investments worth more than PLN 2 billion in an area covering 209.7 ha, and created almost 7,000 new jobs. We actively contribute to the creation of investments being the foundation of local development and national economic development and an example of a thought-out global strategy, taking into account the needs and speciicities of the local market. Our solutions, geared to your individual preferences, will allow you to eeectively build your company's brand and position on the global market.

The Kamienna Góra Special Economic Zone for Medium Business is located in south-western part of Poland, in Lower Silesia and Wielkopolska, in proximity of cities such as Wrocław, Prague, or Dresden. The zone covers a total area of 373.83 ha, including 15 subzones, close to the borders with the Czech Republic and Germany. Investment areas belonging to zone are tted out with all the necessary infrastructure. Entrepreneurs starting business in the Kamienna Góra Special Economic Zone for Medium Business are entitled to public aid equivalent to up to 45% of investment outlays or two-year labour costs of newly employed workers.

LEADING SECTORS Automotive: TAKATA PARTS POLSKA, DR.SCHNEIDER AUTOMOTIVE POLSKA, TBAI POLAND, AUTOCAM POLAND Metal: WEBER-HYDRAULIKA, ENERGOMONTAŻ ZACHÓD WROCLAW Printing: BDN Paper: WEPA PROFESSIONAL PIECHOWICE Ceramic: POLCOLORIT Cosmetic: IMKA

CONTACT tel.: + 48 75 645 20 30 email :strefa@ssemp.pl website : www.ssemp.pl

Energy

Małopolska.

Enjoy! Marek Sowa, Marshal of the Małopolska Region

ałopolska is a region that for many years has invested in the development of areas of key importance for economic growth and improvement of inhabitants’ life quality. These efforts are rewarded by the national economic rankings giving Małopolska ever higher scores. “The results are better than it could have been anticipated several years ago. Małopolska reaffirms itself as one of the most developed regions of Europe. Furthermore, efforts aimed at the development of entrepreneurship in the region are bringing fruit,” says Marek Sowa, Marshal of the Małopolska Region (Małopolska). The latter have received recognition from the EU Committee of the Regions. Małopolska won the prestigious title of “European Entrepreneurial Region in 2016.” It is awarded since 2009 to EU regions that offer the most reliable, future-oriented and promising plan of action, based on an outstanding and innovative business strategy. Małopolska is the first Polish region to have received this award and it is no accident. In recent years, its GDP grew by almost 30%, and the number of companies that want to set up business in the region increases constantly. Consequently, the unemployment rate is decreasing (the figure was 8.8% in June) and salary levels are rising. The unit responsible for improving investor and exporter service and economic promotion of the region is Business in Małopolska Centre (CeBiM). It supports entrepreneurship in the region and promotes its business abroad. Małopolska is attractive to investors also thanks to dozens of economic activity zones and special economic zones covering an area of over 700 hectares. Kraków, the region’s capital, is considered as the best investment destination in Poland for companies from the business services sector (BPO/SSC). In the last three editions of the

58 polish market

“Top 100 Outsourcing Destinations Report” by Tholons Kraków is ranked among the top 10 business service investment locations in the world, while remaining Europe’s leader.

European funds as a chance for development The successful development of Małopolska is also a result of the efficient use of European Funds. Under the Regional Operational Programme (ROP) for Małopolska for 2014-2020 alone, they will total almost EUR 2.9 billion, almost a billion more than in 2007-2013. The ROP for Małopolska is the second largest regional programme in Poland in terms of budget. It allocates more than EUR 600 million to various forms of business support, such as investment in research, development and innovation, creating new zones of economic activity and developing the existing ones, increasing the competitiveness of the SME sector, improving energy efficiency in business, supporting start-ups, raising employees’ qualifications. As pointed out by Marshal Marek Sowa, Małopolska focuses on building a strong partnership between local government, business and science, on effective introduction of European funds and supporting entrepreneurship at every stage of company building. “In the coming years, we will put a special emphasis on the development of modern technologies in business, because it is a huge opportunity for Małopolska. The region harbours a great potential in this area - excellent human capital, infrastructure facilities, and a strong community of start-ups,” says Sowa. Małopolska specializes in several areas. These are mainly:: life sciences, sustainable energy, information and communication technologies (ICT), chemistry, manufacture of metals, metal products and non-metallic mineral products, electrical

and mechanical engineering, creative industries and leisure.

Tourism potential Małopolska is a region with the largest number of historial sites in Poland. It is, therefore, not surprising, that it is the most willingly and frequently visited Polish region. (more than 13 million people in 2014). Tourism is a vital sector of the economy, generating revenues of approx. PLN 11.2 billion (2014) and providing employment to one fifth of the region’s population. The three most attractive tourist destinations are Kraków, Zakopane and Wieliczka (salt mine). Visits to Wadowice and Auschwitz-Birkenau, as well as mountain stays are popular, too. Further tourism development will be prompted by the construction of the S7 expressway, especially the overhaul of the so-called “Zakopianka.” This will shorten time it takes to reach the mountains, while also improving the traveller’s safety and comfort. The S7 section from Lubiń to Rabka-Zdrój is one of the most important elements of the National Roads Construction Programme for the years 2014-2023. What distinguishes Małopolska from other Polish regions is its hosting of the annual Economic Forum in Krynica-Zdrój, a mountain resort in Małopolska. The 3-day prestigious international event gathers politicians, heads of state and government, local authorities, business people, economists and experts from all over the world with a view to discussing the current issues of the world economy and developing political and economic cooperation. Every year, important statements are made during the Krynica Economic Forum, which are widely discussed by experts, but above all enjoy interest from the business community that is actively involved in the organisation of the Forum. •

Investment

Regeneration of

Krakow Jacek Majchrowski, Mayor of Krakow, talks to “Polish Market”. In recent years, the term “regeneration” has become almost a catch-all. Everything is being regenerated – even mere repairs are often referred to as regeneration as in the case of the facade of a tenement house. This distorts the concept behind this term. Hence an attempt to narrow down the use of the term by means of the Act on Regeneration adopted by the parliament on 23 July 2015. What does this process look like in Krakow? Is the new law going to bring any major changes for the city? The regeneration process is nothing new for Krakow – it has been taking place here for many years, making it possible to carry out subsequent transformations in the various parts of the city. The Act reaffirms what we have known since the beginning of preparations for such profound changes, namely that it is not enough to recondition an urban block or a district to make them friendly to people, stimulate activity and creativity and restore their “urbanity”. It is a difficult and long-lasting process that requires a deep insight into a place so as to preserve its character or, quite the opposite, to create a new quality of places and spaces. This is an extensive project which requires discussions and consultations with local residents and other users of a space undergoing the regeneration process. I it is worth recalling at this point public consultation, which became an important tool in our work on the local regeneration plan for the Old Town already in 2007-2008. Only a combination of all these actions allows for carrying out efficient and effective regeneration. pm

The effects of the previously taken measures can be observed today in the presently vibrant Kazimierz district and in Pogórze, which is undergoing transformation. What about the present situation? Is the city focused on regeneration of other areas or is the process coming to an end?

60 polish market

A city like Krakow is a living organism that is constantly evolving, thus our projects must keep up with those changes. For years, we have been implementing Local Regeneration Programmes which cover the Old Town, Nowa Huta and Zabłocie. In each of these districts it is vital to preserve the character of particular areas and combine in a harmonious way the old and new buildings to create a contemporary urban space used for various purposes, make local residents more active and attract investors and visitors. What are the main objectives and characteristic components of the various programmes? What can we expect in a few years? The regeneration of the Old Town is a continuation of the previously started processes supplemented with further initiatives that will help strengthen the potential offered by the business and cultural centre of the city, which includes, among other things, the multitude of building complexes, public spaces as well as buildings and structures of an exceptional cultural and historical importance, as well as the existing institutions dealing with culture, science and administration. As regards Zabłocie, our goal is to continue and stimulate processes that have already transformed this previously degraded, former industrial district into a place friendly to the young and creative. Within the last few years, Zabłocie has become a place housing a great deal of co-working centres and start-ups, attracting, at the same time, artists and entertainers implementing a number of their own projects – from presentations and discussions to festivals. The regeneration of Zabłocie can also serve as an example of successful cooperation between the private and public sectors, as the eagerness of the city encouraged a number of private investors to participate in the project. The “old” Nowa Huta requires completely different actions to be taken – it is a district pm

which requires conservation as a historical representation of urban planning in the times of socialist realism, while not disregarding its significant role in the functional and social life of the city. Regeneration processes are to fully restore the urban function of the sub-centre integrating the industrial, commercial and residential areas of the eastern part of Krakow by improving the space and functional, environmental, economic and social conditions in this part of the city. We want to transform public space in terms of its utility and aesthetic values – to provide the residents with favourable conditions to work, rest, relax and entertain themselves. Another very important objective is to strengthen the local economy. This can be achieved not only by supporting local initiatives but also, by creating a new interesting economic space for new businesses, thus strengthening Krakow’s labour market in areas acquired from ArcelorMittal Poland. The experience gained by Krakow with respect to regeneration would certainly be valuable for numerous cities that are just about to start regeneration processes. Can they take any advantage of it? On 8-10 September 2015, we will once again attend, as a Partner, the Economic Forum in Krynica, where we and the invited guests will be sharing experiences and discussing ideas and examples of good practice which are worth being followed. pm

What is an absolutely indispensable component of regeneration projects? First of all, participation,that is direct participation of residents in all stages of the process. Some projects seem to be very promising, yet without the involvement of local communities and their approval of the proposed changes, they will result in mere reconditioning of the area, and not its regeneration. • pm

Smart city a city like a living

Innovation

Prezentacja najnowszych

rozwiązań

Smart City w transporcie

organism

23-24 września 2015 r.

Smart cities are cities which rely on modern technological solutions and knowledge to improve their operation. This model is becoming increasingly popular across the world, including Poland. It is possible to apply smart solutions to almost all aspects of a city’s life: from managing traffic and energy consumption to monitoring water and air quality to healthcare applications. Under the smart city concept, the city is treated like an organism where each smoothly operating part contributes to the good condition of the whole. Marcin Haber

oad traffic management systems are the most spectacular application of smart city solutions. Such systems can already be seen in Polish cities. A traffic management system adjusts intersection throughput to traffic intensity in a given moment. Simply speaking, in rush hours green lights are on at busy intersections for much longer than at night or in off-peak hours. Systems composed of special software and sensors placed at the intersections calculate in real time the most efficient traffic light timing to ensure that the traffic jams are as small as possible. Another well-noticeable solution, which has probably been present in Polish cities for the longest time, is urban surveillance. It is highly praised by police because it has contributed to a marked reduction in vandalism, theft and other undesirable acts. When these systems were being put in place there were complaints that they would restrict people’s freedom and were an element of an oppressive state. But today, after the systems have contributed to improved security, the dissenting voices are increasingly rare. A smart city is a city put in the hands of its citizens. I have in mind any kind of interactions which enable the citizens to improve their comfort and security, find the shortest way to a place in the city or report problems which matter to them to the municipal authorities. In an era of universal access

62 polish market

to the Internet and mobile devices, it is citizens who increasingly often notify the relevant services about accidents or damaged infrastructure, and suggest solutions to improve the operation of the services. The 19115 application developed in Warsaw on the initiative of the municipal authorities is an example of such a solution. It enables the residents to notify the authorities about issues concerning the city’s life, like for example problems with urban transport, instances of vandalism and the presence of wild animals in the city. This contributes to improving the work of municipal services and gives the citizens the sense that they take part in the life of the city. The smart-city concept is part of a bigger phenomenon, something which we call the Internet of Things where our everyday devices interact with each other and form a single network. The network enables the instant exchange of data among its various users, usually through cloud applications. The Internet of Things connects our daily life with the virtual world, often without our direct involvement. Thanks to the devices we have, we become members of a larger network, for example one used to observe city traffic intensity. You can imagine a situation where such a solution helps to save your life during an accident. Applications helping drivers to find parking spaces are already in use.

In the smart-city context, the notion of Internet of Things also means the interaction of systems and devices, and gathering common data and using it to smooth the functioning of the city. One example is sensors installed at intersections to send information about traffic intensity or the approaching urban transport vehicles. Another example is the systems which automatically redirect traffic to diversions if the main road becomes congested. They have proven their worth in many cities. A system of this kind turned out to be quite useful in the first days after the closure of Łazienkowski Bridge in Warsaw. Environmental protection is one of the aspects taken into account when implementing smart city projects. This is especially evident in European Union documents and initiatives. The “European Initiative on Smart Cities” is focused on optimization, energy efficiency and cuts in greenhouse gas emissions. The goal is to support cities and regions in their efforts to achieve by 2020 a 40% emissions reduction as compared with the reference value of 1990. It is a very ambitious target and can only be achieved thanks to innovations in the area of organization, low-emissions technologies, and the smart management of production and energy consumption. The main emphasis will be placed on energy-efficient buildings, local electricity networks • and transport efficiency.

PARTNERZY STRATEGICZNI

PARTNERZY

Kontakt: Aneta Pernak a.pernak@mmcpolska.pl +48 22 379 29 18

9/2015 polish market

www.smartcityforum.pl

Investment

Potuliccy Park Musicians The Fountain in Kościuszki Park

Pruszków on the podium T

his year’s edition of the Pearls of Local Government competition was a great success for Pruszków. The “Dziennik Gazeta Prawna” daily – the organiser of the ranking and the gala ceremony, which was held on the premises of the Warsaw Stock Exchange on 26 May – studied the activities of almost all 2,500 Polish mayors, including from 894 towns of up to 100,000 inhabitants. Jan Starzyński, the mayor of Pruszków, was announced the winner of the competition, as one of the top 10 “Mayors of the Last 25 Years”, in the category of towns of up to 100,000 inhabitants. This year’s ranking was a special one, as far as it summed up 25 years of Poland’s local government. Let us add that Pruszków found itself among towns

64 polish market

such as Sopot, Nowy Sącz, Legnica and, in close neighbourhood, Józefów near Otwock and Legionowo. Pruszków’s success is a combination of a long-term consistency and perseverance in achieving the objectives approved by its residents, a reasonable fiscal policy and the willingness to cooperate with all the communities interested in the development of the town. Another success of Pruszków is its position in the ranking of “Cities Attractive for Business” – Pruszków was ranked fifth in the category of towns with between 50,000 and 150,000 inhabitants, with a 0.99 growth in the number of companies per 1,000 population in 2014, behind Zielona Góra (2.58), Opole (1.21), Przemyśl (1.17) and Leszno (1.04). The annual ranking by “Forbes” and the Economic

Żwirowisko Park

Information Centre is focused on studying the business birth rate per 1,000 residents. At the same time, it evaluates local governments in terms of creating business friendly climate and leveraging the potential of the city - such as location, development plans, utilities, skills and the purchasing power of residents - to attract investors. Pruszków has for years been ranked in the top 10 Polish cities in this category. In 2011, it came second, in 2012 - eighth, in 2013 - third, in 2014 - fifth. How Pruszków scored in other rankings over the years can be traced at www.pruszkow.pl in the tab “Meet the Town - Pruszków in the Rankings.” In February 2014, the “Gazeta Wyborcza” daily published “Where’s the Chance of Success? The Great City Ranking”, a survey that compares 21 major Polish cities for friendliness in terms of transition into autonomous life by young people. The following variables were considered: chances of getting a well-paid job, ease of starting a business and earning one’s living, entrepreneurship climate,

Train Station in Pruszków

pro-family policy, security, education, social activity, cultural and sports opportunities. The study was extended to cover Pruszków (on a special request of the town). The final results unveiled the most and the least young people friendly cities, including the fourth position for Pruszków, behind Zielona Góra, Warsaw and Rzeszów. On 1 June 2014, Pruszków started the implementation of the Pruszków Large Family Programme, which aims to improve the living conditions of families with many children by reducing their spending on indispensable products and services. The programme promotes and supports large families by increasing development and life chances of children growing up in such families and facilitating their access to culture, sports and education. The programme covers 381 families (whose members were issued 2,238 cards) from Pruszków, including foster families, consisting of parents (single parent) or foster parents (parent) having three or more children, and settling income tax in Pruszków. Eligible residents are issued Pruszków Large Family Cards. • 9 /2015 polish market

Finance

New space on the

insurance market Paweł Bisek, President of Benefia Towarzystwo Ubezpieczeń SA Vienna Insurance Group, talks to “Polish Market.”

Please accept our congratulations. It is 15 years this year since Benefia Towarzystwo Ubezpieczeń SA Vienna Insurance Group was set up and you have been its head since the very beginning. Thank you very much. Indeed, we sold the first insurance policy in July 2000. Initially, the company operated under the name of Fiat Towarzystwo Ubezpieczeń SA and the shareholder was an Italian company belonging to the Fiat group, Toro Targa Assicurazioni. It is under this name that the first policy was sold on July 10, 2000. In 2005, the name of the company was changed to Benefia Towarzystwo Ubezpieczeń Majątkowych SA. At the end of the year, the company saw a change of its shareholder Vienna Insurance Group Wiener Stadtische, one of the largest insurance groups in Central and Eastern Europe, with a history of over 180 years on the insurance market, became the company’s sole shareholder. Over the 15 years of its activity, Benefia has gained a major position on the insurance market, especially in the car insurance segment. In the insurance business, it has a reputation as a stable player in the group. pm

66 polish market

A few weeks ago I was in a kiosk of the well-known press distributor Ruch. I was surprised when the vendor proposed to calculate a premium for my car. She only asked for the vehicle registration certificate. I wonder if you used the service?

I was in a hurry, I did not want to wait long and I worried that a long queue would soon form behind me. But I handed her the registration certificate. And in a matter of a few seconds I received an insurance offer from Benefia. How do you do that? We have decided to go beyond the usual way of doing things. Benefia specialists employed at the IT and sales departments developed an innovative application called Tu i Teraz (Here and Now). The application, using for example a barcode reader, decodes the Aztec Code from a registration certificate and sends the data it contains to the Benefia system. On the basis of this information, Benefia servers check the insurance policy of the vehicle and its owner in the Insurance Guarantee Fund. Then, a policy is calculated and a few insurance variants dedicated to the pm

specific client appear on the display: liability insurance or liability insurance in a package with motor own damage insurance, accident insurance or assistance insurance. The best variant is insurance against all these risks. The multi-offer appears within five seconds and it may take as little as two minutes to buy a policy. I have to say that this is just the first step. We are going to successively expand the range of products we offer through this application by adding other mass insurance products, like for example home insurance, tourist insurance and accident insurance. You said “for example a barcode reader.” Does that mean it is possible to decode the barcode from the registration certificate in a different way? Do you need a cash register to sell the insurance? The answer is yes to the first question and no to the second one. But first things first, the Tu i Teraz application is also a mobile application. The client can do it all independently using a telephone with the Android system. After the application is installed in the phone, its built-in camera plays the role of the Aztec code reader. The decoded data are sent to the pm

Central Insurance Handling System (CSOU) to be checked. Then, insurance is calculated and several insurance variants dedicated specifically for the client are displayed. The offer may be very easily and quickly turned into a policy. You only need to touch the screen to select the offer that suits you best, get familiar with the General Terms of Coverage and pay the premium. It may be paid instantly with the smartphone, or by using a credit card, or electronic money transfer. Benefia’s goal is simply to make the process of taking out insurance easy, pleasant, cheap and quick. This is to be done Here, where the client is at the moment, and Now, when the client happens to have time to buy insurance or has just remembered that their insurance is about to expire. The pressure of time is a curse of our times. But to meet halfway the needs of our clients, who may remember about the need to insure their car while in a hurry not to miss a plane or while waiting in a queue in an office, we have another proposal for them - Benefiomat. It is based on the concept of multimedia kiosks - electronic devices resembling an ATM. The Benefiomat also makes it possible for the client to buy insurance using the Tu i Teraz application. It may also be used for banking operations. This means that the client will not only have their registration certificate scanned at a Benefiomat, and receive an offer and insurance policy, but will also be able to pay for it. When preparing for this interview, I learned that since its inception Benefia had been a pioneer and leader in applying modern technologies. What is the reason behind this visionary approach to business? The idea of the previous owners of the company was to have few full-time employees. They planned to outsource whatever possible. We contracted out most of our business processes. The company did not have a fulltime sales network or claims adjusters and we do not have them now either. But we quickly came to understand that we needed a suitable IT system to manage sales, handle insurance, aggregate data and properly report to the supervision authorities at the same time. We were a newly-established company. We have started creating all the processes from scratch and we could well do the same with the IT system. CSOU is a centralized on-line system. As a result, data for any operation are available instantly to all authorized users. CSOU also operates as a system of communication pm

among participants in the process of selling and handling insurance contracts, and claims adjustment. It is used by all employees and collaborators of Benefia. CSOU enables collecting any information about the client and the object of insurance. Our agents have never had to learn how to collect documentation. Today, many insurance companies operate on the same basis. But 15 years ago we were the first. There is one more thing which deserves attention – price. I think that today, after many years, we can openly talk about it. We developed the system using the money set aside for IT processes – we did not ask the owner for an additional budget. We told the Supervisory Board that we had a modern system only after it had been implemented and all its functionalities operated smoothly. The owner was not satisfied and did not believe that this “masterpiece” cost only PLN2 million to create. An IT and financial audit was carried out. Independent experts noticed our activity and in 2005 we received the IT Leader title in the Finance and Banking category from the “ComputerWorld” weekly. Later, most our competitors chose on-line systems as a basis for their operations. Is Benefia going to start selling insurance in cooperation with other partners, apart from Ruch SA? Since autumn last year Benefia policies have been available both from the Ruch kiosks and vehicle testing stations where you can see what we offer while your car undergoes a MOT test. It gives us satisfaction today to see a rapid and constant growth in sales through these channels. After the first stage, when we opened over 400 kiosks, not a day went by without policies being sold in this chain. This was true even of the pilot period. This autumn we plan to further expand the chain. Let us remember that Ruch has 2,500 kiosks in very good locations. The launch of sales at vehicle testing stations was like hitting a bull’s eye. In this case, premium calculations are counted in thousands. We are convinced that the clients who have received an offer will return to us to buy policies. In recent weeks we have launched a pilot programme at one of the chains selling radio and TV equipment and household appliances. And soon our policies will be offered at a well-known chain of petrol stations. pm

What would you tell the owner or shareholder in a large retail chain looking for new ideas to expand their business?

We welcome every prospective partner. Our business partners - who had doubts and many questions about insurance sales because of their seemingly complex nature, the specialist knowledge required and time needed for the whole process - now praise the mechanisms used by Benefia and are satisfied with their cooperation with us. We will gladly answer to any proposal from a prospective partner. You spoke about the impact of new technological solutions and their widespread use on brand recognition. You have to admit that so far Benefia has been a quite niche company, one known to professionals and clients of car dealerships – your leading distribution channel for years. Aren’t you afraid that the poorly recognized logo will be an obstacle to the expansion of your sales through other channels? I think the Tu i Teraz application proves its worth. Additionally, the 180 years of history and success of Vienna Insurance Group, of which we are part, stand behind us. The group, seeing the huge potential of the solutions we have developed, has decided to strengthen our capital base and at the same time free us of back-office duties. In June, our shareholder initiated a merger of Benefia Towarzystwo Ubezpieczeń SA Vienna Insurance Group and Compensa Towarzystwo Ubezpieczeń SA Vienna Insurance Group. After the merger, the new company will operate under the name Compensa. This will enable it to achieve a stronger position on the property insurance market and will allow Benefia and Compensa staff to jointly and more effectively meet the challenges facing the insurance market. The strategic goal for the company to become one of the top five insurance players, with an over 5% share in the market. The brand name of Benefia will not disappear from the market. A new company, Benefia Ubezpieczenia, will be set up. It will continue to operate independently in the market segments where Benefia is the strongest, that is in the car dealership segment and the segment of new distribution channels. And the merger with Compensa will give us synergy in capital management, especially in the light of the Solvency II directive. It will also make it possible to optimize back-office costs. I will be president of the new company. Michał Gomowski and Mariusz Kurowski will be members of the Management Board. • pm

9/2015 polish market

Energy

Poland’s economy Radosław Kuczyński, President of EFL

he situation in the leasing sector is a sensitive indicator of a country’s economic condition. This is due to the specific nature of leasing operations. Therefore, looking at the results published recently by the Polish Leasing Association, I can say that Poland’s economy is doing really well. In the first half of 2015, the Polish leasing business grew by 13.2%, financing assets with a total value of nearly PLN 24 billion. It is absolutely a record result in the entire history of the PLA. At the end of June 2015, the total value of the active portfolio of the leasing industry amounted to PLN 80.4 billion and was comparable to the balance of investment loans granted by banks to companies. What is important is the fact that the funding structure is balanced. In other words, the overall market growth is not due to single events, but is the result of systematic growth observed in particular market segments. In addition to loan, leasing remains the main external sources of investment funding. The largest share of the leasing market is that of cars, vans and trucks up to 3.5 tonnes. In the first half of 2015 leasing companies financed new and used vehicles with a total value of PLN 8.77 billion. But it is not cars, but machinery and equipment - including IT - that were a key growth driver of the leasing market in the first half-year. There was a 17% increase in funding year-over-year. I would even venture to say that Poland’s economy is facing a two-, three-year

68 polish market

investment boom in the machinery and equipment. This is owing to high production capacity utilisation, stable economic development and reduced unemployment levels, resulting in a decrease in labour supply. In this connection, companies willing to develop will have to invest in machines to replace man’s work. In the first half of 2015, the leasing industry also saw a stable development of heavy transport funding: an 11% growth, with assets worth PLN 6.22 billion. A pick-up was also visible in the real estate segment in the second quarter of the year. The above results indicate that the leasing market growth in the second half of the year will remain balanced. Of course, the segment of machinery and equipment will continue to grow, and so will that of heavy vehicles, as Polish exports are accelerating and there is an increasing demand for transport services from Polish transport companies. By the end of the year, the leasing industry is expected to achieve a 16% growth. The leasing market growth in 2015 will be in line with the expected increase in private investment, estimated by the Polish Leasing Association at 9.6%. In the second half of 2015, Poland’s economy will be under the influence of the factors that shaped it in the previous six months. First of all, the situation on the labour market will gradually improve, which will prompt companies to increase employment. As a result, Polish households will have more cash

available and, with consumer confidence and low probability of losing jobs, will spend a substantial part of the money on consumption. In the second half of the year, consumption will indeed be the engine of Poland’s economic development. In response, companies will continue investing, while entrepreneurs will be taking advantage of the economic situation in Europe. Sales declines, which are currently observed on the eastern markets, will be offset by growing sales to the euro zone. These forecasts are confirmed by “EFL Barometer”, an index based on a study ordered by EFL, and illustrating how SMEs feel about doing business and how far they are willing to grow. In the first quarter of 2015, the barometer reading was 54.3 points compared to 59.7 points in the second quarter. The forecast for the third quarter is up to 60.3 points. It is a very optimistic prognosis, 10 points above the OR threshold, which points to the level of development constraints and uncertainties among entrepreneurs. The results of the “EFL Barometer” suggest that there are more and more companies seeking expansion. Thus, it can be assumed that the financial condition of SMEs is improving. 14.8% of the companies surveyed aim to streamline liquidity and 10.2% to increase external financing. Interestingly, this trend is shared by microentrepreneurs. 42.7% of the respondents who plan any investment in the third quarter of 2015 declare higher expenditure on fixed assets. •

Finance

Bank

Innovation

PO RAZ PIERWSZY W POLSCE

tax

Prof. Małgorzata Zaleska, Director of the Institute of Banking, Warsaw School of Economics (SGH), and Vice-President of the Committee on Financial Sciences, Polish Academy of Sciences (PAN).

axes existed, exist and will exist. “Nothing is certain but death and taxes,” a popular saying goes. What remains to be determined is their subjective and objective scope. These days much is said and written on the taxation of financial transactions and financial institutions, particularly banks. It should be considered as a response to the financial crisis, during which some banks were rescued out of the pocket of taxpayers. It was therefore decided to recover this money spent by means of imposing additional burdens on banks. Attempts failed to introduce a harmonised bank tax at the G20 level and across the EU. The European Commission’s draft directive of 2013

70 polish market

on the taxation of financial transactions was supported by 11 member states only (Austria, Belgium, Estonia, France, Greece, Spain, Germany, Portugal, Slovakia, Slovenia and Italy). This was due to the existence of a strong banking lobby and diverging interests of individual countries, leading to the introduction of different bank taxation solutions in EU countries. Many EU member states have in fact enacted the bank tax. This tax feeds the state budgets (e.g. in France and in Britain) or special funds created with a view to restructuring banks facing financial problems (e.g. in Germany). It is, therefore, meant as a fiscal or stability instrument. In the first case, its purpose is short-term; in the second case the idea is to make savings to avoid potential problems in the future. In most EU countries bank liabilities are subject to taxation, excluding guaranteed deposits and equity, so the tax applies mainly to funds obtained on the financial market. Here are some examples of countries where taxation is effective towards bank liabilities: Austria, Belgium, the Netherlands, Germany, Portugal and Britain. In Cyprus and in Spain only deposits are taxed. Another possibility is taxation of assets or certain items thereof (sometimes risk-weighted). Such a solution exists in Finland and Hungary. Against this background, the French rules seem rather original, with the tax base covering the capital required for the bank to be able to hedge the risk with its own funds. The greater the risk incurred by the bank, the higher capital requirements and thus the tax. The bank tax rates are not harmonised and are rather low, but multiplied by the tax base

usually worth billions of euros or other currencies, it gives a substantial amount. Yet the bank tax is not the only burden placed on the banking business, so the requirements with respect to banks should be considered comprehensively. It is also noteworthy that the majority of financial services is exempt from VAT. It is not a good idea to assess tax burdens and other costs incurred by banks based on aggregated sectoral data. The situation varies from bank to bank, so separate data concerning each bank should be taken into account. Furthermore, the financial situation of individual banks should be considered in terms of their impact on the stability of the entire banking sector. Opponents of the introduction of the bank tax in Poland argue that it would prevent banks from lending, which will loom large on the economic situation. This argument is exaggerated. Banks will not stop lending because they have to earn. Another question is who will pay the costs of such a tax, since banks are not charities. Some of these costs banks will certainly try to pass onto the customers, and some of them is likely to affect the financial results of banks. In the case of the Polish banking sector, these results are high and, so far, even in times of crisis, they have seen a steady growth year-on-year (PLN 11.4 billion for 2010, PLN 15.5 billion for 2011, PLN 15.5 billion for 2012, PLN 15.2 billion for 2013 and 15.9 billion for 2014). In summary, no one should be surprised that the issue of the bank tax is widely discussed. However, it is essential that reliable arguments are raised both for and against it. •

CZŁOWIEK

PRACA

GOSPODARKA

O przyszłości rynku pracy - menadżerowie, liderzy HR, ekonomiści, polityczni decydenci z Polski i Europy.

7-8 października 2015, Hotel Sheraton, Warszawa www.hcecongress.pl Główny Partner Strategiczny

Współorganizator i Patronat Honorowy

Patronat Honorowy

Minister Pracy i Polityki Społecznej WŁ ADYS Ł AW KOSINIAK- K AM YSZ PAT R O N AT H O N O R O W Y

Współorganizatorzy

9/2015 polish market

Innovation

Events

Video marketing

Coachsulting

is born while thinking...

as a new business trend

Adam Półgrabia, President of Coachsulting Group and Trias AVI Sp. z o.o., talks to Maciej Proliński. Is video marketing – a catchy slogan these days – for everyone? Can every brand afford video communication and use it in building its image? The answer is “yes” to both of these questions but, as in the case of other activities, knowledge of the matter and common sense are required. Karol Modzelewski, Muse

e spend more and more time surfing the Internet, which is not only a source of information but also entertainment. Entertainment on the Internet equals video. The question therefore arises of how to use video in marketing activities so as to effectively reach your target group and realise your goals? First, let us look at the numbers. The average 40-year-old spends more time consuming web content than watching TV. In turn, the most engaging way of spending time online is watching video. It is therefore not surprising that the third most popular website in Poland is YouTube – the American service that allows posting and watching videos. From kittens to professional content of such world giants a the BBC, Disney and The Economist. What is more, YouTube is a favourite medium of 98% of web users compared to the 87% who pointed to Facebook (respondents could choose multiple answers). Due to its popularity among web users, YouTube naturally attracts marketers, but it is also possible for a brand to run its own channel – its own TV on YouTube. As shown by the experiences of companies, such activities are highly effective and translate into revenue growth. So how can brands and organisations leverage the potential of video on

72 polish market

the Internet? Let us name some of the most popular ways. (1) In accordance with the standard of the Internet industry, YouTube video can be preceded by ads. Importantly, what distinguishes YouTube from the competition is TrueView – a format that allows viewers to skip ads after 5 seconds. The TruView ad format (85% of ads on YouTube) challenges advertisers to make the message interesting for the viewer right from the start. Therefore, it is a big mistake to broadcast on YouTube the same spots as in TV. Ads of such brands as Caterpillar, DollarShaveClub, Tiger or Poo Pourri show that spots tailored to the Internet audience are much more effective. 2) The power of video on YouTube can also be leveraged through cooperation with the YouTube video creators, e.g. in the form of product placement. The most popular vloggers have more than half a million subscribers, which results in a greater range than many speciality TV channels. Such a cooperation also builds up a liking for the brand because YouTube viewers trust their idols and value their opinions. (3) A brand can also build a permanent audience for its channel, becoming a kind of TV. With an engaging and interesting video, a brand can realistically gain a faithful audience from among which its future ambassadors will later emerge.

What kind of non-advertising videos can a brand post to attract a permanent audience? Take for example Blendtec. This manufacturer of premium blenders shows off the power of its products, blending items such as the iPhone, Nokia 3310 or Xbox 360. The result? Millions of views and 820,000 subscribers. On the Polish market TouTube’s potential is perfectly used by Castorama. By publishing inspiring instructional videos “do it yourself”, Castorama has more than 120,000 regular viewers to its channel and this is organic reach, not paid one. What else should be considered? An emotional sense of ownership. Watching a video, we can experience more emotions, and it is most often emotions (and not reason) that are responsible for your purchase instincts. We are getting closer and closer to the point where only ignorants will not realize the power of video and YouTube. Increasing sales, creating the image, building and engaging community - these are only some of the goals that can be met using video marketing. Muse helps brands make a name for themselves on YouTube, tap the potential of video marketing. We create strategies, optimise channels and provide an original analytical tool that allows control over activities, evaluation of their results and optimisation of campaigns. So that the goals be achieved be• yond expectations.

The need to build an innovative economy based on knowledge and professional management is increasingly emphasised in Polish public debate. “In 15 years’ time, the entire EU, and Poland in particular, we just have to land on another planet, which will represent a completely different economic level,” as Prof. Jerzy Buzek once said. What is the role of consultancies operating on the Polish market in this respect? Consultancies have a huge role to play here, namely supporting the creation of new innovative products made by young business people, founders of startups. We have in Poland many young, talented people, with a tremendous passion for inventing new, innovative solutions using the latest achievements of science and technology. Often, however, they need support to commercialise their innovations. Many startups need assistance to transform from a company capable of producing an innovative product into a company capable of effectively selling it. There are many consulting firms on the Polish market that specialise in specific corporate areas. Significantly fewer are those able – upon examining the internal situation and external market environment – to work out effective development and efficiency improvement plans for their clients. Consultancy services are needed both by large companies and SMEs. The latter tend to have good business ideas, but they often lack expertise on how to grow and optimise operations,like for example switching from the family business to a professional national or regional company, moving to a higher stage of development. pm

Consultancies operating on the Polish marker are probably focused on the most popular areas, such as employment costs, social insurance, or purchase costs...

Most companies are undergoing endless optimisation processes. In order to streamline the company’s operating costs, it is much easier to use the proven best practices (experiences). Optimisation of strategy and development, marketing and sales requires an individual and innovative approach, geared to a specific business. Improving the company’s business architecture is an extremely challenging task that only the best consulting firms can assume. Coachsulting is much more than “simple” consulting, isn’t it? Coachsulting is a new, innovative word. It is a whole new trend in the world, which is in fact simple and somewhat similar to mentoring. Coachsulting is a combination of coaching and consulting, and the optimal way to support the development and growth of the client. Coaching is an interactive process based on aptly asked questions, which helps clients accelerate the pace of development and improve performance. Consulting means providing consultancy services in the form of specialist expertise. In coachsulting, we ask the right questions and provide, in response, expertise as needed. So coachsulting is being born, like any innovation, while thinking ... That is the way we work in Coachsulting Group, bringing together experts with more than 20 years’ experience, to optimize the companies’ strategy and development, marketing and sales. pm

You are a highly respected manager with 20 years’ experience in IT. And it is still a very promising market. You have been president of a new company - Trias AVI since recently. Could you tell us a bit more about its activities?

I have been involved in IT from the beginning of my career in the 1980s – a pioneering time for Polish IT. Over the years, ICT has gripped the world and plays an important role in everyday life. It has taken the economy by storm, which without it simply no longer exists. The IT industry is one of the fastest growing sectors in Poland, a showcase of the Polish economy. Polish IT specialists are increasingly valued in the world, and the Polish IT job market is becoming more and more attractive for professionals from other countries. One of the most important and fastest growing trends in the IT industry is the Internet of Things (IoT). As at the beginning of 2014, the Internet of Things was made up of approx. 2 billion devices, mainly household appliances, lighting, heating and other, creating what is called intelligent buildings. They are going to be as many as 9 billion by 2018. It is more than the number of smartphones, tablets, and smart, PCs and smart TV sets together. Trias AVI Sp. z o.o. is the leader of the Audio Video Light Integration sector in Poland. The company’s priority is to open before its business partners new opportunities through the use of state-of-the-art techniques. We design and integrate telecom systems for audiovisual, lighting, security, ICT and telecom installations. Our solutions are tailored to the needs and requirements of individual projects, developed by a team of specialised engineers. Our strategy involves activity in particular sectors of the market. Our knowledge and experience allow us to design and implement advanced multimedia, telecom and IT systems. Our flagship project is PGE Arena Gdańsk, built specially for the UEFA European Championship Euro 2012. Trias is the official technology partner and general contractor of the • stadium’s telecom systems. 9/2015 polish market

Flying - my passion Adam Rams, Vice-President of the Management Board Delta Trans Logistik Sp. z o.o. and Delta Trans Transporte Sp. z o.o.

ack in childhood days, almost everyone dreamt of doing in the future something special, not available to everyone, something arousing general respect and recognition. For example, being a pilot. When you hear “pilot”, it conjures associations with an extremely courageous person, free as a bird and holding the quasi-secret knowledge of things such as navigation, meteorology, aerodynamics. The image of a pilot, wearing a leather outfit and a flying cap with goggles, struggling with igniting the radial engine, with clouds of smoke coming out of exhaust pipes, leaking oil and other fluids left an average observer with genuine admiration and awe for his courage. Twenty years ago, in order to realise your youthful dreams and become a pilot, you had to undergo a comprehensive theoretical, gliding and parachuting training. Then, provided that everything went well, you could change to aircraft and continue learning until obtaining the desired licence. Then, your skills were

immediately put to test by the machine and by the natural environment. If you survived you became a true pilots. You could impress yourself and people around you. However, with the passage of time, the ethos of being a pilot evolves. 112 years have elapsed since the first flight of the Wright brothers. With the constant development of technologies, materials science, Internet, GPS and other novelties, navigation and meteorology are no longer secret knowledge. Modern aerospace structures enable virtually anyone at any age to become a pilot. Furthermore, general aviation (low-cost airlines, holiday charters) is now widely available, flying as a passenger has become commonplace, and pilots are regarded as ordinary men. So, romanticism gone, is it still a worthwhile hobby to be a pilot? And yet, even in today’s world, you can find new challenges. Personally, I have decided to become an amateur pilot with a professional licence to be able to operate a small plane safely in the same weather

Boeings or Airbuses usually fly through and move around Europe without endangering other aircraft users; to be able to take off and land at large airports like Frederic Chopin in Warsaw or Franz Josef Strauss in Munich. In pursuing my hobby I need to hone my skills as a pilot continuously, including simulation training and theoretical courses. And my own learning effort. Today’s small general aviation planes hardly differ in instrumentation and navigation systems from large airliners. However, due to their complex structures, enormous knowledge is necessary to fly them safely. Those who believed that the autopilot is enough to fly safely were painfully made to realise that there is no substitute for a well-trained pilot at the controls. Here is, in my opinion, the contemporary romanticism of being a pilot. The aircraft I now fly, a Diamond DA42, is sold under the slogan “Not Your Father’s Aircraft.” The machine of the 21st century requires similar pilot skills. •

Why is it worth doing business in CEE?

he Warsaw School of Economics (SGH) together with the Central & Eastern Europe Chapter of the Academy of International Business will try to answer the big question about international business and research. Starting from September 17 until September 19, 2015 the Warsaw School of Economics will host an international event dedicated to linking research with international business. The conference will be organized in cooperation with the AIB-CEE Chapter, a regional branch of a global organization which brings together about 3400 members from almost 90 countries, experts on research in the area of international business. The previous conference took place in Budapest in 2014. “This year we expect around 120 participants from across Europe. We will see presentations of research, teaching and publication projects related to international business. We hope that the event will make for a closer cooperation of researchers from our region”, predicts Professor Mirosław Jarosiński, PhD, from the Warsaw School of Economics, who chairs the conference programme in the organization committee. One of the highlights of the conference will be a panel discussion with entrepreneurs from Central and Eastern Europe who will argue about doing business in the region. Is it really worth doing in the CEE? For all the details about the event including registration, please visit http://warsaw.aib-cee-conference.com.

Cultural Monitor

Tradition - which, however, for the artists is neither a burden nor a habit - is the watchword of the summer Cultural Monitor. Recommendations by Maciej Proliński.

“Agnieszka Osiecka - Six Oceans (Sześć Oceanów)” – Polish Radio – 6 CDs

gnieszka Osiecka was a poet who influenced Polish music for several decades. It has been 18 years since she passed away, and new generations reach for her lyrics. Already as a student of the Warsaw University’s Faculty of Journalism (1952-1956) and the Film, Television and Theatre School in Łódź (1957-1961) she started cooperation with the literary and youth magazines, publishing essays. In 1954 she joined the Student Satirical Theatre (STS) for which she wrote 166 texts as a member of its artistic council for the whole period of STS’s activity, i.e. until 1972. 1962 marked her debut on the Polish Radio. Kalina Jędrusik, the famous Polish actress, sang Osiecka’s lyrics “My First Ball” to the music of Franciszka Leszczyńska. Osiecka was now recognized as a prominent young poet, and the Polish National Radio offered her a job to create and lead a team to broadcast “The Radio Song Studio.” There she met many talented composers, and during the seven years of its existence the team managed to record and play 500 new songs and introduce young, rising singers who later became stars of the Polish music scene, including Ewa Demarczyk, Maryla Rodowicz, Łucja Prus, Wojciech Młynarski, Marek Grechuta, Tadeusz Woźniak and the Alibabki and Skaldowie bands. In the following decades, and until the very end of her life, her position in the world of Polish song and theatre was further confirmed, as evidenced by numerous awards at the National Festival of Polish Song in Opole, once the most important Polish song review. “Six Oceans” is a collection of over 100 songs by Osiecka recorded in 1962-2013. Among the performers you will hear Osiecka’s canonical artists: Iga Cembrzyńska, Maryla Rodowicz, Krystyna Janda, Ewa Bem, Wanda Warska, Magda Umer, Marek Grechuta, Jan Pietrzak, Skaldowie, but also those who

76 polish market

reached for Osiecka only after her death: Raz Dwa Trzy, Stanisław Soyka, Anna Maria Jopek, and Wojciech Waglewski. The collection also includes very interesting interpretations by the youngest generation of Polish artists, including Magdalena Smalara, Tomasz Steńczyk, Marcin Januszkiewicz, Mela Koteluk and Iwona Loranc. Discovering all these songs and their different interpretations is truly engaging. Why? Firstly, behind this lyricism and voyeurism there is a good and noble heart of the author. Osiecka is natural, authentic. She pokes fun at pompous and pretentious attitudes. She has the curiosity of the world, the gift of watching the world (the very close, real, mundane one). Finally, she has the courage to say things straightaway, but with respect for another man. And it is certainly the way she is still perceived by her listeners: from connoisseurs to ordinary people whom she was able to get through to in her songs like no one else. It is worth recalling that many phrases that came from the pen of the poet are now in common use and live their lives outside the songs they were written for: “Can these eyes lie?” (“Czy te oczy mogą kłamać?”), “Long live the ball! Because this life is a ball of balls!” (“Niech żyje bal! Bo to życie to bal jest nad bale!”) or “Green to me” (“Zielono mi”). Anyone who has ever tasted the poetry - lyricism, joy and bitterness of these songs becomes sort of inebriated. “Oceans” is like an apogee of inebriation. “With all its sham, drudgery and broken dreams, it is still a beautiful world.” This is not a quote from Osiecka, but an excerpt from “Desiderata” by Max Ehrmann, an American writer (popularised in Poland by the Cellar Under the Rams – Piwnica Pod Baranami), which I believe corresponds with Osiecka’s message. To sum up: it is worth getting to know and remembering Osiecka.

Cultural Monitor – August 2015

Cultural Monitor

Voo Voo - “Placówka’44” The Warsaw rising Museum – Agora CD

he Warsaw Rising Museum has good intuition when it comes to artists. Those who express themselves to tell us something important about the memorable Warsaw Rising in 1944 are joined by the band Voo Voo with its new album “Placówka’44” and young vocalists: Barbara Wrońska, Tomasz Organek, Tomasz Makowiecki, Barbara Derlak and Justyna Święs. The theme has already appeared in solo recordings of the members of Voo Voo - Wojtek Waglewski, Mateusz Pospieszalski and Karim Martusewicz. But this (like tradition, including musical tradition) is neither a burden, nor a habit for the musicians... You can see it in this new album. Sometimes, mainly where Waglewski sings (because the band’s leader also sings here), you can hear quite a lot of rock&roll. At other times, as in the ballad opening the album or the final one, we get a sort of a musical instrument, the anthem of the past era, but with an unobvious setting (harmonium, bass clarinet). You will certainly smile broadly once at a clear musical irony... And with a delicate melody “Today I am going to fight, Mum” (music by Mateusz Pospieszalski, vocal by Justyna Święs) you will get emotional and pensive, as you can find there purity, innocence, and the whole tragic fate “Placówka’44” tells about. And finally, a word about the lyrics. This album’s lyrics are the result of a unique, yet still little known event, namely the Poetical Contest organised in August 1944 by the soldiers of the Home Army’s (AK) 3rd Region 6th Prague District. The contest was open for all the district soldiers who wrote any poem about the uprising realities. The first prize was awarded to “Steyr.”

“Tribute to Nat King Cole” – DUX - CD

new surprising musical project of a popular and hard-working Polish singer - Maciej Miecznikowski, and a well-known jazz guitarist - Krzysia Górniak on the 50th anniversary of the death of the great American jazz singer and pianist - Nat King Cole. They perform great international hits: “Unforgettable,” “Route 66” and “When I Fall In Love”, sung and played emotionally, in unconventional arrangements, with two guitars and vocal. Miecznikowski and Górniak are accompanied by: Paweł Pańta on bass, Adam Lewandowski on drums and Atom String Quartet. It is sublime, moody album, not too virtuosic, and very valuable. In the rendition of Maciej and Krzysia, all those songs, which seem to be very well-known already, take us to the highest levels of performance art, showing clearly the beauty of the compositions. Technically, Maciej has no difficulty singing Nat’s songs. More than that, this opera singer by education (a graduate of the Academy of Music in Gdańsk), gifted with deep and powerful voice, for 12 years member of the pop band “Leszcze”, makes himself known as an extremely versatile singer with great sensitivity, major intuition and his own tone. An artist who, expressing himself, shares classics. “A Tribute to Nat King Cole” - a joyful intimate music, close to the ear and emotional - should go down very well at concerts, too. Because the duo is ideal both for cosy and big events. A successful and important concert experience guaranteed!

Slow - “Songs for Everyone” – V Records - CD

he band “Slow” is formed by Krzysztof Wermiński (piano) and Tomasz Kaczmarczyk (guitar). Both of them compose, arrange and perform a combination of pop and contemporary jazz. The album “Songs for Everyone”, the second one in the band’s history, is a smooth-jazz superproduction, where sophisticated instrumental pieces are interspersed with melodious songs. In addition to the band’s leaders, excellent musicians of the young generation contributed to the album: Kamil Pelka (bass guitar) and Marcin Rak (drums). Besides - a galaxy of special guests: Jahga and Anna Ozner (vocal), Leszek Szczerba (saxophon), Adam Milwiw-Baron (trumpet) and Paweł “Cibel” Wróblewski. The pride of six out of ten compositions is a string quartet, led by the Wrocław’s Opera violinist - Henryk Kozioł. The musicians are undoubtedly young virtuosos who combine powerful sound with complex instrumental feats. Sometimes accents shift towards simplicity and calm. They feel perfectly both in pacy passages and calm, warm, even pop-like songs, rhythmically and melodically rooted in different cultures of the world. To sum up: great, modern and very diverse jazz! On the one hand, deeply embedded in the tradition of electric playing, on the other hand, Polish, intercultural and fresh. I do not know if is for everyone, but certainly for many lovers of jazz and clarity in song.

9/2015 polish market

Culture

A Brief History of a Divided World

Moniuszko W agner M ozart S trauss

Prof. Andrzej Rottermund, Director of the Royal Castle Museum in Warsaw, and Łukasz Kamiński, PhD, President of the Institute of National Remembrance - Commission for the Prosecution of Crimes against the Polish Nation, invite you to an exhibition entitled “The Cold War. A Brief History of a World Divided”, which will be on display at the Great Courtyard of the Royal Castle in Warsaw from 8 August to 15 October 2015.

The upcoming season in Warsaw’s opera promises many attractions! Maciej Proliński

Maciej Proliński

he Cold War was an ideological, political and military conflict between the capitalist bloc led by the United States and the communist bloc led by the Soviet Union that broke out upon the collapse of the anti-Hitler coalition in the late 1940s and went on till the fall of the communist rule in 1989. It is often believed that the most tense period of the Cold War was until the end of the decade of the 1960s. The essential characteristics of the Cold War were the arms race, ideological tensions and avoidance of direct confrontation while interfering in peripheral conflicts and wars. The term “Cold War” was coined in 1947 by Bernard Baruch, senior advisor to Harry Truman, who was concerned with nuclear proliferation. The Cold War is often boiled down to only a few watchwords: the Berlin Wall, the arms race, the wars in Korea, Vietnam and Afghanistan, or the Cuban missile crisis. But probably few people would be able to situate in the context of the Cold War events such as the civil war in Greece, the attack on the communist China’s seizure of the Kuomintang-held Yijiangshan Islands, or the US landing on the Caribbean island of Grenada. It is increasingly pointed out that the Cold War was in fact a war, sometimes all too hot (let us not be misled by the adjective “cold”!), even though the overt and direct military confrontation between the superpowers occurred only incidentally and

78 polish market

occasionally. The exhibition “The Cold War. A Brief History of a World Divided” will be a good opportunity to recall a number of statements uttered by politicians on both sides of the Cold War barricades that went down in history. It will also be an important invitation to travel into the recent past to get to know the realities of the conflict that for nearly half a century dominated the post-war history of the world, affecting the lives of millions of people and shaping the face of today’s world. “A total and multifaceted nature of the Cold War has left its mark on so many different areas of life that every attempt to show it in one place at one time, in one exhibition, would certainly leave a feeling of dissatisfaction. With this in mind, we propose our own, therefore inevitably subjective, look at the history of the Cold War, giving it the form of a multithreaded story. It consists of events and phenomena, with their various aspects and main participants, meaningful for the conflict, though sometimes little known or even forgotten,” says Paweł Rokicki from the Public Education Office of the Institute of National Remembrance (IPN). The exhibition owes its special power of expression to the photos illustrating the narrative. They come from: Archives of the Institute of National Remembrance, Central Archives of Modern Records, Museum of Popular Front of Latvia, KARTA Centre, photo agencies: BE&W,

CORBIS, East News, EK Pictures, FORUM, Getty Images, NAF Dementi, Polish Press Agency, Reporter. “Among the famous photos that became the icons of the Cold War and those less well-known, complementing the narrative, we wanted to have not only documentary images, but also memorable, thought-provoking ones. We decided to use attention-grabbing zooms so the photos do not need to compete with each other for space, accompanied by a few sentences by way of a commentary. Those particularly interested will find detailed information on several separate boards. Thus, the exhibition’s subtitle ‘A Brief History of a World Divided’ captures its essence and intentions of the authors - a reflection on the conflict that dominated the history of the world for nearly half a century, without aspiring to be an exhaustive chronicle of events,” adds Rokicki. The history of the “Cold War” was already exhibited in 2010 at “Przystanek Historia” IPN’s Educational Centre and prepared by the Warsaw Branch of the Institute of National Remembrance in connection with the 20th anniversary of the German reunification. It was opened Prof. Jerzy Eisler who said back then: “We wanted this exhibition to give an objective account of the events that happened between 1945 and 1991 on almost all continents and that make up the history of the world divided by the Iron Curtain. I think this aim has been achieved to a large extent.” •

he Wielki Theatre-Polish National Opera is one of the most recognised brands of Warsaw. It harbours an enormous potential: that of the place and that of the people. Year after year, it proves it ranks among the leading European opera houses. Co-productions with major opera houses, the presence of prominent directors, singers and conductors, the variety of repertoire, all this builds the conviction that it is simply worth going to Warsaw’s opera. Under the direction of Waldemar Dąbrowski (general) and Mariusz Treliński (artistic), the National Opera, has repeatedly responded to the demands of contemporary creativity, without losing any of its artistic assets. It will be no different in the season of 2015/2016. The first premiere of the season will be “The Haunted Manor” on 8 November. The famous piece of the father of Polish opera, Stanisław Moniuszko, will be directed by David Pountney, who has already successfully staged in Warsaw “King Roger” by Szymanowski and “The Passenger” by Weinberg. “I showed David ‘The Haunted Manor’ and, when he read the libretto, he asked me: ‘OK, but what is it about?’ A man coming from a different culture simply did not understand what had made this work so valuable at the time it was written - in 1861-1864,that is under the tsarist censorship. I explained to him that the most important here is what is unwritten: the power of symbolism that rises

above the limitations imposed by censorship. So it is with all the great works of Polish romantic literature. David realised that the plot is set in the final years of Poland’s First Republic. So we have a free Poland, but we can also feel its nearing twilight... He found a parallel with another moment of Polish freedomthe 1920s and 1930s. Naturally, this will cause a lot of discussion. But I think one of theatre’s missions is to open debates around things that are subject to all sorts of interpretations. In this case it is also about checking the chance of ‘The Haunted Manor’ for an international career,” says Waldemar Dąbrowski. Next year’s premieres include: “La Clemenza di Tito” by Mozart, a co-production with La Monnaie, directed by Ivo van Hove, starring Anna Bonitatibus, Charles Workman, Ewa Vesin, Katarzyna Trylnik and Anna Bernacka (16 January); Strauss’s “Salome”, directed by Mariusz Treliński (22 March); and Wagner’s “Tristan and Isolde”, directed by Mariusz Treliński, which will be staged in Warsaw a month after its premiere in BadenBaden and three months prior to the opening of the season 2016/2017 at the Metropolitan Opera. In August 2016 it will travel to Beijing! The Polish National Ballet will develop in the upcoming season the Shakespeare series, with “The Taming of the Shrew” choreographed by John Cranko (27 November) and “The Tempest” choreographed by Krzysztof Pastor (9 April). As regards concerts, mark your agenda for the jubilee of maestro

Jerzy Maksymiuk on 19 February (80 years!) and Yehudi Menuhin on 22 April (the centenary of birth and a special concert by Sinfonia Varsovia). On 30 March, precisely 50 years after it was first performed, the monumental “Passion according to St. Luke” by Krzysztof Penderecki, one of the most important works of Polish music of the 20th century, will sound in the National Opera. In May 2016 the National Opera will host the 9th Stanisław Moniuszko International Vocal Competition. Organised every 3 years, the contest since its inception in 1992 by Maria Fołtyn (an opera star and a tireless promoter of the work of Moniuszko), has been primarily a great chance for young artists who have an opportunity to showcase their talents before the international jury consisting of eminent renowned singers, directors of opera houses and festivals and educators. It is also an important step towards an international career. Among its winners and finalists are Aleksandra Kurzak, Małgorzata Walewska and Mariusz Kwiecień. The Opera Gallery is a joint project of the National Opera and the Academy of Fine Arts (ASP) in Warsaw. When going for concerts or performances, it is really worth having in mind this venue. In the season 2015/2016 it will feature the works of contemporary Polish artists, starting as early as in September with Franciszek Starowieyski. •

9/2015 polish market

Culture

Food Industry

Passions of the heart and soul

WARSZAWA / TEATR WIELKI – OPERA NARODOWA

25-27.09.2015 /

Szalone Dni Muzyki Pasje serca i duszy

www.szalonednimuzyki.pl / www.follejournee.pl / www.sinfoniavarsovia.org

Maciej Proliński

80 polish market

relationships

6. polska edycja międzynarodowego festiwalu La Folle Journée / Francja · Hiszpania · Japonia

sprzedaż biletów w Teatrze Wielkim - Operze Narodowej od 1 września www.teatrwielki.pl

n the world it has been organised for two decades. In Poland it is going to be held for the sixth time. La Folle Journée - an international festival, a brainchild of René Martin, the organiser of numerous festivals and classical music concerts around the world, and the founder of the Centre de Réalisations et d’Etudes Artistiques à Nantes (CREA) - invites you to set off on a wonderful adventure with the classical music in a relaxed atmosphere of the Teatr Wielki-Polish National Opera in Warsaw on 25-27 September 2015. This year’s edition was given a very poetical title: “Passions of the heart and soul.” La Folle Journée Festival has been successfully organised for many years in France, through Spain, to Japan. It enjoys there great popularity and has earned a permanent place in the cultural life of these countries. The idea is to encourage and facilitate participation in classical music concerts, while maintaining the highest level of music. Short concerts take place from morning to evening in several rooms at the same time. Owing to low fares and a unique atmosphere, everyone without exception should feel invited to join these musical festivities. One of the rules of the Festival is the average concert duration of 45 minutes. You can

Building correct

ORGANIZATORZY

WSPÓŁORGANIZATOR

festiwal dofinansowano ze środków m.st. Warszawa

join the audience after the concert begins and leave when you like. Nothing is imposed on you. You can choose anything you want from a wide selection of concerts and arrange your own concert map. It is possible - if someone is curious to make comparisons - to repeatedly listen to the same song in different versions or to see how the same artist finds himself in another repertoire. The Festival’s audience spans a full range of people - from babies in strollers and kids who can take part in “Smykofonia” (its programme is around the experience of the foundation “Music is for Everyone”, animators, educators, experts and distinguished artists, and the form of these concerts corresponds to the needs and perception possibilities of young children), through teenagers and students, to the elderly. Participants are welcome to dress casually. A permanent element of La Folle Journée is concerts of one of the most distinguished Polish orchestras - Sinfonia Varsovia, which participates in the Festival from its first world edition. Every year, the Festival gathers tens of thousands of people interested in just such an art and its form presentation, who come to Warsaw from all over the country to attend the

real world of music. This shows how much the Festival is needed. The programme of the 6th edition will feature a very interesting, rich and wide panorama of classical music, which will surely touch to your heart and soul, which can be a source of mystical experiences and which was certainly born from the passion. The masterpieces to be heard this year include: St. John’s Passion by Arvo Pärt, Sonata for Viola and Piano in C Major op. 147 by Shostakovich, Bach’s Cantatas: O ewiges Feuer BWV 34, O Jesu Christ, Mein’s Lebens Licht BWV 118b, Gloria In Excelsis Deo BWV 191, Symphony No. 4 in F minor by Tchaikovsky, Piano Concerto by Henryk Wars, Piano Concerto in A minor op.54 by Robert Schumann, Symphony No. 2 in E minor, op.27 by Rakhmaninov and Symphony No.3 op.36 “Sorrowful Songs” by Henryk Mikołaj Górecki. And among the performers will be: Polish Radio Symphony Orchestra, Warsaw Philharmonic Orchestra, Baroque Orchestra of the Collegium Musicum Bednarska, Vox Clamantis, Marita Solberg, Gérard Caussé, and plenty of young performers – mainly symphony orchestras of music schools from across Poland. Finally, the great hero of the event - Sinfonia Varsovia. Mark your agenda already today! •

dofinansowano ze środków Ministra Kultury i Dziedzictwa Narodowego

Correct relationships across the supply chain - a unique programme of the Association of Polish Butchers and Producers of Processed Meat (SRW RP)

he Association of Polish Butchers and Producers of Processed Meat and the Warsaw School of Economics’ Economic and Social College have held a conference entitled “Building correct relationships across the supply chain of pork products”, which is part of the programme under the same name. The conference was opened by Prof. Piotr Ostaszewski, Vice-Rector of the Warsaw School of Economics for Teaching and Student Affairs. The meeting, which was attended by scientists, representatives of sectoral organisations and meat producers, was chaired by Prof. Joachim Osiński, Dean of the Economic and Social College. In his speech, he stressed the impact of soft factors on what is happening in the economy. These include, among others, the behaviour of producers, processors and politicians, including especially their relationships or the lack them. “The guiding principle for all should be common good. The protection of production and producers should be the following principle,” said Prof. Osiński. He pointed out that in a well-managed country education must not follow a monolithic scenario: “We need today interdisciplinary and multi-interdisciplinary knowledge. If we do not change that, we will be three steps behind the others.” The opening lecture on the barriers to the revival of pork production in Poland was delivered by Prof. Andrzej Pisula. He drew attention to a number of factors that caused a sharp decline in pig herds, namely the lack of large breeding farms and constantly growing pig exports. He also talked about the reasons for the low competitiveness of pig production, such as the fragmentation of holdings, the lack of suitable education for young farmers, poor knowledge of production organisation and management, the reluctance of breeders and meat processors to integrate, and a shortage of large pig farms. Zbigniew Nowak, President of the National Council of the Association of Polish Butchers and Producers of Processed Meat, pointed to the role of integration in building a strong meat industry in Poland: “It is essential to raise the

The conference was chaired by Prof. Joachim Osiński of the Warsaw School of Economics (pictured with the microphone). Prof. Piotr Ostaszewski, vice-rector of the Warsaw School of Economics, Prof. Andrzej Pisula of the Warsaw University of Life Sciences – SGGW, Zbigniew Nowak, President of the SRW RP National Council, and Janusz Rodziewicz, President of SRW RP, also took part in the discussion (pictured from right to left).

awareness of consumers so that they draw attention to the origin of the products, their quality and safety.” The programme “Building correct relationships across the supply chain of pork products” is an excellent example of interdisciplinary activities. Working in two panels, economists, lawyers, meat processing experts and entrepreneurs signalled the results of studies which will soon be collected, appended with conclusions and recommendations, and published by the Warsaw School of Economics in the form of a book. This is the first such large-scale project carried out by the Polish meat industry. The panel discussion titled “Development and application of the law concerning the relationships across the supply chain of pork products in the Polish and international legal framework”, chaired by Prof. Jerzy Menkes, featured: Prof. Małgorzata Duczkowska-Piasecka, Prof. Artur Nowak-Far, Filip Przybylski-Lewandowski, PhD, and Maciej Wojciechowski, PhD. The conclusions of the second panel discussion titled “The economic policy and shaping the relationships across the supply chain of pork products”, chaired by Prof. Sławomir Sztaba, were presented by: Prof. Elżbieta Czarny, Prof. Stanisław Kowalczyk, Prof. Katarzyna Duczkowska-Małysz and Prof. Katarzyna Śledziewska. During the meeting summarising the two panel discussions Filip Przybylski-Lewandowski, coordinator of the programme, highlighted 11 recommendations, the most important being the following: establishment of an independent qualification unit, integration of the services supervising production, quality and safety of products of animal origin, concluding long-term contracts between producers and processors, more favourable financing conditions for agricultural production, consolidation of agricultural producers, building awareness and knowledge of decision-makers, creating partner relationships across the supply chain. The programme “Building correct relationships across the supply chain of pork products” is financed by the Pork Promotion Fund. •

Bożena Skarżyńska

9/2015 polish market

Food Industry

POLAGRA FOOD, a comprehensive and innovative

food fair

A 50 year tradition

The International Trade Fair for Food Polagra Food in Poznań has become a tradition in the food industry. The September meetings are much awaited both by market leaders and market entrants. It is here that new products are launched and decisions are made about future cooperation.

the owner and also the Grand Chef

A 50 year tradition

The Gold Medal is an acknowledged distinction awarded to innovative products of the highest quality. Every year, several such distinctions are awarded to food products. This year, as many as 19 medals will be awarded to innovative solutions, including 10 dairy products and 7 meat products. It shows that the sectors that were particularly affected by export restrictions and other market fluctuations, such as the abolition of milk quotas, never stopped their efforts and will be able to offer visitors products outstanding in their quality, manufacturing methods and taste, which will certainly satisfy even the most demanding consumers.

82 polish market

Mieczyslaw Jachacy with his son omas, invite you to the newly opened Restaurant AVANGARDA At the heart of Warsaw's oldest building in the capital, you can experience traditional Polish cuisine with a modern twist. Sophisticated ﬂavors

What’s new on the shop shelves?

MTP Gold Medal

in the business for decades! Legend of the Warsaw gastronomy,

he Polish food industry has overcome adversity it was facing in the last several months, and the value of exports for 2014 is impressive. But further steps are needed to help Polish entrepreneurs uphold this positive trend. Polagra Food, which has supported Polish food producers for more than 30 years, is well one of them. It is a venue for presenting innovative solutions and high quality products, but above all a venue that opens up new opportunities for cooperation.

This year’s Polagra Food will be overflowing with a great deal of novelties. This is primarily a consequence of the changes observed in consumption patterns. A variety of diary products will have their market debut, but not only them. Healthy snacks, sweets, tea, finished products, meat products and additions to dishes will be presented, too.

With years of experience and the best reputation

and dishes prepared with the ﬁnest, selected Polish products. Promising meetings Polagra Food provides a solid ground for future business contacts, both domestic and international. Cooperation opportunities will be discussed not only at exhibitors’ stands, but also during the International Brokerage Event on 22 September. Prepared by the Polish Agency for Enterprise Development (PARP), it is addressed to stakeholders operating in the following sectors: food and beverages, HoReCa, food technology, packaging and transportation. The possibility to identify the business partners to talk to makes such meetings extremely effective.

Injection of marketing knowledge Polagra Food is also meetings with experts. Retailers will certainly find interesting a training session titled “Takeaway Branding” that will present the brand mechanisms allowing to build a strong brand identity. These will include influence techniques in

advertising, methods of building brand identity in a multicultural environment, ways of communicating with customers and maintaining a consistent image.

The strength of tradition Polagra Food will be preceded by the festival of regional, traditional and certified food “Tastes of the Regions”, a Mecca for foodies who are looking for products based on recipes handed down from generation to generation. For retailers, it is an excellent opportunity to get acquainted with original taste products, which may encourage them to diversify into the rarities that customers, whether in small shops or retail chains, are increasingly avid for. Polagra Food will be held on 21-24 September. “Tastes of the Regions” will start two days earlier, on 19 September. More information about both events is available on the websites: www.polagra-food.pl and smaki-regionow.pl. •

We oﬀer a full range of services:: corporate lunches banquets family and friend gatherings proms communions weddings bartender shows with wine tasting catering service banquet ballrooms conference rooms

Innovation

A businessmanvisionary Jan Kulczyk (1950-2015) the winner of Polish Market’s Honorary Pearl

an Kulczyk, one of the most recognisable Polish entrepreneurs, the richest Pole, creator of the global group of companies Kulczyk Investments died on 29 July, from complications after a minor cardiac surgery he had at a Vienna hospital. Jan Kulczyk was born in 1950 in Bydgoszcz. He graduated in Law at the Adam Mickiewicz University in Poznań and in Foreign Trade at the University of Economics in Poznań. He obtained a PhD in International Law. He entered the world of business in 1981, starting a foreign trade company Interkulpol. Seven years later, he ventured into the automotive industry, creating the first Polish distribution network of Volkswagen. In 1991, he established Kulczyk

84 polish market

Holding, which has been part of Kulczyk Investments since 2007. His fortune is estimated at PLN 15.1 billion. Jan Kulczyk is the winner of “Polish Market’s” Honorary Pearl award in Economy awarded in recognition of his international achievements and in gratitude for promoting a positive image of Poland abroad. Jan Kulczyk was considered to be a business visionary. The companies he owned enjoyed international presence. His showcase was Ophir Energy, a LSE company engaged in prospecting for offshore and deepwater oil and gas. For many years, he invested in energy and petrochemical assets. He had a portfolio of exploration interests in South America and Asia. He invested in the development of wind farms as well. He repeatedly supported sports and cultural events. Kulczyk Investments is the strategic sponsor of the Polish Olympic Team. The cooperation was initiated before the Summer Olympic Games in London in 2012. Kulczyk supported Polish sportsmen with an amount of PLN 30 million. He had extensive business contacts abroad. In 2013, “Forbes” ranked him as the 384th richest person in the world, estimating his fortune at USD 3.5 billion. He was the richest Pole cited on the world billionaires list. Jan Kulczyk was buried on 5 August in a family tomb in Poznań’s Jeżycki Cemetery. The funeral was attended, among others, by former Presidents of Poland - Lech Wałęsa - who recalled the deceased in the following words – “Every year of our friendship convinced me of how much good you did. Is anyone able to replace you? I doubt it”, Aleksander Kwaśniewski with his wife Jolanta, and the outgoing First Lady Anna Komorowska. In addition to high-profile politicians, amongst those in attendance were artists, including Krzysztof Penderecki, Jan Englert and Jan A.P. Kaczmarek, and the friends of the late Jan Kulczyk: Jerzy Starak and Waldemar Dąbrowski. •

40 000 m

25 000 m

10 000 m

9 500 m

pasmo S (NATO F) pasmo C (NATO G)

55º

60 km

ZDPRS SOŁA ZDPRS SOŁA jest nowoczesnym wielozadaniowym trójwspółrzędnym (3D) radarem przeznaczonym do wykrywania i wskazywania celów powietrznych oraz pocisków moździerzowych w systemach obrony przeciwlotniczej krótkiego (SHORAD) i bardzo krótkiego (VSHORAD) zasięgu. Posiada dodatkową zdolność wykrywania helikopterów w zawisie oraz własne środki ochrony przed rakietami ARM. ZDPRS SOŁA charakteryzuje się wysoką mobilnością i może być wykorzystywana do osłony obiektów lub przemieszczających się wojsk.

PIT-RADWAR Spółka Akcyjna

tel. centrala 22 540 22 00

ul. Poligonowa 30, 04-051 Warszawa

office@pitradwar.com, www.pitradwar.com